Carroll v Investments (WA) Pty Ltd - [2012] WASC 93

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CARROLL -v- INVESTMENTS (WA) PTY LTD [2012] WASC 93

CORAM: SIMMONDS J

HEARD: 20-22 OCTOBER 2010

DELIVERED : 22 MARCH 2012

FILE NO/S: CIV 2406 of 2008

BETWEEN: JOHN CARROLL
Plaintiff
AND
INVESTMENTS (WA) PTY LTD
Defendant

Catchwords:

Contract for sale of lot off the plan in strata development - Buyer's action to enforce contract - Amendment of proposed strata plan made before proposed strata plan provided to buyer - Whether condition in contract allowing seller to terminate contract applied where authority refused approval of application made before contract entered into for purposes of registration of that amended proposed strata plan - Whether condition in contract allowing seller to terminate the contract applied where authority conditionally approved application made before contract entered into and where condition was in accordance with proposed strata plan provided to buyer but condition on approval was imposed after amendment of proposed strata plan and seller was unwilling to comply with condition - Whether right of termination effectually exercised - Whether if no right to terminate or right not effectually exercised buyer would have had order for specific performance - Whether if no right to terminate or right not effectually exercised buyer had shown loss

Legislation:

Strata Titles Act 1995 (WA), s 3, s 4, s 5, s 25, s 69, s 69A, s 69B
Transfer of Land Act 1893 (WA), s 140

Result:

Plaintiff's action dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr P J Mugliston & Mr A M Brook
Defendant: Mr S K Shepherd

Solicitors:

Plaintiff: Brook & Co
Defendant: Tottle Partners

Case(s) referred to in judgment(s):

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
Casella v Hewitt [2008] WASCA 13; (2008) 36 WAR 1
Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) 65 NSWLR 648
Champtaloup v Thomas [1976] 2 NSWLR 264
Egan v Christina Margaret Chugg as Executor of the Will of Roy Mckenzie Paton [2005] WASC 170
Gollin & Company Limited v Karenlee Nominees Proprietary Limited [1983] HCA 38; (1983) 153 CLR 455
J Kitchen & Sons Pty Ltd v Stewart's Cash and Carry Stores [1942] HCA 18; (1942) 66 CLR 116
Minchillo v Ford Motor Company of Australia Ltd [1995] 2 VR 594
O'Rourke v P & B Corporation Pty Ltd [2008] WASC 36; (2008) 36 WAR 197
Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Vamiso Pty Ltd v Chopard [1999] NSWCA 297

SIMMONDS J:

Introduction

This is an action for enforcement of a contract for the purchase of a unit in what was, at the date of the contract, a development under a proposed strata plan. The plaintiff claims specific performance or damages or both, as well as costs and interest. The plaintiff's claim rests in large part on difficult questions of construction of the contract.
In these reasons I begin by setting out the background to the action. I then describe the present proceedings including the trial before me and the issues the parties or at least one of them puts as before me, before addressing those issues, including the applicable law. The final section of these reasons is my conclusions and call for orders.

Background

The matters that follow are in my view either matters of uncontested evidence before me, or common ground.
The defendant is a company which at all material times engaged in property development. Primestyle Homes was the building and construction division of the defendant. Some of the correspondence in evidence before me is to or by Primestyle, which I accept as being the defendant.
The plaintiff at all material times worked as an administrative assistant for an entity which was appointed to sell units in a 38 unit residential development in the suburb of Bellevue, near Perth Airport (the development). As will be seen that entity changed over the period of concern to me. The sales were to be off the plan for the development.
In June 2004 the defendant became the registered proprietor of land being 132 Clayton Street in Bellevue, and being portion of Swan Location 16 and being lot 2 on diagram 75900, the whole of the land comprised in certificate of title (the Certificate of Title) vol 1857 folio 875 (the original Bellevue land).
The original Bellevue land was shown as being bounded by Clayton Street to the north, Wilkins Street to the east and Katharine Street to the west. The southern boundary was the southern boundary of the former Wilkins Street. The original Bellevue land was shown on the Certificate of Title as subject to among other things two easements, one (A913423) to the State Electricity Commission of Western Australia and the other (G156237) to the Electricity Corporation (the easements). The portion of the original Bellevue land to which the easements related, shown in a sketch (the land subject to the easements), was so shown as the western end of the original Bellevue land extending south east 39.66 m down Clayton Street (of a total boundary length on that street of 221.48 m) and east 50.33 m down the former Wilkins Street (of a total boundary length on that former street of 224.85 m).
In June 2004 the original Bellevue land was vacant land, except for high voltage electrical power lines, from at least one tower, running across the land subject to the easements.
In June 2004 the defendant contacted a Noel Wells of John Bullock and Associates, Consultant Land Surveyors (JBA) to have JBA commence work for the defendant for the purposes of the development. The development was to be on the original Bellevue land. At all material times JBA thereafter carried out the subdivisional and strata titling work for the development on instructions from the defendant.
Under cover of a facsimile dated 21 September 2004 JBA sent the defendant a 'Preliminary Built Strata Plan' dated 20 September 2004 comprising three pages and showing the 'Local Government' as the Shire of Swan (the Preliminary Built Strata Plan showing Swan).
The first page bore the legend 'Location Plan', and showed the land subject to the easements separated from the rest of the original Bellevue land by a vertical dashed line, and comprising two portions separated by a horizontal dashed line. One portion bore the legend 'A913423 Easement to West/Power'; the other portion bore the legend 'G156237 Easement to West/Power'. The first page of the Preliminary Built Strata Plan showing Swan also showed on the other side of the horizontal dashed line 38 numbered units occupying the remainder of the original Bellevue land (the remainder of the original Bellevue land), with no area details for any of the units.
The second page of the Preliminary Built Strata Plan showing Swan bore no legend: it showed the area of the remainder of the original Bellevue land with only a small part of the land subject to the easements, and with area details for each of the 38 numbered units.
The third page was a table showing 38 lot numbers and for each a 'U/E', which it was common ground was a reference to the unit entitlement for each lot. There was also a row 'agg' showing '38'.
As I will indicate there is evidence that there was an earlier version of the Preliminary Built Strata Plan showing Swan which showed a different local government.
On or about 23 December 2004 JBA on behalf of the defendant applied to the Western Australian Planning Commission (the WAPC) for certification of approval to a strata plan under the Strata Titles Act 1995 (WA) s 25(3) (the December 2004 application for approval of a strata plan). The December 2004 application for approval of a strata plan showed as the property the subject of the proposed strata plan the original Bellevue land, and the purpose and proposed use of all of the lots on the proposed strata plan '38 residential lots'. The December 2004 application for approval of a strata plan attached the Preliminary Built Strata Plan showing Swan.
In or about late 2004 construction began on the first stage of the development.
In late 2004 two managers of the defendant, Messrs Joseph Tilli and Peter Tilli, met with Mr Trevor Porter and the plaintiff, then employees of Megawin Property. Megawin Property was the trading name of Megawin Pty Ltd. At about this time Mr Joseph Tilli and Mr Peter Tilli engaged Megawin Property to act as real estate agents in the sale of the units in the development off the plan. Mr Porter at all material times at Megawin Property was responsible for property sales to developers and selling investment properties off the plan on behalf of developers and builders to individual buyers. The plaintiff at all material times at Megawin Property was an administrative assistant. His duties involved administering contracts for sale entered into between buyers and sellers, monitoring the progress of contracts for sale, telephoning banks to follow up on the progress of finance being provided to buyers and generally corresponding with the buyers and sellers and other settlement agents.
Over the period from about January 2005 to March 2005 there were discussions between the defendant and JBA concerning a subdivision of the land subject to the easements from the remainder of the original Bellevue land.
On or about 24 March 2005 JBA on behalf of the defendant applied to the WAPC for approval of a green title subdivision of the original Bellevue land into two lots (the March 2005 application for approval of a subdivision). The plan 'Proposed Subdivision' forming part of the March 2005 application for approval of a subdivision showed the original Bellevue land divided into two proposed lots, one the land subject to the easements and the other the remainder of the original Bellevue land. There were no details of a 38 unit development shown on the plan 'Proposed Subdivision'.
In April 2005 the defendant entered into a contract with the plaintiff for the sale of a unit, villa 18, in the development. The contract (the plaintiff's contract) bears the date 21 April 2005. I will return to that date and the content of that contract below. For the present, it is sufficient to note two features of the plaintiff's contract.
One feature is the inclusion in the plaintiff's contract of an Annexure 1, headed 'Form 28 Disclosure Statement' (Annexure 1 to the plaintiff's contract; I call the disclosure statement referred to the Disclosure Statement). It is common ground the Disclosure Statement was made for the purposes of Strata Titles Act s 69. Annexure 1 to the plaintiff's contract includes under the heading 'Part 3 Acknowledgement Of Receipt Of Notifiable Information' a document bearing the signatures of Mr Joseph Tilli for the defendant (dated 19 April 2005), Mr Porter for Megawin Property (dated 19 April 2005) and the plaintiff (dated 20 April 2005) (the Part 3 acknowledgement in Annexure 1 to the plaintiff's contract). The Part 3 acknowledgement in Annexure 1 to the plaintiff's contract reads as follows in material part:
Description of lot to be sold: lot(s)* 18 on strata plan no [blank]
Street address of lot: Unit* 18, 132 Calyton St Bellevue, Western Australia
I, [defendant] certify that the notifiable information for this property, as required by section 69 of the Strata Titles Act 1985, has been given to -
* the prospective buyer(s) …
…
before the offer or contract to purchase this property was signed by the buyer.
…
I authorise the prospective buyer(s) to inspect the records of the strata company.
[initials]
for and on behalf of the sellers
Dated this 19 day of April 2005
I (name of selling agent) Megawin Property as selling agent hereby certify that the notifiable information for this property, as provided by the seller, has been given to the prospective buyer(s).
[signed]
Signature of selling agent by its duly authorised agent
Dated this 19 day of April 2005
Acknowledgement of Buyer(s)
I/We (name of buyer)* [plaintiff] …
am/are the prospective buyer(s) of this property and I/we acknowledge that I/we have received notifiable information in respect of this property and understand that the disclosure given by the seller(s) or by the selling agent is not an offer or a contract to purchase a strata titled lot, but only provides information to me/us.
[signed]
Signature(s) of prospective buyer(s)
Dated this 20^th day of April 2005.
The other feature is the inclusion in the plaintiff's contract of an Annexure 3, headed 'Attachment 2 to Disclosure Statement Proposed Strata Plan' (Annexure 3 to the plaintiff's contract). There is a page after the first page of Annexure 3 to the plaintiff's contract headed 'Notification of Easement' bearing the signature of the plaintiff (dated 20 April 2005) (the Notification of Easement); there is a contest between the parties as to whether or not the Notification of Easement, notwithstanding its appearing in Annexure 3 to the plaintiff's contract, formed part as an attachment or otherwise of the Disclosure Statement. I return to the Notification of Easement and that contest below.
However, it is not in contest that in Annexure 3 to the plaintiff's contract, after the page containing the notification of easement there were two pages both headed 'Preliminary Built Strata Plan', and that these pages formed part of the Disclosure Statement, as its Attachment 2, as indicated in Annexure 3 to the plaintiff's contract (the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract). Those pages were identical to the first two pages of the Preliminary Built Strata Plan showing Swan, save that the first page of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract bore as the 'Local Government' the entry 'Town of Cottesloe'; save for some 'graphical omissions'; and save that the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract bore highlighting and initials on both pages. The entry for Local Government was in error, indicating the pages were an earlier version of the Preliminary Built Strata Plan showing Swan. The highlighting on the page of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract corresponding to the first page of the Preliminary Built Strata Plan showing Swan was of the entries for the easements; and the initials on that page were of the plaintiff, alongside or just below the entry for each of the easements, and for the defendant, below the indication of the land subject to the easements. The highlighting on the page of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract corresponding to the second page of the Preliminary Built Strata Plan showing Swan was of the subject of the plaintiff's contract, villa 18 in the development; and there were initials on that page which were of the plaintiff, within that highlighting, and for the defendant, immediately below the highlighting.
By 14 May 2005 the plaintiff had paid the deposit provided for under the plaintiff's contract of sale (the deposit) to the trust account of Ronson Mackinlay Conveyancers.
Under cover of a letter dated 18 May 2005 from Ronson Mackinlay to Megawin Property, an addendum to the plaintiff's contract signed by the plaintiff and dated 17 May 2005 was sent to Megawin Property stating that the plaintiff waived the condition precedent as to finance in the contract. It is common ground the plaintiff's contract of sale came into effect no later than 18 May 2005.
In July 2005 a new company Mega Property Group was formed and at about that time the plaintiff's employer became that company. That company acted as agent for the defendant in the sale of at least some units in the development.
Some time in mid to late 2005, while the plaintiff was employed by Mega Property Group, the plaintiff received a proposed strata plan which was to be used in the sale of units in the development and which differed from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract in that it omitted the land subject to the easements (second proposed strata plan). The plaintiff, at least by mid-2006, understood this omission was because the land subject to the easements was to be 'excised and vested in the authority of Western Power'. The plaintiff in his evidence characterised the second proposed strata plan as 'alternative plans' although he admitted that the second proposed strata plan was what was used in the sale of units in the development for at least a period from mid or late 2005.
I have no evidence that the second proposed strata plan or any other altered proposed strata plan was submitted to the WAPC for the purposes of the December 2004 application for approval of a strata plan or of the March 2005 application for approval of a subdivision. Nor was a copy of the second proposed strata plan put before me.
By letter dated 29 May 2006 from the WAPC to JBA the WAPC notified JBA that it had considered the March 2005 application for approval of a subdivision and resolved to refuse it (the decision of the WAPC refusing the March 2005 application for approval of a subdivision). On the uncontradicted evidence of Mr Joseph Tilli, because of this refusal he gave instructions to Mr Porter and Mr Carroll to terminate all of the contracts then held in respect of the sale of units in the development. I did not have any evidence of the implementation of those instructions in respect of the plaintiff or indeed of any other purchaser under a contract, except the evidence of Mr Joseph Tilli that '[a]ll of the other existing contracts were cancelled because Investments did not [intend] to include [the land subject to the easements] as common property'.
Following receipt of the letter dated 29 May 2006, on Mr Joseph Tilli's uncontradicted evidence he had discussions with Mr Wells as to (examination‑in‑chief, ts 253)
what other options Investments might have to to obtain separate subdivision of the easement land. One step was to have a vacant survey strata title issue of the easement land as a separate lot.
By letter dated 31 July 2006 from the WAPC to JBA the WAPC notified JBA that it had considered the December 2004 application for approval of a strata plan and was prepared to endorse its approval on the appropriate forms prescribed under the Strata Title General Regulations 1996 (WA) 'in accordance with the plan date stamped 23 December 2004 once the condition(s) set out have been fulfilled' (the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan). One of those conditions, condition 3, was as follows:
The area containing the Western Power easements being shown on the Strata Plan as common property.
By letter dated 3 August 2006 from the defendant to Mega Property Group, attention Mr Porter, signed by Mr Peter Tilli (the defendant's letter to Mega Property Group dated 3 August 2006), the defendant said this (bolding in the original):
Dear Trevor
Re: Unit 18/132 Clayton Street, Bellevue - Carroll
We refer to the pre‑sale contract above and our letter dated the 25^thMay 2006 [which was not before me].
In particular we bring to your attention clause 20 of the contract of which we cannot comply with in particular clauses 20.1.(2) (3) & (4) due to the fact that we have not received [WAPC] approval and that any approval is likely to require additional land amalgamated with the units now being constructed. We also point out that the contract has not become unconditional at this point in time.
We therefore must advise that the contract has come to an end and we authorise the deposit to be refunded to the proposed purchaser.
We apologise for this situation occurring yet in good faith we will pay an amount of $5,000.00 to the proposed purchaser within the next 90 days.
We await written confirmation within the next 7 days.
Beginning in August 2006 on the uncontradicted evidence of Mr Joseph Tilli there were the following exchanges between him and an officer of the WAPC (examination-in-chief ts 253):
In about August 2006 I spoke to a senior WAPC planning official named Patrick Smit. I discussed with him the plans Investments had to create a separate lot for the easement lot. I told Patrick Smit that I was considering making an application to WAPC for a vacant land survey strata title to be issued for the easement land.
Patrick Smit didn't say no to that suggestion and he didn't say yes. No written application was made by Investments for the survey strata. Patrick [Smit] agreed to orally submit my proposal to senior management and to get a response.
I waited for about six months to get some response from Patrick Smit but I received nothing from him.

By letter dated 25 November 2006 from the defendant to the plaintiff, signed by Mr Joseph Tilli (the defendant's letter to the plaintiff dated 25 November 2006), the defendant said this (bolding in the original):
Dear Sir
RE: UNIT 18 - 132 CLAYTON STREET BELLEVUE
I refer to your above pre‑sale contract and advise this has now been terminated.
Please find enclose a copy of a letter from the [WAPC] to [JBA] dated 31 July 2006 and the 'freehold green title subdivision' refusal dated 29 May 2006.
1.Investments (WA) Pty Ltd commenced a 38 unit development on land which is portion of what is presently a single lot ('Entire Lot').
2.The remaining portion of the Entire Lot is some approximately 3500²m which at present is vacant land ('Vacant Land').
3.Registered over the Vacant Land are 2 Western Power easements which relates to the construction of high tension power lines.
4.On the 38 unit site, a first stage development of 9 units is almost complete. Your conditional agreement is to purchase one of the units of that first stage.
5.If the Vacant Land was still to be part of the Entire Lot when the application for the issue of a strata plan is made, then the Vacant Land would become part of the common property. The rates and taxes applicable to the Vacant Land would be part of the burdens borne by the 38 unit holders and if the Vacant Land is included in common property, then this will increase prices and costs for all unit holders. In any event at all times the Vacant Land was to remain under the ownership of investments [sic] (WA) Pty Ltd.
We therefore sought to have the Vacant Land subdivided from the Entire Lot prior to the strata plan application being made.
The costing of, and planning of the development was carried out on the basis that the Vacant Land would not form part of the common property of the strata plan.
As per annexure 3 of the pre-sale contract the proposed strata plan clearly sets out that the Vacant Land was not to be included in the common property or the strata development generally.
Conditional contract
At the time of entering into the agreement with you we were mindful of the importance of obtaining a subdivision of the Vacant Land. We therefore included on the conditional contract clause 20.1.3, which provides that we can terminate the sale if:
'20.1.3Any relevant Authority imposes any condition on an Approval, and the Seller is unable or is unwilling in its [complete] discretion to comply with that condition.'
We turn now to the letter of [the WAPC] to [JBA] dated 31 July 2006. You will see that condition 3 of that letter on page 3 requires that the area containing the Western Power easements is to be shown on the strata plan as common property. For reasons already explained to you, this condition is unacceptable to us and we are not willing to comply with that condition.
It will therefore be clear that condition 20.1.3 has not been met and we are entirely within our rights to notify you that the contract is at an end.
We await your acknowledgements by return mail and we authorise the return of your deposit.
I will set out the relevant parts of the plaintiff's contract, cl 20 and related provisions, below.
By letter dated 2 January 2007 from the plaintiff to the defendant the plaintiff, referring to the defendant's letter to the plaintiff dated 25 November 2006, stated the basis of the termination appeared to be 'unfounded'. It is common ground the plaintiff at no time accepted that the plaintiff's contract was at an end.
In or about May 2007, as a result of the exchanges between the defendant, JBA and the WAPC to which I have referred, and after the WAPC had approved an application by JBA to the WAPC for endorsement of its approval of a strata plan for the first stage of the development, strata titles were issued for the first nine units in the development. The land subject to the easements was shown in the strata plan as common property, with a further unit (lot 10, later numbered lot 11) covering the remaining portion of the original Bellevue land. It was the uncontested evidence of Mr Joseph Tilli that to provide for the ultimate separation of the land subject to the easements as a separate lot from the original Bellevue land, provision was made by an amendment at about this time to the strata by‑laws (the amendment of the strata by‑laws) for the holder of lot 10, the defendant, to buy the land subject to the easements, for $1.00.
On 10 May 2007 a certificate of title was issued for what had been villa unit 18 in the development. That unit became lot 3 on strata plan 47136 together with a share in any common property as set out on the strata plan, being the whole of the land comprised in certificate of title vol 2656 folio 458 (lot 3).
On 16 May 2007 the plaintiff lodged a caveat K192548 on lot 3 in respect of his interest under the plaintiff's contract (the caveat). Subsequently in proceedings in CIV 1975 of 2007 the caveat was extended until further order of the court.
Subsequently also, the WAPC gave its approval for the land subject to the easements to be joined to lot 11, after which the defendant exercised the option in the strata by-laws to acquire the land subject to the easements, to form part of lot 11.

The present proceedings and the issues

The present proceedings were commenced by a writ filed 24 October 2008 with statement of claim. A defence was filed 22 May 2009 which was amended by leave I granted on the first day of the trial. There was also a reply to the original defence filed 20 July 2009.
At the trial between 20 and 22 October 2010 there was testimony from the plaintiff, Mr Joseph Tilli and Mr Wells. At the end of the trial I ordered there be written closing submissions to be filed and served within 14 days following which, after the expiry of seven days within which either of the parties could call for an oral hearing, and without further hearing, I might make my decision. Written closing submissions for both parties both dated 10 November 2010 were filed over the period 10 ‑ 11 November 2010, while in addition for the defendant a document 'Defendant's Objections to Plaintiff's Closing Submissions' dated 18 November 2010 was filed. As the latter came after the 14 days provided for, I have not taken it into account. In the event there was no call for an oral hearing, and none was held.
On the pleadings, the trial and the parties' closing submissions the following were the issues before me.
The principal issues concerned whether or not the defendant had the right to terminate the plaintiff's contract it claimed and, if so, whether or not it had effectually exercised that right.
There were further issues, raised on the defendant's closing submissions at least, of whether or not, if the defendant did not have the right to terminate the plaintiff's contract, or had not effectually exercised that right, the court should exercise any discretion it had to make an order for specific performance, and of whether or not there was no or no sufficient evidence that the plaintiff had suffered any loss.
During the trial the defendant abandoned the claim in its amended defence that there had been an agreement between the parties that the action should be settled on the terms of that agreement.
I turn now to consider the issues I have described.

The issue of the right to terminate the plaintiff's contract

It was common ground that the plaintiff's contract had been entered into and the conditions in the plaintiff's contract for its enforcement, including the payment of the deposit it provided for and its finance condition, had been met or waived.
The case for the defendant was that by the time of the defendant's letter to Mega Property Group dated 3 August 2006 the defendant had the right, which it effectually exercised, to terminate the plaintiff's contract. That right arose out of the decision of the WAPC refusing the March 2005 application for approval of a subdivision and the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan. That right arose by virtue of the plaintiff's contract cl 20.1.2 and cl 20.1.3. I set out those clauses and related provisions below.
The plaintiff's contract cl 20.1.2 and 20.1.3 read as follows:
20.1At any time within 2 years of the date of this Contract, the Seller may, by notice in writing to the Buyer, terminate this Contract if:
20.1.1…
20.1.2Any relevant Authority refuses to issue an Approval.
20.1.3Any relevant Authority imposes any condition on an Approval and the Seller is unable or unwilling, in its complete discretion, to comply with that condition.
The plaintiff's contract cl 29 headed 'Definitions' includes the following in cl 29.1:
Act means [the Strata Titles Act] as amended.
…
Approvals means all approvals of any description whatsoever required by the Seller, in the Seller's complete discretion, to carry out the Development and register the Proposed Strata Plan in accordance with the Act.
Authority includes a government, a local, statutory or public authority, and a person entitled to carry out a statutory function.
…
Complex means the residential unit complex which is to be erected on the Land and more particularly described in the Proposed Strata Plan.
…
Development means the development of the Land by the construction of the Complex on it in accordance with the Proposed Strata Plan and Specifications, including but not limited to subdivisional works, surveys, grants of easements, the installation of services and all other works necessary to complete and fit out the Complex.
Disclosure Statement means the Disclosure Statement in Form 28 annexed to this contract as Annexure 1.
…
Land means the land known as 18/132 Clayton St, Bellevue WA Western Australia, being more particularly described as lot/s 18 on Strata Plan/Plan/Diagram/ [blank], the whole of the land in certificate of title volume [blank] folio [blank].
Proposed Strata Plan means the plan or plans attached to the Disclosure Statement (described in the Disclosure Statement as Attachment 2) being Annexure [blank] to this Contract, as amended, varied or supplemented from time to time.
The initials of Mr Joseph Tilli and of the plaintiff appeared alongside the handwritten '18/32 Clayton St, Bellevue WA' with '18' in 'Land'.
There is no definition in the plaintiff's contract of 'condition' or 'condition on an Approval'.
At the commencement of the plaintiff's contract, the defendant is identified as the Seller and the plaintiff 'a.t.f. The Mosaic Growth Trust and/or Nominee' as the Buyer.
I will reach some further provisions of the plaintiff's contract relied upon by the parties below.
It will be apparent from the plaintiff's contract cl 20.1.2 read with the defined terms reproduced above from cl 29.1 that the right to terminate cl 20.1.2 refers to could only arise in respect of the decision of the WAPC refusing the March 2005 application for approval of a subdivision, and then only if that decision was a refusal by a 'relevant Authority' of an 'Approval'.
It will also be apparent from the plaintiff's contract cl 20.1.3 read with the definitions I have set out that the right to terminate cl 20.1.3 refers to could only arise in respect of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan, and then only if that decision was a case where a 'relevant Authority imposes any condition on an Approval and the Seller is unable or unwilling, in its complete discretion, to comply with that condition'.
I did not understand it to be contested that the WAPC was a 'relevant Authority' or that it had refused to give an approval, or given an approval on which it had imposed a condition, where that approval was required for the purposes of registration of a strata plan in accordance with the Strata Titles Act. In view of Strata Titles Act s 25(1), and the evidence as to the subsequent dealings between the defendant and the WAPC and the amendment of the strata by-laws culminating in the exercise of the option that amendment provided for, it does not seem to me that the contrary could be successfully contended for.
Nor did it appear to be in contest that in respect of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan that the defendant had been unwilling to comply with a condition in that approval. In view of the evidence as to the subsequent dealings between the defendant and the WAPC and the amendment of the strata by-laws culminating in the exercise of the option that amendment provided for, I do not consider the contrary could be successfully contended for.
However, as I understood the case for the plaintiff put against the defendant, as a matter of the proper construction of the plaintiff's contract there could be no 'Approval' in respect of an application for approval made before the conclusion of the plaintiff's contract, where that application was for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. Nor could there be a 'condition on an Approval' where that application for approval was made in respect of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract and the condition was in accordance with the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. On that case, I should find that the March 2005 application for approval of a subdivision was of the first kind, while the December 2004 application for approval of a strata plan was of the second kind.
As I understood the case for the defendant, it was that I should not find the applications were of the kinds the plaintiff contended for, while, even if I found otherwise, this did not, on the proper construction of the plaintiff's contract, produce the result the plaintiff contended for.
In my view the cases of the parties require me in the first instance to identify the proper construction of 'Proposed Strata Plan' in the plaintiff's contract. Next I must on that construction consider the facts as I find them to be, to determine whether or not the March 2005 application for approval of a subdivision was an application for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract; and I must on that construction consider the facts as I find them to be, to determine whether or not condition 3 of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan was in accordance with the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. Finally, if I conclude that the applications were as described, I must determine whether or not on the proper construction of 'Approval' and 'condition on an Approval' the results are as the defendant contends.
I consider that the applicable principles of construction of the plaintiff's contract were not in contest.
The general principles to be applied are the following, from Casella v Hewitt [2008] WASCA 13; (2008) 36 WAR 1 [70] ‑ [71] (Buss JA), where his Honour quoted from Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 ‑ 110 (Gibbs J) and from Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ), as follows:
The general principles to be applied in the construction of written contracts are set out in the judgment of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99:
'It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, "even though the construction adopted is not the most obvious, or the most grammatically accurate", to use the words from earlier authority cited in Locke v Dunlop ((1888) 39 Ch D 387, at p 393), which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case ((1880) 16 Ch D 681, at p 686). Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd ((1932) 147 LT 503, at p 514), that the court should construe commercial contracts "fairly and broadly, without being too astute or subtle in finding defects", should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd ((1968) 118 CLR 429, at p 437)) (109 ‑ 110).'
The construction of a written contract is concerned with ascertaining what a reasonable person would have understood the parties to mean. Consideration should ordinarily be given not only to the language of the document, but also to the surrounding circumstances known to the parties, and the apparent purpose and object of the transaction. See Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, where Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said:
'This Court, in Pacific Carriers Ltd v BNP Paribas ((2004) 218 CLR 451), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461 ‑ 462 [22]) [40].'
Also see Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181, [11]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451, [22]; Jumbo King Ltd v Faithful Properties Ltd [1999] 3 HKLRD 757, 773 ‑ 774.
I have noted the principle, drawn to my attention by the plaintiff, for cases where a construction which might be open on a literal construction of the terms of the contract is one that has 'little to commend it on the grounds of commercial efficacy or common sense': then the court should prefer a construction which is open and which avoids that characterisation. See Gollin & Company Limited v Karenlee Nominees Proprietary Limited [1983] HCA 38; (1983) 153 CLR 455, 464 (Mason, Murphy, Brennan, Deane & Dawson JJ) (source of quotation); see also J Kitchen & Sons Pty Ltd v Stewart's Cash and Carry Stores [1942] HCA 18; (1942) 66 CLR 116, 124 ‑ 125 (Latham CJ & McTiernan J) and Minchillo v Ford Motor Company of Australia Ltd [1995] 2 VR 594, 609 (Ormiston J, Fullager J agreeing) (warranty should not be construed in a 'technical way but in a manner which would be understood by a person in business'). However, I consider this principle does not for my purposes add to or qualify the propositions referred to above.

On the literal construction of the definition of 'Proposed Strata Plan' I consider it refers to whatever matter answering that description was included in the Disclosure Statement as its Attachment 2. As I have noted it was not in contest that at least the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was so included. I consider then that the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was at least a part of the Proposed Strata Plan.
As I have also noted on the uncontradicted evidence of Mr Wells there was prior to the conclusion of the plaintiff's contract another version of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract, being the Preliminary Built Strata Plan showing Swan, which came after the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. It was that later version which was employed in the December 2004 application for approval of a strata plan.
As I have also noted there was still another version of the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract or equivalent, which was provided to the plaintiff in 2005, for the purposes of contracts concluded thereafter. That version, the second proposed strata plan, on my findings reflected what the defendant was seeking to achieve through the March 2005 application for approval of a subdivision.
The plaintiff's contract clearly contemplates the amendment, variation or supplementation of the Proposed Strata Plan, as its definition expressly recognises. Does that contemplation include amendments, variations or supplementations made before the Proposed Strata Plan should be taken to have been given to the plaintiff?
As I have previously indicated the Disclosure Statement was made for the purposes of Strata Titles Act s 69. That provision says this:
69.Information to be given to purchaser
(1)A purchaser of a lot or proposed lot in a scheme shall be given the notifiable information, as provided by sections 69A and 69B, before he or she signs a contract to buy the lot or proposed lot.
(2)The vendor of a lot or proposed lot in a scheme shall ensure that subsection (1) is complied with either -
(a)by giving the notifiable information to the purchaser on the form referred to in subsection (3); or
(b)by ensuring that the notifiable information forms part of the contract.
(3)A form or forms shall be prescribed for use by vendors in giving the notifiable information under this section.
(4)In any civil proceedings arising out of or connected with a contract, the onus of proving that the notifiable information was duly given in accordance with this Part shall lie upon the vendor.
Included within the category of 'notifiable information' is the following, from Strata Titles Act s 69A(b):
69A.Notifiable information, to be given by every vendor
The notifiable information to be given under section 69 by every vendor is -
…
(b)a copy of either the registered strata/survey‑strata plan or the proposed strata/survey‑strata plan complying with section 5(1)(a), (b), (d) and (e) or 5A(1)(a) to (c), (e) and (f), as the case may require, and particularly drawing attention to information that relates especially to any lot or proposed lot to which the contract relates;
I note also the plaintiff's contract, cl 10.1, as follows:
10Disclosure Statement
10.1The Parties acknowledge that the annexures to this Contract, including the Disclosure Statement and the attachments to the Disclosure Statement, form part of the Contract.
I consider that, whether or not the words 'form part of the Contract' have the effect that the Proposed Strata Plan has the status of a warranty or other promissory obligation, the defendant had chosen to give the notifiable information at least by ensuring it formed part of the plaintiff's contract.
At the same time, I note the Part 3 acknowledgement in Annexure 1 to the plaintiff's contract and the dates of the signatures appearing there. On the date of the plaintiff's contract, which it appears was amended from 19 April to 21 April 2005, the latest of the dates of those signatures fell one day before the date of the plaintiff's contract. This might be taken to indicate that the Disclosure Statement had been provided before the conclusion of the plaintiff's contract. This might be taken to indicate that the defendant had also given the notifiable information other than by ensuring it formed part of the plaintiff's contract. However, I consider that makes no difference to the present point, given the date of the December 2004 application for approval of a strata plan and given the date of the March 2005 application for approval of a subdivision.
In my view, on the words of the plaintiff's contract, being the definition of 'Proposed Strata Plan' read with the definition of 'Disclosure Statement', and even after allowing for the terms of Annexure 1 to the plaintiff's contract and Annexure 3 to the plaintiff's contract, the term 'Proposed Strata Plan' is capable of applying to amendments, variations or supplementations of the Proposed Strata Plan given to the plaintiff made before the Proposed Strata Plan was so given.
I have arrived at that view after taking account, not only of the literal meaning of the words referred to but also of the whole of the plaintiff's contract and its commercial purpose. I note in particular, in addition to cl 20.1.2 and cl 20.1.3 set out above, cls 19.1, 19.2, 19.3 and 19.4, read with cl 29.1 'Property', 'Specifications' and 'Strata Plan', which are as follows (bold in original):
19Variations
Strata Plan
19.1The Seller may make any changes to the Proposed Strata Plan and to the Property as may be required by any competent Authority or otherwise to procure the registration of the Strata Plan provided that such modification does not materially prejudice or affect the size or value of the Property and the Buyer will make no objection, requisition or claim for compensation in respect of any such modification of the Proposed Strata Plan or the Property.
Reconfiguration
19.2The Buyer acknowledges and agrees that (without limiting clause 19.1) the Seller may also modify and reconfigure the Complex or other buildings forming part of it and:
19.2.1Any such changes may affect the Strata Plan and the entitlements of the Buyer and other owners of lots within the Complex;
19.2.2The Buyer will be bound by any change under this clause; and
19.2.3The Buyer will not make any objection or claim for compensation or seek to terminate the Contract as a result of these changes.
Specifications
19.3The Buyer acknowledges that the Seller may have to substitute alternative materials or finishes to those contained or referred to in the Specifications. The Seller shall only be entitled to do so if (in their reasonable opinion):
19.3.1any material in unavailable;
19.3.2unsuitable;
19.3.3no longer economically viable; or
19.3.4an Authority requires a change to any Specification.
19.4The Buyer cannot make any objection, claim for compensation or seek to terminate the Contract as a result of any allocation of car parking buys [sic] or storerooms to lots on the Proposed Strata Plan.
29Definitions
29.1In this document the following definitions apply:
…
Property means unit 18 in the Complex.
…
Specifications means the specifications in respect of the Complex annexed to this Contract as Annexure [blank] as amended, varied or supplemented from time to time.
…
Strata Plan means the Proposed Strata Plan in the form in which it is registered at DLI, as amended varied or supplemented from time to time.
The initials of Mr Joseph Tilli and the plaintiff appear alongside the handwritten '18' in 'Property'.
Those clauses including those definitions, it seems to me, confirm that the plaintiff's contract allowed for the defendant to have broad discretions to change, modify, reconfigure or substitute, as the case may be, matters in the Proposed Strata Plan, the Complex, the Specifications or the Property, as provided in cl 19 and subject to the restrictions there, and subject to the termination of the plaintiff's contract under cl 20.
Of course, both the language of cl 19.1 concerning changes that may be made, and those restrictions in cl 19, clearly indicate the broad discretions are not without limit. Further, it might be contended that it would not be in accord with the character of the Proposed Strata Plan as notifiable information under Strata Titles Act s 69A(b) that a plan that was not 'the Proposed Strata Plan' (emphasis added) as at the date it was given should be regarded as the Proposed Strata Plan as amended, varied or supplemented.
However, the terms of the definitions of 'Proposed Strata Plan' read with that of 'Disclosure Statement' are in my view unambiguous and exclude the possible contention as to currency just described. Of course, it might be that the fact the 'Proposed Strata Plan' was not compliance with Strata Titles Act s 69A(b) might indeed mean that the notifiable information in that respect was not duly given, which might give rise to civil remedies, whether under the plaintiff's contract or otherwise. For that purpose I note the words in Annexure 3 to the plaintiff's contract under the heading 'Attachment 2 to Disclosure Statement Proposed Strata Plan' as follows:
These plans have been prepared from architectural plans and are subject to survey and amendment under clause 11 of the Additional Conditions of sale contained in [blank]. Although the Seller believes, at the date of contract, that these plans are accurate, the Seller makes no representation and gives no warranty that the Proposed Strata Plan, when registered, will be exactly the same as these plans.
I note there is no 'clause 11' as there referred to.
I further note that the statement of belief referred to is one that it might be suggested was either false or without reasonable grounds. However, that does not in my view affect the construction of 'Proposed Strata Plan' which I prefer.
Nor in my view do these matters make the construction which I have indicated I prefer commercially unreasonable, in view of the provisions in cl 19 for changes to the Proposed Strata Plan and the changes to the Proposed Strata Plan that the words just quoted from Annexure 3 to the plaintiff's contract allow for.
I have arrived at this conclusion without regard to evidence of Mr Joseph Tilli that he had at the time Megawin Property was retained as agent for the development, being late 2004, informed the plaintiff and Mr Porter that the land subject to the easements was not going to be included in the proposed development. It will have been seen that the omission of that land was reflected in the second proposed strata plan.
Counsel for the defendant pressed that evidence on me as of a circumstance relevant to the construction of the plaintiff's contract. However, in view of the time at which that alleged statement was made, it seems to me it has little or no bearing on the construction of 'Proposed Strata Plan' in the present respect. There is no evidence of a subsequent exchange on the subject at least until the middle of 2005, an exchange to which I referred in connection with the second proposed strata plan.
This makes it unnecessary to consider whether or not the evidence referred to was inadmissible in view of the plaintiff's contract cl 28.3, on which counsel for the plaintiff relied in relation to the construction of the plaintiff's contract. That clause reads (bold in original):
Entire agreement
28.3This document contains everything the parties have agreed on in relation to the matters it deals with. No party can rely on an earlier document, or anything said or done by another party, or by a director, officer, agent or employee of that party, before this document was executed, save as permitted by law.
I consider that the last words, 'save as permitted by law', might avail a party seeking to rely on evidence of the kind I have referred to, were it to be relevant. However, as I have indicated, I do not consider it was relevant.
I turn now to the question whether or not, on the construction of the plaintiff's contract I prefer, on the facts as I find them to be, the March 2005 application for approval of a subdivision was an application for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract.
On the parties' respective cases, the answer to this question depended upon whether or not the land subject to the easements in the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was there treated as common property in the sense of that term in the Strata Titles Act. If it were so treated, then it appeared not to be in serious dispute that the March 2005 application for approval of a subdivision was an application for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. This is because it provided for the excision of the land subject to the easements from the remainder of the original Bellevue land.
Strata Titles Act s 3(1) 'common property' reads:
(1)In this Act unless the contrary intention appears -
…
common property means -
(a)so much of the land comprised in a strata plan as from time to time is not comprised in a lot shown on the plan;
(b)any leasehold interest acquired by a strata company under section 18; and
(c)the lot or lots shown on a survey strata plan as common property;
I understood that it was common ground that the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was not for a 'survey‑strata plan'.
Strata Titles Act s 4(1a) defines 'strata plan' as follows:
(1a)A strata plan is a plan that -
(a)is described as such in its title or heading;
(b)shows the whole or any part of the land comprised in the plan as being divided into 2 or more lots; and
(c)complies with section 5,
and includes any amendment duly made to that plan.
Strata Titles Act s 5 provides as follows:
5.Strata plan: requirements
(1)A strata plan shall -
(a)consist of a location plan and a floor plan in respect of the parcel;
(aa)where section 3(2)(a) or 3AB applies, contain a statement in the prescribed form describing all of the boundaries of a lot, or part of a lot, on the plan that are fixed by reference to a building or part of a building;
(b)bear a statement containing such particulars as may be necessary to identify the title to the parcel;
(c)be accompanied by a schedule specifying, in a whole number, the proposed unit entitlement in respect of each lot into which the parcel is to be subdivided and specifying also the proposed aggregate unit entitlement;
(d)have endorsed on it the name of the scheme;
(e)have endorsed on it the address of the parcel; and
(f)contain such other features as may be prescribed.
Strata Titles Act s 3(1) defines 'floor plan', 'land', 'location plan' and 'parcel' in material part as follows:
(1)In this Act unless the contrary intention appears -
…
floor plan means a plan, consisting of one or more sheets, which ‑
(a)defines by lines (in paragraph (c) referred to as base lines) the base of each vertical boundary of every cubic space forming the whole of a proposed lot, or the whole of any part of a proposed lot, to which the plan relates;
(b)shows -
(i)the floor area of any such cubic space; and
(ii)where any such cubic space forms part only of a proposed lot, the aggregate of the floor areas of every cubic space that forms part of the proposed lot;
…
land means land that is under the operation of the Transfer of Land Act 1893 and held by the registered proprietor of the land in fee simple;
…
location plan, in relation to a strata plan, means a plan, consisting of one or more sheets, which relates to land and delineates the perimeter of that land and, in relation to that perimeter, the location of any building erected on that land and of any proposed lots or part of proposed lots not within any such building;
…
parcel means the land comprised in a strata/survey‑strata plan;
I should note that the term 'common property' or similar does not appear anywhere in the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract; and there is no express definition of the term in the plaintiff's contract. However, cl 29.2 read as follows:
Unless the context requires otherwise, terms and expressions which are defined in the Act and used but not defined in this Contract have the same meanings in this Contract.
In my view, taking account of the statutory context I have described and cl 29.2 of the plaintiff's contract, there can be no reasonable doubt the areas not shown as lots in the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract are to be taken as having been included as (proposed) common property.
I reach this conclusion without regard to the Notification of Easement. That document read as follows (bold in original):
Notification of Easement
The Buyer/s are aware of and accept that an easement in favour of Western Power applies to the common property area to the corner of Katharine and Clayton Streets. This has been highlighted on the attached proposed strata plan.
Signed: [plaintiff]
Date: 20/4/2005
The signature and the date were both handwritten.
It may be seen that the land subject to the easements is characterised as a 'common property area'. This characterisation would strengthen the conclusion at which I have arrived. It would only do so, however, if the Notification of Easement document formed part of the plaintiff's contract.
The evidence of Mr Joseph Tilli was that he had no knowledge of this document at or about the date of the plaintiff's contract; and the evidence of the plaintiff was that he (the plaintiff) typed the page, although it was also his evidence that '[a]ll contracts were the same, they all had this notification of easement in there and they all had the same strata plan in there'. I took the latter evidence as relating to all of the contracts before the commencement of the use of the second proposed strata plan.
If it were necessary to do so, I would find that the Notification of Easement document was included in the plaintiff's contract. Whether or not Mr Joseph Tilli was aware of the document, it seems to me on the Part 3 acknowledgement in Annexure 1 to the plaintiff's contract that it was sufficient if the document had been provided by or for the defendant. The defendant would have had to give buyers disclosure like that in the Notification of Easement if the land subject to the easements were common property. This was by virtue of Strata Titles Act s 69B(2)(f), which I understood it to be common ground applied in this case, and which reads as follows:
69B.Notifiable information to be given by original proprietor in certain cases
…
(2)Where this section applies, the notifiable information to be given under section 69 by a vendor who is the original proprietor is, in addition to that required by section 69A -
…
(f)details of every licence, right of exclusive use and enjoyment, or special privilege granted, and still in operation, or proposed to be granted to the purchaser or any other person in relation to the common property.
I consider on all of the evidence before me which I have referred to in this connection, including the Part 3 acknowledgement in Annexure 1 to the plaintiff's contract, that it is more likely than not that the Notification of Easement formed part of the plaintiff's contract by virtue of having been provided by an agent of the defendant for this purpose, the plaintiff.

I have also arrived at my conclusion as to the land subject to the easements in the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract to be taken as having been included as common property without the assistance of a further item of evidence pressed on me by counsel for the defendant. That item of evidence was the testimony of Mr Wells with respect to the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract as follows (22 October 2010, cross‑examination, ts 318 ‑ 319):
If you turn with regard to exhibit A, which is that document that indeed you have in front of you there, if you turn the page you see there's another plan, and is that also a plan prepared by you?---Yes, it is.
What does this plan purport to show?---This is basically the floor plan or the ground floor plan. It shows the units as they were proposed from the design drawings, and it shows the total areas of all the units. You know, so it's basically - the first plan is a location, showing where they sit on the property. The second plan shows buildings and areas.
So if you look at the first plan, that is a larger plan just showing locations of various things?---That's right.
On that you could clearly see that the easement was to form part of this development?---That's right.
On the second plan, which is on the page you are looking at at the moment, it shows the size of the individual villas or units?---That's right.
Looking at that second plan, you certainly couldn't say, well, the easement lots are not forming part of the development?---No, but nor is any of the driveways or any other areas that are labelled 'common', so when you look at this plan anything that doesn't have an area attached to it is not part of your strata. It's common property.
If you look at the first plan with regard to the easement areas, that would be part of the common property?---That's right, yes.
I consider that this evidence, which was not objected to, is simply that the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was prepared in accordance with the conventions as to the depiction of common property in the Strata Titles Act. I consider that that evidence adds little to what follows after account is taken of the statutory context I earlier described and cl 29.2 of the plaintiff's contract.
It follows from my conclusion that the March 2005 application for approval of a subdivision was an application for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract.
I turn now to the question whether or not, on the construction of the plaintiff's contract I prefer applied to the facts as I find them to be, condition 3 of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan was in accordance with the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract.
It will be evident from my conclusion arrived at for the purposes of answering the previous question that the answer to the present question is yes, condition 3 of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan was in accordance with the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract.
I have concluded that the March 2005 application for approval of a subdivision was an application for the purposes of registration of a strata plan materially different from the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. I have also concluded that condition 3 of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan was in accordance with the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. As I have so concluded, I must determine whether or not on the proper construction of 'Approval' and 'condition on an Approval' the results are nonetheless as the defendant contends, that cl 21.2 and cl 21.3 of the plaintiff's contract applied to give the defendant a right to terminate the plaintiff's contract.
In my view the results are indeed as the defendant contends, for these reasons.
I have previously set out the definition of 'Approvals' in the plaintiff's contract cl 29.1. I would emphasise from that definition the words 'approvals … to carry out the Development and register the Proposed Strata Plan in accordance with the Act'. Those emphasised words should be read with the definition of 'Proposed Strata Plan' in which I would stress the emphasised words 'the plan or plans attached to the Disclosure Statement (described in the Disclosure Statement as Attachment 2) being Annexure [blank] to this Contract, as amended, varied or supplemented from time to time'. I consider those definitions so read cover a case where the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract (that is, 'the plan or plans attached to the Disclosure Statement (described in the Disclosure Statement as Attachment 2) being Annexure [blank] to this Contract') is 'amended' as the plaintiff's contract allows.
The amendment the defendant's case referred me to was one excising the land subject to the easements from the original Bellevue land thereby reducing the proposed common property. I consider on the evidence as to the second proposed strata plan it could not be successfully contended this was a case where the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract was not 'amended'. Nor did I understand the plaintiff to contend this was such a case.
Further, it appears to me that this amendment is one within the plaintiff's contract, cl 19.1, reproduced above, as a change 'to the Proposed Strata Plan … as may be required by any competent Authority or otherwise to procure the registration of the Strata Plan' (emphasis added). This is provided that 'such modification does not materially prejudice or affect the size or value of the Property'.
As to whether the proviso in the plaintiff's contract cl 19.1 was engaged, I note the following evidence of the plaintiff (cross-examination, ts 147 ‑ 148):
I took you just before our break to the power lines over what has been called the easement land and as far as use of the complex of units on the development at 132 Clayton Road, there's no use that land has been put to is there?---I don't know. I haven't been there for a long time.
Would you expect there to be any?---No.
You were aware in signing the contract, weren't you, that once the complex had been completed there would be a strata company?---Yes.
And you would have been aware that the strata company under the strata by-laws would be responsible for maintaining common property areas?---As a general principle, they'd be responsible for the common property, yes.
No-one else would do it would they?---Correct.
You would expect there to have been costs involved in that, wouldn't you?---No.
No cost involved in maintaining common areas? How would they do it?---What maintenance? What are you referring to?
For example, if the area known as the easement land was a common area it would need to be mowed?---Yes, a small amount of mowing would be foreseeable; yes.
There would be a cost there wouldn't there?---Yes.
And the strata company is responsible for paying land tax isn't it?---It would make negligible difference on the value of the land.
But there would be some wouldn't there?---Presumably, yes.
And rates?---Yes. Once again, it wouldn't be much different for that area there.
It would be fair to characterise it as it would be land which couldn't be used but for which there would be some cost?---Yes.
So it didn't add at all to the amenity of the complex did it?---In my perception, no.
That was the only evidence on the effect of the change on the 'value of the Property'. I took that evidence to be that the change would have had no material effect.
I consider that at least by the date of the second proposed strata plan there was an amended Proposed Strata Plan. That amended Proposed Strata Plan, if it was not in existence by at the latest the date of the March 2005 application for approval of a subdivision, was in view by that date. Those findings mean in my view that the decision of the WAPC refusing the March 2005 application for approval of a subdivision was, within the plaintiff's contract cl 20.1.2, a case where an Authority 'refuses to issue an Approval'.
Those findings also mean in my view that the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan by reason of condition 3 was within the plaintiff's contract cl 20.1.3, if the defendant was 'unable or unwilling, in its complete discretion, to comply with that condition'. In view of the evidence as to the subsequent dealings between the defendant and the WAPC and the amendment of the strata by‑laws culminating in the exercise of the option that amendment provided for, I do not consider it could be successfully contended that the defendant was not 'unwilling, in its complete discretion to comply with that condition'. This is notwithstanding the inclusion of the land subject to the easements in the initial registered strata plan that resulted in the issue of lot 3.
I conclude then that the defendant had a right to terminate the plaintiff's contract, under cl 20.1.2, as a result of the decision of the WAPC refusing the March 2005 application for approval of a subdivision; and the defendant also had a right to terminate the plaintiff's contract, under cl 20.1.3, as a result of the decision of the WAPC conditionally approving the December 2004 application for approval of a strata plan.
This takes me to the second issue, of whether or not the defendant effectually exercised either right of termination.

Whether the defendant effectually exercised its right of termination

The defendant's case was that it had exercised its right of termination by the defendant's letter to Mega Property Group dated 3 August 2006 and by the defendant's letter to the plaintiff dated 25 November 2006.
I would immediately put aside the defendant's letter to Mega Property Group dated 3 August 2006. It is not evident to me that that was 'notice in writing to the Buyer' (emphasis added), as called for by the plaintiff's contract cl 20.1. It rather appears to me to be an instruction to the defendant's selling agent. There was no evidence as to any consequent notice in writing by Mega Property Group to the plaintiff before me.
As to the defendant's letter to the plaintiff dated 25 November 2006 I note that it is not altogether clear from that document which right of termination, that under the plaintiff's contract cl 20.1.2 or that under cl 20.1.3, was being exercised. However, it was not put to me that the defendant had failed to exercise either right of refusal as a result. In any event, I consider the contrary could not be contended for. See Champtaloup v Thomas [1976] 2 NSWLR 264, 271 (Glass JA, Street CJ agreeing).
In closing submissions the plaintiff referred to the plaintiff's contract cl 28.5 as relevant to the exercise of the right of termination. Clause 28.5 reads:
The parties will promptly do and perform all acts and things and execute all documents as may from time to time be required, and at all times will act in good faith, for the purposes of or to give effect to this document.
It was not apparent from the plaintiff's pleaded case, in which no reliance was placed on this clause, and not altogether apparent from the plaintiff's closing submissions, in what way this clause was relevant. I took it that the relevance lay in a claim that the defendant had acted in bad faith by terminating in circumstances where the reason for the termination was the defendant's unhappiness with the land subject to the easements being common property, where that was the way that land was shown in the Preliminary Built Strata Plan in Annexure 3 to the plaintiff's contract. I consider that, on the way I have previously dealt with a right to terminate in that case, it could not be said the exercise of that right would be a failure to 'act in good faith'.
I should add that it was no part of the plaintiff's pleaded case, and not apparent from the plaintiff's closing submissions, that the plaintiff was relying on the word 'promptly' in cl 28.5 in relation to the time at which the defendant purported to exercise its right of termination by the defendant's letter to the plaintiff dated 25 November 2006. In view of authorities such as Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634, 656 (Mason J), followed in Vamiso Pty Ltd v Chopard [1999] NSWCA 297 [74] (Giles JA, Sheller & Stein JJA agreeing), and even although those authorities appeared to concern contracts without provisions like cl 28.5, it was not apparent to me that any such reliance by the plaintiff would have been availing.
Counsel for the plaintiff, in his opening address, did contend, as I understood him, that the defendant had not effectually exercised its right to terminate as it had not made an attempt to repay the deposit to the plaintiff as required by the plaintiff's contract cl 20.2. That clause reads (emphasis added):
If the Seller terminates this Contract in accordance with clause 20.1 the Seller must repay to the Buyer the deposit together with all accrued interest and all other money, if any, paid by the Buyer under this Contract, without deduction. Upon repayment, this Contract shall be at an end and cease to have any further effect and neither party shall have any claim against the other.
This contention was not returned to in closing submissions. There was no reference to a failure to return any other monies than the deposit.
I took the contention to be that 'repayment' was a condition of the effectual exercise of the right to terminate, as indicated by the emphasised words, and notwithstanding the words 'terminates this Contract' in the first sentence. I accept without finally deciding that the contention in this respect is correct. I further accept, as appeared to be common ground, that the settlement agent Ronson Mackinlay had not been approached to refund the deposit, by the plaintiff or the defendant.
However, in my view the contention cannot succeed, in view of the wording of the defendant's letter to the plaintiff dated 25 November 2006 in which at its end the following appears, also set out above:
We await your acknowledgements by return mail and we authorise the return of your deposit.
As I earlier indicated the deposit was held by the settlement agent Ronson Mackinlay.
In view of that wording in the defendant's letter to the plaintiff dated 25 November 2006, it appears to me that the defendant had done what cl 20.2 required it to do in a case where a third party held the deposit for the purposes of settlement.
It follows in my view that the defendant effectually exercised its rights of termination.
This conclusion makes it unnecessary to determine whether or not the court should exercise any discretion it had to make an order for specific performance of the plaintiff's contract, and whether or not there was no or no sufficient evidence that the plaintiff had suffered any loss.
I should note that only the closing submissions for the defendant addressed these matters. However, given the attention devoted to those matters in those submissions I will indicate in brief my view of them.

Whether specific performance should be ordered

Specific performance is, of course, a discretionary remedy.
The defendant submits that the discretion should not be exercised, or should not be seen to have been enlivened, to compel the defendant to transfer to the plaintiff title to the property under the plaintiff's contract together with a share of the common property that would include his share of the land subject to the easements. The defendant submits there are three reasons why the discretion should not be so exercised or so seen.
The first reason is that the land subject to the easements has, pursuant to the defendant's exercise of the option in the strata by-laws to acquire the land subject to the easements, become part of lot 11. This had an effect on the rights and obligations of the owners of the other strata lots, and the unwinding of the exercise of that option required by an order for specific performance would thus have effects on them. They were not before the court.
It seems to me that hardship imposed on other owners by the unwinding of the exercise of the option referred to would be a reason to deny specific performance. See Meagher RP, Heydon JD & Leeming MJ, Meagher, Gummow & Lehane's Equity: Doctrines & Remedies (4^thed, 2002) [20‑110]. I further accept there is some evidence of such hardship in the evidence of the plaintiff, previously referred to, as to the cost of the land subject to the easement and its lack of contribution to the value or amenity of the units in the development. I consider that this evidence would justify the refusal of the order for specific performance sought. However, the issue of hardship to other owners was not in my view raised at the trial and I would not have declined to order specific performance on this ground without giving the plaintiff an opportunity to re‑open his case to lead further evidence on that subject. See O'Rourke v P & B Corporation Pty Ltd [2008] WASC 36; (2008) 36 WAR 197 [183] (Martin CJ).
The second reason why specific performance should be refused was that, it was submitted for the defendant, the plaintiff had not adduced any evidence that he would be ready, willing and able to perform the contract if specific performance were awarded. It is of course a matter of defence to a claim for specific performance that, subject to any statutory provision or rule of court to the contrary, a party seeking specific performance has failed to aver and prove a readiness and willingness to perform that party's return for performance. See Meagher, Gummow and Lehane [20‑115].
In the statement of claim there is a statement that '[o]n 5 June 2007 the solicitors for the Plaintiff advised the Defendant that the Plaintiff was ready, willing and able to settle on the Contract' [10]. In the amended defence there is a statement that
the defendant admits that on 5 June 2007 solicitors for the plaintiff wrote to the defendant in the terms pleaded but states that the Contract was terminated on 3 August 2006, alternatively 25 November 2006, and denies that the defendant was obliged to settle the Property referred to in the Contract [15].
In view of those pleadings, I consider that readiness and willingness was a matter the plaintiff would reasonably have seen to be one that was not in issue. Thus, I would not have declined to order specific performance on this ground.
The third reason why specific performance should be refused, the defendant submits, is that the plaintiff has not demonstrated damages are an inadequate remedy. Equity will not decree specific performance if the plaintiff has an adequate remedy in law: Meagher, Gummow and Lehane [20‑030]. However, damages are not usually seen to be an adequate remedy for failure by a vendor to complete a contract for the sale of land: Meagher, Gummow and Lehane [20-035]; Egan v Christina Margaret Chugg as Executor of the Will of Roy Mckenzie Paton [2005] WASC 170 [17] (Jenkins J). Thus, I would not have declined specific performance on this ground.

Whether there was no or no sufficient evidence that the plaintiff had suffered any loss

I consider that the plaintiff had to plead the material facts which entitled him to claim damages as he did. See LexisNexis, Civil Procedure in Western Australia [20.2.4]. The only such facts evident to me were the defendant's failure to complete the plaintiff's contract: see statement of claim [10]. There was no evidence as to any loss consequent on such failure. That loss would appear to be most obviously the difference between the market value of the property with its unit entitlement as the plaintiff claimed at the date at which completion should have occurred and the purchase price under the plaintiff's contract. Proof of that loss would involve evidence as to that market value. See Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; (2006) 65 NSWLR 648 [11], [36], [53] (Mason P, Beazley JA agreeing). However, there was no evidence as to the market value of the property so described at that or any other time. Nor was there any other evidence of loss apparent to me.

I would conclude then that the plaintiff had failed to prove any loss.

Conclusion and orders

I have concluded that the defendant had rights to terminate the plaintiff's contract which it had effectually exercised.
It follows in my view that the plaintiff's claims to enforce the plaintiff's contract and his action should be dismissed.
The defendant in his closing submissions sought not only an order dismissing the plaintiff's action but also its costs on an indemnity basis, the discharge of the caveat, the costs of the caveat proceedings on an indemnity basis and any loss arising from or relating to the caveat. The defendant foreshadowed submissions would be made with respect to the first (costs of the action) in this list of orders.
So far as the matters of costs of the action and of the caveat proceedings are concerned, I should await submissions as to the bases on which the defendant says the orders as to costs on an indemnity basis sought should be made.
As to the claim for discharge of the caveat, to the extent the caveat rested on the enforceability of the plaintiff's contract, it would seem to me that the defendant should have an order terminating the caveat. I do not have a copy of the caveat or its statutory declaration before me to determine that extent; however, I do have from the file for CIV 1975 of 2007 the affidavit of the plaintiff sworn 24 September 2007 which states that the caveat was lodged 'to protect my interests under the Contract for Sale'.
I will hear from the parties as to the order I should make in respect of the termination of the caveat.
As to the claim for any loss arising from or relating to the caveat, I consider this claim must rest on Transfer of Land Act 1893 (WA) s 140, which provides:
140.Compensation for caveat lodged without reasonable cause
Any person lodging any caveat with the Registrar either against bringing land under this Act or otherwise without reasonable cause shall be liable to make to any person who may have sustained damage thereby such compensation as a judge on a summons in chambers shall deem just and order.
No summons in chambers has been lodged. Leaving aside that matter, I note that in claims under Transfer of Land Act s 140 the onus of proof that a caveat was lodged 'without reasonable cause' lies on the registered proprietor, here the defendant. See Bradbrook AJ et al, Australian Real Property Law (5^th ed, 2011) [5.45]. It is not in contest that, if the plaintiff's contract was enforceable as he claimed, he had a caveatable interest. If that were the basis of the plaintiff's claimed caveatable interest, it is not evident to me, at first blush at least, how, where there had been a strongly contested claim by the plaintiff of the present sort, it could be shown the plaintiff had lodged the caveat 'without reasonable cause'. A caveat lodged by a caveator who had an honest belief on reasonable grounds that the caveator had a caveatable interest would not be so seen, at least where the caveator has not acted for an ulterior or improper purpose: see Australian Real Property Law [5.45] text at footnote 70.
However, I will hear submissions from the parties as to the defendant's claim for loss arising from or relating to the caveat.
I will hear from the parties as to the orders to be made accordingly.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CARROLL -v- INVESTMENTS (WA) PTY LTD [2012] WASC 93 (S)

CORAM: SIMMONDS J

HEARD: 20-22 OCTOBER 2010, 22 MARCH 2012 & ON THE PAPERS

DELIVERED : 22 MARCH 2012

SUPPLEMENTARY
DECISION :21 MAY 2012

FILE NO/S: CIV 2406 of 2008

BETWEEN: JOHN CARROLL
Plaintiff
AND
INVESTMENTS (WA) PTY LTD
Defendant

Catchwords:

Further orders in action - application for costs of action on indemnity basis - whether conduct of successful defendant in not complying with condition of settlement agreement terminated for that non-compliance by the plaintiff warranted denying the defendant its costs or substantially reducing them - whether conduct of plaintiff warranted making indemnity costs order

Legislation:

Rules of the Supreme Court 1971 (WA), O 66 r 1

Result:

Defendant to be awarded its costs, including reserved costs, but not on indemnity costs basis
Orders in related proceedings to be made

Category: B

Representation:

Counsel:

Plaintiff: Mr P J Mugliston & Mr A M Brook
Defendant: Mr S K Shepherd

Solicitors:

Plaintiff: Brook & Co
Defendant: Tottle Partners

Case(s) referred to in judgment(s):

Carroll v Investments (WA) Pty Ltd [2012] WASC 93
Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95
Gray v Sirtex Medical Ltd formerly known as Paragon Medical Ltd [2009] WASC 126
Jenkins v Hope [1896] 1 Ch 278
Mannix v Loumbos Pty Ltd [2000] NSWCA 32
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Quancorp Pty Ltd v Macdonald [1999] WASCA 101
Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S)

SIMMONDS J:

Introduction

This is my decision as to the matter of further orders to be made following the delivery of my decision Carroll v Investments (WA) Pty Ltd [2012] WASC 93 (the further orders) and following the making on that occasion of orders for the dismissal of the plaintiff's claims in the present proceedings. The further orders are principally as to the costs of these and related proceedings.
I begin by setting out matters of factual background to permit an understanding of further orders the parties respectively seek, and their cases for the making of such orders. I then deal with the issues arising out of those respective cases. The final section is my conclusions and call for terms for the further orders.

Background

This is taken from Carroll and the papers filed with the court in the proceedings in CIV 2406 of 2008, as well as in related proceedings with the same parties, CIV 1975 of 2007. This background is also taken from the affidavit of Alan Michael Brook (the Brook affidavit), solicitor for the plaintiff, sworn 5 April 2012 further to the document Plaintiff's Outline of Submissions as to Costs Orders dated 29 March 2012 (the plaintiff's submissions); and this background is further taken from certain annexures to the document Defendant's Submissions on Costs dated 5 April 2012 (the defendant's submissions). In the orders I made on the delivery of Carroll providing for the determination of the further orders I would make I did not provide for affidavit or other material than written submissions by the parties. However, neither party objected to the other's documents I have described. On that basis, I consider I may draw upon them. I will indicate when I am doing so.
In April 2005 the plaintiff entered into a contract (the plaintiff's contract) to buy from the defendant a unit (the plaintiff's unit) in a development (the development) the subject of a preliminary built strata plan which was annexed to the plaintiff's contract. The defendant by that time had two applications in respect of the development pending before the Western Australian Planning Commission (WAPC). One application showed a preliminary built strata plan very similar to but not identical with the preliminary built strata plan annexed to the plaintiff's contract (the first application). The other application showed a proposed strata plan which contained further differences from the preliminary strata plan annexed to the plaintiff's contract (the second application). The differences included in particular the treatment as a separate lot of certain land, part of the land the subject of the development, over which there were easements in favour of the state's electrical power distribution utility (the land subject to the easements).
In May 2006 the WAPC notified the defendant of the WAPC's refusal of the second application.
In July 2006 the WAPC notified the defendant of its approval of the first application on certain conditions. Those conditions included that the land subject to the easements be shown on the strata plan for the development as common property.
In a letter dated 25 November 2006 to the plaintiff, the defendant referred to these two decisions of the WAPC and certain clauses in the plaintiff's contract to do with termination of the contract on a decision on an 'application' for approval in relation to the development. The two decisions of the WAPC were referred to in terms of their failure to permit the recognition of the excisions of the land subject to the easements from the development. The 25 November 2006 letter stated that the plaintiff's contract was terminated. It was common ground that the plaintiff at no time accepted the plaintiff's contract was at an end.
On 10 May 2007 a certificate of title issued for land including what had been occupied by the plaintiff's unit.
On 16 May 2007 the plaintiff lodged caveat K192548 (the caveat) on land comprised by that certificate of title. The defendant's submissions annex a copy of the caveat and the statutory declaration of the plaintiff in support of the caveat. I accept that these indicate that the basis of the caveat was the plaintiff's claim that he had an enforceable interest under the plaintiff's contract, which subsisted.
By originating summons filed 21 September 2007 the plaintiff commenced action in CIV 1975 of 2007. By orders later made in that action the caveat was extended until further order. Also by orders made in CIV 1975 of 2007 the action was stayed pending the determination of the proceedings in CIV 2406 of 2008.
By writ with statement of claim filed on 24 October 2008 the present proceedings in CIV 2406 of 2008 were commenced to enforce the plaintiff's contract. The plaintiff claimed specific performance, 'and or damages', as well as 'costs and interests'.
On 5 November 2008 as stated in the Brook affidavit it was agreed at a mediation conference between the parties to CIV 2406 of 2008 that the proceedings in that action and in CIV 1975 of 2007 be settled as indicated in a handwritten document signed by the plaintiff and for the defendant (the settlement agreement). The settlement agreement provided in material part that both actions
will be settled on the basis that the defendant will pay to the plaintiff $40000 within 30 days from 5 November 2008.
At settlement of this matter the Plaintiff will give to the Defendant an executed and registrable withdrawal of caveat in respect of caveat no. K192548.
The parties agree that at settlement they will each sign a Minute of Consent Orders terminating both actions with no orders as to costs.
See Annexure AMB‑1 to the Brook affidavit.
It appears, if not entirely clearly, from the Brook affidavit that at no time thereafter and notwithstanding letters dated 5 December 2008, 10 December 2008 and 12 December 2008 from the solicitors for the plaintiff to the solicitors for the defendant requesting that settlement take place, did the defendant pay the $40,000 referred to. See Annexures AMB‑2, AMB‑4 and AMB‑5, respectively, for those letters. In the letter of 12 December 2008, the solicitors for the plaintiff indicated they had instructions that, unless by 3.00 pm that day payment was received, the settlement would be at an end and they would apply to the court to reinstate the action.
By a minute of proposed orders dated 19 January 2009 from the solicitors for the defendant provision was made for payment of $40,000 by 20 February 2009, failing which the defendant irrevocably consented to judgment in that amount; and upon payment of that amount the plaintiff would deliver up to the defendant a withdrawal of the caveat and each party would sign a minute of consent orders terminating the proceedings in CIV 2406 of 2008 and CIV 1975 of 2007. See Annexure AMB-6 to the Brook affidavit.
In the event, however, on 19 January 2009 at a Case Management Conference in CIV 2406 of 2008, and on the plaintiff's application to reinstate those proceedings, orders were made for the defendant to file and serve a defence and counterclaim by 20 February 2009. See the Brook affidavit [13] ‑ [14].
I note in respect of the settlement agreement that in the defence filed 22 May 2009 [16], repeated unchanged in the amended defence for which I gave leave at the trial, there was the following plea:
If the Contract has not been terminated by the defendant (which is not admitted) then the defendant further pleads that by an agreement dated 5 November 2008 between Peter Tilli on behalf of the defendant and the plaintiff acting as plaintiff, the plaintiff agreed with the defendant that these proceedings between the plaintiff and the defendant would be settled on the terms and conditions set out in the agreement.
In the plaintiff's reply to defence filed 20 July 2009 the plaintiff pleaded as follows in [9]:
There was no settlement of this case as pleaded in paragraph 16 or at all as there was no payment by the Defendant to the Plaintiff of $40,000.00 within 30 days from 5 November 2008. In fact at no stage since that date has the Defendant said it was ready able and willing to make payment of the $40,000.00.
At trial, as noted in Carroll [45] the defendant abandoned its claim resting on the pleading of the settlement agreement.
Between 20 and 22 October 2010 there was a trial in CIV 2406 of 2008.
On 22 March 2012 I delivered Carroll where I stated my conclusion that the defendant had the right to terminate the plaintiff's contract which it had effectually exercised and thus the plaintiff's claims to enforce the plaintiff's contract, and his action in CIV 2406 of 2008, should be dismissed. I made orders then for the dismissal of the plaintiff's claims in CIV 2406 of 2008. I also made orders that the matters of further orders, including orders as to the costs of CIV 2406 of 2008, as to the caveat and as to related matters the subject of the proceedings in CIV 1975 of 2007, be the subject of written submissions by the parties and a minute or minutes of proposed further orders, to be filed by 5 April 2012. The matter of the making of further orders might thereafter be decided upon the papers.
In the event the plaintiff's submissions and the defendant's submissions were filed on 5 April 2012, with the Brook affidavit in the case of the plaintiff, and the annexures to the defendant's submissions in the case of the defendant. However, no minutes of proposed further orders were filed by either party. At the same time, I consider the orders sought by each party sufficiently appear from their respective written submissions.
I turn now to the orders the parties respectively seek, and an outline or short statement of the effect of their cases for those orders.

Orders sought and outline of the cases for them: the defendant

The defendant seeks the following orders:
(1)The plaintiff pay the defendant its costs in CIV 2406 of 2008, including all reserved costs, on an indemnity basis;
(2)The proceedings in CIV 1975 of 2007 be dismissed;
(3)The caveat be immediately discharged and removed from the register; and
(4)The plaintiff pay the defendant its costs in CIV 1975 of 2007 to be taxed if not agreed.
The defendant's case for order (1) in outline is that the costs should follow the event, and that, as the plaintiff's conduct in bringing and pursuing the action in CIV 2406 of 2008 was unreasonable, an indemnity costs order was appropriate.
The defendant's case for orders (2), (3) and (4) in effect is that as the claims in CIV 1975 of 2007 rested on the same foundation as the claims in CIV 2406 of 2008 the making of those orders followed.
I note that, although in the closing submissions for the defence for the trial in CIV 2406 of 2008 there was a claim for loss arising from or relating to the caveat to which Carroll referred at [140], that claim is not pursued.

Orders sought and outline of the cases for them: the plaintiff

The plaintiff seeks the following orders:
(1)There be no order as to the costs of CIV 2406 of 2008;
(2)If there is to be an order for the defendant's costs, it not be on an indemnity basis and indeed be for 'substantially reduced' costs; and
(3)There be no order compensating the defendant for any loss arising from or relating to the caveat.
The matter of order (3) does not need to be further pursued, in view of the defendant's position previously described.
There are no proposed orders or separate submissions for the plaintiff as to dismissal of the proceedings in CIV 1975 of 2007, the discharge of the caveat or the costs of those proceedings.
The plaintiff's case for order (1) rests on the defendant's conduct under the settlement agreement.
The plaintiff's case for order (2) on a substantially reduced basis rests on the same foundation. The plaintiff's case for the order that in any event the defendant receive its costs but not an indemnity basis is in effect that the defendant had not shown the unreasonableness it contended for; that case is also in terms of the conduct of the defendant under the settlement agreement.
From these competing positions, the following issues present themselves:
(1)Should the costs of CIV 2406 of 2008 follow the event, and be on a substantially reduced basis?
(2)If those costs should follow that event without reduction, should they be on an indemnity basis?
(3)What orders should be made in CIV 1975 of 2007?
I turn to those issues.

Should the costs of CIV 2406 of 2008 follow the event but on a reduced basis?

If the costs of CIV 2406 of 2008 were to follow the event, and leaving aside the matter of reduced costs and indemnity costs, it is not in contest that the defendant would have them on the usual party and party basis, to be taxed if not agreed.
The costs of proceedings are of course in the discretion of the court. However, without limiting that discretion, the court will 'generally' order that the successful party will recover their costs: Rules of the Supreme Court 1971 (WA) O 66 r 1. See on this principle Gray v Sirtex Medical Ltd formerly known as Paragon Medical Ltd [2009] WASC 126 [62] (Le Miere J).
As to the exercise of the discretion so as to make no order as to the successful party's costs, I note the following, citing Mannix v Loumbos Pty Ltd [2000] NSWCA 32 [13] (Foster AJA; Priestley & Foster JJA agreeing), from Kendall C and Curthoys J, Civil Procedure in Western Australia [66.1.4A], Service 136:
A successful party may properly be deprived of an award of costs if guilty of misconduct relating to the litigation or the circumstances leading up to the litigation as where by lax conduct the successful party effectively invites the litigation, unnecessarily protracts the proceedings, succeeds on a point not argued before a lower court, prosecutes the matter solely for the purpose of increasing the costs recoverable, or obtains relief which the unsuccessful party had already offered in settlement of the dispute.
For the plaintiff, reliance was placed on the settlement agreement and the defendant's failure to comply with the condition for payment of $40,000. I understood this to be a claim that the discretion should be exercised to make no order as to costs, or a substantially reduced order as to costs, on either of two bases. One was that the defendant was guilty of misconduct relating to the proceedings in CIV 2406 of 2008 in breaching the settlement agreement resulting in the proceedings being reinstated with the defendant obtaining relief which the plaintiff had offered in settlement of the dispute. The other basis was that the defendant's misconduct was in entering into an agreement following mediation with which it failed to comply.
As to the first basis, the defendant appeared to be referring me to the authority referred to in Mannix [13] of Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72, 98 (McHugh J). That authority itself referred to Jenkins v Hope [1896] 1 Ch 278 to show that the court may 'properly depart from the usual order as to costs when the successful party … obtains relief which the unsuccessful party had already offered in settlement of the dispute': Oshlack (97 ‑ 98).

However, Jenkins was a case which, so far as appears from the report, involved an unqualified offer by the defendants to settle the proceedings there by granting the plaintiff the relief it sought as well as costs. That offer stood at the time that the plaintiff delivered its statement of claim. Here the relief under the settlement agreement was qualified and the offer or acceptance of it had in effect been withdrawn by the plaintiff's termination of the settlement agreement no later than the time of proceeding before the Case Management Registrar on 19 January 2009 to seek the reinstatement of the proceedings in CIV 2406 of 2008.
Of course, the apparent reason for withdrawal of the offer or acceptance by such termination was the defendant's failure to comply with the condition in the settlement agreement, which I understood as the second basis for the plaintiff's claim that I should make no order or a substantially reduced order as to the defendant's costs in CIV 2406 of 2008.
This form of conduct is not addressed in Oshlack or Mannix, the parties cited no authority with respect to it to deny a successful party its costs or to reduce them and I could find no such authority. In my view, conduct of that kind without more would not merit characterisation as the plaintiff contends for here as 'misconduct relating to the litigation'. Such conduct would appear to be a matter which is rather to be dealt with as under the agreement, for which there might be a remedy for its breach. The present are not proceedings for a remedy for such conduct. This is not to say a breach of a settlement agreement might not be such as to give rise to an exercise of the costs discretion such as the plaintiff seeks. An example might be where a settlement agreement was entered into with no intention of complying with its conditions. However, here, on the material before me, there is no more than a failure to comply with a condition in a settlement agreement, a failure which gave rise to a termination of the agreement.
I note that the plaintiff has not referred to any considerations particular to a claim for substantially reduced costs and none presents itself to me.
I also note that the plaintiff has made no submissions that any of the reserved costs in CIV 2406 of 2008 should be separately dealt with, and no reason for such dealing presents itself to me.
Accordingly, I would make an order that the defendant have its costs of CIV 2406 of 2008, including reserved costs, to be taxed if not agreed, subject to the matter of indemnity costs, reached next.

Should the defendant have its costs in CIV 2406 of 2008 on an indemnity basis?

The defendant's case for its costs in CIV 2406 of 2008 on an indemnity basis rested on two bases. One basis was the conduct of the plaintiff in bringing and pursuing those proceedings allegedly in 'wilful disregard' of 'known facts and the established law'. The other basis was the plaintiff engaging in conduct allegedly prolonging the case on 'groundless contentions'.
I consider it cannot be contested that, notwithstanding that the usual order for costs is on party and party basis, an indemnity costs order may be made in a case where a party has commenced proceedings 'in wilful disregard of known facts or the established law' or unduly prolonged the proceedings on 'groundless contentions'. These are examples of an 'element of improper, or at least unreasonable, conduct on the part of the parties or their legal advisors in relation to the case': Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [9] (Pullin J). See also Swansdale Pty Ltd v Whitcrest Pty Ltd [2010] WASCA 129 (S) [10] (Pullin JA & Kenneth Martin J), referring to Quancorp Pty Ltd v Macdonald [1999] WASCA 101 [7] (Wheeler J), where her Honour referred to persisting in a 'hopeless' case.
There are other bases on which the conduct of a party might be sufficient to merit an indemnity costs order being made against them. See Flotilla Nominees [8] ‑ [9]. However, no other basis is advanced by the defendant, and none presents itself to me.
I treat 'wilful disregard of known facts and the established law' and undue prolongation of the case on 'groundless contentions' separately.
As to the first, the defendant appears to rest its claim for indemnity costs on that basis, or at least that the plaintiff ran a 'hopeless' case, on either of two matters. One matter was the foundation of fact which the plaintiff accepted and on which the defendant says the plaintiff's pleaded basis for the relief it sought rested. The other matter was the nature of the relief the plaintiff sought on that basis. I deal with each matter separately.
The defendant's submissions describe, correctly in my view, matters of factual background not in dispute. The defendant's submissions state that the pleaded basis, resting on that factual background, for the plaintiff's contention that the defendant was not entitled to terminate the plaintiff's contract was that the defendant was 'bound' under the plaintiff's contract to retain the land subject to the easements as common property in the development. The defendant's contention was that on the plaintiff's own evidence at trial the plaintiff understood that the defendant was not so bound, and so the plaintiff's pleaded basis fell away, and on established law the plaintiff could not terminate the plaintiff's contract.
I accept that, on the plaintiff's pleadings (see reply to defence dated 16 July 2009 [4] ‑ [6]), his case was that the defendant was not entitled to terminate the plaintiff's contract in the events that had happened, and the basis for that case was that the defendant had not made a 'proper application' to the WAPC under the provisions as to termination in the plaintiff's contract in not including the land subject to the easements as common property in the development. I further accept that the plaintiff's evidence at trial was to the effect that the defendant was entitled to vary the development to excise the land subject to the easements from the development: see Carroll [27] and trial 21 October 2010 (ts 148, 153, 155).
However, in my understanding of the plaintiff's case as pleaded and conducted at trial, that case was that any such variation could not, as a matter of construction of the plaintiff's contract, as a result of the decisions of the WAPC on either the first application or the second application, give rise to a right to terminate the plaintiff's contract. That raised a question of construction and application of the plaintiff's contract that was of some difficulty: see Carroll [59] read with [60] ‑ [111]. In view of that quality of that question, I am unable to conclude that the plaintiff's conduct in pursuing his case was in wilful disregard of known facts and established law.
As to the second matter on which the defendant's submissions appear to rest their claim for indemnity costs as a matter of 'wilful disregard of known facts and the established law', or at least the pursuit of a 'hopeless' case, the nature of the relief the plaintiff sought, the defendant's submissions referred to both of the plaintiff's principal claims, for specific performance and damages.
As to the claim for specific performance, the defendant's case was there were three reasons why the court would not as a matter of discretion have granted that relief. I do not need to review those reasons. That is because they were ones which were put to me at trial. I described them in Carroll and concluded that I would not have declined the remedy of specific performance, at least without giving the plaintiff an opportunity to re-open his case to lead further evidence. See [130] ‑ [135].
As to the claim for damages, the defendant's case was that the plaintiff had neither pleaded particulars of loss nor provided evidence of loss at the trial. In Carroll I dealt with these matters, which the defendant had put to me at trial: see [136] ‑ [137]. My conclusion set out there was that the plaintiff had failed to prove any loss. However, in view of my conclusion on the claim for specific performance, it does not seem to me such failure is sufficient to represent a form of 'improper or unreasonable conduct': Flotilla Nominees [9]. I am of that view as the claim for damages was at least in part an alternative to the claim for specific performance, as a claim for 'and or damages' (emphasis added).
As to the allegation that the plaintiff unduly prolonged the case on groundless contentions, it was not evident to me what other matter the defendant was relying upon than that subsumed by the allegation of the plaintiff's wilful disregard of known facts and established law previously dealt with.
Accordingly, I would not make the indemnity costs order the defendant seeks.
This conclusion makes it unnecessary for me to consider whether or not the breach of the settlement agreement by the defendant on which the plaintiff relies for not making an indemnity costs order is sufficient for that purpose.

What orders should be made in CIV 1975 of 2007?

I note the character of the proceedings in CIV 1975 of 2007, and the nature of the caveatable interest claimed for the caveat. I note also the absence of any submissions by the plaintiff that there are other relevant considerations than those urged against the orders sought by the defendant in CIV 2406 of 2008.
In view of those matters, and as no such considerations present themselves to me, I conclude that orders to the effect of those the defendant seeks in CIV 1975 of 2007 should be made.

Conclusions and call for orders

I have concluded that orders should be made in CIV 2406 of 2008 to the following effect: the defendant should have its costs of that action, including reserved costs, to be taxed if not agreed.
I have also concluded that orders should be made in CIV 1975 of 2007 to the following effects: that proceedings in that matter be dismissed; that the caveat be immediately discharged and removed from the register; and that the plaintiff pay the defendant's costs in that action, including any reserved costs, to be taxed if not agreed. I note in relation to an order to remove the caveat that the registrar is not a party to the action, and so the order could not be in such terms but rather should be crafted with a view to achieving that effect.
I will hear from the parties as to the detailed terms of such orders, and any other orders to be made as a consequence of these reasons.