Zhu v Snell

The witnesses 6Mr Zhu is of Chinese extraction. At times during his cross-examination by Mr Snell, Mr Zhu asked for questions to be repeated, or re-phrased. However, once Mr Zhu was clear as to what was asked of him, his answers were responsive and precise. He impressed me as a witness who had a clear recollection of events. 7Mr Zhu's wife, Ms Luo gave evidence corroborative of Mr Zhu's evidence concerning the events preceding the exchange of contracts on 11 May 2013. Ms Luo gave her evidence clearly, forthrightly and confidently. 8Mr Snell described his occupation as a "Systems Officer". He told me worked in the "IT industry". He conducted the proceedings on behalf of the defendants, and gave his evidence calmly and with courtesy. 9Ms Jiang is also of Chinese extraction. For the most part, Ms Jiang left the conduct of the proceedings to Mr Snell. It was clear that she found aspects of her cross-examination distressing. Nonetheless, she gave her evidence forthrightly. 10Both Mr Snell and Ms Jiang presented as being confident of the correctness of their recollections of events. There are, however, aspects of their evidence that I find impossible to reconcile with the objective circumstances established in the case. I discuss this further below. 11Prior to the events with which these proceedings are concerned, Mr Snell and Ms Jiang were living together in a de facto relationship. The evidence did not make clear if, or when, that relationship ceased. Mr Snell and Ms Jiang continue to reside at the Property.

Background 12Mr Snell and Ms Jiang commenced living together in or about November 2006. 13In or about October 2009, Mr Snell purchased the Property for $378,000. 14On 17 November 2009, Mr Snell and Ms Jiang entered into a "Mutual Agreement" which included these terms: "1. [Ms Jiang] will join the title of [the Property] as joint owner when she gains her permanent residency as the recognition of the de facto relationship between [Ms Jiang and Mr Snell] and her financial contribution in the purchasing of [the Property]... 2. [Ms Jiang] will be compensated AU$30,000 if the relationship is discontinued. 3. If [Mr Snell] has the intention to sell [the Property] he should inform [Ms Jiang] as soon as possible." 15On 2 December 2009, the then owner of the Property executed a transfer in favour of Mr Snell. Although the Property was registered in Mr Snell's name alone, Ms Jiang paid the deposit ($18,900). Mr Snell borrowed the balance from the Commonwealth Bank of Australia ("CBA"), which took a mortgage over the Property. 16Between September 2010 and May 2011 Ms Jiang contributed a further $49,377 to the renovation and maintenance of the Property. 17There is in evidence what purports to be a Residential Tenancy Agreement in respect of the Property dated 25 June 2012 between Mr Snell (as "landlord") and Ms Jiang (as "tenant") for the period 25 June 2012 to 24 June 2015 at a rental of $1 per week (the "Alleged 2012 Lease"). 18There is a dispute in the proceedings as to whether, in truth, Mr Snell and Ms Jiang executed the Alleged 2012 Lease in June 2012. Mr Snell and Ms Jiang contend, but Mr Zhu disputes, that Ms Jiang showed Mr Zhu the Alleged 2012 Lease on 11 May 2013, prior to the exchange of contracts for the Property. Mr Zhu claims that he first heard of the Alleged 2012 Lease in July 2013 (well after exchange contracts for the Property; indeed after the date specified in the Contract for settlement). 19Ms Jiang stated in her affidavit that she and Mr Snell separated in February 2012, but reconciled in June 2012, at which time she asked Mr Snell to enter the Alleged 2012 Lease "in order to protect myself". 20In cross-examination Ms Jiang said: "I was in previous relationship with a Chinese national and I was kicked out...I just want to make sure it will never happen like that...I had a bad experience before and I was rejected access, in a previous relationship... [I wanted] extra protection in case something happens. And the previous property, I pay most of the money too so it is unfortunate... ...I just feel like that's my property, you know, I never should be kicked out from this one." 21In cross-examination, Mr Fermanis challenged both Mr Snell and Ms Jiang as to whether the Alleged 2012 Lease was in fact executed in June 2012. I return to this below.

The Advertisements 22Mr Snell asked Ms Jiang to place advertisements ("the Advertisements") on the websites "buyMyplace.com.au" and "realestate.com.au" for the sale of the Property. Ms Jiang composed the Advertisements. Mr Snell approved their form prior to publication. The Advertisements were published on 7 May 2013. 23The Advertisements offered the Property for sale for $448,000. Both Mr Snell and Ms Jiang agreed this was the "asking price" for the Property (indeed, Mr Snell put this proposition to Mr Zhu in cross examination). 24One of the Advertisements stated that the "most recent median unit price for Waitara" was $522,000. 25However, neither party sought to adduce expert evidence as to the value of the Property in May 2013 and I read the reference to the "median" price of $522,000 as conveying no more than the vendor's contention that the asking price of $448,000 was attractive. 26The Advertisements directed enquiries to Ms Jiang's mobile telephone number and included the following: "NOTE: Potential rental income $480-520 per week. Lease back option available." 27Mr Snell agreed that when he approved the "lease back" figure in the advertisements he had in mind a "lease back" from a prospective purchaser of the Property to him.

Saturday 11 May 2013 28Mr Snell arranged for the Property to be open for inspection by prospective purchasers on Saturday 11 May 2013. Prior to the open day, Mr Jeffrey Joseph, of Linton Pitt Lawyers prepared the Contract. Mr Snell or Ms Jiang left copies of the Contract on the kitchen bench at the Property inspection. 29There is a dispute between the parties as to what occurred on this occasion. 30It is however common ground that, ultimately: (1)Mr Zhu and Mr Snell agreed that Mr Zhu would purchase the Property for $452,000; (2)Mr Snell completed the Contract to show Mr Zhu as purchaser, the purchase price as $452,000, and the deposit payable as $45,200 (10 percent of the agreed purchase price); (3)Mr Snell deleted and initialled the words "Vacant Possession" on the face of the Contract, and Mr Zhu placed his initials adjacent to the words "subject to existing tenancies"; (4)Mr Snell and Mr Zhu then executed and exchanged Contracts; (5)the Contract called for completion in 42 days (that is by 24 June 2013) and contained the usual "cooling off" provision required by s 66X of the Conveyancing Act 1919 ("the Act"); (6)Mr Zhu paid Mr Snell a deposit of 0.25 per cent of the purchase price, being $1,130; and (7)Mr Zhu and Mr Snell entered into a Residential Tenancy Agreement between Mr Zhu (as landlord) and Mr Snell (as tenant) for a period 22 June 2013 to 2 May 2014 at a rental of $450 per week ("the 2013 Lease"); 31Mr Zhu asserted, but Mr Snell disputed, that he and Mr Snell executed the 2013 Lease first, and then the Contract. I find it unnecessary to resolve this dispute. Either way, both documents were executed as part of one transaction and must be read together (see the cases gathered at Lewison & Hughes, The Interpretation of Contracts in Australia, (2012) at [3.03]). 32In his affidavit Mr Snell said that prior to exchange of contracts, Ms Jiang said to Mr Zhu (in English): "Paul and I are breaking up which is why we are selling the property. There are several options we are thinking of. Firstly, you can buy it for over $448,000, but that is conditional on my existing lease continuing until it expires in 2015. The second option is you can buy for market value, somewhere around the $500,000 mark and we will both move out giving you vacant possession. So please take all this into account when making your offer." 33Ms Jiang's account of her statement in her affidavit is as follows: "I have broken up with my partner, Paul. That's the reason we have to sell the property as I do not have a job and cannot pay the mortgage. I do have a lease signed last year which entitled me to stay here until 2015. If you want to pay for the property around $450,000, I will stay here for a while and figure out where I will go. Paul can stay here if I move out before June 2015: otherwise you will have to pay market value of the property, around [$500 000], to let me move out before settlement." 34As I have mentioned, Mr Snell and Ms Jiang claim that Ms Jiang showed Mr Zhu a copy of the Alleged 2012 Lease. 35Ms Jiang also stated in cross-examination: "I said I put money in this property...[Mr Zhu] asked who I am. I said, 'Paul Snell was my partner and this is our joint property and I put money in this property'... I definitely mentioned the term 'money' somewhere." 36Mr Snell said that he did not tell Mr Zhu "directly" of Ms Jiang's alleged interest in the Property but that Mr Zhu "would have been aware in an implied sense" of such interest. 37Mr Zhu gave a very different account of events. 38First, he said that, apart from preliminary greetings, all of his discussions with Ms Jiang were in Mandarin. 39Second, he denied having a conversation with Ms Jiang to the effect referred to in [32] and [33] above and denied that Ms Jiang showed him, or referred to, the Alleged 2012 Lease. 40Mr Zhu gave the following evidence in cross-examination in response to an open question from me ("[a]re there any conversations over and above those you have already told me about that you can remember?"): "[A]t the beginning I asked [Ms Jiang], 'So why you want to sell this property?' This is quite normal questions and I was told [by Ms Jiang]...they were move to overseas next year and they want to sell this apartment, that's the one thing. And when we discussed the price and also we discussed the lease agreement. That is the advertisement they say 'lease back option' as $480 to $520 and because he want move to New Zealand in May of 2014 and he wanted lease agreement, that is around 55 weeks, that is from 22 June, because originally in the contract we should, you know, from the exchange to the settlement should be 42 days so from 22 June of year 2013 to 2 May of year 2014. That is for the lease, so we discussed that. At that the beginning I say that is $480 and [Ms] Jiang say 'oh you should make allow[ance]' and we got agreement to $460 per week and we write these things as agreement. Also we put four weeks deposit, that is about $1840. But before we sign this contract of sales, after we discussed the price of the contract of sales and [Ms Jiang], when I say, 'We pay you what is the asking price', that's the [$448 000] and she take a call from the bedroom and after few minutes come back she told me she got a better price and ask me to match, to pay the same price. But we have some discussion and we say you just ask for [$448 000] and okay we agreed to pay that, but after few minutes [Ms Jiang] got another call and come back and she say, she got another better one so, 'you should increase your price to $450,000' and mean we have some discussing and we agree to pay [$450 000]. After a few minutes come to bedroom and [Ms Jiang] got another call and say, 'Some people can offer more, can you match it?' And we say, 'we match the [$452 000]' so that's the contract price but before we signed that, she want to reduce the rent from $460 to $450. At the beginning, we didn't agree. In this case I think Mr Snell come join that and they have some talk and Mr Snell used English and talked to us, 'Can you just make [Ms Jiang] happy: $10 only per week'. And in this case is very hard to refuse and then we agreed to change it from, that's the lease agreement which went from $460 to $450, that is you can see we have initialled that." 41The effect of Mr Zhu's evidence was that he and Ms Jiang negotiated the price at which Mr Snell would sell the Property by reference to offers that Ms Jiang said she was receiving from a third party. Thus, ultimately, Mr Zhu agreed to pay $452,000 rather than the asking price of $448,000 (in the Advertisements). Further, according to Mr Zhu, he negotiated with both Ms Jiang and Mr Snell as to the rent to be payable by Mr Snell to Mr Zhu under the "lease back option". Ultimately, Mr Zhu agreed that the rent under the 2013 Lease be $450 per week, rather than $480 per week as originally sought by Mr Zhu. 42The evidence of the parties as to these matters is irreconcilable. Each of Mr Zhu, Mr Snell and Ms Jiang presented as witnesses who were confident that their recollection was correct. But their recollections cannot all be correct. In those circumstances, I must look to any objectively established circumstances that might provide a guide as to whose recollection is, on the probabilities, correct. 43As Keane JA (as his Honour then was) said in Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39, at [34]: "Usually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation". 44There is some objective corroboration of Mr Zhu's account. The Advertisements suggested the possibility of a "lease back" of the Property at $480 per week; which Mr Zhu said was his starting point. The form of the 2013 Lease shows that the figure for "rent" has been changed from $460 to $450, consistently with Mr Zhu's evidence that the rent was agreed at $460 per week, and then changed to $450 per week. Further, in Ms Jiang's affidavit she agreed that while Mr Zhu and Ms Luo were present at the Property she "received a call from another potential buyer which I took in the bedroom". 45Further, Mr Zhu's evidence was to some extent corroborated by Ms Luo. 46However, the objective or "independent" evidence that I find to be most helpful is the form of the Advertisements. 47Ms Jiang composed the Advertisements. They nominated her as the contact person. The Advertisements specified an asking price of $448,000 (not "around the $500,000 mark) and stated that a feature of the Property was its potential as a source of rental income between $480 and $520 per week (not $1 per week, as stated in the Alleged 2012 Lease). 48The effect of Ms Jiang's evidence is that she told Mr Zhu he had a choice: either buy the Property for $450,000 subject to her occupation at nominal rent until 24 June 2015 or buy the Property at $500,000 and obtain vacant possession, and thus be able to lease the property at market rent. 49That proposal would have contradicted the offer made in the Advertisements. It seems improbable that Ms Jiang would have made an offer at such odds with the Advertisements; or that Mr Zhu would have entertained such an offer. 50Further, I think it probable that, as Mr Zhu said, the critical conversations he had with Ms Jiang were in Mandarin. Although both Mr Zhu and Ms Jiang gave evidence before me in English, and without the aid of an interpreter, they both struggled in their adopted tongue. I think it likely that, once they realised the other was a Mandarin speaker, they communicated in that language about important matters. Mr Snell agreed he cannot speak or understand Mandarin. 51In those circumstances, I conclude that Mr Zhu and Ms Jiang did speak in Mandarin about all matters of substance and that, contrary to his evidence, Mr Snell did not hear Ms Jiang say the words set out at [32]. 52On the other hand, Mr Zhu's account of what happened, set out at [40] above, was given spontaneously, after Mr Snell had cross-examined Mr Zhu closely as to his conversations with Ms Jiang, and in response to an open question from me as to what he could recall was said. 53For those reasons, I prefer Mr Zhu's evidence as to what was said. I accept his evidence that Ms Jiang did not show him the Alleged 2012 Lease on this occasion (assuming it then existed). 54However, even if Ms Jiang's account is be preferred, the fact is, as she well knew, that on 11 May 2013, Mr Snell (the legal owner of the Property) and Mr Zhu came to an agreement that reflected neither of the options that she claims to have put to Mr Zhu. Mr Snell agreed to sell the Property for $452,000 with a lease back to Mr Snell at $450 per week (which the parties agree is market rent). That agreement closely reflected the offer inherent in the Advertisements. 55Ms Jiang knew these matters because she composed the Advertisements and then witnessed Mr Snell's signature on the Contract and the 2013 Lease. In my opinion, the correct conclusion is that by so acting Ms Jiang consented to Mr Snell taking this course, notwithstanding the interest she claims to have in the Property. 56Assuming Ms Jiang has an equitable interest in the Property by reason of her payment of the deposit and contribution to its maintenance, the question is one of priority between that interest and the equitable interest that Mr Zhu undoubtedly obtained by reason of the Contract (see for example Butt, Land Law, (6th ed, 2010) at [7.33]). 57The relevant principle was summarised by Privy Council in Abigail v Lapin [1934] AC 491 at 502; 51 CLR 58 at 66: "In the case of a contest between two equitable claimants the first in time, all other things being equal, is entitled to priority. But all other things must be equal, and the claimant who is first in time may lose his priority by any act or omission which had or might have had the effect of inducing a claimant later in time to act to his prejudice." 58In Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR 326, Mason and Deane JJ said at 339 and 341: "Where the merits are equal, the general principle applicable to competing equitable interests is summed up in the maxim qui prior est tempore potior est jure - priority in time of creation gives the better equity. But where the merits are unequal and favour the later interest, as for instance where the owner of the later equitable interest is led by conduct on the part of the owner of the earlier interest to acquire the later interest in the belief or on the supposition that the earlier interest did not then exist, priority will be accorded to the later interest... ...preference should be given to what is the better equity in an examination of the relevant circumstances. It will always be necessary to characterise the conduct of the holder of the earlier interest in order to determine whether, in all the circumstances, that conduct is such that, in fairness and in justice, the earlier interest should be postponed to the later interest." 59Ms Jiang knew of the basis on which the Property was marketed. She composed the Advertisements. She then consented to Mr Snell selling the Property to Mr Zhu on the basis of a lease back in the terms of the 2013 Lease; or at least acquiesced in such conduct. In those circumstances, in "fairness and in justice" to Mr Zhu, her interest in the property must be postponed to that of Mr Zhu; even if the Alleged 2012 Lease was created in 2012 and even if she told Mr Zhu of it.

The 0.25 per cent deposit 60It is common ground that, after Mr Snell and Mr Zhu agreed on the sale price of $452,000, and after they had exchanged contracts, Mr Zhu left the Property in order to get his cheque book. 61There is a conflict of evidence as to what happened when Mr Zhu returned. 62In his affidavit, Mr Snell said that the following conversation occurred when Mr Zhu tendered a cheque for $1,130 drawn in favour of Linton Pitt Lawyers: [Mr Zhu]: "I will get you the signed 66W certificate when I see my solicitor. [Mr Snell]: Hang on, that's only 0.25%. The deposit should be 10%. [Mr Zhu]: That is all I need to give today and the rest can come after with the 66W. [Mr Snell]: I don't think that's right. I need the full amount as soon as possible. [Mr Zhu]: Don't worry, it's not a problem. Of course we have the money." 63Both Mr Snell and Mr Zhu agreed that they knew that a "66W certificate" was for a "waiver of the cooling off period" under the Act (see ss 66S, 66T and 66W of the Act). 64Mr Zhu denied that Mr Snell "raised any issue with the fact that I had paid a deposit of 0.25% of the purchase price". 65Mr Zhu gave the following evidence in the cross-examination by Mr Snell: Q. "Can I ask you why you did make the cheque out for only $1,130? A. Because that's agreed by you. You suggest, you suggest you [sic] pay 0.25 per cent today to my lawyer and then pay the rest when you provide the details of the trust account. Q. Did you have the funds available on that day? A. Yes. Q. For 10 per cent? A. Yes. Q. But you only paid 0.25 per cent? A. Can you just repeat? Q. You only paid 0.25 per cent? A. Yes. That is agreed by both parties, by you, by Mr Snell and my self." 66Mr Zhu denied that any question of "waiving the cooling off period" arose on 11 May 2013. He said that issue did not arise until the next day. 67Once again there is an irreconcilable conflict between the evidence of Mr Zhu and Mr Snell. 68However, I do not find it necessary to resolve the conflict because, even on Mr Snell's account of the matter, Mr Snell: (a)knew that the form of contract called for a 10 per cent deposit; (b)knew that, nonetheless, Mr Zhu tendered a deposit of 0.25 per cent; and (c)agreed that the earlier exchange of contracts proceed on that basis. 69Although Mr Snell asserts he stated that it was not "right" that Mr Zhu only provide a 0.25 per cent deposit (because the form of contract exchanged a short time earlier called for a 10 per cent deposit) he nonetheless accepted Mr Zhu's cheque and allowed the transaction to proceed on the basis that the "full amount" be paid "as soon as possible" (which I would construe to mean within a reasonable time; not, as Mr Snell contended, "right now"). 70Mr Snell gave this evidence: Q. "You knew that your price was going to be $452,000? A. Yes. Q. ...is that your handwriting that filled in the $452,000, $45,200 and the $406,800? A. It might be. Q. Is that your handwriting? A. I would say it is. Q. It is your handwriting? A. Yes. Q. So you knew the price was $452,000? A. Yes. Q. You knew the deposit being 10 per cent of the price, that was required to be paid was $45,200? A. Yes because it says 10 per cent of the price, yes. Q. And you knew that after the deposit was paid there was a balance owing of $406,800? A. Yes. Q. It seems to me, I suggest to you it is unequivocal, that you knew the deposit was $45,200, yet you accepted from my client the sum of $1,130. That's right isn't it? A. I did, as some sort of payment of deposit. Your client told me that that is all he had to pay. I believed him at the time. HIS HONOUR: Q. And you agreed to exchange contracts on that basis? A. Well, on the basis that more would be coming, the balance of the deposit would be coming as soon as possible." 71Mr Snell argued that, after having handed over the cheque for $1,130, Mr Zhu left "immediately and hastily" and that Mr Snell did not have a chance to consider his position. I do not accept this evidence. Mr Snell saw that the cheque tendered by Mr Zhu was for $1,130 and not $45,200. He could have refused to accept the cheque. 72In written submissions delivered after the conclusion of the evidence, Mr Snell said, in respect of the evidence I have set out at [70]: "Upon proper reflection, it is clear that my actions at the time had been reflexive and instinctual. I had been forced to react (or, to fail to react) by the sudden quick departure of Mr Zhu. My resulting actions had been based upon clear and considered reasoning. In all honesty: there had simply been no time to think. When his Honour asked me [the question '[a]nd you agreed to exchange contracts on that basis?'; see [70] above], all that was in my mind were two surface [sic] facts:

1. That I had allowed Mr Zhu to leave with the documentation in hand (in retrospect I could not possibly have prevented him from leave); and
2. That I was currently holding his cheque in my hand. My actions at the time, had been driven by reflex and instinct. On the stand, I had not yet realised that fact. But, his Honour was looking at me, and asking me to explain presently. Not answering his Honour would have been unthinkable. But there WAS no answer. As a 'deer caught in the headlights', my impulse was to hurriedly speculate as to what my own motivations might have been. The answer that I gave was in earnest - but the speculation was carried out on the spot, and without the benefit of a deep consideration of the facts. In retrospect, perhaps the proper answer should have been 'I'm not sure'. Upon the proper, deep consideration that this situation demands, a far more compelling analysis of the events easily prevails, and I describe that analysis above." (emphasis added) 73I do not accept this submission. In my opinion it represents an ex post facto analysis by Mr Snell of what occurred. In my opinion, the true position is as revealed in the passage from Mr Snell's cross-examination that I have set out in [70]. 74Even by his own account of events, once Mr Snell saw that Mr Zhu was proffering a cheque for $1,130 rather than $45,200, he had a choice: either refuse to accept the cheque for $1,130 and declare it to be insufficient compliance with Mr Zhu's obligations under the Contract, or accept it and proceed. Mr Snell chose the second option. 75In my opinion, by acting as I have set out, Mr Snell accepted Mr Zhu's cheque for $1,130 as sufficient compliance with Mr Zhu's obligation to provide a deposit, provided Mr Zhu paid the "full amount" within a reasonable time (which, as we will see, he did). 76A party may waive a provision in a contract that is for that party's benefit: Perri v Coolangatta Investments Pty Limited (1982) 149 CLR 537 at 543, 560 and 565. The provision in the Contract calling for a 10 per cent deposit was for the benefit of Mr Snell, as vendor. In my opinion, by accepting Mr Zhu's cheque, and making the statement to which I have referred, Mr Snell waived the benefit of that provision. 77Mr Snell thereby waived any entitlement he might have had to terminate the Contract on the basis of non-payment of the 10 per cent deposit. 78Alternatively, and again assuming the events were as Mr Snell deposed, the parties conducted themselves on the basis of the agreed or assumed fact that payment of the 0.25 per cent deposit was sufficient compliance by Mr Zhu of his obligations under the Contract, provided that the balance of the 10 per cent deposit called for by the terms of the Contract was paid "as soon as possible". Departure from that assumption would cause detriment to Mr Zhu such that an estoppel by convention arises preventing Mr Snell from denying that agreed or assumed fact: for example Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd (1986) 160 CLR 226 at 244. 79Either way, on his own account of events, in my opinion it was not open to Mr Snell to terminate the Contract unless Mr Zhu failed to pay the "full amount" within a reasonable time.

Sunday 12 May 2013 80At 4.22pm the next day, Sunday 12 May 2013, Ms Jiang sent to Mr Zhu an SMS text message as follows: "Hi, Zhu Hong, we are advised the contract we had is not binding, so we are able to accept a higher offer which is $458,000 with 10 month lease @450 per week at the moment. I am not sure if you are willing to match it or not. Please let me know ASAP. Thanks, [Ms Jiang]." 81At 5.42pm on the same day, Ms Jiang sent a further SMS text message to Mr Zhu: "Hi, Zhu Hong. Sorry to let you know if we cannot receive your positive response by 6pm today. We would like to terminate our contract regarding [the Property] at 6pm today. Regards, Crystal Jiang". 82Later in the evening of 12 May 2013, and after Mr Zhu had read the two SMS messages, he and Ms Jiang had a telephone conversation. 83It is common ground that in that telephone conversation Mr Zhu said to Ms Jiang something to the effect: "You can't do that, we have a signed contract". 84In cross-examination Mr Zhu said that Ms Jiang asked him to increase the contract price by several thousand dollars and that she said "I guarantee this [is] the last time I want to increase the price". 85Mr Zhu then gave this evidence: "I didn't say yes and then she passed the telephone to Mr Snell and I talk to Mr Snell. Mr Snell told me, 'I understand your price is conclude[d] but we receive a better offer and Ms Jiang is now to feel uncomfortable and can you please make a better offer, match this price?' I say it is impossible to increase price but he say, 'Can you increase a few thousand dollars more or do something to make Ms Jiang comfortable?' And I didn't make more comments then he say 'could we waive the cooling period'." 86The "cooling period" to which Mr Zhu referred was the "cooling off period" referred to in s 66S of the Act. 87Mr Zhu continued: "But he [asked] me, 'could you confirm to waive the cooling period?' I say, 'Okay I will talk to my solicitor tomorrow to waive the cooling off period.' And then Mr Snell talked to [Ms Jiang] and I don't know what they talk about, maybe some just very short time, maybe one minute. And then he come back, they say, 'Okay..., Ms Jiang is feel comfortable now and we want to keep' - just he was happy to keep the original contract. Then he passed this one to - before that, I also reminded him to ask his solicitor to give us the details of the trust account tomorrow. Then he passed this one to [Ms Jiang] and [Ms Jiang] talked to me, please - we speaking in Chinese - [s]he say, please waive the cooling off period and [Mr Snell] and me accept to stay with the original contract'." 88Ms Luo gave evidence that she heard Mr Zhu's side of this telephone conversation and heard him say: "Hello, Hong here, just received your SMS" and "You cannot do that, we have a signed contract" and "It is impossible to increase price. The contract has been signed" and "OK, I will talk to my lawyer to waive cooling period tomorrow" and "Please check with your solicitor and advise the details of the trust account please." 89Ms Luo said that the first and second of these statements was made in Mandarin and that the other statements were made in English. 90Ms Luo said that after the telephone conversation Mr Zhu said to her: "It was just a game that the vendor wanted to get higher price. They did that a few times yesterday. I don't think they really want to walk away, because they just asked me waive cooling period." 91Thus, the effect of Mr Zhu and Ms Luo's evidence was that in the conversation on Sunday evening 12 May 2013, Ms Jiang again tried to negotiate an increase in the contract price, Mr Zhu rejected any such increase but did agree to "waive the cooling off period". 92Ms Jiang agreed that Mr Zhu said something to the effect set out at [83], but otherwise denied Mr Zhu's account of events and claimed Mr Zhu made various threats including: "Don't dream about it. I won't let anybody else get it. I will ask the court put an injunction to the contract, drag you for years. I will make your family broken and make you dead. I am very rich and powerful, I will track your parents down in China, make your whole family's life hell". 93Mr Zhu denied making any such threats. 94I accept Mr Zhu's evidence as to what was said. Again, Mr Zhu's evidence was given in response to open questions (first by Mr Snell and then by me) and struck me as having the ring of truth.

The alleged "Notice of Termination" 95Ms Jiang claims that during her conversation with Mr Zhu she added: "Hong Zhu, it is too late, we have terminated the contract and we have dropped a termination letter to your letter box". 96In that regard, Mr Snell said that, prior to the conversation between Mr Zhu and Ms Jiang, and having had no response to the SMS text messages referred to above, he prepared, and delivered to Mr Zhu's home letterbox a "Notice of Termination" in the following terms: "I hereby terminate the contract for sale of land for the property... The grounds for termination are for failure to pay the full agreed deposit required (being 10%) as per clause 2 of the contract of sale. Clause 9 also applies. This termination is effective immediately." 97Ms Jiang said she drove with Mr Snell to Mr Zhu's home and saw Mr Snell place the notice in Mr Zhu's letterbox. 98Mr Zhu denied receipt of the Notice of Termination. Both Mr Zhu and Ms Luo said they checked their letterbox the following day, and denied that any such Notice of Termination had been placed into the letterbox. 99For the reasons I have explained, Mr Snell was not entitled to terminate the Contract on the basis of "failure to pay the full agreed deposit" (or at all). If the "Notice of termination" was delivered to Mr Zhu's letterbox, it had no effect. 100In any event, the objective circumstances to which I refer below point strongly to the probability that, contrary to the evidence of Mr Snell and Ms Jiang, no "Notice of Termination" was delivered. 101Mr Snell did not assert the existence or service of the "Notice of Termination" until he swore his affidavit in these proceedings. He has had ample opportunity to do so. There have been numerous occasions (which I set out below) on which Mr Snell could, in my opinion, have asserted the existence and service of a "Notice of Termination", had that been the truth. He did not do so. Indeed, until the commencement of these proceedings by Mr Zhu, not only did Mr Snell not assert the existence or service of the "Notice of Termination", he did not once assert that the Contract is not binding on him. 102The conclusion to which I have come is that no such notice was served and that, contrary to his evidence, Mr Snell did not purport to terminate the Contract on 12 May 2013, or at all.

Events after 12 May 2013 103If I am wrong in coming to these conclusions, and if Mr Snell was entitled to, and did terminate the Contract on 12 May 2013, by engaging in the conduct to which I refer below, he thereafter consented to its revival. 104In Ogle v Comboyuro Investments Pty Limited [1976] HCA 21; 136 CLR 444, Barwick CJ said, at [16] and 451- 452: "...[I]f the promisee chooses to treat the contract as at an end, in so far as it requires further performance on the part of either party to it, the promisor will be quit of any obligation further to perform the contract, assuming of course that he does not successfully contest the right of the promisee so to treat the contract as at an end...[i]t is also a consequence of the acceptance of the repudiation that the contract, being duly terminated, may not be revived except by consent of the parties. ...[If the contract was duly terminated, no unilateral act of the respondent could displace that termination. Only a consensual act could do so"(cited with approval in Bibby Financial Services Australia Pty Limited v Sharma [2014] NSWCA 37 at [65] per Gleeson JA). 105From this point on, and until the commencement of these proceedings, Mr Snell's conduct is consistent only with the existence of a contract binding him to sell the property to Mr Zhu. Accordingly, even if, contrary to my findings, Mr Snell was entitled to, and did, terminate the Contract on 12 May 2013, my conclusion is that the Contract was thereafter revived with his consent.

Monday 13 May 2013 106Mr Snell said in his affidavit that at 7.47am the following day, Monday 13 May 2013, he spoke by telephone to his solicitor, Mr Joseph, to explain what had happened over the weekend. Mr Snell claimed he told Mr Joseph about the purported "Notice of Termination" and that Mr Joseph said to him: "Actually the Contract is still binding and you are not entitled to terminate unless the purchaser does not pay the balance of the deposit by the end of the cooling off period... Unfortunately the contract is still in effect and you should complete it to avoid potentially serious legal consequences... So please could you now send me a copy of the signed front page of the contract and the lease." 107Mr Snell now contends that advice to be "wrong". At the time, however, he assumed it to be correct. He has certainly acted as if the advice was correct. As I have said, from this point on, Mr Snell's conduct is irreconcilable with his current contention that he terminated the Contract on 12 May 2013. 108Mr Zhu gave evidence that prior to 9:00am on 13 May 2013, he received the following voicemail message from Mr Snell: "Hi Paul Snell here. I spoke to my solicitor and forwarded to him the front page of the contract. He said the first thing we need is the signed 66W then you transfer the 10 per cent to the trust account. The account details are Linton Pitt Lawyers Pty Ltd Law Practice Trust Account, BSB XXX Account No XXX". 109Mr Snell denied leaving a voicemail to this effect. He said he gave Mr Zhu the details of Linton Pitt Lawyers' trust account on 11 May 2013, at or around the time of exchange of contracts. 110I do not accept that evidence. It is likely Mr Snell obtained the details of Linton Pitt Lawyers' trust account during his conversation with Mr Joseph referred to at [106]. It is improbable he would have had those details at the time of exchange. 111Further, at 9.02am, Mr Zhu sent his conveyancer, Mr Murray Groom, an email setting out the text of the voicemail message, including the details of Linton Pitt Lawyers' trust account. It is improbable in the extreme, in my opinion, that Mr Zhu fabricated the detail of the voicemail message for the purposes of his email. No such suggestion was put to Mr Zhu in cross-examination. 112I find Mr Snell did leave a voicemail message for Mr Zhu in the terms set out at [108]. That message makes perfectly clear that Mr Snell regarded the Contract on foot and did not regard the Contract as terminated. 113The terms of the message are thus impossible, in my opinion, to reconcile with Mr Snell's assertion that he had delivered a "Notice of Termination" to Mr Zhu's letterbox the night before. 114Mr Groom replied to Mr Zhu's 9.02am email: "I have already spoken to the vendor's solicitor and he has agreed to hold the deposit in trust. If you would prefer to provide a cheque for the balance of the deposit, that is fine. You will need to get it to the solicitor's office. I will come back to you in relation to the contract and the cooling off period as soon as I can". 115At 1.54pm Mr Joseph sent an email to Mr Snell: "The balance of the 10% deposit is due to be paid at the conclusion of the cooling off period. Ie 5pm on 17 May 2013 or when the 66w certificate is provided. If the deposit is not paid when due then you can terminate the contract. Please let me know if you have any queries." 116I am not sure how to reconcile this advice with the terms of Pt 4 of Div 8 of the Act. However, this was the advice Mr Joseph gave Mr Snell.

Tuesday 14 May 2013 117The following day, 14 May 2013, Mr Joseph sent an email to Mr Groom: "Your client dropped in a bank cheque today for $44,070.00. Please find attached a trust receipt. I have requested that the 0.25% currently being held by our client also be deposited. Please forward a 66W certificate. As discussed please [find attached] special condition to be inserted into the contract. '7. Subject to the vendor entering into a residential lease agreement the purchaser will permit the vendor to remain in possession of the property from the date of completion until 2 May 2014 at a rent of $450.00 per week'." 118Mr Snell said in cross examination that, by this time, he had provided Mr Joseph with the 2013 Lease but that Mr Joseph had advised him that the 2013 Lease was not "valid" because Mr Zhu was not then the registered proprietor of the Property. Mr Snell said that Mr Joseph said he would "try and sort something out" and that Mr Snell had agreed to this course of action. Evidently, Mr Joseph's suggestion of the addition of the special condition referred to in the preceding paragraph was the consequence of this discussion. 119Mr Joseph's email also demonstrates that, as at 14 May 2013, Mr Snell was still in possession of Mr Zhu's cheque for $1,130. Mr Joseph said such cheque was "currently being held by our client". 120Trust account receipts issued by Linton Pitt Lawyers reveal that Mr Zhu's cheque for $1,130 and the bank cheque for $44,070 referred to in Mr Joseph's email were both "entered" on 14 May 2013. Mr Snell must have delivered the $1,130 cheque to Mr Joseph on 14 May 2013. 121Later on 14 May 2014, Mr Groom replied to Mr Joseph's email at [117] above as follows: "Thank you for your email & trust receipt. We are instructed to agree to the insertion of Special Condition 7, as drafted by you... We attach s 66W Conveyancing Act certificate, waiving the purchaser's cooling off rights". 122Mr Groom attached to that email a certificate signed by him pursuant to s 66W of the Act. 123Later on 14 May 2013, Mr Joseph wrote to Mr Snell: "We are pleased to confirm that contracts were exchanged on 11 May 2013. The contract is now binding upon both you and the purchaser and settlement can be expected to take place on or before 24 June 2013. ... We are holding the deposit and will account to you immediately following settlement." 124Mr Snell did not demur.

Events thereafter 125On 17 May 2013, Mr Zhu wrote to Mr Snell and Ms Jiang: "Just got a call from St George Bank [Mr Zhu's proposed mortgagee]. As a normal procedure, they are trying to send an evaluator to inspect the apartment you sold in Waitara... The evaluator will contract you directly to make a appointment. Appreciate if you can allow the evaluator to get in. It is a normal procedure and only take very short time." 126Mr Snell replied: "I have spoken to the valuer and arranged for next Monday." 127The St George Bank valuer inspected the Property on the following Monday, 20 May 2013. 128Several weeks later, on 30 May 2013 Mr Joseph wrote to Mr Groom: "We refer to the above matter and are instructed that our client is looking to purchase an investment property. If they [sic] do find one they would like to use your clients' deposit in order to pay the deposit for the new property. Can you please advise whether your client will agree to the release of the deposit." 129Mr Snell's conduct in permitting the incoming mortgagee's valuer to inspect the Property and himself asking for a release of the deposit is further evidence that Mr Snell regarded the Contract as being on foot. 130On 21 June 2013, Mr Zhu sent an email to Mr Snell: "Just confirm we will attend the pre-settlement inspection at 12:00pm next Monday (June 24, 2013). Expect to meet you at building entrance." 131Mr Snell did not reply to that email but, at around noon on 24 June 2013, rang Mr Joseph and instructed him: "There will be no inspection or settlement, please cancel everything immediately." 132On 24 June 2013, Mr Zhu received a letter from St George Bank confirming a loan in the sum of $468,000 to enable Mr Zhu to complete the Contract. 133Mr Zhu said, and I accept, that this letter merely confirmed an approval that St George Bank had communicated to Mr Zhu several days before 24 June 2013. 134Mr Snell referred to the footer on the letter which includes: "2406132306". 135 Mr Snell submitted that the numbers "2306" in the footer reveal that the letter of 24 June 2013 was only generated at 23.06 hrs on 24 June 2013 (i.e. 11.06 pm). Mr Snell submitted that this showed that Mr Zhu was not "ready, willing and able" to settle on 24 June 2013 because St George Bank only approved the loan at "at 11.06pm that day." 135I do not accept this submission. 136Mr Snell adduced no evidence from St George Bank to explain what conclusions should be drawn from the footer to its letter. St George Bank had provided Mr Zhu and Ms Luo with "approval in principle" for a loan of $600,000 as early as 24 April 2013 and had arranged for its valuer to inspect the Property on 20 May 2013. In those circumstances I see no reason to doubt Mr Zhu's evidence that St George Bank had communicated to him its approval for the loan referred to in its letter of 24 June 2013 prior to that day. 137The following day, Tuesday 25 June 2013 Mr Groom sent an email to Mr Joseph: "We note that parties arranged to meet at the property for a final inspection yesterday, Monday 24 June 2013, at 12.00 noon and the vendor was not in attendance, without explanation. We note settlement was booked for yesterday, Monday 24 June 2013, at 2:00pm...and the vendor cancelled the settlement at approximately 12.15pm without explanation... We are instructed to request an urgent rebooking for settlement and await your advice in relation to this." 138Mr Joseph replied: "We are instructed that our client will not be able to settle on 28 [sic] June 2013. We have not as yet been provided with an alternative settlement date." 139On 5 July 2013, Mr Groom sent an email to Mr Joseph: "We refer to the subject matter, which we note was due & booked for settlement on 24 June 2013 (and cancelled by the vendor). We confirm the purchaser remains ready, willing & able to settle and has been ready willing & able to settle since 20 June 2013. Please advise settlement arrangements so we may complete the contract." 140Mr Joseph forwarded this email to Mr Snell and requested instructions. 141On 8 July 2013, Mr Zhu lodged a caveat on the title of the Property claiming an equitable interest pursuant to the Contract. 142On the same day Mr Joseph sent an email to Mr Groom: "We are instructed that our client is not ready to settle and that he will let me know once he has a date ready".

The Alleged 2012 Lease Revealed 143On 14 July 2013, Mr Snell sent an email to Mr Joseph: "As you know, this contract was subject to an existing tenancy, which was signed/initialled as such by both vendor and buyer prior to exchange. I have attached the existing tenancy agreement between myself and [Ms Jiang] which has been in place since 25th June 2012 and is set to expire on 24/6/15. Please note that no inspections (including pre-settlement inspection) will be permitted until the lease expiry date. Please can you ensure this is passed to the buyer's solicitor/conveyancer as soon as possible." 144There is an elision in this email between the first and second paragraphs. In the first paragraph, Mr Snell can only be referring to the 2013 Lease, whereas in the second paragraph Mr Snell is referring to the Alleged 2012 Lease. 145Mr Snell did not suggest in this email that Mr Zhu had on 11 May 2013 been shown a copy of the Alleged 2012 Lease. Indeed, he asked Mr Joseph to "ensure" a copy was passed on to Mr Zhu's conveyancer. 146I asked Mr Snell why he made this request if, as he asserted, he had seen Ms Jiang show Mr Zhu the Alleged 2012 Lease on 11 May 2013. He replied: "Because...I wasn't aware that Mr Zhu's conveyancer had a copy. So Mr Zhu had a copy, according to me". 147I find that evidence to be implausible. I do not accept that Mr Snell sent a copy of the Alleged 2012 Lease to Mr Joseph merely to enable Mr Joseph to notify Mr Zhu's conveyancer of its existence. There is nothing in Mr Snell's email to suggest he then believed Mr Zhu knew of the Alleged 2012 Lease. I think it probable that Mr Snell's motivation in sending this email was to reveal the Alleged 2012 Lease to both Mr Zhu and his adviser. 148I have mentioned that Mr Fermanis challenged both Mr Snell and Ms Jiang as to the provenance of the Alleged 2012 Lease (see [21] above). 149In view of my findings as to the events of 11 May 2013, particularly concerning the postponement of such equity as Ms Jiang had in the Property to that of Mr Zhu arising from the Contract (see [56] to [59] above), it is not necessary for me to come to any conclusion as to whether, in truth, the Alleged 2012 Lease was entered into in 2012. 150However, I have come to the conclusion that, in all probability, and notwithstanding Ms Jiang's evidence as set out at [20] and [21] above, the Alleged 2012 Lease was created in about July 2013. 151This is for a number of reasons. 152First, as I have said, I found Mr Snell's response to my enquiry about his email of 14 July 2013 to be unconvincing. His email, although confused, suggests to me that he was revealing the Alleged 2012 Lease to Mr Joseph for the first time, and asking Mr Joseph to pass it on to Mr Zhu's conveyancer, so that Mr Zhu would become aware of it for the first time. 153Second, the timing of the revelation of the Alleged 2012 Lease is telling. Completion of the Contract was due on 24 June 2013. At the last minute, Mr Snell instructed Mr Joseph to "cancel everything" (see [131] above). He then gave Mr Joseph the Alleged 2012 Lease which just happened to expire on 24 June 2015: exactly two years to the day after the scheduled settlement date. It seems likely to me that, as Mr Fermanis put to Mr Snell and Ms Jiang, the Alleged 2012 Lease was created in July 2013 in an effort to persuade Mr Zhu not to proceed with the purchase. 154On 15 July 2013 Mr Joseph sent an email to Mr Groom enclosing a copy of the Alleged 2012 Lease. Mr Zhu gave evidence, which I accept, that the first time that he was aware of the Alleged 2012 Lease was on 15 July 2013.

The Notices to Complete 155The Contract provided for a 14 day Notice to Complete. 156On 18 July 2013, Mr Groom signed a Notice to Complete calling for completion of the Contract by 2 August 2013. 157Mr Snell said that he received a copy of that Notice to Complete "via Mr Joseph" on the same day. 158For some reason, on 30 July 2013, Mr Groom sent Mr Joseph (by express post) a further Notice to Complete calling for completion on or before 16 August 2013. 159Mr Joseph acknowledged receipt of the second Notice to Complete by telephone call to Mr Groom. Mr Snell received that document from Mr Joseph on 2 August 2013. 160Mr Snell submitted that: "The second notice was invalid as the plaintiff was not entitled to serve a second Notice to Complete until the proper expiry of the full term of the first Notice to Complete." 161Mr Snell offered no authority for that submission. I do not accept it. The evidence did not reveal why, having served a Notice to Complete on 18 July 2013, Mr Groom served a further Notice to Complete dated 30 July 2013. Whatever may be the reason, the second Notice to Complete was served on Mr Snell no later than 2 August 2013 and thus gave him the 14 day notice called for by the Contract. I see no reason to conclude that the second Notice to Complete was not valid.

Later events 162On 14 August 2013, Mr Joseph informed Mr Groom that he was no longer acting for Mr Snell but that: "We will continue to hold the deposit in trust until we are authorised to release it." 163On 15, 20 and 27 August 2013, Mr Groom sent emails to Mr Snell enquiring as to who was acting for him, asserting that Mr Zhu remained ready, willing and able to settle and seeking to arrange a settlement. 164In September 2013, Mr Zhu retained Mr Michael Grogan, solicitor, to act for him. On 12 September 2013, Mr Grogan wrote to Mr Snell calling for completion of the Contract and stating: "Our instructions are to make application to the Supreme Court seeking an order that you perform the obligations imposed on you under the Contract." 165On 8 October 2013, Ms Jiang lodged a caveat on the title of the Property claiming: "Equity interest pursuant to financial contribution towards the purchase and maintenance of the property". 166The facts relied upon in relation to that interest was said to be: "Monetary contribution towards the purchase and maintenance of the property totalling $67,760. The property is the main residence of the caveator and the proprietor due to the de facto relationship." 167On 13 October 2013, Mr Snell replied to Mr Grogan's letter of 12 September 2013: "Due to your client, the purchaser's [Mr Zhu], refusal to acknowledge the existing tenancy agreement which the contract of sale was originally signed for, the settlement was been delayed. I now need to bring to your attention, that a caveat has since been lodged upon this property by my spouse [Ms Jiang], who has a major financial contribution/interest in this property. Ms Jiang does not agree with the sale of this property and refuses to move out of this property under any circumstances. This now means I am not going to be able to settle this matter due to the said caveat being lodged. I can see no other option than to mutually rescind this contract of sale and return your client's deposit in full." (emphasis added) 168This was the first occasion on which Mr Snell had asserted in writing that Ms Jiang had an interest in the Property. Mr Snell however made no mention in this letter of any "Notice of Termination". He did not suggest the Contract was not binding. On the contrary, he spoke to settlement being "delayed" and proposed that the Contract be "mutually rescinded" because of Ms Jiang's alleged interest and that the deposit be returned. 169A week later, on 20 October 2013, Mr Snell evidently had a change of heart and wrote a further letter to Mr Grogan: "Referring to my previous email to you dated 13th October 2013, I received no reply so will assume that your client does not wish to agree to mutual rescission. Despite the refusal of your client to adhere to what was originally agreed upon signing the contract on premises [sic] on Saturday 11th May 2013 and refusal to acknowledge this injustice as being at the root of this case and being the reason for settlement previously being delayed, I have decided to proceed to settlement in order to close the matter. Please be advised that settlement will now be scheduled for Monday 4th November 2013. I would expect your prompt response." (emphasis added) 170Once again, Mr Snell did not assert the Contract had been terminated; indeed he proposed settlement for 4 November 2013. 171On 29 October 2013, Mr Grogan replied: "I have discussed your fax of 20th October with my client. I did not receive your email of 13th October 2013. My client will need to arrange his bank to attend settlement. I assume on settlement you will be remaining in the property $450/week. Please confirm that this is in fact the case." 172Mr Snell replied on the same day: "I will have moved out prior to settlement so will not be remaining in the property. This is due to mental health and safety concerns. I need to bring your attention to the following: 1) My relationship with my spouse, [Ms Jiang], has ended. 2) Ms Jiang has since placed a caveat on the property. 3) After settlement you will have to liaise directly with Ms Jiang as tenant, as you are aware she is covered by an existing tenancy agreement." 173Again, Mr Snell did not contend the Contract had been terminated. He simply asserted that Mr Zhu would have to deal with Ms Jiang. 174Mr Zhu then retained his current solicitor, Mr Anthony Liberiou, from Benchmark Conveyancing Lawyers. On 4 November 2013, Mr Liberiou wrote to Mr Snell: "We have been advised by Mr Zhu to act on his behalf in relation to his property dispute/settlement. Please note that we are the only solicitors who act for Mr Zhu in relation to this matter. Our contact details are below. Please notify us of the details of any solicitor or law firm that may be acting on your behalf." 175On 6 November 2013, Mr Snell wrote to Mr Liberiou including: " ... 2. You will be aware that my spouse has lodged a caveat on this property, so despite me being willing to settle, her refusal to remove the caveat under any circumstances has frustrated this contract so the completion is impossible. Due to these reasons, I propose a mutual rescission of this contract and a return of the full deposit to your client." (emphasis added) 176In this letter, far from asserting that the Contract had been terminated, Mr Snell stated that although he was willing to settle, the Contract had been "frustrated" by Ms Jiang's conduct. He again proposed "mutual rescission". 177On 22 November 2013, Mr Snell caused Land and Property Information to serve on Mr Zhu a lapsing notice pursuant to s 74J of the Real Property Act 1900 in respect to Mr Zhu's caveat lodged on 8 July 2013. 178Service of that notice prompted the commencement of these proceedings by Mr Zhu. On 6 December 2013, Slattery J ordered that the caveat be extended until further order. The matter was referred to the Expedition List and set down for hearing.

The purported termination of 12 May 2013 179For the reasons that I have set out at [95] to [102] above, my finding is that Mr Snell did not serve on Mr Zhu any "Notice of Termination" on 12 May 2013, or at all. 180Further, for the reasons set forth at [74] to [79] Mr Snell was not, in any event entitled to serve any such "Notice of Termination". 181In any event, for the reasons set out at [103] to [105], and assuming Mr Snell was entitled to, and did terminate the Contract on 12 May 2013, he has by his subsequent conduct consented to its revival.

Did Mr Zhu have notice of any equitable interest of Ms Jiang in the Property prior to exchange of contracts? 182For the reasons set forth in [46] to [55] I am not satisfied that Ms Jiang or Mr Snell told Mr Zhu of any interest Ms Jiang might have in the Property prior to exchange of contracts on 11 May 2013. 183In any event, even if Ms Jiang did make such disclosure, for the reasons I have set forth in [56] to [59], such equitable interest as Ms Jiang has in the Property is postponed to Mr Zhu's equitable interest as purchaser.

Did Mr Snell and Ms Jiang execute a Tenancy Agreement in 2012? 184For the reasons set forth at [143] to [154] I am not satisfied that Mr Snell and Ms Jiang executed the Alleged 2012 Lease in 2012. In my opinion, it is probable that Mr Snell and Ms Jiang executed that document in or about July 2013. 185In any event, even if, contrary to that finding, Mr Snell and Ms Jiang executed the Alleged 2012 Lease in 2012, and even, as Ms Jiang contends, she informed Mr Zhu of the Alleged 2012 Lease prior to exchange of contracts, such interest of Ms Jiang in the Property as was thereby revealed is postponed to Mr Zhu's equitable interest as purchaser (see [56] to [59] above).

Was the 30 July 2013 Notice to Complete valid? 186I see no basis upon which to conclude that 30 July 2013 Notice to Complete was otherwise than valid (see [155] to [161] above).

Has Mr Zhu engaged in duress, undue influence or unconscionable conduct? 187I am not satisfied that Mr Zhu has engaged in any relevant duress, undue influence or unconscionable conduct. 188If, as Ms Jiang contends, and Mr Zhu denies, Mr Zhu said words to the effect set out at [92] above, such conduct did not cause either of the defendants to take, or refrain from taking, any step relevant to the issues in these proceedings.

Is Mr Zhu entitled to specific performance? 189In light of these conclusions, on the face of it, Mr Zhu is entitled to have the Contract specifically performed. 190Mr Snell submitted that there were a number of reasons why that result should not follow.

Is Mr Zhu ready, willing and able to complete? 191First, Mr SnelI submitted that Mr Zhu was not, at any relevant time, ready, willing and able to complete the Contract. 192I do not accept that submission. 193For the reasons I have set forth at [132] to [136], I am satisfied that Mr Zhu was ready, willing and able to complete the Contract as at 24 June 2013, the date specified in the Contract for completion. 194The evidence before me establishes that Mr Zhu now has on deposit with St George Bank a sum in excess of $600,000. He is thus able to complete the Contract.

Impossibility 195Mr Snell submitted that specific performance should not be granted because completion of the sale is "impossible" as the amount now owing by Mr Snell to his mortgagee (CBA) exceeds the amount payable by Mr Zhu to Mr Snell on settlement. 196No doubt, the terms of CBA's mortgage over the Property (which was not in evidence) entitle CBA to refuse to discharge that mortgage, absent payment of all monies owing to it. 197However, Mr Snell adduced no evidence from the CBA as to what its attitude would be to discharging its mortgage over the Property upon tender to it of the entire net proceeds of sale of the Property. 198In the absence of such evidence, I see no reason to doubt that the CBA would discharge its mortgage provided it was paid all of the net proceeds of sale. 199There is no suggestion in the evidence that the price at which Mr Snell agreed to sell the Property to Mr Zhu was otherwise at market value. 200The other basis on which Mr Snell contended that completion would be impossible is the existence of Ms Jiang's caveat. 201However, having held that such interest as Ms Jiang has in the Property is postponed to that of Mr Zhu under the Contract, I propose to order that Ms Jiang's caveat be removed.

Hardship 202Mr Snell submitted that a further reason specific performance should not be granted is that to do so would cause hardship to him and Ms Jiang, whereas no hardship would be caused to Mr Zhu were specific performance denied. 203As to the hardship of the defendants, Mr Snell submitted that: "As of 2 April 2014 [Mr Snell] has no current income. [Mr Snell's] employment contract expired and he must seek a new job. It would not be possible to find somewhere else to live, as paying rent would be impossible. [Mr Snell] would seek relief from [CBA] via their compassionate program to be able to pay the mortgage whereby interest payments are waived for six months. Ms Jiang has no job or family or relatives in Australia where she could reside. It would not be possible for her to find somewhere else to rent. [Ms Jiang] should also no longer be compelled to live in the Property with [Mr Zhu] as landlord." 204I would not be prepared to deny Mr Zhu specific performance on the basis of hardship unless the defendants could show that the granting of equitable relief would impose hardship amounting to oppression far outweighing the inconvenience to Mr Zhu if left to a remedy in damages (for example per Nettle J in IGA Distribution Pty Ltd v King and Taylor Pty Ltd [2002] VSC 440 at [243]). 205As the authors, Young, Croft and Smith, On Equity, (2009) at [17.370], observe, in Patel v Ali [1984] 1 Ch 283 at 288 it was held that: "[O]nly in extraordinary and persuasive circumstances would hardship provide an excuse for resisting performance of a contract for sale of immovable property." 206Further, what must be shown is hardship caused by the proposed grant of specific performance, not hardship caused by the bargain made by the parties (David Jones Ltd v Perpetual Ltd [2006] QSC 337 at [158]). 207Here, such hardship as Mr Snell and Ms Jiang may suffer if specific performance is granted is a result of the Contract entered into by Mr Snell, with Ms Jiang's knowledge, and the manner in which Mr Snell and Ms Jiang have resisted Mr Zhu's claim to enforce the Contract. 208If Mr Snell and Ms Jiang are now in a position of hardship that is a product of their own making, and certainly no fault of Mr Zhu's. 209Mr Snell submitted that Mr Zhu will suffer no hardship as he was: "Purchasing the property as investment property for his portfolio of existing properties. He has no 'special interest' in this property and it has no unique value to him. The Property is an average, common unit in the locale. To [Mr Zhu] it is merely an opportunity for profit." 210Specific performance is usually granted in relation to contracts for the sale of land, even where the plaintiff has contracted to purchase the land solely for investment purposes (Pianta v National Finance & Trustee Ltd (1964) 180 CLR 146 at 151). 211I see no reason why the usual course should not be followed. Mr Zhu contracted to buy the Property; not some other property. There is no reason why he should be denied that for which he contracted.

Would damages be an adequate remedy? 212For the same reasons, my conclusion is that damages would not be an adequate remedy.

Relief against forfeiture and s 55(2A) of the Act 213Alternatively to his claim for specific performance, Mr Zhu sought an order for the return of the deposit either by way of relief against forfeiture or under s 55(2A) of the Act. 214In view of the conclusions to which I have come as to the substantive issues in the proceedings, it is not necessary for me to decide these questions.

Conclusion 215Mr Zhu is entitled to specific performance of the Contract. 216I make a declaration in accordance with paragraph 1 of the Amended Summons. 217I make orders in accordance with paragraphs 2, 7, 8, 10, 11 and 13 of the Amended Summons. 218I will make an order to the effect of paragraph 9 of the Amended Summons in chambers on provision of an appropriate settlement adjustment schedule. 219I grant the plaintiff leave to apply on short notice for any further orders needed to give effect to these reasons.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 April 2014