Baju Henley Square P/L v Bruce - [2015] SASC 169

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
BAJU HENLEY SQUARE P/L v BRUCE
[2015] SASC 169
Judgment of The Honourable Justice Bampton
28 October 2015
CONVEYANCING - MATTERS ARISING AFTER COMPLETION - GENERALLY
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - VENDOR'S REMEDIES - SPECIFIC PERFORMANCE
Defendant contracted with the plaintiff to purchase an apartment off the plan in a development at Henley Beach (the Contract) – settlement scheduled for 15 February 2012 – defendant commissioned an internal measurement survey of the apartment on 15 February 2012 – following receipt of the survey the defendant served a Notice of Termination on the plaintiff asserting that the plaintiff had breached the Area Condition of the Contract – defendant claimed he had contracted for an apartment of 130 square metres and asserted that a marketing plan drawing (the Drawing) bearing the notation 130 square metres is of contractual effect – plaintiff served a Notice to Complete on the defendant on 24 February 2012 nominating settlement for 13 March 2012 – defendant served a second Notice of Termination asserting that the plaintiff had failed to obtain development approval by the satisfaction date provided for in the Contract – plaintiff seeks specific performance of the Contract – defendant by cross-claim seeks declarations that the plaintiff has breached the Area Condition or the Development Approval Condition of the Contract and seeks a return of the deposit he paid plus interest.
Whether the Drawing is of contractual force and effect – whether the Architect’s Plans depict the area of the apartment – whether the area of the apartment includes the area occupied by nibs – whether the area of the apartment includes an additional area to the edge of the balcony slab – whether the plaintiff has established he validly terminated the Contract for a breach of the Area Condition – whether the defendant has established he validly terminated the Contract for a breach of the Development Approval Condition – whether the plaintiff entitled to specific performance.
Held:
1. The Drawing is not of contractual force and effect.
2. The first Notice of Termination is invalid.
3. The second Notice of Termination is invalid.
4. The plaintiff is entitled to specific performance.
Community Titles Act 1996 (SA) s 9, s 19(4), s 28(1); Development Act 1993 (SA) s 32, s 33, s 40; Development Regulations 2008 (SA) reg 15, reg 42, reg 46, reg 47, Sch 5, Sch 6, referred to.
City of Marion v Paior (2013) 117 SASR 223; CSS Investments Pty Ltd v Lopiron Pty Ltd (1987) 16 FCR 15; Jones v Dunkel (1959) 101 CLR 298; Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield [2004] SASC 373; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; Rivergum Homes Pty Ltd v The District Council of the Copper Coast [2004] SASC 376; Sullivan v Glennon (1986) 68 ALR 399; Tiplady v Goldcoast Carlton Pty Ltd (1984) 3 FCR 426; Turner v Bladin (1951) 82 CLR 463, considered.

BAJU HENLEY SQUARE P/L v BRUCE
[2015] SASC 169
Civil
BAMPTON J.
Overview
The Contract
The First Notice of Termination
The Second Notice of Termination
The Proceedings
The cross-claim
Issues for determination
Glossary
The Evidence
Craig Bruce’s evidence
Karen Bruce’s evidence
Construction of the Contract
Special Conditions addressed by clause 6
The alleged breach of Special Condition 4.1.1 and invoking of clause 6.2
The alleged breach of Special Condition 1.1.1 and invoking of Special Condition 1.4
The First Notice of Termination
The measurements and surveying of Lot 221
Mr Andrew’s first report dated 16 June 2013
Mr Kennedy’s first report dated 19 July 2013
Mr Andrew’s further opinion dated 10 September 2014
The measuring of the balcony
Joint statement
Resumption of Mr Andrew’s evidence
Mr Kennedy’s evidence
Analysis of the validity of the First Notice of Termination
The Drawing
The Second Notice of Termination
Development Approval for the Development
Philip Smith
Mr Bruce’s submissions regarding the Second Notice of Termination
Baju’s submissions regarding the Second Notice of Termination
Analysis of the Second Notice of Termination
Conclusion
Findings
Remedy
Ready, willing and able
Allegations of deception and dishonesty made during closing submissions
Damages are an inadequate remedy

Overview

In early 2010 Craig and Karen Bruce decided that a three bedroom apartment to be built on the second level of the H₂O development at Henley Beach would suit them as an investment property. On 1 March 2010, Mr Bruce entered into a contract with Baju Henley Square Pty Ltd (Baju) to purchase proposed Community Lot 221 (Lot 221) including two car parks in a proposed Community Scheme (the Contract). Mr Bruce paid a deposit of $119,000 toward the purchase price of $1,190,000.
Settlement was due to take place on 15 February 2012. However, on 15 February 2012, Mr Bruce commissioned an as constructed internal measurement survey, following which he was informed that the area of Lot 221 had been calculated at 122 square metres.
It is Mr Bruce’s case that he had contracted for an apartment of 130 square metres, measured in accordance with s 19(4) of the Community Titles Act 1996 (SA) (the CTA). Mr Bruce served a Notice of Termination on Baju, dated 20 February 2012,[1] alleging Baju had breached the Area Condition of the Contract (the First Notice of Termination).
[1] Exhibit D4.
On 24 February 2012, Baju served a Notice to Complete on Mr Bruce nominating 13 March 2012 as the date for settlement.
Mr Bruce did not settle and served a second Notice of Termination on 20 March 2012,[2] this time asserting Baju had failed to comply with the Development Approval Condition of the Contract by not obtaining Development Approval by the Satisfaction Date of 30 June 2011 (the Second Notice of Termination).
[2] Exhibit D6.
The Contract
The Contract was for the sale and purchase of a yet to be created community Lot 221 in a community plan of division to be prepared and deposited in the Lands Titles Office (the LTO) by the Registrar General.
The Contract was a Real Estate Institute of South Australia (REISA) standard form residential contract[3] comprising:
·REISA residential contract standard terms, conditions (REISA terms and conditions) and a Schedule (Schedule) dated and executed on 1 March 2010.
·A document titled “Special Conditions” (Special Conditions).
·Annexure A – eight architectural drawings (the Architect’s Plans). One of the Architect’s Plans is highlighted in pink highlighter denoting Lot 221. The highlighting bears Mr Bruce’s initials.
·A marketing plan drawing (the Drawing) provided to Mr Bruce with the Contract documents depicting the internal layout of Lot 221 bearing the words “Area Total 130sqm”.
·Annexure B (Guarantee & Indemnity), Annexure C (Schedule of Finishes, Fixtures and Fittings), Annexure D (Indicative Scheme Description), Annexure E (Indicative Primary and Secondary Residential By-Laws), and Form 1 – Vendors Statement.
[3] Exhibit D2.
The First Notice of Termination
In the First Notice of Termination served on 20 February 2012,[4] Mr Bruce alleged Baju had breached clause 4.4.1 of the Special Conditions (the Area Condition).
[4] Exhibit D4.
The Second Notice of Termination
In the Second Notice of Termination, dated 21 March 2012,[5] Mr Bruce alleged Baju had failed to fulfil clause 1.1 of the Special Conditions (the Development Approval Condition).
[5] Exhibit D6.
The Proceedings
Baju commenced proceedings against Mr Bruce seeking specific performance of the Contract. There is no dispute that Baju was ready, willing and able to deliver title on 15 February 2012 and 13 March 2012 and that it remains ready, willing and able.
Mr Bruce denied Baju’s claim asserting he was entitled to terminate the Contract.
The cross-claim
Mr Bruce has cross-claimed, seeking declarations that Baju has breached the Area Condition and the Development Approval Condition of the Special Conditions and a return of the deposit he paid plus interest or, alternatively, damages for breach of contract.
Mr Bruce alleged that the Contract was for a lot with an area of 130 square metres “being the area stated on the Architect’s Plan (as defined in Special Condition 26), incorporated into the Contract pursuant to clause 3.1.2 of the Special Conditions”. Mr Bruce seeks to establish that the Drawing is part of the Architect’s Plan(s) and that by reference to it Lot 221 was to have an area of 130 square metres measured in accordance with the CTA.
Mr Bruce pleaded in paragraph 8.3 of his cross-claim that, measured in accordance with s 19(4) of the CTA, the area of Lot 221 is 122 square metres. However, as Mr Bruce’s surveying expert agreed with the field measurements of Baju’s surveying expert, the dispute between them was confined to two discrete measurements. The first was the measurement of two nibs or protrusions made by the frames and mullions of the bay window to bedroom 3 of 0.05 square metres included by Baju’s expert. Mr Bruce argued that the nibs form part of the eastern boundary of Lot 221 which are structural walls and are therefore not part of the title to Lot 221. He contended that logically no space occupied by the nibs should be included in the area to be measured.
The second was an area of 0.38 square metres to the extent of the balcony also included by Baju’s expert in his area calculation. This measurement was also excluded by Mr Bruce’s expert.
Accordingly, Mr Bruce’s allegation is that, measured in accordance with s 19(4) of the CTA, the area of Lot 221 is 123.35 square metres.
Mr Bruce alleged that Baju changed the area of Lot 221 from 130 square metres by more than five per cent without obtaining his consent, thereby breaching the Area Condition.
As I was satisfied that Mr Bruce carried the persuasive and evidentiary onus of demonstrating Baju had breached the Contract in the manner he has alleged and pleaded into issue by Baju’s defence to the cross-claim, I ordered that he be dux litis.
Issues for determination
Essential to Mr Bruce’s case is establishing that the Drawing is of contractual effect. The issues for my determination are whether the Drawing is of contractual effect and whether Mr Bruce has established he validly terminated the Contract as a result of Baju’s alleged breach or non‑fulfilment of the Area Condition or the Development Approval Condition.
If Mr Bruce fails to prove his case, the issue for determination then becomes whether Baju is entitled to specific performance.
Glossary
It may be of assistance if I explain at this juncture the role of persons and entities mentioned in this matter:
·Baju is the plaintiff, vendor and agent of the registered proprietor of Lot 221, Bayspring Pty Ltd, pursuant to clause 4.7 of the “Special Conditions” for the purpose of creating the Community Scheme and the transfer of Lot 221 at settlement.
·Bayspring Pty Ltd is the developer of the H₂O and Baju apartments at 340 Seaview Road Henley Beach and registered proprietor of Lot 221 (the Developer).
·The Development is the development of the H₂O and Baju apartments.
·The City of Charles Sturt is the local council which assessed and approved the Development (the Council).
·Julianne Price Real Estate was Baju’s agent. Julianne Price was the person Mr and Mrs Bruce dealt with in relation to Lot 221.
·Craig Bruce is the defendant and purchaser of Lot 221.
·Karen Bruce is Craig Bruce’s wife.
·Robert Andrew is a licensed surveyor and the principal of Andrew & Associates, the surveying firm engaged by Mr and Mrs Bruce.
·Chad Heinrich is a trainee licensed surveyor who carried out the survey of Lot 221 on 15 February 2012 under Mr Andrew’s supervision.
·Ross Kennedy is a licensed surveyor engaged by Baju.
·Phillip Smith is a senior town planner with the Council, called by Mr Bruce as a witness.
·North East Conveyancers is Baju’s conveyancer.
·The Community Plan for the Development is deposited plan C27018 deposited on 1 February 2012 (C27018).[6]
[6] Exhibit P4.
The legislation and the guidelines referred to in relation to defining, surveying or measuring Lot 221 are:
·Section 19(4) of the CTA which provides that:
Subject to any explicit statement to the contrary in a strata plan, the following principles apply to the definition of a lot by strata plan—
(a)     where a boundary is defined by reference to a wall or fence—the boundary is the inner surface of the wall or fence;
(b)     where a boundary is defined by reference to a floor—the boundary is the upper surface of the floor;
(c)     where a boundary is defined by reference to a ceiling or roof—the boundary is the under surface of the ceiling or roof.
·The Plan Presentation Guidelines (the PPG), which describe the requirements for property related plans lodged in the LTO. Section 9 describes the requirement for community plans.
·Property Council of Australia Guidelines (the PCA Guidelines):
-       Property Council of Australia – Method of Measurement for Lettable Area.
-       Property Council of Australia – Method of Measurement for Residential Property.
The legislation referred to regarding the Development Approval of the Development is:
·the Development Act 1993 (SA) (the Development Act); and
·the Development Regulations 2008 (SA) (the Development Regulations).
The Evidence
Mr Bruce and Mrs Bruce both gave evidence. Mr Bruce also called a licensed surveyor, Robert Andrew, and a senior town planner with the Council, Philip Smith, to give evidence.
The licensed surveyor, Ross Kennedy, was the only witness called by Baju.
In discussing Craig and Karen Bruce’s evidence, I will refer to Lot 221 as “the apartment” (as they did in their evidence) and then revert to referring to it as “Lot 221” for the balance of my reasons.
Craig Bruce’s evidence
Mr Bruce gave evidence about his discussions with Baju’s sales agent, Julianne Price, prior to execution of the Contract. The import of his evidence was that the size of the apartment was important to him and his wife.
Mr Bruce’s reasons for choosing the apartment were that it would be on the second level; have three bedrooms; and have better quality fixtures and fittings than the Baju apartments which were to be built next to the H₂O apartments.
Mr Bruce said that he was told by Julianne Price that the apartment would be ‘seven star luxury’. In cross-examination, he agreed that he wrote an email to Julianne Price that said “we were promised five star luxury”.
He remembers the Drawing being in the Contract but could not recall where.
Mr Bruce gave evidence that he visited the site every couple of weeks during the period of construction to see how it was coming along.[7]
[7] T68.
Mr Bruce received a letter from North East Conveyancers, dated 2 December 2011, stating that Practical Completion of the apartment was imminent and inviting him to inspect prior to settlement.[8] He described being unbelievably disappointed at what he saw. He said “we just wouldn’t have paid that amount of money for this property if we’d seen it completed, it was very disappointing”.[9]
[8] Exhibit P1.
[9] T70.
He said that, given the amount of money that they had spent and the expectation set by Ms Price, they assumed they were going to be walking into a beautiful, modern, spectacular apartment. Instead, Mr Bruce said it was just incredibly disappointing and you could barely swing a cat in the living room.
Mr Bruce said his mental impression of the apartment was not specifically informed by the Drawing. It was informed partly by it and also by conversations with Ms Price and another person. He said it was not formed by the Architect’s Plans. Mr Bruce said that he did not compare or measure the actual area of the apartment with the living space detailed on the Drawing. Mr Bruce claimed to have absolutely placed reliance on the internal dimensions of rooms as shown on the Drawing and yet he did not know whether the internal areas were or were not consistent with the internal areas depicted on the Drawing. He said the living space, being the living room and the kitchen, was not unliveable but that there was not a lot of it.
Following inspection of the property, Mr Bruce and his wife decided they would sell the property “for the right price”.
Mr Bruce was notified of Practical Completion by letter dated 19 December 2011.[10]
[10] Exhibit P16.
In January 2012, Mr Bruce sought access to the apartment so that his sales agent could show prospective buyers through it.[11]
[11] Exhibit P17.
The date nominated for settlement by Baju in an email dated 2 February 2012 pursuant to Special Condition 9.3 was 15 February 2012.
In the course of arranging finance with Citibank to purchase the apartment, Mr and Mrs Bruce were informed by Citibank that its valuer had measured the apartment at 110 square metres. Mrs Bruce asked her father to measure the property. Mr Bruce said his father-in-law’s measurement came in smaller than the 130 square metres they were expecting.
Thereafter, Mrs Bruce arranged for a survey to be performed by the surveyors Andrew & Associates. Andrew & Associates reported on 15 February 2012 that their survey calculated the internal area of the apartment at 122 square metres.[12]
[12] Exhibit D3, TB50.
Following receipt of the survey, Mr Bruce said he and his wife sought legal advice. Upon receiving that advice, they were made aware of clause 4.4.1 of the Special Conditions.
Settlement did not occur on 15 February 2012.
Mr Bruce then purported to terminate the Contract by a Notice of Termination dated 20 February 2012, citing a breach of the Area Condition.[13]
[13] Exhibit D4.
Following receipt of a Notice to Complete, issued by Baju on 24 February, requiring completion by 13 March 2012, Mr Bruce then became aware that there was a problem with the Development Approval obtained by the vendor. He then purported to terminate the Contract by a Notice of Termination dated 21 March 2012 on the ground that the Development Approval required by Special Condition 1.1 was not obtained by the Satisfaction Date.[14] Mr Bruce agreed in cross-examination that his reasons for terminating were not in fact related to Development Approval or eight days’ delay in the stamping of a document.[15]
[14] Exhibit D6.
[15] T84/38.
Mr Bruce admitted that he had not read the Contract to the level he should have. He said he was not aware at the time he signed the Contract of the provision in Special Condition 4.4.1 which stipulated that the vendor may not without the purchaser’s written consent change the area of the purchased lot by more than five per cent.
Karen Bruce’s evidence
Karen Bruce was very much involved in her husband’s decision to purchase the apartment. Mrs Bruce undertook her own research and found that they would be paying a little bit more per square metre than comparable apartments in the Holdfast Shores complex. She said she was told the finish would be “luxurious, opulent, state of the art” and that it would be “seven stars”.
Mrs Bruce’s evidence was that she used her real estate licence to access RP Data online in order to look at the sale prices for other apartments of various sizes. When asked how RP Data knows the area of a property transferred which is registered in the LTO, she said “the areas are probably taken from the sales agents’ guides or from real estate information”. Mrs Bruce said that she really had no idea about how the information as to area was compiled by RP Data when she searched its database to find comparative apartment sales on a square metre basis.

Mrs Bruce said she was present when the Contract was signed. She could not recall where the Drawing was located in the Contract on the day it was signed.
Mrs Bruce obtained permission to enter the apartment to measure for curtains before the invitation to inspect was sent to Mr Bruce. She said that she was horrified because it was so small and it had an overall feeling of not being opulent.
Upon viewing it a second time with her husband, she said it looked nicer because it was clean but it was not what they were promised.
Mrs Bruce said that they were not able to obtain finance without the help of her father. She and her husband sought finance from Citibank. Upon learning of Citibank’s valuation and measurement of the area, she arranged for her father to measure the area of the apartment. Mrs Bruce said that she was told that settlement was due on 15 February 2012 and she contacted the surveyors Andrew & Associates that day about measuring the apartment. She said she alerted Mr Chad Heinrich of Andrew & Associates to the five per cent tolerance clause and that the measurement came back at 122 square metres.[16]
[16] Exhibit D3.
In cross-examination, Mrs Bruce said the apartment looked small compared to a property they owned that was 155 square metres.
I accept both Mr and Mrs Bruce’s evidence apart from their assertions that they were promised Lot 221 would be 130 square metres. Their evidence is not of assistance in determining the issues in dispute. It does not point to any fact or circumstance relevant to the Contract. The thrust of their evidence was that size was important to them and that they were disappointed with what they saw upon practical completion.
Construction of the Contract
Before I discuss the surveyors’ and the planner’s evidence, I will discuss the relevant provisions of the Contract.
In order to obtain the declarations he seeks, Mr Bruce must establish that he validly terminated the Contract for the alleged breaches of the Area Condition and/or the Development Approval Consent.
Considering his entitlement to the declarations requires an understanding of the meaning and effect of the Special Conditions alleged to have been breached in the context of the Contract as a whole.
The relevant provisions of the REISA terms and conditions are:
·Clause 1 which is the interpretation clause;
·Clause 1.14 provides that the land means the land described in the Schedule;
·Clause 1.23 provides that “Special Condition” means a special condition set out in the Schedule;
·Clause 2 contains provisions dealing with the agreement for sale and purchase;
·Clause 3 provides that the Contract price is as set out in the Schedule;
·Clause 6 is concerned with the Special Conditions as defined by clause 1.23. It provides that the party required to comply with a Special Condition must make every reasonable endeavour to do so. If the Special Condition is not complied with before the date specified in the Special Condition (or of no date is specified, within 21 days of the date of this Agreement) then;
- clause 6.1; if the failure to comply with the Special Condition is not due to the neglect or default of the Vendor or the Purchaser, the Vendor or, unless the purchaser has waived such condition and communicated such waiver in writing to the Vendor or the Agent, the Purchaser, upon giving seven days’ written notice to the other party, may terminate this Agreement and upon its termination (unless the condition is complied with in the meantime) all monies paid under this agreement must be re-paid to the Purchaser and all rights and liabilities under this Agreement, will cease; or
- clause 6.2; if the failure to comply with a Special Condition is due to the neglect or default of the Vendor or the Purchaser, the party not in default may terminate this Agreement. “If the Vendor is in default, the Purchaser may, upon giving seven days written notice to the Vendor, terminate the agreement and all monies paid by or on behalf of the Purchaser must be repaid to the Purchaser upon the termination or otherwise clause 7.2 will apply” …;
·Clause 7 contains provisions dealing with default;
·Clause 8 contains miscellaneous provisions. In particular, clause 8.10 provides that the other terms and conditions set out in the Schedule ‘Other Conditions’ form part of the Contract.
The relevant Items of the Schedule are:
·Item D of the Schedule describes the Land as “proposed community Lot 221 as shown in the attached Architect’s Plan including 2 car parks”;
·Item H of the Schedule which provides that the Contract price was $1,190,000;
·Item R which identifies that clause 6 of the general provisions prescribes the Special Conditions;
·Item S which provides that other conditions provided for in clause 8.10 are “As per Special Conditions attached”.
The relevant Special Conditions are:
·Special Condition 1.1 provides that the sale and purchase of the purchaser’s lot is conditional upon the vendor on or before the Satisfaction Date:
1.1.1obtaining the Development Approval on terms satisfactory to the vendor …
·Special Condition 1.2 provides that the vendor must use its reasonable efforts to satisfy the conditions in Special Condition 1.1.
·Special Condition 1.4 provides that if a condition in Special Condition 1.1 is not fulfilled by the Satisfaction Date either party may terminate the agreement by written notice to the other. If the agreement is terminated in this way:
1.4.1the vendor must repay or cause to be repaid the deposit plus interest thereon less any investment expenses to the purchaser within seven days;
1.4.2neither party has further rights against the other party under the agreement, except in respect of default under this Special Condition.
·Special Condition 1.5 provides that the “Purchaser acknowledges and agrees that the Vendor is not obliged to commence the Development Works unless and until special condition 1.1 is satisfied”.
·Special Condition 1.7 provides that the purchaser acknowledges and agrees that Building Rules Consent for the construction of the Development may be granted in stages as construction of the Development proceeds[17] and, at the Satisfaction Date, Building Rules Consent may not have been granted in respect of all the building work comprised in the Development.[18]
[17] Clause 1.7.1.
[18] Clause 1.7.2.
·Special Condition 4 provides:
4.4     Despite the foregoing provisions of this special condition 4, the Vendor may not without the Purchaser’s prior written consent:
4.4.1change the area of the Purchaser’s lot by more than 5%;
4.4.2make changes or substitutions in or to the materials, finishes or fittings in the Purchaser’s lot which will have a material detrimental affect on the overall proposed finish or appearance of the Purchaser’s lot.
·Special Condition 26 prescribes that the following words:
-       “Architect’s Plans” shall mean the plans prepared by Loucas Zahos attached to the Contract and marked Annexure “A”.
-       “Purchaser’s Lot” shall mean the land, being the community lot(s) being purchased by the purchaser pursuant to the Contract.
-       “land” has the same meaning as in the REISA contract. As stated above, clause 1.14 provides that the land means the land described in the schedule and Item D of the schedule describes the land.
-       “Development Approval” shall mean all of the necessary approvals required under the Development Act 1993 or any other applicable legislation from all relevant authorities in relation to the Development Works and includes all variations to those approvals and any supplementary or other approvals in connection with the Development Approval.
-       “Satisfaction Date” means 30 June 2011.
Mr Bruce in the First Notice of Termination alleged a breach of, or non‑compliance with, Special Condition 4.4.1 and purported to rely on clause 6.2 of the REISA terms and condition to terminate.
In the Second Notice of Termination, he alleged that Special Condition 1.1 was not fulfilled by the Satisfaction Date and asserted that Special Condition 1.4 gave him an absolute and unqualified right of termination.
Special Conditions addressed by clause 6
The Schedule at Item R incorporates the provisions relating to Special Conditions in clause 6 of the REISA terms and conditions.
Clause 8.10 provides that the other terms and conditions set out in the Schedule “Other Conditions” form part of the Contract. Item S provides that “Other Conditions” provided for in clause 8.10 are “As per Special Conditions attached”.
It is apparent that the provisions comprising the document titled “Special Conditions” are, for the purposes of the REISA terms and conditions, either conditions which are promissory or conditions which are outside the responsibility of the parties.
Only Special Conditions 1 and 2 are titled “Conditions”. Special Condition 1 contains provisions relating to “Development Approval and Finance”. Special Condition 2 contains provisions relating to the “Community Scheme”.
A number of the Special Conditions are not in the nature of conditions. For example, Special Condition 10 concerns adjustments and outgoings and Special Condition 14 concerns dispute resolution.
Special Conditions 1.2 and 2.2 each oblige the Vendor to use its reasonable efforts to satisfy the Special Conditions.
Clause 6 of the REISA terms and conditions provides that the party required to comply with a Special Condition must make every reasonable endeavour to do so. Clause 6 provides a right to terminate in circumstances where a vendor or purchaser has promised to use their reasonable endeavours to undertake and achieve something. It does not provide a right to terminate in circumstances where a party has promised to undertake or achieve something. It addresses events or circumstances which are not within a party’s power to bring about but over which they may have influence if they use their reasonable endeavours.
In other words, clause 6 is concerned with the Special Conditions like Special Conditions 1 and 2 which oblige a party to use reasonable endeavours to achieve fulfilment of the particular Special Condition.
A party’s right to invoke clause 6 arises when a particular Special Condition has not been complied with before the date specified in the Special Condition and where no date is specified within 21 days of the date of the Contract.
The conclusion that clause 6 is concerned with breaches of non-promissory obligations is supported by clause 6.2 which is conditional upon the neglect or default of one party. If it were concerned with promissory obligations it would address a failure to comply, not culpability.
As Baju submitted, many of the provisions of the Special Conditions are incapable of being read with clause 6 and at least some of them must have been intended to be “Other Conditions” within the meaning of clause 8.10 of the REISA terms and conditions.
I now turn to discuss Special Condition 4.4 which should be noted prescribes no timeframe for compliance.
The alleged breach of Special Condition 4.1.1 and invoking of clause 6.2
The complaint Mr Bruce made in the First Notice of Termination was an alleged failure by Baju to construct Lot 221 with an area of 130 square metres, which failure amounted to a failure to comply with Special Condition 4.1.1.
Special Condition 4 is headed “Acknowledgements” followed by a subheading to clauses 4.1 to 4.6 of “Purchaser’s Acknowledgements” and a subheading “Vendor as Agent for Registered Proprietor” to clause 4.7.
Special Condition 4.1 provides that Mr Bruce acknowledges that prior to settlement Baju may make variations to the proposed development “by making amendments to the size, materials, finishes fittings, configurations and dimensions of or in the Purchaser’s Lot or other Lots within the development...”.
Special Condition 4.2 provides that Mr Bruce acknowledges and agrees to Baju’s absolute and unfettered discretion to make changes.
Special Condition 4.3 provides that Mr Bruce will not delay or refuse to complete settlement or have any claim against Baju as a result of any changes made by Baju.
Special Conditions 4.1, 4.2 and 4.3 are qualified by Special Condition 4.4, which relevantly provides:
Despite the foregoing provisions of this special condition 4, the Vendor may not without the Purchaser’s prior written consent:
4.4.1change the area of the Purchaser’s Lot by more than 5%;
Clause 2 of the REISA terms and conditions imposes an essential obligation on Baju to sell the property defined by clause 1.18 as, the “Land”, which in turn is defined by clause 1.14 as the land described in the Schedule. The Schedule describes the Land as “proposed community Lot 221 as shown in the attached Architect’s Plan including 2 car park(s)”.
As contended by Baju, it is because it is not possible to prescriptively provide a geographically precise description of the land and the property in a sale of a future community lot that the REISA terms, conditions and schedule are supplemented by the Special Conditions. The Special Conditions by and large confirm that so long as the essential term is complied with, that is the delivery of Lot 221, Baju was permitted to make variations to the Development which would impact upon the dimensions and the layout of the lot. Clause 4.4 puts a restriction on this. Accordingly, it imposes an obligation on Baju not to make changes described in Special Conditions 4.1 and 4.2 without Mr Bruce’s consent in accordance with Special Condition 4.4.
An alleged breach of Special Condition 4.4.1 does not entitle Mr Bruce to invoke clause 6 of the REISA terms and conditions. Special Condition 4.4.1 is not one of the Special Conditions clause 6 addresses. It imposes an obligation on Baju not to change the area by more than five per cent without consent. In my view, if Special Condition 4.4 is contravened Baju will have breached one of the “Other Conditions” of the Contract. The consequences of any such breach fall to be considered in accordance with general law principles.
The alleged breach of Special Condition 1.1.1 and invoking of Special Condition 1.4
Special Condition 1 contains provisions relating to “Development Approval and Finance”. It provides:
1.1The sale and purchase of the Purchaser’s Lot is conditional upon the Vendor, on or before the Satisfaction Date:
1.1.1 obtaining the Development Approval on terms satisfactory to the Vendor; and
1.1.2 obtaining formal approval from a financial institution acceptable to the Vendor to advance to the Vendor the funds required by the Vendor to undertake the Development on terms acceptable to the Vendor.
Special Condition 2 contains provisions relating to the “Community Scheme”, the completion of the “Development Works” and the causing of the proposed Community Plans of Division to be deposited in the Lands Titles Office by the Registrar General.
Special Condition 3 provides that, subject to Special Condition 1 being satisfied, Baju is then obliged to use reasonable endeavours to complete the Development Works by the Proposed Date of Practical Completion and is obliged to cause those works to be undertaken in a proper and workmanlike manner generally in accordance with the Architect’s Plans and specifications and in compliance with Development Approval.
In other words, the obligations on Baju to construct are conditional upon the satisfaction of the Development Approval Condition in Special Condition 1.
If Special Condition 1.1.1 was not satisfied in that Development Approval was not obtained by the Satisfaction Date, Mr Bruce’s entitlement to terminate is found in Special Condition 1.4.
Special Condition 1.1 is one of the Special Conditions contemplated by clause 6. As noted earlier, clause 6 is concerned with Special Conditions that require a party to use its reasonable efforts to satisfy the conditions in the Special Condition. Clause 6 obligates the party to make every reasonable endeavour to comply with the Special Condition. The right to terminate provided for in clause 6 is enlivened upon non-compliance with the timeframe specified in the Special Conditions it addresses or within 21 days of the date of the Contract.
The sale and purchase of Lot 221 is conditional upon Development Approval being obtained on or before the Satisfaction Date (30 June 2011). Special Condition 1.4 provides that if a condition in Special Condition 1.1 is not fulfilled by the Satisfaction Date either party may terminate the Contract by written agreement. It follows that the right to terminate in Special Condition 1.4 has to be read as invoking clause 6 of the REISA terms and conditions.
The First Notice of Termination
Mr Bruce purported to terminate the Contract by the notice dated 20 February 2012 alleging the Architect’s Plans (which on his case included the Drawing bearing the words “130sqm”) indicated the area of Lot 221 was 130 square metres. Mr Bruce asserted the area of Lot 221 was in fact 123.35 square metres and that his consent had not been obtained to change the area by more than five per cent.
The measurements and surveying of Lot 221
I will discuss the evidence of both surveying experts before discussing the evidence of Mr Bruce’s final witness, Mr Smith, as the surveying evidence is relevant to the alleged breach of Area Condition referred to in the First Notice of Termination. Mr Smith’s evidence is relevant to the alleged non-fulfilment of the Development Approval Condition.
Mr Andrew’s first report dated 16 June 2013
Mr Andrew’s firm took initial instructions from Mrs Bruce on 15 February 2012. He was asked to undertake an as constructed internal measurement survey and provide an area for Lot 221.[19] Mr Andrew’s trainee licensed surveyor, Mr Heinrich, undertook the survey on 15 February 2012 under his supervision and direction. The area was calculated at 122 square metres plus or minus 0.2 square metres. Mr Andrew provided a report dated 16 June 2013 based on the 15 February 2012 survey.[20]
[19] Exhibit D7.
[20] Exhibit D7.
In order to perform the survey, Mr Heinrich obtained a copy of the Community Plan, C27018. The plan indicated the position of Lot 221 and its lot subsidiaries. As no measurements are shown on the plan, Mr Andrew said the boundaries are the monuments; being constructed walls, fences, ceilings, and floors. Mr Andrew explained that he understood the principle of community lot as defined in the CTA as the space occupied or owned within its physical boundaries as airspace. He confirmed his firm’s measurements reflected this by referring to the inside face of walls or glass or fences. He also stated in cross‑examination that, in his opinion, that there is little difference to the measuring process used by the Property Council of Australia (PCA) in determining net lettable areas. His firm used the PCA Guidelines for measurement to “have relatively fixed and quantifiable processes” for their measurements.[21]
[21] T136.
In his report, Mr Andrew explained that as his survey was to be used to calculate the area of a community strata title lot, reference was made to the definition used for the boundaries of a community strata lot within s 19(4)(a) of the CTA. Mr Andrew said this definition stated that where the boundaries are defined by reference to a wall or fence, the boundary is the inner surface of the wall or fence.
It was put to Mr Andrew in cross-examination that the PCA Guidelines used by Mr Heinrich were guidelines described as being for office buildings and for the determination of the net lettable area. Mr Andrew was asked whether he was aware of the PCA Guidelines for measuring residential premises and he was shown a copy of a document titled “Method of Measurement for Residential Property” issued by the Property Council of Australia Ltd. Mr Andrew said he was not aware of these guidelines, he had not referred to them and that he had only used the PCA office building guidelines. During cross-examination the following day, Mr Andrew said that he had had a mental blank and that he was aware of the PCA Guidelines for measuring residential premises but just did not think of them because he did not think an apartment would be measured under those guidelines for the purposes of community title.

Mr Andrew gave evidence that he measured Lot 221 as defined in the CTA. He said that, in his view, s 19(4) mandated that what had to be measured was airspace.
Mr Andrew agreed that a surveyor or drafter has their own interpretation of s 19(4)(a) of the CTA and is able to employ their own definitions of the outer limit of the title.[22]
[22] T131.
Mr Andrew confirmed he did not conduct the survey by reference to the Architect’s Plans and only had reference to C27018.
Mr Kennedy’s first report dated 19 July 2013
Mr Kennedy’s first report was prepared following a survey he conducted on 10 April 2013. Mr Kennedy was asked by Baju’s solicitors to provide an area of Lot 221 measured in accordance with:
·the PCA Guidelines – Method of Measurement for Residential Property (the Residential PCA Guidelines);
·the CTA; and
·by scaling the Architect’s Plans namely, Drawing number SK4510, issue P2, designated contract set, plotted at AO, Scale 1 to 100.
Mr Kennedy was instructed to:
·ignore the protrusions into the unit space made by window frames and mullions and measure only to the face of glass and the production thereof;
·measure the unit as a whole, i.e. not to measure the Lot 221 balcony, atrium and entry as separate areas and then combine those areas for a total area; and
·exclude from the measured area the associated car parks and air‑conditioning unit.
In relation to his measurements of the area in accordance with the CTA, Mr Kennedy said that s 19(4)(a) states that where the boundary is defined by reference to a wall or fence, the boundary is the inner surface of the wall or fence. C27018 does define the boundaries between lot subsidiaries by reference to wall and fence, but does not define the lot boundaries by reference to any monument. For the purpose of calculating area, Mr Kennedy said he took the boundary to be the inside face of walls and glass that formed the perimeter of the lot and subsidiaries.
Mr Kennedy confirmed that Sheet 1 attached to his report is a calculation based on his survey measurements using the Residential PCA Guidelines and therefore he measured to the outer limit of the external walls and to the mid-point of parting walls, resulting in a measurement of 132.4 square metres.[23]
[23] T325.
The calculation illustrated on Sheet 2 adopts the CTA approach and measures up to the internal face of common walls and external walls and the internal face of the glass on the balcony. Using this approach, in Sheet 2 Mr Kennedy measured an area of 123.4 square metres.
Sheet 3 shows a calculation of area of 123 square metres based on dimension of scale from the Architect’s Plans and scaled in accordance with the CTA.
Sheet 4 is Mr Kennedy’s calculation based upon scaling from the Architect’s Plans but measuring to the outside face of external walls and to the midpoint of common walls, resulting in a measurement of 131.3 square metres.
Mr Andrew’s further opinion dated 10 September 2014
Mr Andrew provided his further opinion in a letter dated 10 September 2014, having read Mr Kennedy’s first report. He agreed with the survey field measurements provided by Mr Kennedy apart from Mr Kennedy’s ignoring “the protrusions into the unit space made by window frames and mullions…”.
It was Mr Andrew’s opinion that if the nibs or protrusions are not ignored in the third bedroom then the area could be reduced by 0.05 square metres to 123.35 square metres.[24]
[24] Exhibit D8.
Put simply, it was Mr Andrew’s evidence that Mr Kennedy’s calculations went through the nibs and his own went around them. The nibs were therefore included in Mr Kennedy’s area calculation and excluded from his.
Mr Andrew said he ignored the space occupied by the nibs in his measurements as he was determining air space.
Mr Andrew was asked to consider C27018 and he agreed that he did not observe what has been described as a bay window to the left of the word “void” as appears between the atrium sub 221 and the atrium sub 225. He agreed there were no nibs drawn on the plan and he agreed that title is conferred by reference to the Community Plan.
The measuring of the balcony
Mr Andrew and Mr Kennedy both prepared their initial reports on the assumption that the balcony of Lot 221 should be measured to the glass balustrade.
On the third day of trial, Baju sought leave to amend its fourth defence to counterclaim by deleting the reference in para 6.2.2 to the measurement of 123.4 square metres and inserting in lieu thereof the measurement of 123.78 square metres.
I permitted the amendment over Mr Bruce’s objection and ordered that he have his costs thrown away occasioned by the amendment, in any event.
The revised measurement of 123.78 square metres was calculated following instructions given to Mr Kennedy on 20 September 2014 to measure the extent of the balcony slab of Lot 221 and calculate what area that would add if it were that the extent of the slab marked the edge of the balcony subsidiary to Lot 221 rather than the internal face of the glass balustrade of the balcony.
Mr Kennedy prepared a supplementary report following his survey on 20 September 2014. Mr Kennedy’s area determinations from his survey measurement are:
·adopting the CTA, an extra area of 0.38 square metres, which, when added to the previous calculated area of 123.40 square metres, results in a calculated area of 123.78 square metres.
·adopting the Property Council Guidelines, an extra area (to extent of silver outside framing edge of balcony) of 0.18 square metres. When added to the previous calculated area of 132.40 square metres this results in a calculated area of 132.58 square metres.
The trial of the matter was adjourned during cross-examination of Mr Andrew to allow Mr Bruce an opportunity to have Mr Andrew undertake a further survey having regard to Mr Kennedy’s supplementary report. I also directed that the parties use their best endeavours to arrange for Mr Kennedy and Mr Andrew to meet on site with a view to preparing a report for the Court in relation to the calculations performed by Mr Kennedy.
Joint statement
Mr Andrew and Mr Kennedy prepared a joint statement dated 17 October 2014 confirming that they attended Lot 221 on 15 October 2014.[25] Mr Kennedy provided Mr Andrew with his measurements of the balcony balustrade and slab. Mr Andrew then measured from the inner surface of the balcony wall to the outer surface of the balustrade including the capping of this wall and to the outer edge of the slab.
[25] Exhibit P15.
Mr Andrew checked his measurements with Mr Kennedy’s and concluded that Mr Kennedy’s measurements and area calculations in relation to the additional areas were mathematically correct.
In addition to co-authoring the joint report, Mr Andrew prepared his own supplementary report dated 17 October 2014.
Resumption of Mr Andrew’s evidence
Following the adjournment, Mr Andrew was cross-examined about the reference in his supplementary report wherein he stated that the bold black line (BBL) delineating the perimeter of C27018 defined the outer limits of the building structure enclosed within and that Lot 221 was contained within that building structure.[26]
[26] Exhibit D23.
Mr Andrew said the “planter box” shown on C27018 was not in place at the time of either of his firm’s surveys. He said the plantar box was not included as a lot subsidiary in the notes beneath the figures 221 on Sheet 8 of C27018. He said it was therefore assumed that the lot subsidiary of 221 shown as the balcony abutted the BBL as is the case for the other lots facing Seaview Road on the second level. Mr Andrew accepted that the reference to “planter box” was not a boundary label but rather a description of land use.
Mr Andrew referred to a note on Sheet 8 of C27018 that states “Boundaries between lot subsidiaries shown as balcony are wall”. He said there is no other note or statement on C27018 which further describes the balcony’s boundaries. There are no notes which describe the BBL. The BBL is taken therefore as representing the building structure and Lot 221 is contained within that building structure. He said this implies that the building structure is not owned by Lot 221 and in community strata schemes the building structure is usually owned by the Community Corporation. He pointed out that this is usually regarded as a fundamental principle of community strata buildings in which the building structure is owned by the Community Corporation set up for that community strata scheme. He referred to s 28(1)(a) of the CTA which states that the common property created by a community plan comprises, in the case of a strata plan, those parts of the building that are not part of a lot. C27018 has not noted that the building structure incorporating the balcony for Lot 221 is part of that lot.
Mr Andrew concluded that as it was not stated, then the building structure forms part of the common property and not part of Lot 221. Therefore, he determined that any part of the balcony which is part of the building structure is not part of Lot 221 and the glass panelling of the balcony is not part of Lot 221.
He referred to s 9 of the CTA regarding Strata Division. He said that s 9(2) states that each strata lot must be wholly or partly within a building that has been erected on the community parcel and the boundary of the lots within the building must be defined by reference to the building.
Mr Andrew referred to the Plan Presentation Guidelines (PPG) Version 6 issued in August 2014 by the LTO which set out the requirements for plans lodged at the LTO. Section 9, in particular, refers to Community Plans.
Section 9.22 states that Lateral Lot Subsidiary boundaries may be defined by monument, data, or a combination of both. Labels may be used to assist the definition of these boundaries. Mr Andrew pointed out that there are no labels shown on C27018 for the boundaries of the balcony of Lot 221.
Section 9.23.2 states that a label must be shown to identify the boundary of lot subsidiaries where a monument which is not a structure (e.g. fence, wall, edge of concrete, join in concrete etc.) forms a boundary of a lot subsidiary.
Mr Andrew said C27018 has not shown any labels on the boundary lines for the balcony of Lot 221. He said this implies that the balcony boundary line is represented by a structure, that is, a wall of the building and in the case of Lot 221 it is the glass panelling.
Mr Andrew referred to section 9.26.5 which states that lot subsidiary boundaries within a structure generally do not require labels where the boundaries are the inside face of walls. As the external boundaries of the balcony are not labelled in C27018, Mr Andrew assumed that he could use the inside face of wall for his measurements.
Mr Andrew said that section 9.26.7 states that a label must be shown where a lot subsidiary boundary is a monument and not a structural component of the building. He said that this section reinforces that the external boundaries of the balcony are structural as they are not labelled.
Whilst Mr Andrew was on site at the H₂O apartments with Mr Kennedy on 15 October 2014, he inspected the balcony and its walls. He was of the opinion from this inspection that the glass panelling of the balcony does form a structural part of the building within the confines and description of the CTA.
Mr Andrew reported that he regarded the lateral surface boundary of the balcony as being the inner face of the wall comprising glass panels.
Mr Andrew disagreed with Mr Kennedy’s inclusion of an additional area of 0.38 square metres. He contended that the inclusion of this additional area was not a valid interpretation of C27018, the CTA, or section 9 of the PPG.
Mr Andrew conceded that where a balcony had no balustrade and was open, the edge of the concrete would be the edge of the structure. Mr Andrew determined that the western boundary was identified by a “wall” in the form of a glass balustrade because it was attached to a structure and therefore a structure itself. Mr Andrew agreed that he had assumed, based on his experience, that the title ends at the glass balustrade.
Mr Kennedy’s evidence
Mr Kennedy confirmed in cross-examination the Architect’s Plans showed a balustrade on the balcony to Lot 221. He explained that in calculating area, in his first report, according to the Residential PCA Guidelines he took the western boundary to be the outside face of the glass of the balustrade. His first report makes it clear that in calculating area according to the CTA he took the western boundary to be the inside face of the balustrade.
In cross-examination, Mr Kennedy was asked whether the western boundary was not labelled on C27018 because the boundary was a “physical structural partition”. Mr Kennedy agreed that he would expect that structure to be a balustrade. It was put to him that it could not be anything other than a balustrade because the reason certain boundaries are not labelled is where there are structural, physical partitions like a balustrade, and that where the boundary is not a physical structural partition, it must be labelled. In answer, Mr Kennedy said he had to approach the issue as a surveyor and explained:[27]
AIf I can just approach it as I would if I was doing this on-site. I’d be out on the balcony, I’d have a look to see what structural, physical evidence would be a suitable monument if you like. How that may well be a balustrade, but as in the case of just this last week where I have done a similar job to this, there has been nothing put in place at that stage -
HER HONOUR
QSo no balustrade.
ASo there’s no physical separation. Now I have a developer who wants to get this plan deposited as quickly as possible obviously because there is a lot of money tied up in it. In the case I’m dealing with, these physical structures will be the last to be placed on-site because they form an open area for the tradesmen to bring in their tools in, in and out of the building. So it will possibly be the last bit of physical structure put in place, but yet I need to get a plan in and deposit it. So I need to make a choice as to what I use as a monument for the end of my unit subsidiary. I need to make a decision on what I’m going to use as the monument to define the extent of my unit subsidiary. But what I do have is I have an edge of concrete slab and I consider that to be in this scenario an appropriate monument to use.
[27] T364.
For the reasons that follow I prefer Mr Kennedy’s evidence to that of Mr Andrew regarding the inclusion of the nibs in the area calculation of Lot 221.
Further, I cannot be satisfied having regard to Mr Kennedy’s evidence that the additional area to the edge of the slab should be included in the area of Lot 221.
Analysis of the validity of the First Notice of Termination
Bearing in mind that it is Mr Bruce’s case that he was promised an apartment with an area of 130 square metres and it is Baju’s case that:
·measured in accordance with the Residential PCA Guidelines the area of Lot 221 is 132.40 square metres; and
·measured in accordance with the CTA the measurement is 123.78 square metres,
the tables below set out the various areas of Lot 221 referred to in evidence. The first table sets out the area promised by the Architect’s Plans. The second sets out the actual area following construction.

Area promised (Architect’s Plans per contract) Property Council Guidelines CTA basis

Scaled from Architect’s Plans 131.30 sqm 123.00 sqm

Actual area (as built) Property Council Guidelines CTA basis

Survey measurements 132.40 sqm 123.40 sqm

Survey measurements excluding nib walls 123.35 sqm

Survey measurements including to edge of slab on balcony 123.78 sqm

Survey measurements including to edge of slab on balcony excluding nib walls 123.73 sqm

I am unable to determine whether the additional area to the edge of the slab of the balcony should be included. Mr Andrew assumed based on his experience that the internal face of the glass balustrade on the balcony defined the western boundary. He also said that in his opinion the inclusion of this additional area was not a valid interpretation of C27018, the CTA or the PPG.
On my reading of Mr Kennedy’s evidence he did not say it was his opinion it should be included. His initial measurements were all made by reference to either the outside face (according to the Residential PCA Guidelines) or the inside face (according to the CTA) of the glass balustrade, being the western boundary. The evidence regarding whether or not the area of Lot 221 includes the additional area to the edge of the slab is therefore ambiguous. The evidence suggests its inclusion is dependent on a subjective decision made by a surveyor as to what defines the western boundary at the particular time he conducts the survey.
Mr Kennedy’s survey including the nibs is supported by the fact that the nibs are not shown on the Community Plan and there is therefore no reason to consider that the nibs do not form part of Lot 221. The nibs are internal to the overall space and, in my view, there is no reason having regard to C27018 to exclude the area of the nibs from the measurement of Lot 221. Mr Andrew stated in his June 2013 report that it is his opinion that Lot 221 is the community lot within the Community Strata Scheme as registered at the LTO in C27018. He also agreed in evidence that title is conferred by the Community Plan. Accordingly, the area of the nibs on the Certificate of Title is shown as forming part of the owner’s title.
Further, unlike Mr Andrew, Mr Kennedy performed calculations based on dimension of scale from the Architect’s Plans and scaled in accordance with the CTA and the Residential PCA Guidelines. Mr Andrew did not contradict Mr Kennedy’s evidence regarding the Architect’s Plans. The following measurements demonstrate there is little difference between the areas indicated by the Architect’s Plans and the areas as built:
·by measuring according to the CTA to internal walls (and the interior of the balcony balustrade) including the nibs, the Architect’s Plans scaled up to 123 square metres and as built is 123.40 square metres. Mr Kennedy calculated this as a variation of area of 5.08 per cent from the 130 square metres shown on the Drawing.
·by measuring according to the Residential PCA Guidelines to the exterior of external walls and the mid-point of common walls, the Architect’s Plans scaled up to 131.30 square metres and as built is 132.40 square metres. Mr Kennedy calculated this as a variation of area of 1.85 per cent from the 130 square metres shown on the Drawing.
It is clear the appropriate PCA Guidelines to use are the Residential PCA Guidelines. However, the state of the evidence is such that I am unable to determine whether the area of Lot 221 should be calculated according to the CTA or according to the Residential PCA Guidelines. It follows that I can make the following findings:
·measured in accordance with the CTA, the actual area of Lot 221 is 123.40 square metres; and
·measured in accordance with the Residential PCA Guidelines, the actual area of Lot 221 is 132.40 square metres.
As discussed later, the Contract does not define the area of Lot 221 other than by reference to the Architect’s Plans. The Special Conditions permitted Baju to change the area by no more than five per cent without the consent of Mr Bruce.
On Mr Bruce’s case, if the Drawing is of contractual effect, Baju could change the area by five per cent without his consent to 123.50 square metres.
The areas promised according to the Architect’s Plans were:

Area promised (Architect’s Plans per contract) Property Council Guidelines CTA basis

Scaled from apartment 221 on eight plans 131.30 sqm 123.00 sqm

Less five per cent 124.74 sqm 116.85 sqm

The Drawing

Whether or not the Drawing is of contractual effect is at the heart of whether Mr Bruce was entitled to terminate the Contract for breach of the Area Condition. It is not clear from the evidence as to the precise location of the Drawing within the Contract documents. Mr and Mrs Bruce did not have any memory of where the Drawing was located in the Contract when they received it. It is an agreed fact that when Mr Bruce’s solicitor received the Contract from Mr Bruce, Annexure A to the Contract comprised the Drawing followed by the eight pages of Architect’s Plans.
Mr Bruce asserted that Special Conditions 3.1.2 provided that Baju would cause the Development Works to be undertaken in a proper and workmanlike manner generally in accordance with the Architect’s Plans.
Mr Bruce argued the Drawing is part of the Architect’s Plans because it conforms to the definition of Architect’s Plans in Special Condition 26 and together with the Architect’s Plans comprises Annexure A to the Contract. He contended that the notation 130 square metres on the Drawing clearly means that the area of the proposed Lot 221 would be 130 square metres. He also relied on the fact that the Drawing is “marked with a handwritten additional term” relating to the inclusion of robes and it was initialled at the same time as other parts of the Contract. Further, he argued that Lot 221 is a box of airspace to which separate legal title has been bestowed by the CTA. He said since it is airspace its area is properly to be measured from internal surfaces in the manner indicated by s 19 of the CTA. For that reason, he said that the Contract does not need to stipulate that Lot 221 was to be measured in accordance with the CTA.
Baju contended the Drawing is of no contractual effect and does not form part of the Architect’s Plans. Baju relied on the disclaimer in the Drawing which provides:
DISCLAIMER: Illustrations, photos and CAD [computer-assisted drawn] images are indicative only and do not represent the final outcomes of this project. Prospective purchasers must rely on their own enquiries and independent advice before signing a contract. This printed item does not constitute an offer or contract. Antunes Group, Loucas Zahos, the relevant vendor and their agents do not accept any liability for any incorrect information or omissions.
Mr Bruce said the disclaimer only relates to the images and illustrations on the Drawing and further the Drawing is the only stipulation as to area. I do not agree. The document must be read as a whole. The whole of the Drawing gives an indication or visualisation of the internal layout, the orientation and the dimensions of Lot 221. The text or annotations assist to illustrate the diagrams. By reference to the disclaimer, it is a document intended for “prospective purchasers”. It assists prospective purchasers visualise the yet to be built apartment. It is a preliminary introduction to the layout and orientation of the apartment. The words and annotations are part of the illustration of the Drawing. They, like the internal layout diagram and the diagram showing the position of Lot 221 in the building, are part of computer-assisted drawn images and/or illustrations. Accordingly, the disclaimer applies to the whole of the document. As such, prospective buyers to whom this document is directed must, as mandated by the disclaimer, rely on their own enquiries and independent advice before signing a contract. The words of the Drawing are clearly not of promissory effect.
It is worthy of note that, unlike the Drawing, the Architect’s Plans do not bear any disclaimer. It follows that it is the Architect’s Plans that are of contractual effect. It was submitted by Mr Bruce that the Architect’s Plans do not “say anything about area” and that area is not “readily or at all discernible from those areas”. It is the Architect’s Plans from which the area, location, common property and location of car parks of Lot 221 can be discerned.
There is no scale on the Drawing unlike the Architect’s Plans which make clear that the scale for the plans is 1:100 @ A0. Whilst this scale would only be correct using A0 plans, allowance would have to be made for the difference between A4 plans in Annexure A and A0 plans.
As submitted by Baju, whatever size paper is used, the scale which indicated the distance on the plans corresponding to 2, 4 and 8 metres was capable of application on any size paper.
Mr Bruce submitted that to determine area from the plans would be “contrary to the prohibition in the Architect’s Plans” which reads “Do not scale. Use figured dimensions only”. Baju pointed out that as the Architect’s Plans are not the final construction drawings this warning is an instruction to a builder. It does not mean that the plans do not indicate a total area for Lot 221.
As the evidence as to measurement revealed, the as built area of Lot 221 varies from the dimensions indicated by the Architect’s Plans by a very small amount, and in Mr Bruce’s favour. Baju, in their closing submissions, submitted that the living room and kitchen both had an area that exceeded the dimensions shown on the Drawing.[28]
[28] At para 27.
If I am wrong and the Drawing is of contractual effect, the difference between 130 square metres less five per cent and the area of Lot 221 as built including the nib walls is 0.1 square metres. If the nibs are excluded, the difference is 0.15 square metres. If there is a breach of the Area Condition it is insubstantial.
The First Notice of Termination did not validly terminate the Contract.
The Second Notice of Termination
In the Second Notice of Termination, Mr Bruce purported to terminate the Contract alleging Baju had failed to fulfil the Development Approval Condition by not obtaining Development Approval by the Satisfaction Date.
Development Approval for the Development
To assist in following my discussion of Mr Smith’s evidence and the parties’ submissions on this topic, I set out the relevant sections of the Development Act and Development Regulations.
Section 32 of the Development Act provides that no development may be undertaken unless the development is an approved development.
The Development Act defines “development authorisation” to mean “any assessment, decision, permission, consent, approval, authorisation or certificate required by or under this Act or any other Act prescribed by the Regulations for the purposes of this definition”.
Sections 33(1) provides:
33—Matters against which development must be assessed
(1)A development is an approved development if, and only if, a relevant authority has assessed the development against, and granted a consent in respect of, each of the following matters (insofar as they are relevant to the particular development):
(a) the provisions of the appropriate Development Plan (“development plan consent”);
(b) the provisions of the Building Rules (“building rules consent”);
Sections 33(1)(a) and 33(1)(b) of the Development Act provide that a development is an approved development if, and only if, consent is granted in respect of both the provisions of the relevant development plan and the provisions of the building rules.
Sections 33(2) and 33(3) provide:
(2)An application may be made for all or any of the consents required for the approval of a proposed development, or for any one or more of those consents.
(3)A relevant authority may, in granting a development plan consent, reserve its decision on a specified matter until further assessment of the relevant development under this Act.
Section 33(4) provides that “A development will be taken to be an approved development when all relevant consents have been granted and a relevant authority (in this case the Council) has, in accordance with this Act, indicated that the development is approved”. This subsection provides for an evidentiary means of demonstrating s 33(1) consents.
Pursuant to s 40(1), a relevant authority must, on making a decision on an application for approval, give notice of the decision in accordance with the Development Regulations. Regulation 42 provides that, pursuant to s 40, notice of a decision must be given in a form determined by the Minister for the purposes of this regulation.
Regulation 46 is a “Special provision relating to staged consents”. Regulation 46(1) provides that if “it appears to a relevant authority that all of the consents necessary for the approval of a particular development have been obtained under Division 1 of Part 4 of the Act, and that no such consent has lapsed and that all such consents are consistent with each other, the relevant authority must … forthwith (and in any event within 5 business days after receiving the last consent) issue a notice of approval under the Act”.
A notice of approval issued under this regulation is “in part, confirmation that all necessary consents have been obtained”.[29]
[29] Rivergum Homes Pty Ltd v The District Council of the Copper Coast [2004] SASC 376 at [67] (Doyle CJ).
Regulation 46(3) provides that the requirement under reg 46(1) does not arise unless or until the Development Authorisation (Staged Consents) fee under Schedule 6 has been paid, if relevant.
Regulation 47 provides that if an approval which requires a Building Rules Consent is granted by a relevant authority, the relevant authority must return to the successful applicant a copy of the plans, drawings, specifications and other documents and information lodged by the applicant pursuant to reg 15 and Schedule 5, stamped or otherwise endorsed with the relevant consent.
Philip Smith
Mr Smith is the senior town planner with the Council who assessed the Developer’s applications for development of the H₂O and Baju Apartments.
Development Plan Consent was granted to the Developer for the H₂O development on 17 November 2009[30] and was assigned the Development Application number 252/1258/09 (1258/09 (H₂O)). The Baju development, immediately adjacent to the H₂O development, was assigned Development Application number 252/3093/07 (3093/07 (Baju)).
[30] Exhibit D9.
By letter dated 22 December 2009,[31] the Developer lodged an application with the Council seeking approval for the H₂O development to proceed in three stages. As explained by the Developer’s architects, Loucas Zahos,[32] the purpose was to minimise the excavation and retaining wall disturbance by not decommissioning and recommissioning heavy machinery onsite.
[31] Exhibit P7.
[32] Exhibit P7.
By letter dated 5 February 2010,[33] the Council approved the staging application referring to it as a variation to 3093/07 (Baju), enclosing a Decision Notification Form bearing a decision date of 4 February 2010 and assigning Development Number 252/0035/10 to the staging application.
[33] Exhibit P8.
Mr Smith agreed that, whilst the letter dated 5 February 2010 made reference to the staging application being an amendment to 3093/07 (Baju), it was a variation application in respect of 1258/09 (H₂O) and other parts of the Development.[34] Mr Smith said the wrong development number had been referred to by the private certifier, Katnich Dodd.
[34] T226/19; T227/29.
As Mr Smith said, the approval of the staging application gave the Developer “the ability to stage the developments, in that they were able to commence certain parts of it without having to wait for the full development approval to be granted. So for example, from recollection, the applicant wished to do excavation of the Baju site and do excavation of the recently approved planning consent for the H2O site at the same time, so it allowed them to stage the excavation, stage the structural parts of the basement car park …”.[35]
[35] T204/19.
Katnich Dodd Building Surveyors, acting as private certifiers, gave Building Rules Consent for the H₂O development consistent with the three stages of development contemplated by the approved staging application. The consents were:
1Building Rules Consent for stage 2 in respect of 0035/10 was granted on 9 July 2010;[36]
2Building Rules Consent for stage 2A in respect of 0035/10, was granted on 23 July 2010;[37] and
3Building Rules Consent for stage 3 in respect of 0035/10 was granted on 24 March 2011.[38]
It should be kept in mind that it was Mr Smith’s evidence that 0035/10 was an approved variation to the H₂O development.
[36] Exhibit P9; T228-229.
[37] Exhibit P10; T229-230.
[38] Exhibit P11; T231-232.
Following receipt of the Building Rules Consent on 24 March 2011, Mr Smith, by letter dated 27 April 2011,[39] requested the Building Rules Consents be re-issued under the correct development number 1258/09 (H₂O).
[39] Exhibit D12.
In a letter dated 18 May 2011,[40] replying to Mr Smith’s letter dated 27 April 2011, Loucas Zahos referred to the re-issuing of documents for Building Rules consent for 1258/09 (H₂O). Amongst the documentation attached to the letter is Katnich Dodd’s Decision Notification Form regarding Building Rules Consent dated 16 May 2011.[41]
[40] Exhibit P12.
[41] Exhibit D10.
Mr Smith agreed that it appears by reference to Exhibit D10, the Developer obtained the Decision Notification Form referring to Building Rules Consent granted 16 May 2011 from Katnich Dodd in response to his indication that the wrong application number had been used.
Mr Smith agreed that the Decision Notification Form indicating that Building Rules Consent for stage 3 had been granted on 24 March 2011[42] was similar to the reissued Decision Notification Form indicating that Building Rules Consent for stage 3 had been granted 16 May 2011.
[42] Exhibit P11.
It is apparent that the re-issued Building Rules Consent dated 16 May 2011 was delivered to the Council on 19 May 2011 under cover of Loucas Zahos’ letter dated 18 May 2011.[43]
[43] Exhibit P13; T235/10.
It was submitted by Baju that Mr Smith’s request that the Building Rules Consents be reissued appears to have been unnecessary.
Baju contended that, while it might have been administratively more convenient for the final Building Rules Consent to be designated as relating to 1258/09 (H₂O), this was entirely a matter of administrative form and requirement.[44]
[44] T223.
Baju, having obtained Development Plan Consent in November 2009, had obtained the first relevant Building Rules Consent in respect of the H₂O development in February 2010, and had obtained the last Building Rules Consent, albeit under 0035/10, by 24 March 2011. I agree that the clear inference from Mr Smith’s evidence, together with Exhibits D10 and P11, is that final Building Rules Consent for the H₂O development was granted on 24 March 2011 and the consent was re‑issued on 16 May 2011.
Following the re-issued Building Rules Consent dated 16 May 2011, Loucas Zahos responded to the “reserved matters to be dealt with prior to the issue of full Development Approval” raised by Mr Smith in his email dated 31 May 2011.[45]
[45] See Exhibit D16 in response to Exhibit D15.
Mr Smith talked about his understanding of the process of gaining Development Plan Consent. He said that effectively there may be some matters that need further clarification but are not so significant that they necessarily hold up the issuing of Development Plan Consent. He referred to the Council routinely reserving matters such as landscaping and stormwater. He said Council only reserves on the basis that these matters are not going to impact on the appropriateness of the use being approved. He said the Council requires those matters to be dealt with between the Development Plan Consent and before the Development Approval is granted.
By reference to emails between Mr Smith and Loucas Zahos, it is apparent Loucas Zahos followed up the Council regarding the reserved matters.[46] On 29 June 2011, Mr Smith informed Loucas Zahos that he was down to the last reserved issue regarding stormwater with respect to the application he was “about to sign off on”. Mr Smith advised that he was expecting to meet with the civil engineer that afternoon.[47]
[46] Exhibits D17 and D18.
[47] Exhibit D20.
Mr Smith stated in the email that he was hopeful the issue would be resolved at the meeting with the engineer that afternoon. Although Mr Smith could not specifically recall, he assumed the issue was sorted out at the meeting and that all reserved matters were then resolved.[48] Mr Smith accepted that the stormwater report dated 4 May 2009 may well have in fact been provided earlier.[49] There was no evidence of any other reserved matter requiring resolution after this email. I infer therefore from Mr Smith’s evidence and the subsequent raising of the Development lodgement fee invoice that all reserved matters had been resolved following Mr Smith’s meeting with the engineer on 29 June 2011.
[48] T220.
[49] Exhibit D16; T218/8.
Regulation 46(1) of the Development Regulations required the Council to issue any final indication of approval forthwith or within five days of receipt of the last relevant consent. Mr Smith’s evidence was that he understood that approximately 10 days was permitted.
Mr Smith acknowledged that this time requirement places the Council under considerable pressure and it is often not complied with in the case of big developments and was not complied with in this case.[50]
[50] T237/13.
The Council did not prepare a Decision Notification Form notifying of final Development Approval for 1258/09 (H₂O) until 8 July 2011. The Developer was notified by letter dated 18 July 2011 enclosing the Form.[51]
[51] Exhibit D11.
Mr Smith agreed that the Decision Notification Form notifying of final Development Approval could not be issued until a fee was paid pursuant to reg 46(3), and that fee could only be paid once an invoice was raised. Mr Smith confirmed that the invoice was not raised until 8 July 2011. He was not able to say whether there had been a delay in raising the invoice and he could not recall when he affixed the “Charles Sturt Development Approval” stamp to the architectural drawings. He said it would not have been unusual for there to have been an internal delay in the issue of the invoice requisition.[52]
[52] T221/27.
I accept Mr Smith’s evidence.
Mr Bruce’s submissions regarding the Second Notice of Termination
Mr Bruce conceded that his construction of Special Condition 1 is a strict interpretation of his contractual rights. He confirmed that he did not know that the Decision Notification Form notifying of final approval was not issued on 8 July 2011 until he consulted his solicitor. He asserted that as Development Approval was not obtained by the Satisfaction Date, Special Condition 1.4 entitled him to terminate the Contract.
Mr Bruce accepted that planning consent and Building Rules Consent had been obtained before 30 June 2011 but he argued Development Approval had not.[53]
[53] T55.
Mr Bruce submitted that the mere grant of Development Plan Consent and Building Rules Consent do not, of themselves, amount to Development Approval. He referred to the “reserved matters”, arguing that they are in the nature of conditions precedent to the grant of Development Approval.
He submitted that there is a three part process under s 33 of the Development Act which involves the grant of Development Plan Consent, the grant of Building Rules Consent, and a further assessment of reserved matters under s 33(3).
He said successful further assessment results in the issue of Development Approval, which is notified by the issue of a Decision Notification Form and signified by the affixation of a red stamp with the words “Development Approval” to the plan. He submitted that this is not a mere formality, it is only granted after all reserved matters have been dealt with to the satisfaction of the Council.
Mr Bruce submitted that Special Condition 1.1 required Baju to obtain Development Approval by 30 June 2011. He argued that as the decision was made on 8 July 2011 and notified on 18 July 2011, the approval was not obtained within the time stipulated in the Contract.

Mr Bruce contended that time stipulations for the occurrence of conditions precedent to performance of obligations under a contract are to be treated differently from time stipulations for the performance of those obligations. Mr Bruce cited Perri v Coolangatta Investments Pty Ltd[54] and submitted that time stipulations for the occurrence of conditions precedent are to be taken to be of the essence and the rules of equity relating to relieving against time stipulations for performance of obligations under land contracts have no application to time stipulations in relation to conditions precedent.
[54] (1982) 149 CLR 537.
Mr Bruce submitted that Special Condition 1.4 makes it clear that as the Development Approval was not obtained by 30 June 2011, either party was therefore at liberty to terminate and he has done so. He said the obtaining of the approval on 8 or 18 July 2011 is not and cannot be the fulfilment of the condition, since the time stipulation must be exactly complied with.
He argued that Baju was aware that the condition had not been fulfilled and took no steps either to alert him or seek an extension but took its chances that Mr Bruce would never find out or, having found out, would not be disposed to terminate. Mr Bruce submitted that, having deliberately chosen to ignore the non‑fulfilment of the condition, Baju did so at its own peril. He said that the condition was incapable of being fulfilled after 30 June 2011 and not amenable to extension otherwise than by the parties’ agreement.
Mr Bruce contended that the only qualification on his right to terminate for non‑fulfilment is found in Special Condition 1.7.4 which provides that he may not terminate for non-fulfilment solely on the ground that Building Rules Consent had not been granted for the whole of the Development. He said it is common ground that all Building Rules Consents had been obtained before 30 June 2011. The ground on which he terminated is not a failure to obtain Building Rules Consent but rather a failure to obtain Development Approval.
Mr Bruce maintained that the Development Approval remained a necessary approval under the Development Act and was therefore an approval which had to be obtained under the Contract by 30 June 2011.
Mr Bruce argued there is no evidence to support a finding that the date on which Council decided to grant an approval was earlier than 8 July 2011 and its possibility is pure speculation. He said the Development Act provides for the indication of approval by s 40(1) which provides that a relevant authority must, on making a decision on an application, give notice of the decision in accordance with the Development Regulations. He argued none of the matters argued by Baju amount to proof that on or before 30 June 2011 Mr Smith had indicated to anyone that the Development had been approved within the meaning of the Development Act. He said the statement in the email dated 29 June 2011 referring to the application “that I’m about to sign off on” must be construed in its context as a sarcastic reminder that the application had not yet been granted and yet the building work was proceeding, presumably unlawfully. So, he argued, far from being an indication that approval was confidently at hand, it is properly to be regarded as a pointed reminder that Development Approval had not yet been obtained.
Mr Bruce submitted that Mr Smith’s assumption that the issue as to stormwater being the last of the reserved matters was sorted out on the afternoon of 29 June 2011 is inadmissible speculation rather than the product of rational inference. He argued that Special Condition 1.1 is to be properly regarded as for the benefit of both parties.
He argued there is no evidence that the Council was at fault. Even if it were, as with all conditions precedent, the fulfilment of which requires the co‑operation of a third party over which the parties to the Contract have no control, the parties take the risk that the third party may not act in time. He argued that this does not provide a ground for equitable intervention.
Baju’s submissions regarding the Second Notice of Termination
Baju submitted that Special Conditions 1.1.1 and 1.7 are plainly for the benefit of the vendor.
Baju submitted that if the Development Approval extended to a process under s 33(4), which it did not accept, it is necessary to distinguish between the fact of consent, the communication or notice of that consent, and the issuing of a formal notice recording that consent (upon payment of a fee). Regulation 46(3) provides that the latter notice will not issue until the fee is paid.
Baju referred to Mr Smith’s evidence that he considered it part of his function, pursuant to s 33(4), to assess the Development Plan Consent and Building Rules Consent for consistency. It was submitted that this notion finds no expression in the Development Act and the Development Regulations obviously cannot be used to interpret the Act. Baju pointed out that Mr Smith found no inconsistency and that there was no inconsistency. Baju contended that this means that whatever the process of assessment Mr Smith undertook, the fact is that each of the Development Plan Consent and three Building Rules Consents were sound and effective from the time it was granted.
Baju referred to Mr Smith’s evidence in relation to the reserved matters and argued that on a plain reading of s 33(3), the reserving of a designated matter is not a condition precedent to the granting of an effective Development Plan Consent. The reservation occurs in granting a Development Plan Consent. In other words, it was contended that no occasion for the reservation of matters arises unless a grant is also made. The reserved matters are therefore in the nature of conditions subsequent to the grant or, alternatively, in the nature of qualifications upon the grant. They do not defer the effective date of the grant.
It was submitted that, bearing in mind that Mr Bruce carries the onus of proving that Development Approval in the contractual sense was not obtained before 1 July 2011, the Court would be slow to find that he has discharged the onus particularly having regard to the significant consequence which he seeks to attach to it.
Baju submitted that the evidence of Mr Smith permits the inference in any event that he had decided upon approval in the sense in which Mr Bruce would construe s 33(4) by 29 June 2011, or at the least by 1 July 2011, and that Mr Bruce has not discharged his onus to show the position was otherwise.
Baju argued that if the Development Approval Condition was not satisfied by the Satisfaction Date, and there was a delay of eight days as alleged, Special Condition 1.4 was not absolute and unfettered.
First, it was argued that, on a proper construction, it was necessary then to have regard to the provisions of clause 6 of the REISA terms and conditions as to termination. It was submitted that there is no suggestion or evidence that non‑fulfilment of the condition can be attributed to the neglect or default of Baju and so Mr Bruce was confined to exercising such rights as clause 6.1 of the REISA terms and conditions provided, and since that clause required the party not in default to afford the other party an opportunity to remedy, and since, on Mr Bruce’s case, the default had been remedied prior to giving any relevant notice, clause 6.1 does not avail Mr Bruce.
Since the fulfilment of the condition was remedied well prior to the purported termination, Baju submitted there was, and is, no basis for termination.[55]
[55] CSS Investments Pty Ltd v Lopiron Pty Ltd (1987) 16 FCR 15; Sullivan v Glennon (1986) 68 ALR 399 at 401.
It was contended that, in any event, once approval for staged development was obtained as contemplated by Special Condition 1.7, Special Condition 1.4 has no further work to do and Mr Bruce’s rights are found in the regime prescribed in Special Condition 1.7.
Baju submitted that the evidence was that the Building Rules Consents were obtained well ahead of time and that the request for information raised by the Council regarding the reserved matters was dealt with largely by referring the Council to material that had already been provided.
Analysis of the Second Notice of Termination
Mr Bruce alleged that Baju had failed to satisfy s 33(4) and that the subsection creates an added requirement that the relevant consents be granted and the relevant authority indicate that the Development is approved. I agree with Baju’s interpretation of the Special Condition 1.1.1 to the effect that the issue is not whether Baju has satisfied s 33(4) of the Development Act, but whether Baju had “all of the necessary approvals required under the Development Act” as required by the Contract.
The expression “Development Approval” is a term defined in the Special Conditions as meaning:
…all of the necessary approvals required under the Development Act 1993 (SA) or any other applicable legislation from all relevant authorities in relation to the Development Works and includes all variations to those approvals and any supplementary or other approvals in connection with the Development Approval.
(Emphasis added)
This definition does not correlate to the definition of “Development Authorisation” referred to in the Development Act.
As submitted by Baju, s 33(4) is an evidentiary provision which exists for the benefit of an applicant. Section 33(1) defines when a development is an approved development and in that respect s 33(4) has no substantive work to do.
Upon the granting or obtaining of the final consent required pursuant to s 33(1), a particular development is an “approved development”. An indication under s 33(4) by a council is not required for the development to be an approved development.
As submitted by Baju, the Full Court decisions Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield[56] and Rivergum Homes Pty Ltd v The District Council of the Copper Coast[57] make clear the independent significance of the s 33(1) consents and demonstrate that a notification or indication from the Council under s 33(4) will not overcome an inconsistency between the planning consent and the Building Rules Consent. Further, later consents or indications do not change the meaning of earlier consents.[58]
[56] [2004] SASC 373.
[57] [2004] SASC 376.
[58] Oakden Shopping Centre Pty Ltd v City of Port Adelaide Enfield [2004] SASC 373; Rivergum Homes Pty Ltd v The District Council of the Copper Coast [2004] SASC 376.
Baju pointed out that, to the extent that some judgments of the Court refer to and assume the independent significance of an indication under s 33(4), they have not decided, in any case where it has been necessary to the decision, that a development is not approved without such an indication having been obtained.[59]
[59] See, for example, City of Marion v Paior (2013) 117 SASR 223 at [13], [41].
In this matter, s 33(1) sets out the criteria against which “building work” must be “approved”. There are two relevant requirements which must be fulfilled before the building work is an “approved development”. There must be an assessment by the Council and there must also be Building Rules Consent. In this case, Building Rules Consent was provided by a private certifier pursuant to Part 12 of the Development Act.
It is clear and not disputed that both consents required under s 33(1) were obtained prior to the Satisfaction Date. In my view, this means, on a proper construction of the Contract, Special Condition 1.1.1 was satisfied by the Satisfaction Date.
Special Condition 1.1 makes settlement conditional upon Baju obtaining Development Approval on or before the Satisfaction Date unless Baju proceeds by way of an approved staged development. Mr Bruce, by Special Condition 1.7, acknowledged and agreed that Baju may obtain Building Rules Consent in relation to some stages after the Satisfaction Date.
Pursuant to Special Condition 1.7.4, Mr Bruce acknowledged and agreed that where the Development involved Building Rules Consents to be obtained in stages, he could not terminate under Special Condition 1.4.
I agree with the submission that reading Special Condition 1 as a whole makes it clear that in the circumstances of a staged development Special Condition 1.7 must prevail over Special Condition 1.1.
Special Condition 1.7.3 prescribes that if, at the Satisfaction Date, Building Rules Consent has not been granted in respect of some of the building work, the vendor must obtain such consent thereafter on a timely basis as the Development proceeds. As submitted by Baju, this confers rights to a purchaser according to ordinary contractual provisions.
As is clear from Mr Smith’s evidence, the development of the H₂O and Baju apartments was staged as contemplated by Special Condition 1.7.
Special Condition 1.7 clearly provides that where the Developer proceeds by reference to staging of consents, as was done in this matter, the requirement to achieve Development Approval did not require the obtaining of Building Rules Consents to every aspect of the construction works. It follows that it did not require a s 33(4) indication in respect of every aspect of the construction works.
In circumstances where a development is a staged development and the vendor has obtained some but not all Building Rules Consents, Special Condition 1.7.3, imposes an obligation upon the vendor to obtain all necessary Building Rules Consents in a timely manner. A purchaser’s protection is therefore found, not in a right of termination, but in Special Condition 1.7.3.
The evidence in this matter supports a conclusion that that obligation was complied with by 16 May 2011 at the very latest.
The remedy pursuant to Special Condition 1.4 is not available to Mr Bruce. I agree with Baju’s submission that, at most, Mr Bruce would be entitled to invoke the specific contractual remedy applying to Special Conditions found in clause 6 of the REISA terms and conditions. Therefore, if Mr Bruce has any right to claim to have terminated the Contract for non-fulfilment of the Development Approval Condition it must be by a right provided for in clause 6 of the REISA terms and conditions.
Any failure to comply with Special Condition 1.1 cannot be attributed to the neglect or default of Baju and so Mr Bruce cannot avail himself of clause 6.2 of the REISA terms and conditions. In my view, clause 6.1 also does not assist Mr Bruce because it requires the party not in default to afford the other party an opportunity to remedy and the “default” had been remedied prior to giving any relevant notice. It is Mr Bruce’s case, that any breach was remedied by 8 July 2011. In other words, the breach he relies on was remedied some eight months before he gave written notice of termination (albeit seeking to invoke Special Condition 1.4 not clause 6.1 of the REISA terms and conditions).
Mr Bruce admitted in cross-examination that when purporting to exercise the termination power under Special Condition 1.4 this had nothing to do with Development Act issues.[60] He was not aware of the Development Approval process and, in particular, the issuing of the Decision Notification Form informing of a decision made on 8 July 2011 to grant Development Approval, until March 2012. In the intervening period, Lot 221 had been constructed, the Community Plan deposited on 1 February 2012, and two dates for settlement had passed.
[60] T84/38.
As pointed out by Baju, although Mr Bruce may not have appreciated that there had been a delay in the issue of the Council’s indication under s 33(4) of the Act, Mr Bruce could have made enquiry to the Council or to Baju if it had been of any moment to him.
The clear intent of Special Condition 1.1 of the Development Approval Condition was to ensure that Mr Bruce was not required to proceed with the Contract to purchase Lot 221 for a potentially indefinite period while Building Rules Consents were still being pursued.
As contended by Baju the commercial purpose of the right to terminate does not justify its exercise where there is no such exposure to indefinite delay and where the Building Rules Consents have in fact been obtained prior to the exercise of the right of termination.
I am satisfied that all “necessary approvals” in the nature of Building Rules Consents required under the Development Act were obtained at the latest 16 May 2011 which was a “re-issuing” of consent granted on 23 March 2011.
I am satisfied the inference can be drawn from the totality of the evidence on the issue of Development Approval that a decision had been made to grant Development Approval by Mr Smith by 30 June 2011.
Mr Bruce did not have a right to terminate the Contract for an alleged non‑fulfilment of Special Condition 1.1. The second Notice of Termination did not terminate the Contract.
Further, I agree with Baju’s construction of Special Condition 1.4 to the effect that if it is thought to be a freestanding right of termination, it nevertheless falls to be considered in the context of ordinary principles of vendor and purchaser law.
Conclusion
Findings
In summary, my findings are:
·The Drawing is of no contractual effect.
·The area of Lot 221 is to be discerned from the Architect’s Plans.
·The area of Lot 221 includes the area occupied by the nibs as shown in C27018.
·The area of Lot 221 pursuant to the Architect’s Plans measured according to the Residential PCA Guidelines is 131.30 square metres or by reference to the CTA is 123 square metres.
·The area of Lot 221 as built measured according to the Residential PCA Guidelines is 132.40 square metres and therefore exceeds the area promised in the Architect’s Plans measured according to the Residential PCA Guidelines.
·The area of Lot 221 as built measured on the CTA basis is 123.40 square metres and therefore exceeds the area promised in the Architect’s Plans measured according to the CTA.
·I accept the measurements of Mr Kennedy. The measurements he arrived at by reference to the Residential PCA Guidelines and the CTA were both within five per cent of the area promised as permitted by the Area Condition.
·I am unable to make a finding that the area of Lot 221 includes the additional area to the edge of the slab.
·Mr Bruce has not established there has been a breach of the Area Condition.
·The First Notice of Termination is invalid.
·Mr Bruce was not aware of the issuing of the Development Approval Notification Form after 30 June 2011 until he consulted his solicitors in March 2012.
·I am satisfied that all necessary consents for the purpose of the Contract were obtained by 16 May 2011 at the latest.
·There is no evidence of any reserved matter remaining outstanding after 29 June 2011.
·It is a reasonable inference to be drawn from Mr Smith’s evidence and Council documents tendered that the Development Approval Notification Form could have been issued by the Satisfaction Date if an invoice had been raised and paid immediately following Mr Smith’s meeting with the engineer in the afternoon of 29 June 2011.
·Mr Bruce has not established there has been a breach of the Development Approval Condition.
·The Second Notice of Termination is invalid.
Had I found that the reference to 130 square metres in the Drawing had contractual force and effect, that it overrode the promissory reference to the area depicted in the Architect’s Plans, and that Lot 221 as built comprised the area asserted by Mr Andrew, the difference in the area promised, less 5% permitted in the Area Condition, is 0.15 square metres.
Further, if there was a non-fulfilment of the Development Approval Condition it was rectified by, at the latest, 8 July 2011.
In my view, if there was a breach of the Area Condition or the Development Approval Condition; it was insubstantial.

As Fitzgerald J stated in Tiplady v Goldcoast Carlton Pty Ltd:[61]
It has been established by a long line of authority that a purchaser’s right to rescind is limited to cases in which the difference between the property agreed to be transferred and the property which the vendor was able to transfer was substantial. … Shortly stated, the test is whether the property which the purchaser would receive is substantially different from that which he contracted to buy.
(Emphasis added)
[61] (1984) 3 FCR 426 at [45].
I dismiss Mr Bruce’s cross-claim and enter judgment for Baju. The remaining issue is whether Baju is entitled to specific performance.
Remedy
Ready, willing and able
There is no dispute that Baju, as agent for the Developer, is ready, willing and able to convey the title to Lot 221.
Baju asserted that it is entitled to specific performance as a remedy. Mr Bruce submitted that Baju does not come to equity with clean hands and cannot invoke the remedy of specific performance.
Allegations of deception and dishonesty made during closing submissions
During closing submissions, Mr Bruce alleged that Baju did not have clean hands, had practiced deliberate deception, and that it was never Baju’s intention to build an apartment of 130 square metres or even a lot that came within the five per cent tolerance. Mr Bruce went on to allege that this is not a case of a party genuinely attempting to perform contractual obligations and failing to do so through no deliberate delinquency and that it was always Baju’s intention to build an apartment that exceeded the five per cent tolerance, which it was submitted was tantamount to an intention to breach the Contract from the moment it was signed. Finally, Mr Bruce boldly submitted that Baju should not be rewarded for its dishonesty by an order for specific performance which would have the effect of condoning its misbehaviour.
These allegations can be shortly dealt with. Mr Bruce has not pleaded that Baju engaged in dishonest or deceptive conduct and, in fact, had withdrawn his cross-claim based on misrepresentation by letter dated 7 April 2014 to Baju’s solicitors.
I was invited by counsel for Mr Bruce “not to be timid” and to find Baju’s conduct was deliberately misleading. It was submitted that I should draw a Jones v Dunkel[62] inference from Baju not calling evidence to explain why it prepared Architect’s Plans for Lot 221 of 123 square metres and explain why it was telling purchasers by way of the Drawing that it was 130 square metres. The Jones v Dunkel principle does not apply. The pleadings do not require Baju to call any evidence to rebut the allegations of deception and dishonesty.
[62] (1959) 101 CLR 298.
Mr Bruce contended that he could not plead these allegations until Baju closed its case. Baju could not, in the absence of fair notice or any notice of the allegations, know that it needed to call evidence. There has been no notice, nor application to amend to plead such allegations. There is no evidence before me to suggest such conduct. I reject Mr Bruce’s submissions on this topic.
Damages are an inadequate remedy
Mr Bruce argued that it is necessary for Baju to demonstrate that damages are an inadequate remedy, so as to entitle it to pursue specific performance.
There is no need to lead evidence regarding inadequacy of damages in a claim for specific performance of an agreement for the sale and purchase of land. As the authors of Cheshire & Fifoot Law of Contract state:[63]
… in relation to land, there is a fixed rule that damages is never an adequate substitute for transfer of the land.
and:[64]
… in the case of a contract for the sale of land, provided that the purchaser is entitled to sue for specific performance, the vendor also can obtain such relief.
Therefore, just as a purchaser can compel specific performance of an agreement for the sale of land, so can a vendor.
[63] N Seddon, R Bigwood and M Ellinghaus, Cheshire & Fifoot Law of Contract, (Lexis Nexis Butterworths ,10^th Australian ed, 2012) at 1186, [24.4].
[64] N Seddon, R Bigwood and M Ellinghaus, Cheshire & Fifoot Law of Contract, (Lexis Nexis Butterworths, 10^th Australian ed, 2012) at 1188, [24.6].
Further, the editors of Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies state:[65]
One thing is clear. If for a purchaser damages are not an adequate remedy, the vendor equally is entitled to specific performance although the vendor’s only right is to receive a payment of money, and the purchaser’s only outstanding obligation is to pay it. In Turner v Bladin,[66] the High Court (Williams, Fullagar and Kitto JJ) said:[67]
We are of opinion that where the contract is of such a kind that the purchaser can sue for specific performance, the vendor can also sue for specific performance, although the claim is merely to recover a sum of money and that he can do so although at the date of the writ the contract has been fully performed except for the payment of the purchase money or some part thereof.
Two justifications are advanced for this undoubted proposition of law. One is that where the court would regard damages as an inadequate remedy for one party and would grant that party specific performance, justice requires that the other party should equally be able to enforce the contract in specie, even though damages would otherwise be regarded as adequate for that party. … The other justification is that in these cases payment of money is not all that the vendor requires: the vendor is also entitled to divest himself or herself of the property. Damages, therefore, are not adequate for the vendor.[68]
(Footnotes in original)
[65] JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies, (Lexis Nexis Butterworths, 5^th ed, 2015) at 657, [20-045].
[66] (1951) 82 CLR 463 at 473.
[67] See also, Nives v Nives (1880) 15 Ch D 649; the dictum of Nicholas J in Eastwood-Epping Ice & Fuel Co Ltd v Pittock (1938) 38 SR (NSW) 671 at 677 approved by the court in Turner v Bladin (1951) 82 CLR 463; Clifford v Turrell (1845) 1 Y & CC 138 at 150; 62 ER 826 at 831; Walker v Eastern Counties Railway Co (1848) 6 Hare 594; 67 ER 1300; Rudder v George Hudson Holdings Ltd [1972] 1 NSWLR 529 at 535.
[68] Dougan v Ley (1946) 71 CLR 142 at 150.
The passage from Turner v Bladin,[69] referred to by Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies[70] and cited above, continues as follows, demonstrating that specific performance is equally available to vendor and purchaser:[71]
The law is, we think, correctly stated by Nicholas J. (as he then was) in Eastwood-Epping Ice & Fuel Co. Ltd. v. Pittock[72]: “The right of a vendor to sue for a decree in equity that payment should be made according to a contract, although it is a claim for a money payment only, appears to be an additional right recognized in every case in which the other party to the contract might have sued for specific performance had he been the party complaining of the breach (see Fry on Specific Performance , 6th ed. (1921) p. 33; Maitland on Equity, 1st ed. (1936), p. 239).
[69] (1951) 82 CLR 463 at 473.
[70] JD Heydon, MJ Leeming and PG Turner, Meagher, Gummow & Lehane’s Equity: Doctrines and Remedies, (Lexis Nexis Butterworths, 5^th ed, 2015) at 657, [20-045].
[71] (1951) 82 CLR 463 at 473.
[72] (1938) 38 SR (NSW) 671 at 677; 56 WN 26.
Mr Bruce has failed to make out his case that he validly terminated the Contract on the basis of a breach of the Area Condition or a breach of the Development Approval Condition. He cannot, in my view, oppose a grant of specific performance.
Baju has a legitimate interest in divesting itself of Lot 221. I am satisfied that Baju has established its entitlement to an order for specific performance of the Contract.
I will hear the parties regarding consequential orders and costs.

Area promised (Architect’s Plans per contract)	Property Council Guidelines	CTA basis
Scaled from Architect’s Plans	131.30 sqm	123.00 sqm

Actual area (as built)	Property Council Guidelines	CTA basis
Survey measurements	132.40 sqm	123.40 sqm
Survey measurements excluding nib walls	123.35 sqm
Survey measurements including to edge of slab on balcony	123.78 sqm
Survey measurements including to edge of slab on balcony excluding nib walls	123.73 sqm