Bedroff Pty Ltd v Rennie

[2002] NSWSC 928

CITATION:	Bedroff Pty Ltd v Rennie [2002] NSWSC 928
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	SC 4323/02
HEARING DATE(S):	5, 6 September 2002 [then written submissions]
JUDGMENT DATE:	22 October 2002
PARTIES :	Bedroff Pty Limited (P) Marlene Joyce Rennie (D)
JUDGMENT OF:	Young CJ in Eq

COUNSEL :	J M Ireland QC (P) T S Hale SC (D)
SOLICITORS:	Holman Webb (P) Beesley & Hughes (D)
CATCHWORDS:	CONVEYANCING [40]- Condition- Purported waiver- Whether condition solely for benefit of one party. CONVEYANCING [64]- Time- When completion due- Whether notice to complete premature.
LEGISLATION CITED:	Duties Act 1997, s 304
CASES CITED:	Amber Holdings (Aust) Pty Ltd v Polona Pty Ltd [1982] 2 NSWLR 470 Charles Lodge Pty Ltd v Menahem [1966] VR 161 Dent v Moore (1919) 26 CLR 316 Gustin v Taajamba Pty Ltd (1988) 4 BPR 9373 Measey v Evans [1996] QCA 108 Meehan v Jones (1982) 149 CLR 571 Sandra Investments Pty Ltd v Booth (1983) 153 CLR 153 Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117 Toga Development No 10 Pty Ltd v Gibson (1973) 2 BPR 9260 Turnstila Pty Ltd v North Shore Gas Co Ltd (1981) 2 BPR 9105 Vakele Pty Ltd v Assender (1989) 4 BPR 9591 Willing v Baker (1992) 58 SASR 357
DECISION:	See para 84.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 22 October 2002

4323/02 – BEDROFF PTY LTD v RENNIE

JUDGMENT

1 HIS HONOUR: This is the final hearing of a purchaser's specific performance suit in respect of industrial property in the main street of Byron Bay, generally known as 159 Jonson Street, though on some occasions it is referred to as 156 Jonson Street.

2 The contract entered into by the parties on 5 October 2001 was in the 2000 edition of the standard form. It provided for a purchase price of $1.55 million, with a deposit of $77,500. On the front page the box marked "Completion date" was filled in as "See Special Condition 6".

3 There were 13 special conditions. It is necessary to summarise or set out some of these special conditions and also printed condition 29.

4 Special condition 2 provided that if completion had not been effected by the completion date, then a party might give a 14 day notice to complete. Special condition 3 provided that if completion did not take place on the date specified, then the vendor was entitled to interest at 10% from the due date for completion. Special conditions 4 and 6 are as follows:

"4. This contract is subject to the Purchaser obtaining a deferred commencement Development Consent or a Development Consent for a development, which is permissible from Byron Shire Council or such other consent authority or authorities that may apply under the Environmental Planning & Assessment Act 1979 as may be amended from time to time within nine (9) months from the date of this contract.
If such deferred commencement Development Consent has not been obtained within that time either party may rescind on fourteen (14) days notice to the other party in writing.
6. The Purchaser shall notify the Vendor immediately upon the said Development Consent being obtained and settlement is to occur within twenty-eight (28) days of the date of a Notice of Determination of Approval of Development Consent, whether or not it is on a deferred commencement basis, has been communicated to the Purchaser and the Vendor requests such completion date."

5 Special condition 8 provided that there had been a reduced deposit but that if "the Purchaser defaults in the observance or performance of any obligation imposed on her [sic] under or by virtue of this Contract then the Purchaser will forthwith pay to the Vendor the balance of the ten percent (10%) of the purchase price…".

6 Special condition 10 is as follows:

"10. The Purchaser must do everything reasonable to obtain a Notice of Determination of Approval of Development Consent to the permissible development including obtaining deferred commencement Development Consent to which the Vendor has already provided her Owner's Consent.

7 Printed clause 29 is headed "Conditional contract". 29.1 and 29.7 are as follows:

"29.1 This clause applies only if a provision says this contract or completion is conditional on an event.
29.7 If the parties can lawfully complete without the event happening -
29.7.1 if the event does not happen within the time for it to happen, a party who has the benefit of the provision can rescind within 7 days after the end of that time; and
29.7.2 if the event involves an approval and an application for the approval is refused, a party who has the benefit of the provision can rescind within 7 days after either party serves notice of the refusal.
29.7.3 the completion date becomes the later of the completion date and 21 days after the earliest of -

· either party serving notice of the event happening;

· every party who has the benefit of the provision serving notice waiving the provision; or

· the end of the time for the event to happen."

8 Nothing happened in and about any application to the Byron Shire Council prior to 17 May 2002. Indeed, no application has ever been made to the Council for development consent. It will be noted that under special condition 4 the consent had to be achieved by 5 July 2002.

9 On 17 May 2002, the purchaser's solicitors wrote to the vendor's solicitors as follows:

"Completion of this contract was conditional upon the purchaser obtaining a Deferred Commencement Development Consent or a Development Consent for a Development which is permissible from Byron Shire Council within nine months of the date of the Contract.
We are instructed to advise you that our client is prepared to complete the Contract without this consent and we have been further instructed to make arrangements for completion."

10 On 29 May, the vendor's solicitors referred to this letter and noted their understanding that the purchaser had not lodged a development application. The letter then asked for the purchaser's specific intentions in relation to settlement.

11 On 5 June, the purchaser's solicitors sent a form of transfer for approval and execution and asked whether special condition 12 of the contract had been fulfilled. On 13 June the vendor's solicitors answered requisitions and dealt with the matter raised by the purchaser's solicitors' letter, and ended, "Please can you now advise what your client has done in satisfaction or otherwise of Special Condition Number 10 of the contract".

12 On 4 July, the purchaser's solicitors faxed the vendor's solicitors about an occupation of part of the property by someone with a boat and asked what arrangements had been made to ensure vacant possession.

13 On 5 July 2002 the vendor's solicitors wrote confirming that the vendor had signed the transfer and noting that only $30,000 of the $77,500 deposit had been paid. The letter asked when the balance was going to be paid and also to advise in respect of the obtaining of the development consent under special condition 10. On 9 July 2002 the vendor's solicitors answered the query in the fax of 4 July and said that as they had not received a response to their letter of 5 July, they proposed to issue a notice to complete later that day.

14 A formal notice to complete was given on 9 July. It is necessary to set it out in full:

" NOTICE TO COMPLETE
TO: BEDROFF PTY. LIMITED ACN 079 158 955
5103 St. Andrews Terrace
SANCTUARY COVE QLD 4212
AND: their Solicitors,
HOLMAN WEBB
167 Macquarie Street
SYDNEY NSW 2000
DX 233 SYDNEY
WHEREAS:
A. By Agreement dated 5 October 2001, the Vendor agreed to sell the property described as 159 Jonson Street, Byron Bay ("the property"). The Purchaser by this Agreement agreed to purchase the subject property.
B. The Purchaser has paid deposit monies totalling $30,000.00. The Contract dated 5 October 2001 provided for the payment of a deposit of $77,500.00.
C. The Vendors are ready, willing and able to complete the transaction, which commenced on 5 October 2001.
D. By Special Condition 4 of the Contract, the Purchaser was entitled to obtain from Byron Shire Council a Development Consent in relation to the land, which is the subject of this Contract. Special Condition 4 gave the Purchaser nine (9) months within which time such Development Consent could be obtained.
E. As such time under Special Condition 4 has passed and such Development Consent has not been obtained, then either party may rescind this Contract upon the giving of fourteen (14) days notice to the other part in writing.
F. The Vendor has done all things necessary to assist with the obtaining of the Development Consent stipulated in Special Condition 4.
As Solicitors for and on behalf of the Vendor WE HEREBY GIVE YOU NOTICE:-
1. You are required to complete the purchase of the property at the offices of Beesley & Hughes Solicitors at 16 Byron Street, Bangalow by 3.00pm on 26 July 2002.
2. If you fail to comply with this notice, the Vendor shall by notice in writing to you terminate this Agreement for Sale.
3. In the event of termination the Vendor will/may sue you regarding the following:-
(a) For breach of the Contract, in particular the obligation of you as purchasers to pay the deposit of $77,500.00 and accordingly to recover the sum of $47,500.00, being the balance of the deposit payable by the Purchaser.
(b) In the event the Vendor re-sells the property, to recover from the Purchaser any loss the Vendor may suffer (if any) arising from any inability to achieve a comparable price on any such resale and all expenses of, or incidental to, such resale or attempted resale and the Purchaser's default.
4. Penalty interest applies.
DATED: 9 July 2001.
(Sgd)
BEESLEY & HUGHES
Solicitors for and on behalf of the Vendor
16 Byron Street
BANGALOW NSW 2479
DX 20101 BANGALOW"

15 The purchaser's solicitors sent a fax on 10 July to the effect that it contended that the vendor was not entitled to issue a notice to complete. This was followed by a letter on 18 July to the effect that it did not have to top up the deposit and that it had waived its rights under special condition 4 and to say that in any event the notice to complete was bad as to the amount of time allowed. The purchaser also put a caveat on the title.

16 On 26 July the purchaser's solicitors wrote to the effect that the boat was still on the land, therefore the vendor had not given vacant possession, notifying the vendor's solicitors that a caveat had been lodged and that should there be a purported termination "then our client will take whatever action is necessary to protect its position".

17 A lapsing notice was then given in respect of the caveat. On 30 July 2002, the purchaser's solicitors said that the notice to complete was invalid as the vendor was not ready, willing and able to complete the contract by giving vacant possession and that in any event, the claim for interest was an invalid demand which vitiated the notice. Notwithstanding all this, the vendor purported to terminate the contract on 2 August. The vendor then put the property up for reauction.

18 The purchaser filed a statement of claim seeking specific performance on 30 August 2002, and on the same day filed a notice of motion to extend the caveat and to prevent the auction being held.

19 The motion came on before me as duty judge on 5 September. The parties agreed to treat the hearing before me as the final hearing of the proceedings and the evidence was presented and the arguments on that evidence presented both in writing and orally. I reserved my decision overnight.

20 The reason for haste was that the auction had been set for the following Monday, 9 September.

21 However, on 6 September further submissions were made. Having reached a provisional conclusion that the plaintiff's claim had substance, I granted an injunction to prevent the auction occurring, received further evidence, gave leave for further submissions to be made in writing, and reserved my decision. This is that decision.

22 The facts which I have set out above are not in dispute. There is some material to suggest that the plaintiff could have obtained finance to settle the purchase. I infer from the correspondence that the purchaser was not at all anxious to settle the purchase before it had to do so and thus save itself interest on borrowed moneys, and on the other hand the vendor thought that she could get far more for the property at reauction. Those appear to be the motives of the parties, but apart from the question of interest, if specific performance succeeds, they are irrelevant to the legal issues I have to consider.

23 The issues that arise are as follows:

(1) On the true construction of the contract was it within the power of the purchaser to waive special condition 4?

(2) If the answer to (1) is "No", has the vendor waived her rights under special condition 4?

(3) What was the completion date of the contract?

(4) Is the notice to complete valid in form and sufficient as to time?

(5) Was the notice to complete given prematurely?

(6) Could it be said that the purchaser was in default under special condition 8?

(7) Should any of the following issues affect the result:

(a) the failure to stamp the contract before the proceedings were commenced;

(b) the issue of the boat; or
(c) otherwise.

(8) Should an order for specific performance be made?

(9) If so, should interest be payable and from what date and at what rate?

(10) What is the result of the case?

I will deal with each of these matters in turn.

24 (1) The initial argument of this case was rather strange in that I was handed a series of photostats of decisions which were relevant as to when a party may waive conditions in a contract, almost all of which had been decided in Queensland since 1984. I put this phenomenon down to the regrettable fact that a lot of research is now done by computer by research assistants, and computers do not seem to recognize any decision given before about 1984. Apart from the High Court's decisions in the field, there are, indeed, a series of decisions in New South Wales given before 1984, which are of far more assistance than the unreported Queensland decisions. Indeed, it must always be remembered that whilst the Queensland Property Law Act 1974 is substantially similar to our Conveyancing Act 1919 and often guidance can be had from Queensland decisions because of this, the standard form of contract for the sale of land in Queensland makes time of the essence, so that in questions as to time in the operation of contracts for the sale of land, Queensland decisions often have to be read in the light of that very great difference.

25 In Amber Holdings (Aust) Pty Ltd v Polona Pty Ltd [1982] 2 NSWLR 470, 475, Holland J said:

"It would also appear to be settled that if a condition is inserted entirely for the benefit of one party, that party may (perhaps, even if guilty of some default affecting the fulfilment of the condition) waive its fulfilment and require the other party to perform the contract notwithstanding … but not unless the condition is found to be wholly for the benefit of the waiving party."

His Honour went on to say at 475G:

"A question that arises here is whether, although the substance of the condition may be considered as being designed to protect and benefit only the purchaser, the presence of express bilateral rights to rescind on failure of the contingency precluded unilateral waiver by the purchaser. In my opinion, the answer is that it does."

26 His Honour held that where the contract provides that both parties have a right to rescind, it is not possible without waiver of the right by the other party or variation of contract to convert a bilateral right to rescind into a unilateral right to rescind. His Honour referred with approval to the previous decision of Toga Development No 10 Pty Ltd v Gibson (1973) 2 BPR 9260. That again was a case where either party could rescind if the condition did not happen. The same result was reached, Mahoney J saying at 9264:

"There has been no exhaustive statement in the authorities of the kind of benefit to a vendor which will prevent a purchaser relying upon this kind of waiver. The kind of benefit in question includes an actual or potential increase in the value of other property owned by the vendor which may arise from the performance of the condition in question … . The relevant benefit is not, however, limited to such financial benefit. It has been held that if a clause operates to enable a party to a contract to 'determine with certainty and without waiting upon the will and acts of' the other party 'what his position under the contract is' that clause confers a benefit upon that party; it has been held that in such a case the purchaser cannot claim that the clause is solely for his benefit in the relevant sense …".

The quotation came from a decision of the Full Victorian Supreme Court in Charles Lodge Pty Ltd v Menahem [1966] VR 161, 165-6.

27 I followed that passage in Vakele Pty Ltd v Assender (1989) 4 BPR 9591, 9596, where again the authorities are reviewed.

28 In Meehan v Jones (1982) 149 CLR 571, 592, Mason J said that a clause which gave each party a right to terminate if an event wholly within the control of the purchaser had not occurred, was not exclusively for the benefit of the purchaser.

29 The High Court considered the matter again in Sandra Investments Pty Ltd v Booth (1983) 153 CLR 153. This was a Queensland appeal. The contract in question was also one explicitly giving the purchaser a right to rescind without mentioning that the vendor had a similar right. The headnote rightly says that the Justices came to the view that in that contract the condition was solely for the benefit of the purchaser. However, there is some discussion on p 161 in the judgment of Gibb CJ which suggests there may be circumstances where a condition is still for the benefit of the purchaser even though its fulfilment or non-fulfilment did affect the vendor.

30 The matter was considered by the South Australian Full Court in Willing v Baker (1992) 58 SASR 357. None of the three judgments have any reference to any of the NSW decisions on the topic. Legoe J gave the leading judgment. He discussed when a party may waive a condition and reached the conclusion that (with respect correctly) it all depended on the construction of the contract in question. However, his Honour seems to have been primarily guided by the 5th Australian edition of Cheshire and Fifoot's Law of Contract, a passage that now appears as the first paragraph of [20.10] of the 7th Australian edition (Butterworths, Sydney, 1997). Unfortunately, the learned editors of Cheshire and Fifoot, not having considered the NSW decisions, make the statement: "The rule cannot, however, be said to have a very precise form." That statement probably led Legoe J into thinking that such a clause may be waived by a purchaser notwithstanding that the vendor would receive some benefits under it. That does not appear to be the law in New South Wales; see eg Butt, The Standard Contract of Sale of Land in NSW 2nd ed (LBC, Sydney, 1998) [28.27].

31 Counsel referred to the decision of the Queensland Court of Appeal in Measey v Evans [1996] QCA 108. In that case, the contract provided that the relevant special condition was solely for the benefit of the purchaser. Pincus JA and Helman J held, despite some misgivings as to the construction of the whole document, that that provision should be given effect to so that only the purchasers were entitled to waive the condition.

32 Mr Hale SC for the defendant, submitted that whether or not a provision is for the benefit of the vendor as well as the purchaser is to be determined in the circumstances existing at the time of the notice of waiver. I do not consider that this submission is correct. Mr Hale SC relies on a passage in Turnstila Pty Ltd v North Shore Gas Co Ltd (1981) 2 BPR 9105, 9106. However, I consider that that passage which notes the right to waive is a result of an implied term, in fact points to one having to consider the matter as at the date of contract.

33 Mr Hale SC then puts that special condition 4 does not specify the development in respect of which the development consent was to be sought. It left it up to the plaintiff to select the form of development. The plaintiff could well have merely submitted a trivial development application such as for a fence in order to bring forward the time for completion.

34 He adds:

"In those circumstances the vendor's right of rescission seven and a half months later would be of no benefit since the purchaser could, for the sake of form, obtain within a short period of time a development consent of the type just described."

35 There is a lot of force in these submissions which have not really been answered by Mr Ireland QC.

36 However, the answer to the submissions is that both parties made their contract on the basis that some sort of development application would be made. They probably considered that such an application would be more than merely a trivial development such as the erection of a fence. Accordingly I doubt whether Mr Hale's scenario has validity. Should either party have changed its or her mind, it would need the other's consent to advance the settlement date or to consent to a provision of the contract being waived.

37 In my view the approach taken in the Toga case and other NSW cases should be followed. The vendor has some interest as to whether the special condition is fulfilled. Apart from certainty, any development consent in relation to industrial land would probably be of some benefit to the vendor and furthermore, the purchaser has expressly contracted in special condition 10 to bring that about. In my view the clause is not solely for the benefit of the purchaser, and the purchaser alone cannot waive it.

38 (2) The next question is whether the vendor, by her conduct, has waived her rights to object to the purchaser's unilateral election to treat the contract as unconditional.

39 Mr Ireland QC for the plaintiff, said that there was need to take care to examine what it is that it is alleged to have been waived. Is it the condition or notification of obtaining the consent under special condition 6, or the giving of a written notice under special condition 4? In my view the matter to be waived is better expressed in the way I have set out above, that is, whether there has been waiver of the right to object to the purchaser proclaiming the contract as unconditional.

40 Probably the term "waiver" is inappropriate for the reasons given by Mahoney in Toga (supra) at 9269. More properly the question is whether there is an estoppel against the vendor.

41 However, if waiver is the true subject of the analysis, the enquiry must be as to whether the conduct of the vendor was unequivocal in the true sense of the word, that is, "The conduct must be capable of one construction only, namely that X has chosen to forego its rights": Wilken and Villiers Waiver, Variation and Estoppel (John Wiley & Sons, Chichester, 1998) para [40.08] at p 48. I cannot see that the evidence which consists of the correspondence I have abstracted earlier is strong enough to reach this conclusion.

42 Looking at the question as one of estoppel, Mr Hale SC submits that the plaintiff is now estopped from asserting that, for the purposes of clause 29.7.3 the defendant also had the benefit of special condition 4 and that therefore the plaintiff's purported waiver of that provision was ineffective. He says that the defendant relies upon estoppel by representation and estoppel by convention.

43 He accordingly says that clause 29.7.3 operates so that completion is 21 days after 17 May being the date on which "every party who has the benefit of the provision serving notice waiving the provision". Twenty-one days after 17 May is 7 June.

44 He develops the submission by putting that the purchaser's letter of 17 May represented that it had waived the condition concerning development consent and that the contract was now unconditional.

45 The vendor then answered requisitions, procured a deed of assignment from the State Rail Authority and confirmed that the transfer had been signed. She did all this well knowing that no development application had been made.

46 The vendor then made the assumption that the date for completion was 21 days after 17 May on the purchaser's representation or conduct and acted to her detriment in serving the notice to complete when she did.

47 Alternatively, the plaintiff is estopped from denying that special condition 4 had been waived.

48 The submission the concludes:

"For the plaintiff to now depart from the assumption upon which the defendant conducted herself would be unjust and unconscionable and it is therefore estopped from doing so."

49 Reduced to its simplest form, Mr Hale's proposition is that the purchaser's conduct on and after 17 May led the vendor to form a belief to her detriment that special condition 4 had been removed from the contract.

50 Evidence to support this proposition is fairly weak. There is nowhere in the evidence a statement by the vendor or any witness called on her behalf that she ever relied on the purchaser's conduct of 17 May or otherwise.

51 Again the letter of 17 May merely said that the purchaser was prepared to complete the contract without the consent. It did not explicitly waive the condition.

52 Furthermore, the correspondence which I have already extracted earlier in these reasons contains not a word about any such representation or reliance. Indeed, on 29 May the vendor was still saying that the purchaser had not lodged a development application.

53 It would seem from the correspondence that the parties were more concerned with possible problems with the boat and the deed of assignment from the State Rail Authority.

54 Thus, I cannot see how this material can amount to a representation by statement or by silence upon which the purchaser might rely, nor is there sufficient evidence that the purchaser did in fact rely in on it.

55 Accordingly, in my view, there was no waiver or estoppel.

56 (3) As I have said, the box for completion date on page 1 merely referred to special condition 6. Special condition 6 could not come into play because no development consent was ever obtained. What then, was the completion date?

57 One has to go to printed condition 29. This was added for the first time in the 2000 edition of the contract, and there is little exegesis of it, though see CCH's Conveyancing Service Vol 1 [7-082].

58 29.1 provides that clause 29 is only to apply "… if a provision says this contract or completion is conditional on an event". "A provision says" would seem to indicate that one must look for some express term. There is none in this contract. However, it seems to me, and the contrary was not really argued, that special condition 4 comes within the definition.

59 On this basis, as the parties could lawfully complete without the consent, clause 29.7 comes into play. However, clause 29.7.1 is inconsistent with special condition 4, and the latter, being a typed clause, would prevail over a printed clause unless the context showed that some other construction should be applied. The context does not so require. Thus one goes to 29.7.3, there is no completion date, therefore completion is to take place 21 days after the end of the time for the event to happen which was 5 July 2002.

60 Thus the completion date is 26 July 2002.

61 (4) It is said that the notice to complete is invalid as to form and insufficient as to time.

62 As to the former, it must be remarked that the notice is a very peculiar one. There are basically two types of notices to complete: (a) notices putting an essential time on an intermediate step before a contract is completed; and (b) notices making time of the essence for final completion of the contract. The present notice in its recitals seems to suggest it is of type (a), but the requirements are of type (b).

63 As can be seen from the correspondence, there was some debate between the solicitor as to whether the vendor was in a position to give a notice to complete. Most of those have now evaporated and I will deal with those matters under head (7).

64 The reasons for complaining with the notice to complete's form are:

(a) the recitals do not recite the default which bases the requirement that time be of the essence for completion; and

(b) the notice demands too much in that it requires interest.

65 Although almost all well drawn notices to complete recite the default, there are a number of decisions of Powell J, the most recent being Taylor v Raglan Developments Pty Ltd [1981] 2 NSWLR 117, 132, that it is incorrect to say that a notice to complete is only valid if it expresses the default. Lindgren J, as his Honour now is, accepted Powell J's proposition, despite the fact that he had said the reverse in the first edition of his book (see Lindgren Time in the Performance of Contracts 2nd ed (Butterworths, Sydney, 1982) p 98 [499.14]). The Court of Appeal took the same view in Gustin v Taajamba Pty Ltd (1988) 4 BPR 9373, 9378-9. Thus I find that the notice to complete was not defective on account of the fact that it did not set out the default.

66 The only mention of interest in the notice to complete is "4. Penalty interest applies". This is a rather esoteric statement. However, it seems to me that it does no more than call attention to the fact that the vendor is claiming the 10% interest from the time the contract ought to have been completed. It would have been better had the recitals in the notice to complete stated that the time for completion had gone by and accordingly interest began to run, but it did not do so. Indeed, had the drafter of the notice directed his or her mind to this point, there would not have been the problem that I set out under head 5. Accordingly, in my view, the notice, despite its poor form, was adequate.

67 So far as time is concerned, it seems to me that in view of the provisions of the special conditions as to 14 days' notice, the great amount of time which had expired since the contract was entered into, and the general correspondence, that in all the circumstances 14 days was a sufficient period to set out in the notice to complete.

68 (5) The notice to complete sought to make time of the essence in respect of completion. It did not, of course, actually say that time was of the essence, but it seems to me that it is sufficiently implicit in what was said.

69 However, the notice was given on 9 July. The completion date, for the reason I have set out earlier, was 26 July. Accordingly, at the time when the notice to complete was given, there was no breach of the obligation to complete.

70 The time for completion had not occurred. That was the only substantial and serious breach which would warrant the making of time of the essence for completion. Accordingly, the notice was premature.

71 As I understand it, Mr Hale SC for the vendor conceded that if he should lose on the first two points which I have considered, then it followed that the notice must be premature. This concession was rightly made.

72 (6) Although it really is of little moment in view of the conclusion I have reached, it seems to me that there was the situation where the purchaser was in default under the contract, special condition 10, because it had not, as promised, done everything reasonable to obtain a notice of determination of approval of development consent. Indeed, it had done absolutely nothing about applying for such consent. It follows that the deposit should have been topped up under special condition 8. However, this default has no relevance to the question of failure to complete.

73 (7) I will deal briefly with three issues which were raised but do not, to my mind, affect the result of the case:

(i) Stamp Duty. At the commencement of the case, I asked Mr Ireland QC whether the contract he was tendering had been stamped. It soon became apparent that it had not been stamped. There was a short adjournment, and during that short adjournment the original contract was lodged with the revenue authorities and undertakings given. The point was available to the vendor to say that the proceedings should be dismissed because the plaintiff had no right to specific performance because the contract had not been stamped. However, both parties wanted to make use of the court time available and the case proceeded.

74 On 6 September when I was about to give reasons for judgment, Mr Ireland informed me that the revenue authorities had raised a requisition about the stamping of the contract, and at that stage Mr Hale said that there should be a verdict for the defendant because the contract was not stamped. Mr Ireland then obtained an adjournment which I thought I should give.

75 Section 304 of the Duties Act 1997, provides that:

"An instrument … is not available for use in law or equity for any purpose … unless … it is duly stamped."

76 Although the legislation is slightly changed from that which was examined by the High Court in Dent v Moore (1919) 26 CLR 316, the general text is the same. Of the predecessor of the present section, Isaacs J, when giving the decision of the High Court in that case, said at 324 that until the public requirement of taxation had been complied with:

"the instrument (except in criminal proceedings) is not 'available' and not 'effectual' – that is, it has no effect – for any purpose whatsoever at law or in equity: in other words, it cannot be considered as an instrument giving title, or as one which could be made the means of compelling anyone to give title. It is in the eye of the law a nullity, except for criminal proceedings and, of course, for the purpose of being stamped."

77 The contract has now been stamped. Thus, apart from reminding everybody of the requirement of the law, I need take this matter no further.

78 (ii) The correspondence referred to a boat being on the land and thus the vendor was not able to give vacant possession. There was indeed some arrangement between the vendor and an acquaintance that the latter could place a partially built boat he was building on the land, but the boat was removed and this is now a non-issue.

79 (iii) There was some suggestion made, particularly in the light of recital E to the notice to complete, that in lieu of requesting completion, the vendor could now rescind. Indeed, on 6 September the vendor formally purported to rescind.

80 In my view, the actions of the vendor including the action of giving a notice to complete and terminating operates as an election not to take the alternative course of rescinding and have the contract terminated ab initio.

81 (8) Accordingly, the purported termination by the vendor was ineffective because time was never of the essence of the contract, the notice to complete being given prematurely. The purchaser now appears ready, willing and able to complete, and subject to what I say about interest in paragraph (9), there is no reason why an order for specific performance should not be granted.

82 (9) The only issue as to interest is whether it should be ordered. In my view, there should be an order for interest. The correspondence, as I have said, shows a clear indication that the purchaser was trying to use every possible technicality in order to delay settlement. Almost every point that its solicitor took was quite invalid. The purchaser has succeeded here on a point that it never took in correspondence, namely that the notice to complete was premature.

83 No reason has been shown why the contract should not have been completed on the completion day, namely 26 July. The contract provided for 10% interest, and that should be paid on the purchase price on and after 26 July until the contract is completed. Even if the contract had not so provided, it would seem to me that in accordance with equitable principles, interest should be awarded from 26 July 2002. Accordingly, when adjusting what is to be paid on completion, the purchaser is to pay interest at 10% of the purchase price (less any part of the deposit that was actually passed unconditionally to the vendor) from 26 July until settlement.

84 (10) There should thus be a declaration that the contract is still on foot, that the purchaser is entitled to specific performance. There should be an order for specific performance. Liberty to approach a Master for directions as to the implementation of the order and an order that the vendor pay the purchaser's costs of the proceedings. There should be liberty to apply. The exhibits should be retained.

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Last Modified: 10/23/2002