Birdseye v The Registrar-General of Lands Titles Office & W & R Pty Ltd - [2007] SADC 130

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
BIRDSEYE v THE REGISTRAR-GENERAL OF LANDS TITLES OFFICE & W & R PTY LTD
[2007] SADC 130
Judgment of Her Honour Judge Shaw
13 December 2007
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - BREACH OF CONTRACT - REPUDIATION
Vendor and Purchaser - sale of land - termination by vendor - service of documents - notice to complete by fixed date - repudiation - declaration and specific performance
Land and Business (Sale and Conveyancing) Act 1994 ss.5 & 17, referred to.
Mehmet v Benson (1965) 113 CLR 295; Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1994) 63 SASR 235; Brien v Dwyer (1978) 141 CLR 378; Kirk & Anor v Ashdown & Anor [1998] QCA 77; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; Harbray Nominees Pty Ltd v Ongley [2004] SASC 62; Butt, P "The Modern Law of Notices to Complete" (1985) 59 ALJ 260; Robinson v Becata Pty Ltd [2004] NSWSC 310; Louinder v Leis (1982) 149 CLR 509; Balog v Crestani (1975) 132 CLR 289; Central Pacific (Campus) Pty Ltd v Staged Developments Australia Pty Ltd [1998] V Conv R 66; Wilde v Anstee [1999] 48 NSWLR 387; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; Ross T Smyth & Co v T D Bailey Son & Co [1940] 3 All ER 60; Bishop v Taylor (1968) 118 CLR 518; Eskin & Ors v Trewin & Ors [Unreported, Supreme Court of Victoria, Byrne J, 15 June 1995]; Meagher, R Meagher, Gummow and Lehane's Equity: Doctrines and Remedies 4th Ed Lexis Nexis Butterworths, Chatswood N.S.W., 2002; Gurney v Gurney (No. 2) [1967] NZLR 922; Adelaide Brighton v Ostabridge [2005] NSWSC 737; Shevill v The Builders Licensing Board (1981-1982) 149 CLR 620; Allmed Pty Ltd v Opak Investments Pty Ltd & Ors [Unreported, Supreme Court of SA, Mullighan J, 28 June 1994, S4631]; Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514; McKinnon Holdings Pty Ltd v Hind [1984] 2 NSWLR 121; Romanos v Pentagold Investments Pty Ltd (2003) 77 ALJR 1882 at [20]; Carydis v Merrag Pty Ltd [2007] NSWSC 1220, considered.

BIRDSEYE v THE REGISTRAR-GENERAL OF LANDS TITLES OFFICE & W & R PTY LTD
[2007] SADC 130
Introduction

This is a claim by Mr Nicholas Birdseye (“the plaintiff”) for a declaration and specific performance in relation to rural land sales contracts (“the contracts”) entered into between the plaintiff and the second defendant, on 28 May 2003 ("the contract date") for the purchase of two blocks of land near Sceale Bay on the Eyre Peninsula.
The second defendant is a company incorporated under the Corporations Act 2001 (Cth) and the registered proprietor of the two blocks of land. At all relevant times, Mr and Mrs Guidera were directors of the company and Mrs Guidera was the company secretary.
Each contract stipulated a purchase price of $120,000.00 for each block.
Each contract required the payment of a deposit in the sum of $5,000.00 on the next business day after the expiration of the cooling off period. An important issue is whether the plaintiff was required to pay the deposit after the expiration of the cooling off period following the execution of the contracts by the company on 28 May 2003. The plaintiff contended that there were irregularities in relation to the content of the relevant documents and the proper service of documents upon him.
The second defendant (“the company”) contended that the non-payment of the deposit was a breach of each contract. Further, the plaintiff failed to complete the contracts on the settlement date fixed by each contract, namely 10 July 2003. The company contended that it terminated the contracts. The company submitted that although the plaintiff was provided with further opportunities to complete each contract, he failed to do so. The company contended that the plaintiff’s conduct amounted to a repudiation of the contracts.
The plaintiff contended that the contracts remained on foot. The plaintiff submitted that he had not breached the contracts, he did not repudiate the contracts and the company’s purported termination of the contracts was invalid.
The first defendant is the Registrar-General with powers and responsibilities under the Real Property Act 1986 (SA) and has advised that he would abide the event in this matter.
Chronology of Events
In about Easter 2003, the plaintiff spoke to the company’s agent, Mr Stephens of Elders Real Estate, Streaky Bay, expressing his interest in purchasing the blocks of land in question, namely Lot 106[1] and Lot 109.[2]
[1] Certificate of Title Volume 5895 Folio 870 (formerly Certificate of Title Register Book Volume 5392 Folio 868)
[2] Certificate of Title Register Book Volume 5613 Folio 683
On 12 May 2003, Mr Stephens sent to the plaintiff, by ordinary post, a letter with two land contracts for purchase of the two blocks, together with two Vendor’s Statements (Form One).
The contracts were standard form Real Estate Institute of South Australia Rural Contracts. The contracts each provided for a purchase price of $120,000.00 against a deposit of $12,000.00. The contracts each provided that the settlement was to take place on 25 June 2003 “or such other day as is mutually agreed, in writing, by the Vendor and Purchaser”.[3] The balance of the purchase price was to be paid at settlement. There were no special conditions. The contracts were not subject to finance.
[3] Exhibit P1, document 4, clause P, page 13 of 15
The letter from Mr Stephens requested the plaintiff to sign and return the documents with his deposit cheque.[4]
[4] Exhibit P1, document 3
A copy of the title search showing that Christine Anne Pluker was the registered proprietor of Lot 106, was attached to the Vendor’s Statement for Lot 106.
Prior to 16 May 2003, the plaintiff said that he spoke to Mr Stephens regarding the title issue in relation to Lot 106 and the date of the contract, which was incorrectly recorded in the Vendor’s Statements as 16 May 2003.
On 16 May 2003, the plaintiff altered the required deposit sum so that the total deposit to be paid for the two lots was $10,000.00. He also altered the settlement date of the contracts so that the settlement date was 10 July 2003. The plaintiff executed and returned to the land agent, the contracts and one of the two Vendor’s Statements, namely for Lot 109.[5]
[5] The plaintiff signed an acknowledgement of receipt of the Form One in relation to Lot 109
On 28 May 2003, the company accepted the contracts.
On the same date, the land agent forwarded to the plaintiff by ordinary post, a letter with copies of the contracts and a Vendor’s Statement relating to both Lots 106 and 109. The plaintiff was requested to sign the documents and return them with the total deposit sum of $10,000.00. The plaintiff was advised that the vendor was using Ms Karen Paterson of Port Lincoln as the conveyancer.
The plaintiff did not pay the deposit sum of $10,000.00 into the land agent’s trust account within three clear business days after 28 May 2003.
On 30 May 2003, a new title was issued for Lot 106 in the name of the company. The plaintiff was not told about this.
Prior to 10 July 2003, Ms Paterson commenced to act as the conveyancer for both parties.
On 10 July 2003, the settlement did not proceed.
On 15 August 2003, Ms Paterson made contact with the plaintiff seeking information about the nominee for the transaction.
On 8 September 2003, Mr Guidera, is alleged to have spoken to a person interested in buying Lot 109. Mr Stephens had a note for 8 September 2003, referring to a Mr Fudge and Lot 109.
On the same day, Mr Stephens, on behalf of the company, purported to automatically terminate the contracts upon the basis of the non-payment of the required deposit.[6]
[6] Exhibit P1, document 6
On 12 September 2003, the plaintiff wrote to the company stating that he had been “waiting to hear that the cooling off period has expired” prior to paying the deposit.[7]
[7] Exhibit P1, document 6 - handwritten note
On 16 September 2003, the plaintiff paid the sum of $30,000.00 into the trust account of the conveyancer, Ms Paterson.
On 22 September 2003, the solicitors for the company, Coates & Co, sent a letter of advice to the company. Mr Stephens was authorised and instructed to follow the solicitor’s advice. Ms Paterson stated that from this time, she commenced to act solely for the plaintiff.[8]
[8] Transcript p 269
On 23 September 2003, Mr Stephens forwarded, by registered post, “the contract etc for the purchase of the above property”,[9] and new Vendors Statements for Lot 106 and Lot 109. The plaintiff was asked to sign an “Addendum” to the contracts and return it with the original Form One. The Addendum nominated a settlement date of 17 October 2003. The Form One for Lot 106 referred to the Pluker title and identified the date of the contract as 16 May 2003.
[9] Exhibit P1, document 9
On 9 October 2003, Mr Stephens said that he spoke to the plaintiff about the documents sent on 23 September 2003. The plaintiff said that he had not received the documents.
On 13 October 2003, Mr Stephens said that the plaintiff told him that he would return the Form One.
On 15 October 2003, Ms Paterson forwarded to the plaintiff the Memorandum of Transfer, Authority to Act form and other forms. There was an error in the Memorandum of Transfer in that it specified a purchase price of $264,000.00, instead of $240,000.00. The plaintiff spoke to Ms Paterson about this mistake. Ms Paterson said that she would correct it and return it to the plaintiff. Ms Paterson faxed the Memorandum of Transfer to the National Australia Bank (“NAB”). Ms Paterson conducted council searches.
On 15 October 2003, Ms Paterson signed an acknowledgement that she was acting for more than one party to the transaction although it was not sent.[10]
[10] Exhibit P1, document 12, T p287
Ms Paterson wrote to the Commonwealth Bank of Australia (“CBA”) on behalf of the company, in relation to the discharge of the mortgage over Lot 109,[11] in which she referred to a proposed settlement date of 29 October 2003. Ms Paterson said that this date was “plucked out of the air”.
[11] Exhibit P1, document 12
On 17 October 2003, the proposed settlement referred to in the letter sent on 23 September 2003, did not proceed. Ms Paterson, was not aware of this proposed settlement date. A Memorandum of Transfer in registrable form was not available on this date. The two registered mortgages over Lot 109 had not been discharged.
On 20 October 2003, Mrs Guidera telephoned Ms Paterson complaining that she had “not heard a thing”. Ms Paterson spoke to the NAB in relation to the plaintiff’s funding of the purchase. Ms Paterson was told that the NAB had not received a formal loan application from the plaintiff. The plaintiff told Ms Paterson that he had received various documents from Mr Stephens but had not looked at them.
On 27 October 2003, Coates & Co, on behalf of the company, served the plaintiff with a Notice to Complete alleging that the plaintiff was in default for not settling on 17 October 2003. This Notice to Complete nominated 10 November 2003 as the new settlement date.[12] The plaintiff immediately faxed the Notice back to Coates & Co and referred to alleged errors in the documents.
[12] Exhibit P1, document 13
On 28 October 2003, the plaintiff paid the sum of $10,000.00 into Ms Paterson’s trust account.
On 3 November 2003, the plaintiff paid a further sum of $10,000.00 into Ms Paterson’s trust account.
On 5 November 2003, the plaintiff told Ms Paterson that he wanted to complete. Ms Paterson spoke to NAB. She was informed that the plaintiff’s loan was not approved. Ms Paterson sent the plaintiff a second set of transfer documents.
On 6 November 2003, the plaintiff paid the sum of $20,000.00 into Ms Paterson’s trust account.
On 10 November 2003, the settlement proposed in the Notice to Complete sent on 27 October 2003, did not proceed. As at that date, the plaintiff had not received a corrected Notice to Complete. The company mortgages were not discharged. The plaintiff paid a further sum of $5,000.00 into Ms Paterson’s trust account.
On 18 November 2003, a Notice of Termination was sent to the plaintiff. Proceedings were threatened for the forfeiture of the deposit monies but they were not instituted.
On 21 November 2003, the plaintiff sent a letter[13] that the company alleged contained false statements.
[13] Exhibit P1, document 17
On 25 November 2003, the plaintiff visited Ms Paterson at Port Lincoln and signed a corrected Memorandum of Transfer in relation to each block. Ms Paterson said that she ceased to act for the plaintiff from this time.
On 26 November 2003, the CBA approved internally the plaintiff’s finance application of $177,000.00, subject to valuation.
On 26 November 2003, the plaintiff travelled to Streaky Bay and delivered the Memorandum of Transfer to Mr Stephens’ office. The plaintiff delivered a note stating that settlement can take place at any time.
On 1 December 2003, the plaintiff sent a letter[14] stating that he wanted to complete.
[14] Exhibit D4
On 5 December 2003, a letter from the CBA confirmed that a facility of $177,000.00 was approved subject to a valuation security, and a registered mortgage over the two Lots. In his pleadings, the plaintiff alleged, he was ready, willing and able to complete from this date.
On 9 December 2003, a valuation in the total sum of $140,000.00 for both blocks, was received by the CBA.
On 15 December 2003, the CBA approved finance in the sum of $177,000.00.
On 19 December 2003, a valuation of $900,000.00 for a property owned by the plaintiff’s wife at McKinnon Parade was received by the CBA. The CBA considered it was well secured.
On 16 January 2004, Ms Paterson advised Mr Stephens in writing, that she no longer acted for either party. On the same date, Ms Paterson advised the company that she acknowledged that Coates and Co would now be acting on its behalf in this matter.
On 2 February 2004, the plaintiff lodged a caveat over the two Lots.
On 22 October 2004, the company filed an application to remove the caveat.
On 5 November 2004, the plaintiff’s solicitors wrote to Coates & Co contending that the contracts were still on foot.
On 8 November 2004, the CBA re-confirmed that the finance approval of $177,000.00 was not subject to valuation.
On 11 November 2004, proceedings were issued by the plaintiff. On the same date, the purchaser’s Notice to Complete nominated a settlement date of 23 November 2004.
On 12 November 2004, the District Court, by consent, granted an extension of time for removal of the caveat and injunction.
On 30 May 2007, the sum of $65,000.00 was paid from Ms Paterson’s trust account into the plaintiff’s solicitor’s trust account.
Plaintiff’s Claim
The plaintiff seeks firstly, a declaration that the two contracts were not validly terminated by the company and are capable of enforcement.
Secondly, the plaintiff seeks specific performance of the two contracts by which the company is required to complete the purchase and transfer of the land to the plaintiff at the agreed purchase price.
The plaintiff concedes that any order for specific performance ought to be made conditional on terms which address the delay in the commencement of these proceedings.
The plaintiff acknowledges that he could have commenced proceedings following the company’s Notice of Termination dated 18 November 2003.
Therefore, it was open to the court to require the plaintiff to pay interest for the period from 18 November 2003 until the date of institution of the proceedings, namely 18 November 2004, on either the sum of $165,000.00 (the sum of $75,000.00 remains in Ms Paterson’s trust account) or alternatively, on the total sum of $240,000.00.
The Company’s Case
The company submitted that the plaintiff’s claim for specific performance must fail for a number of reasons.
Firstly, the company validly terminated the contracts because the plaintiff was in breach of the contracts, having failed to pay the deposit by the due date. Secondly, by his conduct in 2003, the plaintiff repudiated the contracts and this repudiation was accepted by the company. Thirdly, the plaintiff is unable to show that at all material times, he “has performed or been ready and willing to perform the terms of the contract on his part”.[15] Fourthly, the plaintiff has not come to this court with “clean hands” and therefore ought be denied an exercise of discretion in his favour. Finally, in the event that the court decides to order specific performance, any decree of specific performance must be conditional upon prompt completion of the contract on the basis of 2007 land prices and the additional requirement that the plaintiff pay interest under clauses 7.1.1 and 1.7 of the contracts, up to the date of the hearing.
[15] Mehmet v Benson (1965) 113 CLR 295, 314
Credibility Findings
The company alleged that the plaintiff was less than candid in a number of areas in his evidence. In particular, it is said that he was untruthful in relation to his efforts to obtain funding in October and November 2003 and about his financial capacity. His evidence in relation to his communications with Mr Stephens in June and July 2003, and in relation to his communications with Mr Stephens and Ms Paterson in September and October 2003, was said to be not credible.[16] In addition, the company pointed to a number of apparently incorrect statements by the plaintiff in correspondence.
[16] Defendants’ Address pp.411-415
Despite the criticisms of the plaintiff’s evidence, I formed the view that the plaintiff was doing his best to honestly recall the events of 2003 and since. I consider that he had a good recall of his conversations with Mr Stephens and of his concerns in relation to documentation sent to him. Although I found Mr Stephens to be an honest witness, I formed the view that in relation to particular conversations with the plaintiff, the plaintiff was more reliable. Where there was a conflict between the evidence of the plaintiff and the evidence of Mr Stephens, I preferred the evidence of the plaintiff on the balance of probabilities. Despite the criticisms of the plaintiff’s evidence in relation to his dealings with Mr Stephens and Ms Paterson, I found his evidence to be generally reliable.
I found Ms Paterson to be a witness who was endeavouring to tell the truth and was generally reliable. However, in one important respect, I found her evidence unreliable and indeed mistaken. Although Ms Paterson denied that she was acting for both parties after 22 September 2003, she conducted herself as if she was.[17] I find that Ms Paterson continued to act for both purchaser and vendor until January 2004.
[17] See second defendant’s defence and counterclaim para (9). On 15/10/03 Ms Paterson wrote to CBA in relation to discharge of mortgage over Lot 109. On 20/10/03 Mrs Guidera telephoned her, 17/10/03 council searches. Acknowledgement that acting for both parties form (T270-271), correspondence to parties on 16/1/04 (T291)
I have regard to the criticisms of Mr Guidera’s evidence. However, I found him to be an honest witness. Insofar as it is contended that he had discussions with a prospective purchaser in September 2003, I do not need to determine that issue because it does not impact upon my findings in this matter.
I consider that all of the witnesses who gave evidence were generally endeavouring to tell the truth.
Service of Vendor’s Statements
The Evidence
I accept the plaintiff’s evidence that after he received the contracts and the Vendor’s Statements in May 2003, he telephoned Mr Stephens. He asked Mr Stephens about the propriety of serving the Vendor’s Statements prior to the execution of the contract because the Vendor’s Statements incorrectly identified the contract date as 12 May 2003.

Mr Stephens informed him that there was an error in one of the Vendor’s Statements in relation to the description of the title.
Mr Stephens told the plaintiff that it would be necessary to send him new Vendor’s Statements. Subsequently, under cover of a letter dated 28 May 2003, the plaintiff received a copy of the contracts and another Vendor’s Statement,[18] which was a composite Vendor’s Statement relating to both blocks of land. Mr Stephens explained in his evidence that he sent this composite Vendor’s Statement because the plaintiff had failed to sign one of the Vendor’s Statements sent to the plaintiff on 12 May 2003.
[18] Ex P1 Tab 5
The plaintiff said that he signed this substitute Vendor’s Statement and sent it back to Mr Stephens.
In about June, the plaintiff telephoned Mr Stephens in order to ascertain whether he had received the Vendor’s Statement. The plaintiff said that he needed to know about receipt of the Vendor’s Statement so that he could determine the date when the cooling off period expired and therefore, the date when the deposit was due to be paid under the contracts.
The plaintiff said Mr Stephens told him that he had not received the documents and he would re-send them. The plaintiff said that he did not receive the further documents. At the time that settlement was due on 10 July 2003, the plaintiff had not heard further from Mr Stephens. Mr Stephens was absent on holidays from about mid July to mid August 2003.
Upon receiving the letter dated 8 September 2003 from Mr Stephens purporting to terminate the contracts for non-payment of the deposit, the plaintiff returned the letter by facsimile with a note indicating that he was awaiting advice as to the expiration of the cooling off period.
Mr Stephens acknowledged in his evidence that there was a mistake in the documents in relation to the description of the title for Lot 109, that there was a mistake in the Vendor’s Statements as to the date of the contract and that the Vendor’s Statements sent on 12 May 2003 and 28 May 2003, ought to have been sent by registered post. He also accepted that if the plaintiff had asked for another set of documents he would have provided them.
Contentions of the parties
An important area of dispute between the parties is the effect of the failure of the company to serve the plaintiff by certified mail, with Vendor’s Statements explaining the purchaser’s cooling off rights, in accordance with section 5 and section 17 of the Land and Business (Sale and Conveyancing) Act 1994 (“the Act”).
The plaintiff contended that section 17 of the Act required service by registered post or certified mail. The contracts expressly provided that the deposit was “payable” on the next business day “following the expiration of the cooling off period”.[19]
[19] Clause P to the Schedule
The plaintiff submitted that the obligation to pay the deposit did not arise until after the expiration of the plaintiff’s cooling off rights. The occasion for the exercise of those rights was dependent upon service of the correct documentation in accordance with the provisions of the Act. Further, there were errors in the documents relating in particular, to the date of the contracts and the description of the title for Lot 106.
The company submitted that the plaintiff acknowledged receipt in fact of the Vendor’s Statements and signed and returned three of the four documents sent to him.
The Legislation
Section 5 of the Act provides as follows:
5 – Cooling off
(1)Subject to this section, a purchaser under a contract for the sale of land or a small business may, by giving the vendor written notice before the prescribed time of the purchaser’s intention not to be bound by the contract, rescind the contract.
(2)The notice may be given as follows:
...
(c)by posting it by certified mail to the vendor at the vendor’s last known address (in which case the notice is taken to have been given when the notice is posted); or
...
(8)In this section –
prescribed time means –
(a)in relation to the sale of land –
(i)where the vendor’s statement is served on the prospective purchaser before the making of the contract – the end of the second clear business day after the day on which the contract was made; or
(ii)where the vendor’s statement is served on the purchaser after the making of the contract – the end of the second clear business day from the day on which the statement was served,
or the time settlement takes place (whichever is the earlier);
Section 17 of the Act provides as follows:
17 – Service of vendor’s statement etc
A vendor’s statement, a notice of amendment to a vendor’s statement or a certificate of an agent acting on behalf of a purchaser may be served on a purchaser –
(a)by delivering it to the person personally; or
(b)by posting it by certified mail to the person at the person’s last known address.
The “ordinary rule” is that notice may be given by any means that actually brings it to the attention of the person to whom it is given Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd.[20]
[20] (1994) 63 SASR 235 at 239
Conclusion in Relation to Service
In my view, the plaintiff admitted by conduct, his receipt of the Vendor’s Statements on or before 16 May 2003.
Although there was non-compliance with the Act in relation to service of the Vendor’s Statements, it is plain that the service was effective to bring to the attention of the plaintiff, the contents of the relevant documents. In addition, the service enabled calculation of the “prescribed time” in s5(8) of the Act. I consider that the service of the Vendor’s documents was valid despite the fact that service was by ordinary post and despite the inaccuracy in relation to the description of the date of the contracts in the Vendors Statements, or the inaccuracy in relation to the title for Lot 106.
TERMINATION LETTER OF 8 SEPTEMBER 2003
The company submitted that the contracts were lawfully brought to an end and terminated by the letter from its agent to the plaintiff, dated 8 September 2003 (“first termination letter”).[21]
[21] Exhibit P1, document 6
The first termination letter stated the following:
Re: Contract Sections 106 & 109 – Hundred of Wrenfordsley
Dear Nick,
I have been advised by the vendor that due to the non compliance of the terms of contract (clause 7.1.2) to give notice that the contract has been terminated.
Due to the original settlement date being changed to the 10^th July and after various phone calls, the deposit has still not been received
It was signed by Mr Stephens.
Contentions of the Parties
The company contended that the plaintiff had three clear business days after 28 May 2003, in which to pay the total deposit sum of $10,000.00, into the land agent’s trust account. The plaintiff failed to do so. This constituted a breach of an essential condition of the contracts.
As a result, the company had an immediate right to terminate the contracts without prior notice of its intention to do so.[22]
[22] c.f. Brien v Dwyer (1978) 141 CLR 378, 385, 386
The company submitted that this termination was not affected by the letter and documents sent to the plaintiff on 28 May 2003, or any events after that date.
In fact, the plaintiff did not pay the deposit until 16 September 2003. This was after the termination of the contracts on 8 September 2003. This was a clear breach of clauses 3 and 7 of the contracts.
The company submitted that in any event, if the letter dated 8 September 2003, was to be treated as a notice to remedy default under clause 7.1.2 of the contracts, time was of the essence. The plaintiff failed to pay the deposit within three business days, namely by 12 September 2003.
The company submitted that it could rely on the plaintiff’s concession in evidence that upon one view of the letter, it was a complaint that the plaintiff had not paid his deposit under clause 7.1.2 of the contracts. The company submitted that it was clear from the plaintiff’s handwritten statement that he would pay a deposit.[23] Therefore, the plaintiff viewed the letter as a notice to remedy default under clause 7.1.2 of the contracts. It followed that under clause 7.1.2 of the contracts, the plaintiff was obliged to pay the deposit within three business days of the first termination letter, namely, by 12 September 2003. Further, clause 7.3 of the contracts provided that time was of the essence for clause 7 provisions.
[23] Exhibit P1, document 6
The company submitted that although an amount in excess of the deposit was paid on 16 September 2003, namely, two days later, this was too late.
The plaintiff submitted that the letter was incapable of terminating the contracts. The contracts remained on foot because failure to serve the documents in accordance with the Act meant that the cooling off period had not commenced to run.[24] I have rejected this contention.
[24] Section 17 of the Act and section 33 of the Acts Interpretation Act 1915 (SA)
The plaintiff submitted that even if the plaintiff was in default, the company could not automatically terminate the contracts for non-payment of the deposit. Pursuant to clause 7.1.2 of the contracts, the company was obliged to give the purchaser notice of the failure to pay the deposit, and give him an opportunity to remedy his default. This was not done. Indeed, during cross-examination, Mr Stephens agreed that this had not occurred.[25] Mr Stephens did not even contact the plaintiff to ask where the deposit was.
[25] Transcript p333
The Contractual Terms
The company’s right to terminate the contracts for non-payment of the deposit is governed by the terms of each of the contracts.
Clause 3 of each contract provides:
3. The Price
3.1 The Price is comprised as set out in the Schedule and is payable as follows:-
3.1.1 Deposit as set out in the Schedule to the trust account of the Agent.
.....
Where the Purchaser otherwise defaults under this condition, the provisions of clause 7.1 will apply.
.....
And
3.1.3The balance at settlement
The plaintiff was required to pay the deposit one business day after his cooling off rights had expired.[26]
[26] Exhibit P1, land contract pp 13 of 15 clause P of the schedule
The plaintiff did not pay the deposit within the prescribed time under s5(8) of the Act, namely three clear business days of 28 May 2003. Therefore, the plaintiff was in breach of clause 3 of the contracts from that time.
Where the plaintiff defaulted in the payment of the deposit, the contracts required the company to give the plaintiff notice to pay the deposit in accordance with clause 7.1.2 of the contracts.
Clause 7.1.2 of each contract provides:
7.1.2If the Purchaser fails to pay the Deposit in accordance with this agreement, or otherwise breaches a term of this Agreement prior to the Settlement Date, the Vendor may, without Prejudice to any other legal rights or remedies the Vendor may have, give to the Purchaser notice in writing requiring such default to be remedied within a period of three business days from the service of the notice and stating that, unless the default is remedied within that period, this Agreement will automatically terminate. If the default is not remedied within the period specified, this Agreement will automatically terminate at the expiration of that period unless, in the meantime, the Vendor withdraws the notice by written notice to the Purchaser.
Clause 7.3 of the contracts provided that time is of the essence in relation to any clause 7 obligation.[27]
[27] Also see Kirk & Anor v Ashdown & Anor [1998] QCA 77
Findings in Relation to First Termination Letter
The question of whether the failure to pay the deposit constituted a breach which entitled the company to rescind the contracts or whether it meant that the contracts were terminated automatically, depends upon the contractual conditions. The “meaning and effect of such contractual conditions depends ultimately on the language in which those provisions are expressed”.[28]
[28] Kirk & Anor v Ashdown & Anor supra
The contracts did not provide that payment of the deposit was an essential condition of the contracts, nor did they provide that the contracts would come to an end automatically for non-payment of the deposit.
Clause 7.1.2 of the contracts, does not support the company’s submission that non-payment of the deposit is a breach of the contract which results in the automatic termination of the contracts.
Clause 7.1.2 of the contracts clearly provides that the purchaser must be given notice of the consequences of failure to pay the deposit and of failure to remedy a breach of the contracts.
It was necessary for any notice to remedy the default, to comply with clause 7.1.2 of the contracts or, alternatively, at least to give the plaintiff a reasonable time within which to pay the deposit and complete the contracts and inform him of the consequences of the failure to do so.
The failure to pay the required deposit into the land agent’s trust account on time did not constitute a breach of an essential condition of the contracts. I am not satisfied, in the circumstances of this case, that the failure of the plaintiff to pay the deposit gave the company an immediate right to terminate the contracts without giving prior notice to the plaintiff of its intention to do so,[29] and without complying with clause 7.1.2 of the contracts.
[29] c.f. Brien v Dwyer (1978) 141 CLR 378, 385; Romanos v Pentagold Investments Pty Ltd (2003) 77 ALJR 1882 at [20]
In my view, the first termination letter was not a notice which complied with clause 7.1.2 of the contracts. It did not require the plaintiff to remedy his alleged default within a period of three business days. Further, it did not state that unless the default was remedied within that time, the contracts would automatically terminate. Rather, the first termination letter purported to automatically terminate the contracts.
I find that the contracts were not lawfully brought to an end or terminated by the first termination letter. Alternatively, I find that even if the first termination letter was relied upon as a notice to remedy a default under clause 7.1.2, it was not a valid notice under that clause and was ineffective.
Where the contractual provisions continued to govern the contractual relations between the parties, and where proper notice pursuant to clause 7.1.2 has not been given, the payment by the plaintiff of the sum of $30,000.00 on 16 September 2003, namely an amount in excess of the deposit, meant that any breach in relation to the failure to pay the deposit, was remedied.
Alternatively, I find that if there was any breach by the plaintiff and a valid termination of the contracts for non-payment of the deposit on time, or a valid recission by the company, the company elected to affirm the contracts and acknowledge that they remained on foot.
In my view, the company, by its subsequent conduct, is estopped from relying on the purported termination of 8 September 2003. In particular, I refer to the act of forwarding to the plaintiff by registered post, the documents and covering letter of 23 September 2003,[30] where an Addendum to the contracts was sent to the plaintiff. In the circumstances, it would be unconscionable and unfair for the company to rely on the letter of termination of 8 September 2003.
[30] Exhibit P1, document 9
VENDOR’S STATEMENTS WITH ADDENDUM TO CONTRACTS SENT ON 23 SEPTEMBER 2003
By letter dated 23 September 2003, Mr Stephens forwarded to the plaintiff by registered post, new Vendor’s Statements and an “Addendum” to the contracts signed by the vendor, nominating a settlement date of 17 October 2003 (“the Addendum documents”).[31] The covering letter requested that the plaintiff sign and date the Addendum documents and return the documents to Mr Stephens. The settlement did not take place on 17 October, 2003.
[31] Exhibit P1, document 9
Contentions of the Company
The company submitted that the letter of 23 September 2003, and the enclosed documents, provided the plaintiff with another opportunity to settle on the date nominated by the company. It was submitted that this opportunity had no contractual significance unless the company’s first termination letter was ineffective.
The company submitted that where no alternative date to 12 July 2003 was provided by the contracts, the company was entitled to nominate a date for completion within a reasonable time Perri v Coolangatta.[32]
[32] (1982) 149 CLR 537
Conclusions in Relation to the Addendum Documents
I find that the intention of the company in re-sending documents to the plaintiff under cover of the letter dated 23 September 2003, was in effect, to start all over again in relation to completion of the contracts. Indeed, this was confirmed by Mr Stephens in his evidence. Further, the Notice to Complete attached to the letter dated 27 October 2003, from the company’s solicitor to the plaintiff, referred to the plaintiff’s failure to “fulfil the terms of the extension of the contract”.[33]
[33] Ex P1, doc 13
If the contracts continued to govern contractual relations between the parties, clause Q of the contracts applied to the fixing of an alternative or new settlement date. In those circumstances, having regard to the meaning and effect of the contracts, it was necessary that a new settlement date be fixed with the agreement of both parties.[34]
[34] Clause Q of the Schedule. Also see definition of “settlement date” in the Act
That is, under the terms of the contracts, the vendor was not entitled to unilaterally nominate a new settlement date.
Alternatively, if the provisions relating to the fixing of the settlement date had been spent and the common law applies, then it is necessary to consider whether the Addendum documents are effective at common law. It is necessary to consider whether the settlement date nominated was within a reasonable time[35] and whether the extension of the contract made time of the essence in relation to that new settlement date.
[35] Harbray Nominees Pty Ltd v Ongley [2004] SASC 62, [76] – [77]
In my view, the conduct of the company in forwarding the Addendum documents and other documents to the plaintiff on 23 September 2003, constituted an acknowledgement and affirmation that the contracts remained on foot. If the plaintiff was in breach of the contracts as at that time for failure to pay the deposit on time and for failure to pay the balance of the purchase price, the company had elected to waive that breach and to keep the contracts on foot.
NOTICE TO COMPLETE 27 OCTOBER 2003
On 27 October 2003, the company served a Notice to Complete (“the Notice”) on the plaintiff and nominated a settlement date of 10 November 2003.[36] The Notice was delivered by registered mail. The Notice alleged the plaintiff was in default for not settling on 17 October 2003.
[36] Exhibit P1, document 13
The covering letter was in the following terms:
Dear Sir,
PURCHASE OF NO. 7-9 JUBILEE ROAD, STREAKY BAY
SOUTH AUSTRALIA
Please find enclosed a copy of a Notice to Complete in regards to the Contract dated and signed by the Purchaser on 28 May 2003 following your failure to complete settlement on 17 October 2003.
The Notice to Complete provides that settlement must be completed on 10 November 2003 at 11.00 a.m. at the Lands Titles Office, Grenfell Street, Adelaide otherwise our clients will be taking action in regards to damages and the forfeiture of the deposit.
We understand that Ms Karen Paterson acts as your conveyancer and invite the conveyancer involved with this deal, whether or not that is still Ms Paterson, to contact us as a matter of urgency.
The ‘Notice to Complete’ was in the following terms:
I, as Agent of the vendor, W & R Guidera Pty Ltd of PO Box 104, Streaky Bay SA 5680 hereby give notice pursuant to clause 7.13 of the Contract for Sale of Land entered into between the vendor and the purchaser dated the 28^th day of May 2003 that subsequent to the purchaser’s failure to fulfil the terms of the extension of the contract and complete on the 17^th of October 2003 we serve a notice upon you that Settlement must be completed on the 10^th day of November 2003 at 11.00 a.m. at the Land Titles Office Grenfell Street, Adelaide.[37]
[37] Counsel advised that the handwriting on the Notice to Complete was not part of the document as received by the plaintiff T. p36
Contentions of the Company

The company submitted that the nominated settlement date of 17 October 2003 in the Addendum documents, provided a reasonable time for the plaintiff to settle. His failure to settle on that date entitled the company to terminate without further notice to the plaintiff.[38]
[38] Perri v CoolangattaInvestments Pty Ltd (1982) 149 CLR 537
The company asserted that the plaintiff could not provide any explanation as to why he did not settle on 17 October 2003.
The company submitted that the plaintiff remained in breach of the contracts because he failed to pay the deposit on time and he did not pay the balance of the purchase price on 17 October 2003.
The plaintiff failed to give adequate instructions to the broker, Ms Paterson, before the period October to November 2003.
It was no answer for the plaintiff to claim that the company was not ready and willing to settle because the mortgages had not been discharged as at the nominated settlement dates. The evidence was that the discharge of the mortgages could occur within two or three days.
The company contended that the plaintiff did not and could not settle because his application for funding from the NAB failed.
The company submitted that the Notice to Complete dated 27 October 2003, delivered by registered post, was strictly unnecessary. It nominated a new settlement date of 10 November 2003. The plaintiff ignored this notice. He did not attempt to obtain funding from the CBA until 7 November 2003.
The company submitted that although, “it was badly drawn”,[39] the essential purpose of the Notice was to nominate a new settlement date of 10 November 2003. The company submitted that the plaintiff took the risk of ignoring the Notice and thereby lost the opportunity of remedying the breach. The company submitted that the plaintiff did not nominate an alternative settlement date.
[39] Company’s written submission, para 5.50
The Contractual Provisions
Clause 7.1.3 of each of the contracts provides that if the purchaser breaches the agreement prior to the settlement date, the vendor may give notice to the purchaser to complete. However, each contract provided that the notice was required to be given in specific terms. Further, it was provided that a notice to complete may be given more than once:
7.1.3 If:-
7.1.3.1 The purchaser breaches this Agreement prior to or on the Settlement Date; and
7.1.3.2any such default continues unremedied for a period of not less than three (3) business days the Vendor may at any time after those three (3) business days give notice to complete to the Purchase. The notice must –
7.1.3.3appoint a time for Settlement (between 10.00am and 3.00pm on a business day); and
7.1.3.4require the Purchaser to settle at the time appointed in the notice.
If the Purchaser fails to comply with the terms of the notice, the Vendor may, without prejudice to any other legal rights or remedies the Vendor may have, terminate this Agreement by notice in writing to the Purchaser. A notice of completion may be given more than once.
.....
7.3 Time is of the essence in respect of any obligation under clause 7.
The Law
According to Professor Butt, the requirements for a valid notice to complete are as follows:
1.     The recipient of the notice must be in default such as to justify the giving of the notice.
2.     The giver of the notice must be able, ready and willing to proceed to completion.
3.     The time fixed by the notice must be reasonable in all the circumstances; and
4.     The notice must be in order as to form and content.[40]
[40] Butt, P “The Modern Law of Notices to Complete” (1985) 59 ALJ 260; Also see Robinson v Becata Pty Ltd [2004] NSWSC 310 [36]-[38]
A pre-condition for a valid notice to complete is a contractual default on the part of the plaintiff.[41]
[41] Harbray Nominees Pty Ltd v Ongley (2003) 230 LSJS 82
In Harbray Nominees Pty Ltd v Ongley,[42] Perry J was required to consider a clause in a contract relating to a purchaser’s default, which is in similar terms to clause 7 in the contracts in the present case.
[42] (2003) 230 LSJS 82
In that case, the issue was whether the purchaser was in default of a special condition as to finance.
Perry J held that the purchaser was not in default at the relevant time. The obligation to settle under the contract did not arise unless and until the special condition was satisfied. His Honour said:[43]
71.The request that he settle in accordance with the notice to complete was, therefore, unsupported by the contract. The defendant was entitled to ignore it and rest upon the non-fulfilment of the condition precedent.
72.It follows that the purported notice of termination given by the plaintiff, being a notice purporting forthwith to terminate the land contract by reason of the failure of the defendant to comply with the notice to complete, was ineffective.
[43] at [71] – [72]
Further, the party giving the notice must be free of default by way of breach or relevant delay.[44]
[44] Louinder v Leis (1982) 149 CLR 509
The party which seeks to rely upon the notice to complete has the onus of showing that the time allowed for completion is reasonable.
The notice must state that if settlement does not occur on the date nominated in the notice, the company would treat the contracts as at an end or would treat itself as entitled to terminate it. It is permissible to have regard to the surrounding circumstances including the correspondence, in order to clarify any ambiguous terms in the notice.[45]
[45] Balog v Crestani (1975) 132 CLR 289
The test is whether a reasonable person who had considered the notice and considered it fairly and reasonably, would have been left with any doubt as to its meaning.[46]
[46] Central Pacific (Campus) Pty Ltd v Staged Developments Australia Pty Ltd [1998] V Conv R 66, 901 (54-575); Robinson v Becata Pty Ltd supra [30]-[35]
Termination is not necessarily to be regarded as accepted where the plaintiff maintains throughout his right to complete the purchase.[47]
[47] Mehmet v Benson (1965) 113 CLR 295
Findings in Relation to the Notice
I am not satisfied that as at 17 October 2003, the company was able, ready and willing to proceed to completion.
I accept that the company was entitled to give a valid notice to complete even if at the time of giving the notice, the mortgages had not been discharged, provided that they were able to be discharged prior to the settlement date.[48]
[48] cf Wilde v Anstee [1999] 48 NSWLR 387 at 54
However, in the present case, Ms Paterson, who was to arrange the discharge of the mortgages, was not advised by the company of the proposed settlement date of 17 October 2003. Mr Guidera had left the paperwork to Mr Stephens, Ms Paterson and Mrs Guidera. In fact, on 15 October 2003, Ms Paterson wrote to the CBA on behalf of the company advising of a proposed settlement date of 29 October 2003. As at 17 October 2003, the two registered mortgages over Lot 109 had not been discharged.
In my view, the plaintiff was not required to complete on 17 October 2003, for the reasons already given. Therefore, his failure to complete on that date was not a breach of the contracts as extended on 23 September 2003.
I find that the Notice to Complete was defective in a number of important respects. Clause 7.1.3 of the contracts required that a Notice to Complete clearly identify the alleged “breach” or “default” relied upon. The Notice did not do this but merely referred to the failure to complete on 17 October 2003.
Both the letter from Coates & Co, the solicitors for the company and the Notice, mis-described the land as 7-9 Jubilee Road, Streaky Bay. It referred to only one contract and only to Lot 109.[49] The Notice accompanying the letter from Coates & Co was undated and purported to rely on a clause in the contract which did not exist, namely “7.13”.
[49] ct 5613/683
The Notice wrongly described the vendor as “W & R Guidera Pty Ltd”.
In my view, viewed objectively, a reasonable person in the plaintiff’s position would have been left in doubt as to the precise meaning and effect of the Notice to Complete. Even though the plaintiff well knew that he had entered into two contracts for the sale of land in the Sceale Bay area, the defects in the Notice were significant.
There were of course, irregularities in relation to the Addendum documents. The Vendor’s Statements and the Addendum incorrectly identified the date of the contracts as 16 May 2003. The Form One in relation to Lot 106 referred to the former title.[50]
[50] Certificate of Title Volume 5392 Folio 868 instead of Certificate of Title Volume 5895 Folio 870
I am not satisfied that the Notice complied with the terms of the contract, bearing in mind the defects in the documents provided to the plaintiff, the surrounding circumstances, and my findings in relation to the Addendum documents.
Accordingly, in my view, the Notice to Complete of 27 October 2003 was invalid and ineffective and cannot be relied upon by the company. It follows that the Notice of Termination of 18 November 2003 was also invalid and ineffective, insofar as it relied upon a failure to complete in accordance with the Notice.
I find that the plaintiff did not ignore the Notice to Complete. He was concerned that the Notice was faulty. The plaintiff returned the Notice to Coates & Co by facsimile with a note of errors.
I accept the plaintiff’s evidence that he expected to receive a corrected document before a new settlement date could be fixed. This was a reasonable request in view of the errors in the documents relied upon by the company and relevant to the preparation of an accurate Memorandum of Transfer. The company and/or Coates & Co did not address the plaintiff’s concerns nor advise him that they did not intend to do so. Rather, the company issued a Notice of Termination dated 18 November 2003. This Notice purported to terminate the contracts for alleged “failure to fulfil the terms of the extension of the contract and complete on 17 October 2003”.
The Notice to Complete of 27 October 2003, was a recognition by the company that the contracts remained capable of being completed, even if the plaintiff was in breach.
The plaintiff’s conduct in not settling on 17 October 2003, did not amount to repudiation of the contracts nor justify recission.[51]
[51] Louinder v Leis (1982) 149 CLR 509, 526
Therefore, the contracts have remained on foot since 18 November 2003.
REPUDIATION OF THE LAND CONTRACTS
Contentions of the Company
The company’s alternative contention was that even if the Notice of Termination was not effective to bring the contracts to an end, the plaintiff repudiated the contracts by his persistent failure to pay in accordance with the terms of the contracts. The company contended that by his conduct, the plaintiff made it clear that he was intent on settling on the land contracts only when it suited him. This did not happen until he had obtained his funding from the CBA in December 2003.
The company submitted that the plaintiff had made no real attempt to obtain funding until after 7 November 2003. Funding did not become available until 19 December 2003.
Despite the written requests on behalf of the company of 12 May 2003 and 28 May 2003, the plaintiff did not pay the deposit within the time required by the terms of the land contracts. The plaintiff did not actively pursue a settlement in July 2003 and failed to reveal that he did not have the funds necessary to complete the purchase between July and November 2003. Prior to that date, he was not able to settle because he did not have the funds. The plaintiff’s trustee in bankruptcy was pursuing him. The evidence did not establish that the plaintiff was able to rely upon the property registered in his wife’s name as security to obtain a bank loan.
The company contended that the plaintiff’s overall conduct when considered objectively, demonstrated that the plaintiff could not or would not fulfil his obligations under the land contracts to pay the balance of the purchase price. Rather, his conduct showed that he would do so “only if and when it suits”.[52]
[52] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623, 634, 657-658
The company submitted that the plaintiff’s repudiation had been accepted by the company in September and November 2003.
The company submitted that this same conduct revealed the plaintiff’s unwillingness or inability to perform the contracts. He was in breach of an express condition of the contracts.
The company also submitted that the plaintiff was precluded from obtaining an order for specific performance because at the time of each of the three nominated settlement dates, the plaintiff was not ready, willing and able to settle. The company submitted that the plaintiff had admitted this fact on his pleadings and in his evidence.
That is, the plaintiff could not establish that at all material times he “has performed or been ready and willing to perform the terms of the contract on his part”.[53] Ms Paterson gave evidence that payment of the deposit was the starting point for her work as a landbroker. The company submitted that the plaintiff did not provide adequate instructions to Ms Paterson prior to October to November 2003. The plaintiff did not pay the deposit until after the first termination letter. This was a serious breach of the contract. The failure to tender the settlement sum in 2003 was a further serious breach of the contract.
[53] Mehmet v Benson (1965) 113 CLR 295, 314
The Law
A party will be regarded as having repudiated a contract where he shows either an intention not to be bound by the entire contract or by a term or terms of sufficient importance.[54]
[54] Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd supra at p634
In order for the company to establish that the plaintiff repudiated the contract, there must be words or conduct of the purchaser which indicate an intention “to abandon and altogether to refuse performance of the contract”.[55]
[55] Butt supra at 274
If the company is to rely on delay as evidence of repudiation, then unless the delay is gross and protracted, repudiation is unlikely to be established.
Because repudiation is such a serious matter, it will not be lightly found or inferred.[56]
[56] Ross T Smyth & Co v T D Bailey Son & Co [1940] 3 All ER 60, 71
This question is determined not by reference to the party’s subjective intentions but rather by reference to how his conduct would appear to a reasonable person in the position of the other contracting party.
Findings in Relation to Repudiation of Land Contracts
In my view, the requirement of readiness and willingness to settle does not demand that a purchaser should “always have the purchase price in his pocket”. All that is necessary is readiness and willingness to perform the contract according to its terms.[57]
[57] Bishop v Taylor (1968) 118 CLR 518, 525
I have already made findings in relation to the plaintiff’s non-payment of the deposit and of the balance of the purchase price as required by the contracts and in the context of subsequent correspondence.
Although the plaintiff may have misunderstood the legal position, he was also concerned about the accuracy of the Vendor’s Statements and of the Certificate of Title for Lot 106.
Notwithstanding these concerns, the plaintiff signed and returned the contracts and one of the Vendor’s Statements.
In relation to the plaintiff’s failure to settle on 10 July 2003, I accept that the plaintiff was awaiting notification from Mr Stephens as to his receipt of the documents from the plaintiff.
I am not satisfied that the plaintiff’s real reason for not settling on either of the proposed settlement dates, was that he did not have funding. I am not prepared to infer from the plaintiff’s statements and conduct, viewed from the perspective of a reasonable person in the position of the company, that he repudiated the contracts. It was not necessary for him to be ready, willing and able to settle at all times during 2003. In my view, the conduct of the plaintiff throughout 2003 was of someone who was willing to settle at the appropriate time. The “appropriate time” had not arisen prior to 5 December 2003 for the reasons I have given.
In any event, in relation to the settlement date of 10 July 2003, the company’s subsequent conduct constituted an election to affirm the contracts and to treat the contracts as if they were on foot. I refer in particular, to the letter and Addendum documents dated 23 September 2003.
The plaintiff submitted that the relevant date for determining the readiness and willingness of the plaintiff to settle in relation to a claim for specific performance is the time of the grant of the remedy.[58]
[58] Eskin & Ors v Trewin & Ors [Unreported, Supreme Court of Victoria, Byrne J, 15 June 1995 p16]
In my view, in order to obtain specific performance, it is necessary for the plaintiff to establish that he was ready, willing and able to perform each contract at the date of the hearing, although readiness, willingness and ability at an earlier time may be relevant to discretionary considerations.[59]
[59] Carydis v Merrag Pty Ltd [2007] NSWSC 1220 at [33] - [38]
If the relevant time is the date when the proceedings were commenced,[60] namely 12 November 2004, I find that the plaintiff was ready, willing and able to settle on each contract, as at that date. He was also ready, willing and able to settle as at 23 November 2004, the settlement date nominated by the plaintiff.
[60] Meagher, R Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies 4^th Ed Lexis Nexis Butterworths, Chatswood N.S.W., 2002 at 674, Gurney v Gurney (No. 2) [1967] NZLR 922 at 925; Adelaide Brighton v Ostabridge [2005] NSWSC 737
As at 8 November 2004, the CBA had re-approved for the plaintiff, the facility of $177,000.00. Those funds, together with the sum of $75,000.00 held at that time in Ms Paterson’s trust account, were sufficient to pay the purchase price under the contracts plus expenses.
If the relevant time is at the date of the trial, I find that the plaintiff was ready, willing and able to settle on each contract as at that date. The plaintiff had available for settlement the amount of $65,000.00 in his solicitor’s Trust Account and funds in the sum of $177,000.00 from the CBA, as well as the sum of $240,000.00 from the ANZ Bank.
In addition, I find that the plaintiff has the ability to make a payment of interest in addition to the contract price, which the plaintiff concedes is necessary for the plaintiff to do equity.
Further, in my view, this issue can be taken into account in any consideration of the terms upon which an order for specific performance ought to be made.
I find that the plaintiff has been ready, willing and able to perform the terms of the contract since 5 December 2003.
In relation to the company’s contention that the plaintiff has otherwise repudiated the contract by his conduct, I find that the plaintiff has not evinced an intention not to be bound by the contracts. I am not satisfied that the plaintiff’s conduct in failing to complete the contracts on either of the proposed settlement dates, or his conduct in relation to the Notice to Complete, amounted to a repudiation of the contracts. Indeed, I find that the payment by the plaintiff of the total sum of $75,000.00 into Ms Paterson’s Trust Account between 16 September 2003 and 10 November 2003, demonstrated his clear intention to secure the contracts.
In any event, I find that even if the plaintiff’s conduct could be viewed as a repudiation of the contracts, it was not accepted by the company.[61]
[61] Shevill v The Builders Licensing Board (1981-1982) 149 CLR 620, 625
In my view, the company’s conduct of sending the documents of 23 September 2003 with an Addendum to the Contracts, constituted an election to keep the contracts on foot and to seek completion of the contracts.[62]
LACK OF CLEAN HANDS
[62] c.f. Allmed Pty Ltd v Opak Investments Pty Ltd & Ors [Unreported, Supreme Court of SA, Mullighan J, 28 June 1994, S4631]
Contentions of the Company

The company contended that even if the plaintiff was ready, willing and able to settle, he is seeking equitable relief but he has not come to the court with “clean hands”. The company submitted that the plaintiff should not have specific performance because a number of factors argued against an exercise of discretion in the plaintiff’s favour.
The company contended that because of the rise in land values since the contract date, an order for specific performance would be unfair to the company. It was submitted that settlement should occur at a price of at least $400,000.00.
Next, the company asserted that the plaintiff delayed until after December 2003, when he eventually obtained his funds. In fact, it was submitted, the plaintiff delayed in vindicating his claimed rights until February 2004 and again until November 2004. The company submitted that a delay of even 10 minutes would deny the plaintiff the benefit of an order for specific performance.[63]
[63] Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514
Prior to 18 December 2003, the plaintiff was unable to acquire the two blocks of land in question, despite his contractual obligation to do so.
A week before the hearing, the plaintiff first admitted that he was only ready, willing and able to settle after 5 December 2003.[64]
[64] Exhibit D16B
The plaintiff was less than frank about his failed efforts to obtain funding from the NAB or his inability to obtain funding from the CBA, prior to December 2003. The company also pointed to what it said were the plaintiff’s false statements and half truths.[65]
[65] See 2^nd defendant’s written outline paras 7.3.5 – 7.3.9
Findings in Relation to Clean Hands
In my view, there was no illegal or unconscionable conduct by the plaintiff. Indeed, during 2003, the plaintiff conveyed his willingness to complete the contracts once the documentation was in order.[66]
[66] for example, handwritten note of 12/89/03 – telephone conversation with Ms Paterson on 5 November 2003
I note that following non-payment of the deposit and the failure to complete on 10 July 2003, the company did not take any action for two months.
In addition, the plaintiff paid a total sum of $75,000.00 into the trust account of Ms Paterson, who was acting for both the plaintiff and the company at the time.
I note the criticisms of the plaintiff’s veracity in relation to his applications for funding. However, in my view, such criticisms do not undermine my confidence in the plaintiff’s evidence in this court and the explanations he provided. I am not satisfied that there was any lack of candour by him. I have found that there was no fault on the part of the plaintiff in failing to complete in response to the Notice to Complete.
I am not satisfied that the delays were the fault of the plaintiff. I am certainly not satisfied that the plaintiff caused or otherwise engineered the delays whilst he endeavoured to secure the necessary funds to complete the contracts.
I am not satisfied that any of the delays alleged by the company resulted in any unfairness to the company. Errors in relation to documents presented to the plaintiff by the company, meant that it was necessary for them to be re-drawn and re-served.
Any alleged delays during 2004 were not unreasonable or unconscionable.
From 18 November 2003, the company maintained that the contracts had been terminated. Once the plaintiff lodged a caveat on 2 February 2004, the company was on notice in relation to the plaintiff’s claimed entitlement to the blocks. The company did not apply to remove the caveat until 22 October 2004.
I find that there is no evidence of actual prejudice, detriment or hardship to the company by reason of delay. I note during his evidence, that Mr Guidera expressed his concerns about the performance of the contracts upon the basis that it was “just principle” and that he was “not worried about the price”.
The company alleged that there was an increase in the value of the blocks since the date of the contracts. In this respect, the company relied upon evidence from Mr Rock, the Relationship Manager with the Business Section of the ANZ Bank, who was asked about the contents of an email addressed to him from a firm of finance brokers. Mr Rock acknowledged that the email contained a reference to a valuation of $400,000.00 for the two blocks. I am not satisfied that this email reference is sufficient evidence of a valuation of the blocks in the order of $400,000.00.
I have received evidence of a valuation report commissioned by the CBA in December 2003, which provided a valuation of the blocks of $70,000.00 each. This was consistent with Mr Stephens evidence of sale prices, (as compared to market value).[67]
[67] T260-261; Ex P13
The company does not point to any other specific undue hardship if an order for specific performance was made.[68]
[68] McKinnon Holdings Pty Ltd v Hind [1984] 2 NSWLR 121
Contentions in Relation to Interest
The company submitted that any order for specific performance ought to be conditioned upon prompt completion. The company submitted that the plaintiff should be required to complete in 28 days on the basis of 2007 prices for the blocks in question, namely, a purchase price of at least $400,000.00. Alternatively, the company submitted that the plaintiff should be required to complete in 28 days on the basis of the 2003 prices together with interest. Interest should be levied at the rate of 8.69%, that being the default interest rate under clause 7.1.1 and 1.7 of the contracts. Between 10 July 2003 (when the payment should have been made), and 22 June 2007, the amount is about $322,400.00 that is, the interest component is $82,395.88.
Conclusions in Relation to Interest
In my view, the fairest approach based upon the evidence before me, is to address the delays by reference to the agreed purchase price and the assessment of interest in accordance with the contractual terms.
I find that it is appropriate to use the agreed purchase price for both blocks, namely, the figure of $240,000.00, in the determination of interest. I note that the plaintiff has never entered into possession of the property.
In my view, if interest was calculated upon the basis contended for by the company, the company would be placed in a better position than if it had settled in 2003. The company has refused to complete since proceedings were issued on 11 November 2004.
In my view, the plaintiff ought to pay interest calculated daily for the period from 18 November 2003 to 11 November 2004, on a figure of $240,000.00. I propose to use the default interest rate in the contracts although I have found that the plaintiff was not in breach of the contracts at the time that the company purported to terminate the contracts. That results in an interest payment to be made by the plaintiff of $20,513.88.
ORDERS
The court makes the following orders.
There will be judgement for the plaintiff.
It is ordered as follows:
Firstly, I declare that both contracts for the sale of land, namely, in relation to Certificate of Title Register Book Volume 5895 Folio 870 and Certificate of Title Register Book Volume 5613 Folio 683, were not validly terminated by the second defendant. I declare that both contracts are valid, subsisting, binding and enforceable.
Secondly, an order is made for specific performance of the two contracts in relation to the land in Certificate of Title Register Book Volume 5895 Folio 870 and Certificate of Title Register Book Volume 5613 Folio 683, by which the company is required to complete the purchase and transfer of the land to the plaintiff at the agreed total purchase price of $240,000.00 and upon the following conditions:
1.The Rural Sales Contract for the purchase of the land wholly comprised in Certificate of Title Register Book Volume 5392 Folio 868 shall be rectified to refer to Certificate of Title Register Book Volume 5895 Folio 870 (Lot 106).
2.That the plaintiff complete each contract within 28 days from the date of judgment on the basis of the agreed contract price in the total sum of $240,000.00 inclusive of GST, less $10,000.00 (the total deposit monies).
3.That the plaintiff pay in addition, the sum of $20,513.00 to the second-named defendant within 28 days by way of interest.
I note that $10,000.00 remains in Ms Paterson’s account and $65,000.00 is held in the plaintiff’s solicitors’ trust account.
The second-named defendant’s counterclaim is dismissed
I will give the parties liberty to apply. I will hear from the parties as to whether any further orders or declarations are required.
I will hear the parties as to costs.