Dwyer & Varga v Berry - [2016] SADC 110

District Court of South Australia
(Civil)
DWYER & VARGA v BERRY
[2016] SADC 110
Judgment of His Honour Judge Stretton
2 September 2016
CONVEYANCING - STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE - PROTECTION OF PURCHASERS - OBLIGATIONS ON VENDOR: DISCLOSURE, WARNINGS AND LIKE MATTERS
CONVEYANCING - BREACH OF CONTRACT FOR SALE AND REMEDIES - VENDOR'S REMEDIES - DAMAGES
ESTOPPEL - ESTOPPEL BY CONDUCT - ESTOPPEL IN PARTICULAR CIRCUMSTANCES - CONVEYANCING CASES
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - ELECTION AND RESCISSION - LOSS OR WAIVER OF RIGHT TO RESCIND
The plaintiffs contracted to sell property in the main street of Hahndorf to the defendant. The defendant failed to pay the deposit specified in the contract at any time. A few days after the contracted settlement date the defendant had neither paid the deposit nor settled. The plaintiffs therefore purported to terminate the contract for failure to pay the deposit. The defendant then purported to terminate the contract pursuant to the finance clause. The plaintiffs subsequently re-sold the property for considerably less than the contract price they had achieved with the defendant. They sought damages pursuant to clauses in the contract which provided that if they terminated on account of the purchaser’s failure to pay the deposit they were entitled to sue for damages. Neither party acted with legal advice at any time. The defendant resisted the claim on the basis that the deposit had never become payable, that if it did become payable the time for payment was waived or extended, and that the plaintiff never validly terminated for breach. Other issues as to the meaning of the contract as to payment of deposit, waiver, and affirmation of contract were in contention.
Held:
1.      The pro-forma Society of Auctioneers and Appraisers SA Inc. contract as executed by the parties required the payment of a deposit in the form of a “deposit guarantee”, which was defined as a guarantee by a registered insurance company or bank to pay the vendor an agreed amount of $20,000 in the event of a default in settlement by the purchaser.
2. The Form 1 required to be served per the Land and Business (Sale and Conveyancing) Act was inaccurate and incomplete, and was invalid.
3.      The deposit only became contractually payable after the service of a valid Form 1, and accordingly never became payable. Accordingly the defendant never became contractually liable to pay the deposit and hence was not in breach of the contract for not having paid the deposit.
4.      The documentation served by the plaintiffs on the defendant purporting to terminate the contract did not amount to a contractual termination but instead amounted to a request that the defendant agree to mutually terminate the contract. No agreement was forthcoming. Accordingly that documentation did not terminate the contract.
5.      The documentation served by the defendant on the plaintiffs purporting to terminate the contract also did not amount to a contractual termination.
6.      Accordingly the contract remained on foot until it was repudiated by the plaintiffs by their subsequent sale of the property to a third party.
7.      The defendant did not breach her contract with the plaintiffs, nor did the plaintiffs terminate the contract for breach.
8.      The plaintiffs’ claim for breach of contract is dismissed.
Land and Business (Sale and Conveyancing) Act 1994 s 7; Environment Protection Act 1993 s 103I, referred to.
WR Pty Ltd v Birdseye [2008] SASCFC 321; Brien v Dwyer (1978) 141 CLR 378; Romanos v Pentagold Investments Pty Limited (2003) 217 CLR 367; TCN Channel 9 Pty Ltd (1989) 16 NSWLR 130; Sotiros Shipping Inc v Samiet Solholt (The Solholt) [1983] 1 Lloyd’s Rep 605; Empresa Cabaña Importada de Alimentos v Iasmos Shipping Co SA [1984] 2 Lloyd’s Rep 1; Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133; Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333; Myles Pearce & Co Pty Ltd v Leuci and Anor (1997) 193 LSJS 491; South Australian Planning Commission and Wylie v McNeil (1985) 42 SASR 524; Wilson v City of Mitcham (1986) 61 LGRA 126; Astil & Anor v South Esplanade Developments Pty Ltd [2007] SASCFC 231; Waterman v Gerling Australia Insurance Co Pty Ltd [2005] NSWSC 1066; Commonwealth v Verwayen (1990) 170 CLR 394; Craine v Colonial Mutual Fire Insurance Co. Ltd (1920) 28 CLR 305; Grundt v Great Boulder Gold Mines Pty Ltd (1937) 59 CLR 641; Berry v Hodson [1988] 1 Qd R 361; The Commonwealth of Australia v Verwayen (1990) 170 CLR 394; Tropical Traders v Goonan (1964) 111 CLR 41; W&R Pty Ltd v Birdseye [2008] SASCFC 321; Toll Pty Ltd v Alphapharm (2004) 219 CLR 165, applied.

DWYER & VARGA v BERRY
[2016] SADC 110

The plaintiffs seek damages from the defendant for the defendant’s alleged breach of a contract for the sale of land by the plaintiffs to the defendant.
The case is unfortunate example of what can go wrong when parties in a significant commercial matter contract, disagree, fall into conflict and then attempt to resolve the contract between them, all without any legal advice or legal assistance. As is so often the case in those circumstances, the result has been protracted and no doubt expensive litigation.
Introduction
The plaintiffs owned land and retail premises at 91 Mount Barker Road Hahndorf (“the property”).
On 7 November 2012 the plaintiffs contracted to sell the property to the defendant for $830,000.
The plaintiff vendors were selling privately, however enlisted some unpaid assistance from a friend who was a real estate agent. The friend to all intents and purposes took on the role of agent in dealings with the defendant. The defendant purchaser was herself a real estate agent, and handled the matter herself. Neither took legal advice.
The contract provided that the defendant would pay a “deposit guarantee” of $20,000 on the day following the expiration of cooling-off. The contract was also subject to a certain level of finance being obtained by the defendant, and provided for settlement on 1 February 2013.
It is common ground that no deposit was ever paid and a “deposit guarantee” was not provided, nor did the defendant settle on or by 1 February 2013, and on 8 February 2013 both the plaintiffs and the defendant separately took action by which they each separately assert the contract was terminated.
Specifically, the plaintiffs claim that at about 4.30pm on 8 February 2013 they served a notice of termination on account of the defendant’s failure to pay the deposit.
The defendant claims that at about 5pm that same day 8 February 2013 she notified the plaintiffs that finance had been declined which would “automatically cancel the contract correctly”, inferentially on the basis that the finance clause in the contract had not been satisfied.
The claim
The plaintiffs claim that the contract provided that if the defendant failed to pay the deposit by the date specified, the plaintiffs were entitled to terminate the contract without prior notice and sue the defendant for damages. They claim that the defendant failed to pay the deposit and that as a result the plaintiffs were entitled to, and did, validly terminate the contract.
The plaintiff claims that they then continued to try and sell the property, and eventually sold it on 26 June 2014 for $738,083.80.
The plaintiffs claim that by virtue of the defendant’s breach of contract they have suffered loss and damage in the form of:
·The $20,000 deposit which was not paid:
·The difference between the contracted price with the defendant of $830,000 and the eventual sale price of $738,083.80, amounting to $91,916.20; and
·Resale expenses of $2,149.80.
The defence
The defendant was unrepresented at trial.
She had previously been represented, and her settled defence and reply raised the following matters in answer to the plaintiffs’ claim:
·That the contractual requirement to provide a “$20,000 deposit guarantee” did not amount to an express term that a deposit guarantee was payable as claimed by the plaintiffs;
·That the purported Form 1 Statement (“Form 1”) contained a material defect such that it did not constitute a vendor’s statement for the purpose of section 7 of the Land and Business (Sale and Conveyancing) Act 1994 (“the Act”). The material defect was constituted by the document wrongly stating that there was no Development Plan Amendment of a certain type released for public consultation, when in fact there was. As a consequence of there being no Form 1, it is argued that time for payment of the deposit never started to run, a deposit never became payable, and hence the plaintiffs were never entitled to terminate for breach on the basis that no deposit had been paid.
·That the contract did not provide for the payment of a deposit and therefore a deposit was never due and payable, the defendant did not breach the contract by failing to pay one and the plaintiffs were not entitled to terminate for failing to provide a “deposit guarantee”, except pursuant to the general breach condition clause 9.2 which required the giving of 7 days’ notice.
·That even if the plaintiffs were entitled to terminate the contract, the purported termination notice was not served in a manner authorised by the contract and was therefore ineffective.
·That even if the plaintiffs were entitled to terminate the contract, their document did not amount to a unilateral termination contemplated by the contract as it was in the form of a proposed agreement with the defendant to terminate. It did not therefore terminate the contract.
The defendant also pled that in any event the plaintiffs had failed to mitigate their loss. The defendant pled that by subsequently selling the property to someone else the plaintiffs had repudiated the contract, which the defendant accepted. The defendant pled in the alternative that she had in any event cooled off on 17 October 2014, which she was entitled to do as she had never been served with a compliant vendor’s statement (Form 1) and hence the prescribed time limit for cooling off had not commenced.
The unrepresented defendant argued at trial that she had in any event, by virtue of an email exchange with the plaintiffs’ agent and the agent’s subsequent conduct of proceeding on the basis that the contract was still on foot, been given more time to pay the deposit, and had then proceeded on that basis, only to be in effect surprised by the plaintiffs ultimate purported termination without notice on the basis that she had not paid the deposit and their subsequent claim for damages. This raised the issue of whether the plaintiffs had, subsequent to the defendant’s alleged breach of the term to pay the deposit by its due date, by the alleged actions of their agent, waived the breach and thereby affirmed the contract such that they could no longer terminate without notice for a failure to pay the deposit, and/or should be estopped from denying that they had waived the breach.
While this defence was not initially pled, it was actively pursued throughout the trial, the defendant cross examined witnesses to that effect, and argued it in her closing address. The defendant applied to amend her defence part way through the trial and upon being satisfied that there was no material prejudice to the plaintiffs the court gave her leave to amend her defence to plead the email exchange and that she was granted more time to pay the deposit.
The contract
It is common ground that on 7 November 2012 the parties signed a written contract for the sale of the property. The agreed price was $830,000.
The contract document was in a standard form provided by the Society of Auctioneers and Appraisers SA Inc.
Contractual provisions as to deposit
The pro-forma contract provided for a deposit. In light of the significance of the deposit and the issues said to arise from it, I set out the provision in full. The pro-forma term was set out as follows:
DEPOSIT $_______________________
The deposit will be paid:
oImmediately after auction; or if no auction
oIf the purchaser is a company or if the cooling off right is waived then on signing this Contract;
oOn the next day following the expiration of the “cooling off” period, being 2 business days after service of the Form 1.
oOther: _________________________________________________________
(tick or cross the applicable boxes)
For the deposit, the words “20,000 deposit guarantee” were written in, and the third dot point had been crossed, indicating that the deposit would be paid the next day following the expiration of the cooling off period, being 2 business days after service of the Form 1. Hence the executed contract read as follows:
DEPOSIT $ 20,000 deposit guarantee (hand written)
The deposit will be paid:
oImmediately after auction; or if no auction
oIf the purchaser is a company or if the cooling off right is waived then on signing this Contract;
X On the next day following the expiration of the “cooling off” period, being 2 business days after service of the Form 1.
oOther: _________________________________________________________
(tick or cross the applicable boxes)
The terms “deposit guarantee” and “deposit bond” are defined in the contract and both deposit bond and deposit guarantee are also contemplated in a section relating to “auction conditions”.
The interpretation section of the contract includes the following definition of deposit which in turn defines both deposit guarantee and deposit bond:
“deposit” means the amount detailed in this contract as payable for a deposit and may include a “Deposit Guarantee” or “Deposit Bond” in the vendor’s discretion which are guarantees by a registered insurance company or bank to pay to the agent or vendor an amount agreed as the deposit in the event of a default in settlement by the purchaser.
Although auction conditions did not apply to the contract, the provision and receipt of a deposit guarantee is also contemplated in such circumstances and is regarded as an alternative to a cash deposit:
AUCTION CONDITIONS
…….. If sold by auction then the deposit of 10% of the purchase price (or such other amount notified by the auctioneer or agent prior to the auction and advised to the purchaser prior to the auction) is payable in cash or by cheque immediately upon the successful acceptance of the bid unless a Deposit Guarantee or Deposit Bond is accepted by the vendor in the vendor’s discretion and delivered on acceptance of this contract. The vendor is not bound to accept any Deposit Guarantee or Deposit Bond.
It is clear from all of this that the contract defines deposit to include a “deposit guarantee”, which is in turn defined as a “guarantee by a registered insurance company or bank to pay to the agent or vendor an amount agreed as the deposit in the event of a default in settlement by the purchaser”.
The contract by its terms therefore obliged the defendant to provide such a guarantee, in other words a “guarantee by a registered insurance company or bank to pay to the agent or vendor an amount agreed as the deposit in the event of a default in settlement by the purchaser”, such amount being $20,000, to the plaintiffs “on the next day following the expiration of the “cooling off” period, being two business days after service of the Form 1.”
I find that there was no oral variation to or qualification made to the contractual provisions on or before the day the contract was signed.
Contractual provisions as to default
The plaintiffs’ claim is based on the plaintiffs’ alleged default in paying the deposit. The parties dispute the effect of the default provisions in the contract. It is appropriate to set them out in full.
9      Default by Purchaser
               9.1    Default in Payment of Deposit
Notwithstanding any other provision of this Contract, in the event the Purchaser fails to pay all or any part of the deposit by the date specified then the Vendor will be entitled to immediately terminate the Contract without prior notice.
9.2    Default by Purchaser Prior to Settlement
In the event the Purchaser is in default in performing or observing any obligation imposed on the Purchaser under this Contract prior to settlement then the Vendor, in addition to any other rights or remedies it may have under this Contract or otherwise, may give the Purchaser notice in writing requiring the Purchaser to remedy the default within seven (7) days from service of the notice. If the Purchaser fails to comply with the notice the Vendor may terminate the Contract by further written notice without prejudice to the Vendor’s rights and entitlements at law. The Vendor will be entitled to serve more than one notice without prejudice to any of its rights and obligations.
9.3Default by Purchaser in Settlement
In the event the Purchaser defaults in the due observance or performance of the obligations on the Purchaser’s part to settle and such default continues for a period of three (3) clear business days after the Settlement Date then the Vendor may serve a notice on the Purchaser requiring the default to be remedied and appointing a time for settlement being not less than three (3) clear business days after the service of the notice requiring the Purchaser to settle at the time and date appointed in the notice. If the Purchaser fails to comply with the notice the Vendor may terminate the Contract by further written notice without prejudice to the Vendor’s rights and entitlements at law. The Vendor will be entitled to serve more than one notice without prejudice to any of its rights and obligations.
9.4Remedies of Vendor
(a)In the event this Contract is terminated by the Vendor then the Vendor may either retain the property or sell the property and in either event sue the Purchaser for damages.
(b)The Vendor will be entitled to retain the deposit if this Contract is terminated by the Vendor.
(c)If the Vendor re-sells the property the Vendor may retain absolutely any surplus arising from such re-sale in excess of the original Purchase Price and expenses arising from the re-sale and all losses and expenses incurred by the Vendor resulting from the Purchaser’s default.
(d)In the event this Contract settles on a date after the date for settlement first agreed to by the parties and as stated in the Contract (and whether or not subsequently varied by agreement) and provided that the delay in settlement is not due to the Vendor’s default, the Purchaser will pay at settlement, if demanded by the Vendor, interest on the Purchase Price at the default rate for the period between the date for settlement first agreed and the date of actual settlement. In this event, at settlement all outgoings and income on the property shall be apportioned and adjusted to midnight on the day before the date for agreed settlement.
10Default by Vendor
In the event the Vendor defaults in performing or observing any obligations or duties under the Contract then the Purchaser in addition to any rights at law and without prejudice thereto will be entitled to serve a notice on the Vendor requiring the Vendor to remedy the breach within three (3) clear business days from service of the notice. If the Vendor fails to comply with the notice the Purchaser may terminate this Contract by further written notice without prejudice to the Purchaser’s rights and entitlements at law. The Purchaser will be entitled to serve more than one notice without prejudice to any of its rights and obligations.

It is clear that clause 9.1 entitles the vendor to terminate the contract without notice if the purchaser fails to pay the deposit, and that the vendor has that right “notwithstanding any other provision of this contract”. Clause 9.2 entitles the vendor to serve notice on the purchaser to remedy any default by the purchaser under any part of the contract, “in addition to any other rights or remedies it may have under this Contract or otherwise”.
In other words, the vendor’s right to terminate the contract for failure to pay the deposit is expressed to exist independently of, and in addition to, the vendor’s right to give the purchaser notice to remedy any default.
It is accordingly clear that the contract provides that, notwithstanding the vendor may if it wishes give the purchaser a notice per clause 9.2 to remedy any breach, the vendor has the option to terminate the contract without notice per clause 9.1 if the purchaser fails to pay all or any part of the deposit by the date specified in the contract.
The defendant argued that was not what the contract meant, in part because that would be unfair to a purchaser. As discussed with her in the course of the trial and final addresses, with some exceptions the law of contract is not about providing for complete equity or fair bargains between parties. Rather, it is primarily about determining what the parties have agreed, and enforcing their agreement.[1]
[1] Toll Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165
In any event, the law of contract has long recognised the significance of the payment of a deposit, and at common law non-payment of the deposit will commonly justify termination of the contract without notice. As Doyle CJ said in WR Pty Ltd v Birdseye [2008] SASCFC 321 at paras [26] – [29]:
In Brien v Dwyer (1978) 141 CLR 378 Barwick CJ described a deposit (in the context of a contract for the sale of land) as an “earnest of performance”: at 385 and 386. Gibbs J said that the primary purpose of a deposit was as “a guarantee that the purchaser means business”. Stephen J described its purpose in similar terms at 398, as did Jacobs J at 401 and Aickin J at 407.
The purpose and character of a deposit were relied on by each member of the Court in Brien to support a conclusion that upon failure by the purchaser to pay the deposit when required by the contract, the vendor was entitled to rescind the contract without prior notice to the purchaser, and without giving to the purchaser a notice that made time for payment of the deposit of the essence of the contract: Barwick CJ at 385, Stephen J at 398, Jacobs J at 401 and Aickin J at 407. As Gibbs J said at 393:
It was not necessary for the vendor, before he terminated the contract, to give notice requiring payment of the deposit within a reasonable specified time. The time for payment of the deposit was, as I have held, fixed by the contract, and the condition that the deposit be paid upon the signing of the agreement was an essential term going to the very root of the contract, the breach of which would immediately entitle the vendor to terminate the contract. …
These aspects of the reasoning of the members of the High Court in Brien were referred to with approval by Gleeson CJ, McHugh, Gummow, Hayne and Heydon JJ in Romanos v Pentagold Investments Pty Limited [2003] HCA 58; (2003) 217 CLR 367 at [19]-[20].
The status of a contractual term requiring the payment of a deposit, and the consequences of a failure to make payment as required, are matters that depend on the construction of the agreement in question in each particular case. But the purpose of a deposit, and the common understanding that failure to pay a deposit as required entitles a vendor to terminate a contract immediately, are matters to be borne in mind when considering the meaning of the contractual provisions in question in this case.
In this case the contractual terms are absolutely clear. If the deposit is not paid in accordance with the contract, then the vendor may terminate without notice.
Vendor’s rights consequent on termination for non-payment of the deposit
Clause 9.4 provides that in the event the contract is terminated by the vendor then the vendor may either retain the property or sell the property and in either event sue the Purchaser for damages.
It goes on to provide that in the event of termination by the vendor the vendor will be entitled to retain the deposit, and that if the vendor re-sells the property the vendor may retain absolutely any surplus arising from such re-sale in excess of the original purchase price and expenses arising from the re-sale and all losses and expenses incurred by the vendor resulting from the purchaser’s default.
The defendant argued that the right to sue for damages only applied where notice had been given to the purchaser per clause 9.2 to remedy the default. Her arguments included the submission that such an interpretation was fairer to a purchaser, as it would allow the purchaser a chance to remedy any suggested default and give the purchaser notice that the vendor was contemplating termination. Whilst that submission may be substantively accurate in that it would provide the purchaser with a chance to remedy any default and advance notice of a possible termination, that is not what the contract says.
The defendant argued that other contracts she had experience with did not have such an operation. Whilst that might also be substantively accurate, the provisions of other contracts are irrelevant to this contract. The parties signed this contract, and are accordingly bound by the terms and conditions of this contract.
Whilst it might seem obvious, it is worth observing that a pro-forma contract provided by an industry association that acts entirely or primarily for vendors, is likely to contain terms highly favourable to vendors. If a purchaser executes such a contract, the purchaser will be bound by its terms.
The contract plainly gives the vendor the right to terminate without notice if the deposit is not paid, and in that event sue for any damages it incurs thereby.
The ability to secure damages will importantly be subject to the vendor’s legal duty to mitigate its loss.[2] If the vendor re-sells for the same or more, there will be no loss. If the vendor elects not to try and resell, then again ordinarily there will be no loss as the vendor has failed to make any attempt to re-create the bargain it had with the earlier purchaser. Indeed if the purchaser re-offers to purchase for the same price and the vendor declines, then there will be an obvious failure to mitigate and there will again be no recoverable loss. In these practical ways the vendor’s legal duty to mitigate its loss provides some relief from the potential harshness of the contract.
[2] TCN Channel 9 Pty Ltd (1989) 16 NSWLR 130, Sotiros Shipping Inc v Samiet Solholt (The Solholt) [1983] 1 Lloyd’s Rep 605, Empresa Cabaña Importada de Alimentos v Iasmos Shipping Co SA [1984] 2 Lloyd’s Rep 1, Castle Constructions Pty Ltd v Fekala Pty Ltd [2006] NSWCA 133, Tyco Australia Pty Ltd v Optus Networks Pty Ltd [2004] NSWCA 333.
However, if the contract is terminated by the vendor for non-payment of the deposit and the vendor takes all reasonable steps to mitigate its loss, for example by taking all reasonable steps to sell the property for as much as possible within a reasonable time, which would need to include a preparedness to re-contract with the purchaser if the purchaser were willing and able to do so, then the original purchaser is potentially liable to the vendor for loss they may suffer if they are not able to obtain the originally contracted price.
The contract provided the plaintiff vendors with a contractual right to terminate without notice if the contracted deposit was not paid in accordance with the contract, and a right to sue for damages for loss arising in that event.
Was the Form 1 invalid, such that payment of the deposit never became due, such that the defendant was never in breach for not providing it, and the plaintiffs were accordingly not entitled to terminate for non-payment of deposit?
The contract provided that the deposit, to be provided by way of deposit guarantee, would be paid 2 business days after service of the Form 1, being the Form 1 statement pursuant to the Land and Business (Sale and Conveyancing) Act 1994 (“the Act”).
The defendant argues that the document she received was deficient such that it did not constitute a Form 1 statement and that, accordingly, payment of the deposit never became due, the defendant was therefore never in breach for not providing it, and the plaintiff was accordingly not entitled to terminate for non-payment of deposit.
The Act contains a number of requirements for the sale and purchase of land. Section 7 requires that a vendor must supply certain information to a purchaser. It provides:
7—Particulars to be supplied to purchaser of land before settlement
(1)A vendor of land must, at least 10 clear days before the date of settlement, serve, or cause to be served, on the purchaser a statement in the form required by regulation (signed by the vendor) setting out—
(a)     the rights of a purchaser under section 5;[3] and
[3]    Cooling off rights.
(b)     the particulars required by regulation of—
(i)all mortgages, charges and prescribed encumbrances affecting the land subject to the sale; and
(ii)if the vendor acquired a relevant interest in the land within 12 months before the date of the contract of sale—all transactions relating to the acquisition of the interest occurring within that period; and
(iii)    any prescribed matters.
(2)     …..
(3)The statement need not include reference to charges arising from the imposition of rates or taxes less than 12 months before the date of service of the statement.
(4)     …..
(5)     …..
The form and particulars required for the provision of the information were prescribed by regulations 8 and 9 of the Land and Business (Sale and Conveyancing) Regulations 2010 applicable at the time of the contract in November 2012:
8—Sale of land—form of vendor's statement
For the purposes of section 7(1) of the Act, a statement is in the required form if it comprises—
(a) Parts A, B and C of Form 1; and
(b)Part 1 of the table of particulars set out in Division 1 of the Schedule of Form 1; and
(c)such items in Part 2 of that table as contain prescribed encumbrances or charges that affect, presently or prospectively, title to, or the possession or enjoyment of, the land subject to the sale; and
(d)if the vendor acquired a relevant interest in the land within 12 months before the date of the contract of sale—that part of Division 2 of the Schedule of Form 1 headed "Particulars of transactions in last 12 months"; and
(e)such other parts of Division 2 of the Schedule of Form 1 as contain the matters that affect, presently or prospectively, title to, or the possession or enjoyment of, the land subject to the sale; and
(f)if the land subject to the sale is a community lot under the Community Titles Act 1996 or a unit under the Strata Titles Act 1988—the notice in Division 3 of the Schedule of Form 1.
9—Sale of land—particulars required, prescribed encumbrances and prescribed matters
For the purposes of section 7(1)(b) of the Act—
(a)the particulars required to be set out in the vendor's statement are the particulars required by the Schedule of Form 1;
(b)the encumbrances specified in Division 1 of the Schedule of Form 1 are prescribed encumbrances;
(c)the matters specified in Division 2 of the Schedule of Form 1 are prescribed matters to the extent that they affect, presently or prospectively, title to, or the possession or enjoyment of, the land subject to the sale.
The legislation prescribes that the Form 1 statement must be accurate:
10 (1) A vendor's statement must be accurate as at the date of service on the purchaser.
The importance placed by the legislation on the accuracy of the statement, and the legislature’s attitude to the status of an inaccurate statement is further apparent from section 10(2):
10 (2) If after the service of a vendor's statement but before the purchaser signs the contract circumstances change so that if a fresh statement were to be prepared there would have to be some change in the particulars contained in the statement, then the vendor's statement will be regarded as defective until a notice of amendment is served and when such a notice is served it will be presumed that the vendor's statement was served, as amended by the notice, on the date of service of the notice.
It is common ground that the document purporting to be the Form 1 statement (“the purported Form 1”) sent to the defendant by the agent assisting the plaintiffs was both inaccurate and incomplete.[4]
[4] There was considerable dispute at trial as to whether the agent assisting the plaintiff had altered or forged the documents he supplied to the plaintiffs’ solicitors for the purposes of this litigation, essentially by altering headers and footers to remove references to his previous employer. While on balance I find it is probable that he did this, it was common ground that the defendant was served with a Form 1, which such Form 1 had both the error and the omission claimed by the defendant. The error and the omission were not disputed by the plaintiffs; see paras 51-60 of the plaintiffs’ counsel’s concluding written submissions.
Firstly, at page 5 of the purported Form 1 under “Development Act 1993 - Part 3 – Development Plan” the document wrongly stated that there was no Development Plan Amendment released for public consultation by a council on which consultation was continuing or on which consultation had ended but whose proposed amendment had not yet come into operation, when in fact there was.
Secondly, at page 10 of the purported Form 1 under “4 - Pollution and site contamination on the land – details recorded by EPA in public register”, the requirement that the Form 1 disclose whether the EPA held any details in the public register of any agreement entered into with the EPA relating to an approved voluntary site contamination assessment proposal under section 1031 of the Environment Protection Act 1993 is not answered, as the answer recorded is “*YES/NO”.
The defendant argues that accordingly the document she was served with was not a compliant Form 1, and accordingly she was never served with a valid Form 1, and as her liability to pay the deposit would only arise per the contract 2 days after the service of a valid Form 1, therefore the payment of the deposit never became due. Therefore she argues she cannot be in breach of a contractual term to pay a deposit, as the deposit never became due.
The plaintiffs argue that the agent assisting the plaintiffs also sent the defendant all the original searches he had obtained, and the correct answers to both questions was locatable or ascertainable within those materials, and therefore the policy aim of the legislation had been met as the defendant had in fact been separately given the correct information.
The plaintiffs also submit that the purported Form 1 was substantially compliant, the error and omission were trivial and that the document should therefore still be characterised and regarded as a Form 1 per the contract, such that the service of the Form 1 per the contract was valid and the defendant was therefore liable to provide the contracted deposit by way of deposit guarantee within two days of that service.
It is common ground the deposit guarantee was never provided. On that basis the plaintiffs therefore argue that for that reason they were fully entitled to terminate the contract without notice per clause 9.1 and sue for damages per clause 9.4 of the contract.
The requirements for a valid Form 1 and the effect of errors or omissions have been the subject of close consideration by the Supreme Court in recent years. In short, for a valid Form 1, the document must be accurate and contain all the prescribed information.
In Myles Pearce & Co Pty Ltd v Leuci and Anor (1997) 193 LSJS 491 the Full Court had to consider the validity of a Form 1. In that case the purchaser purported to ‘cool off’ long after the service of a purported Form 1, indeed shortly before the prescribed day for settlement of the contract, on the basis that the Form 1 was inaccurate, and hence the time limit for cooling off consequent upon the service of the Form 1 had not commenced and hence not ceased. The issue was directly analogous with the case at bar insofar as it addressed whether errors or omissions in a Form 1 will render the Form 1 invalid for the purposes of the contract between the parties and the consequent commencement of other time limits for action pursuant to the contract.
Bleby J, with whom Doyle CJ and Duggan J concurred, said at 498:
The cooling-off period is inextricably linked with the delivery of the vendor's statement, and it must be linked for a reason. That reason is not difficult to discern. The information required to be given by s90 and by the Regulations is information which a purchaser in many cases will not be able readily to obtain. It is information which may well affect the purchaser's decision to buy at all, or which may affect the price which the purchaser is prepared to pay. It appears reasonably clear that Parliament intended that a purchaser should be given all that relevant information, and then be allowed a reasonably short period in which to review the decision to purchase before becoming irrevocably bound by it.
Parliament and the Governor in Council have determined what information must be supplied to the purchaser, and by inference have determined what information may be material to the purchaser's decision. Parliament has also made plain by s91B(1) that the information in the vendor's statement must be accurate. In subsection (2) it has taken the further expedient that where the vendor's statement has been served before the contract is signed and so the cooling-off period has not yet begun to run, the information must be accurate at the time when the cooling-off period does start to run. By linking the commencement of the cooling-off period to the provision of accurate information in the vendor's statement, Parliament has provided the clearest inference that the cooling-off period is not to run until accurate information of a material kind has been provided. If some of that material information is not supplied or is misleading, the purchaser cannot make an informed decision, and the cooling-off period will not commence to run against the purchaser.
If that places a heavy onus on vendors and agents to provide complete and accurate information, that merely reflects the policy of the legislation.
Bleby J went on to conclude that each of the errors on the Form 1 were sufficient to invalidate the Form 1, and expressed the view that any non-disclosure of any item in column 1 of the Form would invalidate the notice, as would the failure to disclose the full detail relating to a relevant encumbrance, even when the encumbrance itself was disclosed. As Bleby J said at 498-499:
Information about a previous transaction affecting the land is a matter which Parliament has prescribed must be included in the vendor's statement: s90(1)(b)(ii). It is plainly relevant to the price a purchaser may be willing to pay. Failure to give the information is a material omission which may affect a person's decision to proceed with the purchase at the price agreed. The policy of the Act is that the purchaser should not be deprived of the right to cool-off merely because the information is not given. The failure to give that information will constitute a material defect which invalidates the notice.
Failure to disclose the existence of a mortgage is in a similar category. Even though it may be intended to discharge the mortgage before settlement, its existence in some circumstances may alert a purchaser to enquire as to whether a breach of its terms has occurred and whether the purchaser might be deprived of the benefit of his or her contract by the mortgagee exercising powers of sale or foreclosure contained in the mortgage. However, one need not speculate as to why the provision of the information is significant. Parliament has decreed that it is. Failure to provide information as to the existence of a mortgage is a material defect which invalidates the notice.
Thus, either one of those defects by itself would have invalidated the notice. There was, in my opinion, non-compliance with the statutory requirements in those two material respects. In my opinion, the same would apply to non-disclosure of any of the relevant items listed in Column 1 of Form 18.
The question of the encumbrance raises slightly different issues. The existence of the encumbrance, its registered number and the identity of the encumbrancee were all identified. What was not identified (but which the Form 18 required to be identified) was the nature of the restrictive covenant contained therein, whether it affected the whole of the land and whether it affected other land. In view of my decision as to the other defects, it is not necessary to decide whether this defect too would have invalidated the notice. However, I express the view that those defects were also sufficient to render the notice invalid. In this respect, there was not a failure to disclose at all. The information disclosed was incomplete. It told the purchasers nothing about the nature and extent of the encumbrance at all. To find this out they would have to have conducted a search of the Lands Titles Office or have made enquiries of the encumbrancee. However, the address of the encumbrancee might not have been able to be ascertained without a search at the office of the Australian Securities Commission. Not every purchaser would have access to facilities to enable such searches to be undertaken and the results to be considered and, if necessary, acted upon within two business days of receiving bare notice of the existence of an encumbrance.

The plaintiff’s position, as indeed the Full Court in Myles Pearce acknowledged from authorities such as South Australian Planning Commission and Wylie v McNeil (1985) 42 SASR 524 and Wilson v City of Mitcham (1986) 61 LGRA 126 at 134, is that when considering the validity of a statutory notice, the test to be applied is whether the notice, when read as a whole, substantially complies with and achieves the purpose of the statutory scheme. The plaintiffs’ position is that the notice did substantially comply.
The Full Court in Myles Pearce said that what amounts to substantial compliance with the statutory requirements will be a matter of fact and degree, but that importantly it must always be assessed against the purpose of the legislation. In that case, the encumbrance in question was disclosed and identified in the Form 1, but the detail had been omitted. Given the legislative purpose, even that relatively minor omission was held to have invalidated the Form 1. As Bleby J said at 500-501:
I have already noted that the purpose of s88 of the Act is to enable purchasers to make an informed decision about whether they will proceed with the contract or exercise their rights to cool-off. The nature of the information required to be given about an encumbrance is such that it should not require the purchaser to conduct one or more searches at Government offices in order to ascertain the nature and extent of the encumbrance. That is information which the legislation has decreed is relevant to a purchaser exercising cooling-off rights. There was not substantial compliance with the requirements of the legislation having regard to its purpose, and accordingly I would hold that for this reason also the vendor's statement was invalid.
The agent argued that a purchaser should not in these circumstances be permitted to cool-off for reasons not associated with the defects in the statement. Cooling-off is a summary self-help remedy. The purchaser does not have to justify the decision to cool-off to anyone. The decision to cool-off may or may not be related to the provision of the information required by s90 and the Regulations. That is a necessary consequence of the summary remedy that Parliament has provided. The mere fact that it may have taken the purchasers in this case some time to realise that the notice was defective does not deny them the right to cool-off for any reason at any time occurring before the prescribed time referred to in s88(8). In the circumstances of this case, that time had not passed, and the cooling-off rights granted by the Act could be exercised at any time and for any reason.
The stringency of the requirement for the accuracy of the Form 1 was again apparent from the Full Court’s judgement in Astil & Anor v South Esplanade Developments Pty Ltd [2007] SASCFC 231. In Astil a defective Form 1 had been served, and all accepted that meant that the time to cool off did not commence to run. In that case Doyle CJ said at paras [42]-[47]:
There can be no doubt that the relevant provisions of the Act are intended to provide protection for a purchaser of land under a contract.
To that end the purchaser is given an unqualified right to rescind the contract, provided the right is exercised before the prescribed time.
I describe the right as “unqualified” because its exercise does not depend upon the purchaser having any cause for complaint, nor does it depend upon any default or failing on the part of the vendor. The purchaser can exercise the right for no reason at all, or because the purchaser has had a change of mind, or because the market has moved and the contract no longer seems advantageous to the purchaser.
This is a relevant factor. The exercise of the right has nothing to do with fairness as between vendor and purchaser, and is not affected by possible prejudice to the vendor as a result of its exercise.
It is also relevant that the right is a self‑help remedy that is to be followed by the return of money paid under the contract (subject to certain exceptions) and, ordinarily, without the intervention of the Court.
Moreover, a vendor must be taken to know that the purchaser has this right, and that failure to serve a vendor’s statement, or the serving of a defective vendor’s statement, will mean that the right to rescind will remain available until settlement, subject to the giving of an accurate vendor’s statement.
In Astil Bleby and Sulan JJ also emphasised the requirement that the Form 1 be accurate and complete, concluding that “any defect” in it, whilst not necessarily invalidating the contract, will mean that the time limits flowing from the service of an accurate and complete Form 1 will not commence to run: at paras [79] – [84]
In short, the Act goes to some length to ensure that accurate information relevant to a decision to purchase is given to a purchaser before settlement. The Act places an onus of providing that information on the vendor and on agents on pain of a penalty if that is not done.
The only circumstances where a vendor’s statement need not be supplied is where the purchaser has given a formal waiver under and in accordance with the safeguards provided in s 16(c) of the Act. A form for that is prescribed by reg 16 of the Regulations and is contained in Part B of Form 3. Except in those circumstances, an accurate vendor’s statement is regarded as essential for a purchaser to be placed in a position where he or she can make an informed decision about whether to enter into or to proceed with the contract.
The service of the vendor’s statement also happens to determine the period within which the purchaser may exercise the right to rescind provided by s 5. That right can be exercised for no reason at all, but the purchaser loses that right within a short time of either being given the full information or signing the contract, whichever happens last. The vendor’s statement is an important trigger in determining the prescribed time for the purpose of exercising the right to rescind, as well as being the means of informing the purchaser of what the legislation regards as all relevant information to enable the purchaser to make an informed decision. The scheme of the Act is therefore not merely to require service of a vendor’s statement in order to enable a vendor to trigger the time within which a cooling-off notice must be given. The principal purpose of the statement is to provide a statement of the purchaser’s rights under s 5 as well as a great deal of factual information relating to the land.
We repeat what was said in Myles Pearce & Co Pty Ltd v Leuci & Martin of the Act’s predecessor, which is equally applicable to the present Act:
………….. (Omitted, as reproduced earlier)
Section 5(7) of the Act removes the right to rescind (but not the obligation to provide the vendor’s statement) either in circumstances where the right to rescind after signing the contract would be impracticable (as in sale by auction, sale by tender or sale by means of the exercise of a contractual option to purchase) or where it is assumed that relevant and appropriate advice has been or can be obtained by a certain class of purchasers described in the subsection, namely bodies corporate and purchasers acting on independent legal advice, duly certified by the legal practitioner concerned.
Any failure to serve a vendor’s statement or any defect in the statement does not render the contract void or unenforceable. It merely means that, subject to what is said below, the purchaser’s right to rescind is extended until after a valid notice is served.
Bleby and Sulan JJ went on to hold that the rights preserved to the purchaser if a compliant Form 1 was not served were however subject to ordinary principles of contract and equity such as waiver and estoppel. Doyle CJ disagreed, and held that the Act comprised a scheme which evinced an intention to exclude such principles. This court is bound by the majority view expressed by the Full Court.
I therefore proceed to consider whether the defendant waived her right to receive an accurate and complete Form 1, or is estopped from relying upon the plaintiffs’ failure to serve an accurate and complete Form 1.
In the matter at bar, whilst it was established by the plaintiffs that the defendant had been provided with a bundle of emailed paperwork within which the correct version of the incorrect information was ascertainable, and the mode of ascertaining the omitted information was available, the court does not find on the balance of probabilities that the defendant became aware of those matters at the time, rather, she did not become aware of them at the time. Nor did she either consciously choose to waive her right to receive an accurate and complete Form 1 or knowingly proceed to deal with the plaintiffs in knowledge that she had received an incorrect Form 1 in any circumstances sufficient to give rise to an estoppel.
In response to the plaintiffs’ submission that the defendant could have checked all the supporting documentation she was sent, and thereby uncovered the error and the omission in the purported Form 1, some observations should be made. There is no obligation on a purchaser to conduct research to ascertain whether the Form 1 they have been given is correct, or for that purpose check reams of supporting documentation a vendor might send them. The whole point of a Form 1 is so that a purchaser does not have to conduct their own research or check bundles of supporting or other documentation. Conversely, the requirement that the vendor provide an accurate and complete Form 1 cannot be abrogated or avoided by a vendor simply parcelling up reams of source documentation and sending that on to the purchaser.
The error and the omission in this case were not minor, or typographical, or of no consequence. Apart from the fact that the legislation has deemed them as required information, it may well be relevant to the decision of a purchaser as to whether there has been a Development Plan Amendment released for public consultation by a council on which consultation was continuing or on which consultation had ended but whose proposed amendment had not yet come into operation, as that can materially affect the property, its potential future uses and that of the other properties in the immediate environment of the property.
It might also be very relevant to a purchaser whether the EPA held any details of any agreement entered into with the EPA relating to an approved voluntary site contamination assessment proposal under section 103I of the Environment Protection Act 1993. As can been seen from the legislative framework reflected in Division 3 of Part 10A of the Environment Protection Act as operative in November 2012, where such an agreement is in place it will likely indicate that the EPA is satisfied that or suspects that the site has been contaminated but has agreed not to issue a site contamination assessment order to a person in relation to a known or suspected site contamination because a person has undertaken to carry out an assessment in accordance with an approved voluntary site contamination assessment proposal.
The plaintiff also submitted that there was no suggestion that the defendant was concerned about or considered those specific issues, which is common ground. Whilst there in fact was an undisclosed (in the Form 1) proposed Development Plan Amendment, its contents as put to the defendant in cross examination at trial were not of particular concern to the defendant. On investigation, there was no evidence that the site had been relevantly contaminated or that there was a site contamination assessment agreement in place.
None of this is however to the point. The legislation provides that this information must be provided, and the Supreme Court has held that if a vendor wants to be able to take advantage of the rights and benefits that flow from the service of a Form 1, then they have to ensure that the Form 1 is materially accurate.
The inescapable conclusion is that the purported Form 1 served in this case was materially defective. The defendant at no stage waived her right to receive a valid Form 1, nor did she do anything that would give rise to an estoppel. Because she did not receive a valid Form 1, the plaintiffs’ contractual right to receive the promised deposit did not materialise, as it was contingent on the receipt of a valid Form 1.
Hence the defendant in not providing the deposit did not breach the contract. The plaintiffs were accordingly not entitled to terminate the contract without notice on that ground. The plaintiffs could not and therefore did not validly terminate the contract on that ground. As the defendant did not breach the contract by failing to pay the deposit, the plaintiffs’ claim for breach of contract must fail, and their action must be dismissed.
In case the court is wrong about that, I will proceed to consider the other primary issues upon which the case was contested.
Was there a contractual obligation to pay a deposit?
At trial the defendant argued that the contract did not oblige her to pay “a deposit”, and further that it was well known and in any event she made it plain that something described as a “deposit guarantee” could not and would not be provided until her finance was approved.
These arguments may be dealt with more succinctly.
The contract was clear that upon service of a valid Form 1, the deposit would become payable in two business days. The deposit was specifically expressed to be provided by way of a “deposit guarantee”, which was one of the types of deposit specifically defined in the interpretation section of the contract as constituting a valid deposit. That section of the contract defined a “deposit guarantee” as a “guarantee by a registered insurance company or bank to pay to the agent or vendor an amount agreed as the deposit in the event of a default in settlement by the purchaser.”
I find that at the time of signing the contract there was no discussion between or among the parties to suggest that this was not what a deposit guarantee meant, nor was there any suggestion it was not a deposit or that it was subject to finance approval. In other words, there was no verbal variation or qualification to the contract’s clear provision that the defendant provide a deposit guarantee as defined at the time required by the contract.
Accordingly, if a valid Form 1 had been served, the defendant was plainly required to provide a guarantee by a registered insurance company or bank to pay to the agent or vendor an amount agreed as the deposit in the event of a default in settlement by the purchaser. Expert evidence was called at trial which established that such products are available in Australia.
Whilst the defendant called expert evidence that providers of such a product required finance to have been approved before such a product would be sold, the plaintiffs called expert evidence to the effect that such a product could be obtained without finance having been provided, the vendor of the product’s primary concern being that they could recover the money paid out on the guarantee from their client. I accept the expertise of both witnesses. I find that the product was available to the defendant notwithstanding her full finance had not been approved, and even if it wasn’t, she had contracted to provide it, and would therefore have been in breach of contract not to provide it.
The defendant also argued that certain subsequent communications that occurred between her and the plaintiffs via the plaintiffs’ agent amounted to granting her an extension of time to provide the deposit guarantee. I will deal with that issue together with the issues of waiver, affirmation and estoppel, as they all arise from the same email exchange and course of conduct.
Was the defendant’s contractual requirement to pay the deposit by the contract date extended, or waived by the plaintiff and/or was the contract affirmed nonetheless, and/or does an estoppel lie?
The defendant argued that the plaintiffs through their agent had extended time for payment of the deposit. She also argued that the plaintiffs waived their right to receive the deposit by the date articulated in the contract and their consequent right to terminate without notice as set out in the contract.
All these issues initially arose as a result of an email exchange between the defendant and the plaintiffs’ agent on the days before deposit was due per the contract (if a valid Form 1 had been served), and by the plaintiffs’ and their agent’s conduct in not terminating the contract immediately the deposit was not paid but only purporting to do so at a much later stage.
I set out that correspondence. As can be seen, the plaintiffs’ agent contacted the defendant shortly before the day the deposit would have been due (if the Form 1 had been valid), enquiring about the provision of the deposit guarantee:
From: Russell Gwynne [mailto: [email protected]]
Sent: 19 November 2012 1:21 PM
To: Sandra Berry
Subject: RE: Hahndorf
Hi Sandra,
Hope you had a great weekend and sold plenty!
Just wondering how you want to get the deposit guarantee to me for Hahndorf? I’m happy to drop by and collect if from your office if that helps? Also could you please forward me the details of your conveyancer so I can forward it to Simon’s conveyancer and forward her any info she may need.
Cheers, Russell
Russell Gwynne
The next day, the defendant replied saying that the finance clause was not due to be met until the Friday, and that her bank would not provide the deposit guarantee until her finance had been approved:
From: Sandra Berry [mailto:[email protected]]
Sent: 20 November 2012 10:33
To: Russell Gwynne
Cc: nick foale ([email protected])
Subject: RE: Hahndorf
Hi Russell,
Thanks for following up. The finance clause is due to be met this Friday. The deposit guarantee won’t be given by the bank until they have agreed to finance. If I need to momentarily, I will make a small deposit by cash if you think it’s necessary.
Regards
Sandra
This position was not accepted by the plaintiffs’ representative, who took the communication as an ‘update’, rejected the suggestion that the defendant pay a small cash amount in lieu of the deposit, and said he would wait for her to provide the contracted deposit guarantee:
From:       Russell Gwynne [email protected]
Sent:        Tuesday, 20 November 2012 11:10 AM
To:          Sandra Berry
Subject:    RE: Hahndorf
Thanks for the update Sandra. Wasn’t sure if you realised the finance clause is for tomorrow not Friday? No need to transfer anything in the meantime for the deposit, I will just wait for the guarantee.
Cheers, Russell
Russell Gwynne
It is true that the plaintiffs’ representative’s response did not directly address the issue of what would occur if the guarantee did not become available from the defendant’s bank within the time frame expressed in the contract. It corrected the defendant’s mistaken view as to the day by which the finance clause had to be satisfied, rejected the offer of a small cash payment, and indicated that the plaintiffs would wait for the defendant to provide the contracted deposit in the form of the specified deposit guarantee.
The phrasing of the email does suffer some lack of clarity as to whether it meant the plaintiffs still expected the deposit guarantee on the contracted date, or whether it meant the plaintiffs were prepared to wait until Friday, or some further time, whenever that might be, that the defendant’s full finance was approved.
Overall however, it is clear that the defendant did not actually request an extension of time to provide the deposit nor did she request any waiver or amelioration of the contract as to the deposit. Nor was such an extension agreed at any time. Indeed she had not said that the deposit would not be provided on time. Rather, her correspondence inferred that she would not provide the deposit on time if the bank did not provide her with a finance approval in time for her to comply.

From the defendant’s perspective, the plaintiffs’ representative’s final response was either a rejection of her position, or at best equivocal. It was not specifically agreeing to a waiver or an extension of time, as indeed that had not been requested. It rejected the offer of an interim or substituted small cash payment. It reaffirmed that the deposit guarantee was payable and that the plaintiffs were waiting for it. There could be an inference from the plaintiffs’ agents email that the plaintiffs might be prepared to abide a short wait, perhaps until Friday.
I find there was no further written correspondence about the deposit.
The plaintiffs both gave evidence that they wanted the deposit paid as per the contract and that it was followed up. Both said that they did not authorise their agent to send the emails in question nor did they at any stage agree to, or authorise, any concession to be made re the acceptance of the deposit from the defendant.
Specifically, plaintiff Ms Varga said she had no direct discussions with the defendant on that topic, as her partner the other plaintiff Mr Dwyer was following that up. She said that after an extended period of time when the deposit had not been paid, indeed after the nominated settlement date of 1 February 2013 itself had passed, they decided that they just weren’t getting anywhere and decided to terminate the contract. [5]
[5] T64-65.
Mr Dwyer gave evidence that he became aware the deposit had not been paid the day after it was due, and so he started “harassing” his agent about it, and asking where it was. The agent told him he would chase the defendant up for it. Mr Dwyer continued to liaise with his agent about the payment of the deposit and in that respect identified a number of calls to his agent from his telephone records. The agent variously told him he had asked the defendant for the deposit, that he the agent was doing his best, and that he was waiting for the defendant to pay the deposit. He identified a call from his call records to the defendant on or after about 12 December 2012 which he said was him leaving a message asking where the deposit guarantee was. He said he continued to chase his agent about the deposit throughout December 2012 but it did not arrive.[6]
[6] T213-217.
He recalled the agent also telling him at some stage that the defendant had not come up with the finance as yet but was working on it.
Mr Dwyer identified with reference to his call records an 11 minute call he made to the defendant Ms Berry in January 2013, and said that was he continuing to pursue the deposit. He asked her for the deposit guarantee and requested it be paid. He said the defendant responded that it was linked to her finance, and also mentioned seeing her parents and talked about another property she had, and he indicated that if finance was a problem he may be able to assist with vendor finance. She responded she would think about it but that she had it all under control, and no figures were mentioned. He continued to request that she pay the deposit guarantee. She said she was dealing with it. He said he rang her several times but the defendant did not want to deal with him, indicating she preferred to communicate via his agent.[7]
[7] T218-221.
Mr Dwyer said that after further discussions between the plaintiffs and their agent he was at the end of his tether as the deposit had not been paid, they had been told a range of different things about finance, and the settlement day had come and gone. Therefore they decided to terminate the contract, and did so by notice on 8 February 2013.[8]
[8] T221-224.
Accordingly the plaintiffs’ evidence is that they always wanted the deposit paid in accordance with the contract, continued to pursue it after the due date, made no concessions in relation to it, and at the stage that they were at the “end of their tether”, gave up and terminated the contract.
The plaintiffs’ friend/agent, a Mr Gwynne also gave evidence.[9] He said that the deposit guarantee was suggested and offered by the defendant on the day of signing the contract, and there was no discussion on that day indicating that there was any problem or issue with it, nor that it would be in any way tied to the granting of finance.[10] The plaintiffs’ agent agreed he had sent the email on 19 November following up the provision of the deposit guarantee. He said that her response to the effect that the deposit guarantee would not be provided until finance was approved was the first time such a thing had been mentioned. He said that his emails that day were his own responses, in other words he had not contacted the plaintiffs to get their instructions as to how to respond.[11]
[9] Mr Gwynne's agency role was never entirely clear. Subsequent to the events he removed headings and footers from the executed documents, and the plaintiffs and Mr Gwynne maintain he was simply a friend helping out. He dealt with the defendant in all respects however as if he was the plaintiffs' agent.
[10] T241.
[11] T250.
The plaintiffs’ agent agreed that Mr Dwyer continually chased him as to where the deposit was, and consequently he continued to chase the defendant as to her approval for finance. He was told a range of things by the defendant, including that she needed to sell a property in Macclesfield, that she was getting valuations done, that she was getting some money from family, and also he said that he had been referred to the defendant’s finance broker who had been very unhelpful, just indicating that they were waiting for valuations or that it was “with the bank”. It was never indicated to him that finance had been declined. He had a vague recollection that he had some discussions with Mr Dwyer and the defendant about vendor finance but he could not recall any specifics. He was not told about or involved in the termination on or before 8 February 2013, but was told about it by the plaintiffs after the event.[12]
[12] T252-256.
The defendant gave evidence that she agreed that the email exchange earlier set out had occurred. She said that she “took from his response that the owners had agreed to wait for the guarantee until it was made available by the bank and a cash deposit of any kind would not be necessary.”[13] She gave evidence with reference to her call records to say that she rang the plaintiffs’ agent on the evening of 5 February 2013 to let him know she had received a letter from her finance broker declining finance in relation to an application she had made on 25 December. She tendered a text from the plaintiffs’ agent on 8 February 2013 regarding the amount of vendor finance that was required. It read:
08/02/2013 1:54PM Hi Sandra, hope you’re well. If you could call me for an update on Hahndorf that would be great. Simon just wanted to know if you had come up with an amount to work into the equation. Cheers, Russell.
[13] T456.
With reference to her call charge records the defendant said she called the plaintiffs’ agent at 3.20pm to discuss the vendor finance amount. Then at 4.28pm she received an email from the plaintiffs themselves (set out later in these reasons) attaching a notice referring to termination. She took it to be a request that she agree to terminate the contract. The defendant said she then rang the plaintiffs’ agent to confirm what was going on, to which she said that the plaintiffs agent said that the plaintiffs were being difficult, he’d had enough of trying to assist them and he didn’t know why they had sent her the email.[14]
[14] T464-465.
Overall, in the final analysis, nothing passing between the parties constituted an overt agreement to waive or vary the deposit conditions in the contract. Such a variation to the written contract would have had to be clear and unequivocal, and there was simply no such agreement between the parties.
The plaintiffs’ agent requested the deposit guarantee to be provided, and when the defendant said that she could not provide it that day and offered a small cash deposit in lieu, he rejected that and responded that he would wait for the deposit guarantee. Neither did the fact that the parties continued to correspond about other topics over the ensuing weeks, primarily as to how the defendant was going with securing finance, overtly constitute a waiver. The topic had been left with the plaintiffs’ agent stating on the day prior to due date for the provision of the deposit guarantee, that he would wait for the guarantee. Simply not following it up, or pursuing other aspects of the defendant’s obligations, did not constitute an overt agreement to vary of the clear and unequivocal obligation the defendant had (if a valid Form 1 had been served) to provide the deposit guarantee.
Was it nonetheless a waiver by conduct or inference, an affirmation of the contract precluding reliance upon the breach, or do the events justify an estoppel preventing the plaintiffs from relying upon the failure to pay the deposit as prescribed by the contract?
I find that at all times the plaintiffs wanted the deposit to be paid, and followed up the payment of the deposit through their agent. I find that neither the plaintiffs nor their agent agreed to waive the payment of the deposit or agree an extension of time for it to be paid. The email exchange of the 19^th and 20^th of November 2012 occurred as set out above. The plaintiffs were not aware of it at the time and did not authorise their agent to reply as he did. The agent’s reply did not overtly agree an extension of time, but maintained that the deposit be paid, that a small cash interim amount would not be accepted, and simply said that the agent would wait for the contracted deposit guarantee to be provided. As the defendant had told him the deposit guarantee would not be provided until finance was approved, understandably from that time forward the agent’s enquiries with the defendant focussed on asking whether finance had been approved. I find that at the agent’s suggestion, there was some brief discussion between Mr Dwyer and the defendant as to whether vendor finance would assist, which was then pursued with the defendant by the agent, although no agreement was really discussed in any detail nor agreement reached.
Over time there have been many judicial and academic opinions expressed as to the scope and overlap of the concepts of waiver, election to affirm a contract, and estoppel. I will not attempt to repeat the many and varied iterations of that debate, and the way it has developed over time. Including that kind of lengthy analysis in a District Court judgement is a waste of everybody’s time and money. Accordingly I summarise the law as I draw it from the plethora of authorities on the topic, only a few of which I have referenced.
In short, waiver of a contractual right may occur where a party faced with two alternate and inconsistent courses of action or optional rights pursuant to the contract adopts one course, which is fundamentally inconsistent with the other right continuing or subsisting.[15] For an effective waiver by conduct the plaintiffs would have to have performed an intentional act effectively indicating the right is abandoned; by for example suggesting that the plaintiffs would not terminate the contract, or by acting in a manner inconsistent with the right to terminate.[16] Generally, to be effective a waiver must be clear and unequivocal.[17]
[15] The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, Tropical Traders v Goonan(1964) 111 CLR 41.
[16] Commonwealth v Verwayen (1990) 170 CLR 394 at 407, Craine v Colonial Mutual Fire Insurance Co. Ltd (1920) 28 CLR 305 at 326 and Grundt v Great Boulder Gold Mines Pty Ltd (1937) 59 CLR 641 at 658.
[17] Berry v Hodson [1988] 1 Qd R 361.
Estoppel will apply where a party has made a representation by word or by their conduct that they will not act on the contractual breach and the other party has acted to their detriment in reliance on that. As Duggan J said in W&R Pty Ltd v Birdseye [2008] SASCFC 321 at paras [113] – [116]:
The requirements necessary to attract the operation of this category of estoppel are discussed in the judgment of Owen J in Bell and Brereton J in Waterman v Gerling Australia Insurance Co Pty Ltd.
In Bell Owen J referred to the requirement that:
There must be at least a demonstrable acceptance of a particular state of things as the foundation for the dealings of the parties. There has to be a course of dealing between the parties, that is to say, acts or conduct that impinge upon their mutual affairs.
Further, the person to be estopped must have contributed in some way to the creation or continuation of the assumption so as to make it unconscionable for that party to depart from the understood basis of dealing between the parties.
Finally, the plaintiff must prove detriment in the event of a departure from the assumption.
However, notwithstanding that waiver, as distinct from estoppel, can operate on the basis of an affirmation of the contract without necessarily involving the affected party having acted to their detriment, that will not mean that a party who has a right to terminate a contract where a payment is not made by a due date, who accedes to late payment and does not immediately terminate at that time or even for an extended time, is necessarily waiving that party’s rights. As Menzies J said in Tropical Traders v Goonan (1964) 111 CLR 41:
…. it appears to me on principle that a vendor becoming entitled to rescind for non-payment of purchase money upon the stipulated date for payment, who does no more than give the purchaser the opportunity to pay within a limited time thereafter, is not thereby electing not to rescind for non-payment on the due date nor is he representing that time is not of the essence; rather he is intimating that he intends to exercise his right to rescind unless payment is made within the time of grace.
A somewhat analogous situation occurred in the aforementioned case of Birdseye. The purchaser failed to pay the deposit on time, then correspondence continued between the parties for 3 months, at which time the vendor terminated without notice for failure to pay the deposit. The reason the deposit for the purchase of two parcels of land had not been paid on time was seemingly as a result of confusion on the part of the purchaser as to when it became due. Doyle CJ said at paras [38]-[40]:
Delay by a vendor in exercising the right to terminate for failure to pay a deposit is capable of depriving a vendor of that right. In Brien Barwick CJ said at 386:
Of course, if a vendor is aware of the failure to pay the amount of the stipulated deposit, he cannot delay in exercising what, in my opinion, is his undoubted right of rescission of the contract. If he takes steps in performance of the contract without knowing whether or not the deposit has been paid, the ability validly to rescind the agreement might have to be decided upon general grounds in the particular circumstances. If, without taking any such steps, a vendor fails to pursue his right to rescind, a court of equity might possibly be prepared to treat his inactivity as inordinate and as having itself led the purchaser into some position of disadvantage, in the particular circumstances of a case. But, in my opinion, the right to rescind, arising at the very moment of the execution of the contract is not lost otherwise than by the conduct (including, perhaps, in an appropriate case, the inaction) of the vendor.
Mr Birdseye justified his failure to pay the deposits by claiming that he did not understand when his right to “cool off” expired. In some way that I cannot follow he attempted to relate the expiry of that right to the receipt by Mr Stephens of the Form 1, signed by Mr Birdseye and posted to Mr Stephens shortly after 28 May 2003. But in my opinion Mr Birdseye’s misunderstanding of the situation cannot excuse his failure to comply with the provisions of the contracts. Although Mr Stephens failed to correct Mr Birdseye’s misunderstanding, I do not accept that that can alter the consequences of Mr Birdseye’s default. It appears that he spoke to Mr Stephens some time during June, but by then he was already in default. In my opinion nothing that occurred between Mr Stephens and Mr Birdseye between 2 June 2003 and 8 September 2003 had the effect of denying the vendor its entitlement to terminate the contracts. The mere delay by the vendor does not, of itself, deny the vendor that entitlement.
For those reasons I conclude that the contracts were validly terminated by the vendor by Mr Stephen’s letter of 8 September 2003.
In the Tropical Traders case, after an initial termination notice communications continued between the parties and the vendor sent the purchaser further documentation, sought an amended settlement date, accepted monies on account of the purchase price from him and served a notice to complete. In doing so, the Full Court concluded that the purchaser had been led to understand that the vendor was treating the contract as still on foot, not relying on the earlier termination without notice, and as a result had acted to his detriment by paying money to the vendor’s agent. In those circumstances the vendor was estopped from denying that the contract remained on foot, or that the late payment made by the purchaser did not satisfy the contractual requirement for the payment of a deposit.
In the case at bar the plaintiffs’ agent requested the deposit be paid. When the defendant said it wouldn’t be paid until finance was approved, the agent’s inquiries in pursuit of the deposit focussed on and pursued the defendant for confirmation of finance approval. Nothing was said or done at any time, either by the plaintiffs or their agent, to suggest to the defendant that the deposit was not payable or that the plaintiffs would not exercise their right to terminate without notice if it remained unpaid. They did nothing to create any “mutual understanding” to that affect or any “shared acceptance” of such a state of affairs.[18] At most, one interpretation of the plaintiffs’ agent’s email and subsequent contact might be that the plaintiffs were allowing some short further time for compliance with the deposit condition. As it was, they showed considerable patience and gave the defendant much longer than that to comply with the deposit condition.
[18] Concepts mentioned in a number of the authorities as to what is required for an effective waiver.
Accordingly I find that the plaintiffs did not waive any right to terminate, nor are they estopped from asserting any right to terminate.
Did anyone terminate the contract on 8 February 2013?
By 8 February 2013, little further had happened. The defendant had not paid the deposit in the time frame set out in the contract (if a valid Form 1 had been served). The plaintiffs and their agent had continued to pursue the defendant for the deposit and enquire about finance approval.
The settlement date of 1 February 2013 as per the contract had come and gone. The defendant was still maintaining that whilst she did not have finance she was pursuing finance. There had been some discussions as to whether the plaintiffs might provide vendor finance, but that had not advanced to any concrete proposal or state of agreement.
At that time therefore, if the plaintiffs had served the defendant with a valid Form 1 (I have earlier found that they did not), they would have retained a right to terminate without notice for failure to pay the deposit, and sue for damages.
It is common ground that the contract also provided that if the defendant had not obtained finance in the sum of $875,000 by 21 November 2012, either party could immediately terminate the contract by giving notice in writing to the other party, with the proviso that the purchaser could only exercise this right so long as the purchaser had used their best endeavours to obtain the specified finance. The plaintiff could not however sue for damages for termination in this instance unless the defendant had not used her best endeavours to obtain the finance.

It is common ground that as at 8 February 2013 the defendant had not obtained finance.
I have had regard to the evidence called by the defendant, including detailed documentation over time, as to her attempts to obtain finance. She initially put the matter in the hands of her broker, and as time went on and no finance was obtained, became more actively involved herself. I accept all the evidence she gave on the topic of her attempts to obtain finance and the court is satisfied that she did use her best endeavours to obtain the required amount. It is unsurprising that in the final analysis she was unsuccessful, as she was attempting to borrow $45,000 more than the purchase price. So the fact that she did not obtain finance is quite unsurprising and certainly no indication in itself that she did not use her best endeavours.
Accordingly, as at 8 February 2013 both parties had the right to terminate the contract in writing on the basis that finance had not been obtained. If terminated on that basis, neither had a right to sue for damages.
The plaintiffs gave evidence that on 8 February 2013 they became fed up, and decided to terminate the contract for non-payment of the deposit. It is common ground that the plaintiffs sent the following documentation by email to the defendant:
From:              Patricia Varga [email protected]
Sent:                Friday, 8 February 2013 4:28 PM
To:                  Sandra Berry
Subject:            91 Mount Barker Road, Hahndorf
Attachments:     91 Mount Barker Road, Hahndorf.tif, “AVG certification”.txt
Good afternoon Sandra,
To allow us to move forward with the property, please find attached Termination of Contract for 91 Mount Barker Road, Hahndorf. Please sign and return to me via email at your earliest convenience.
If your circumstances change in the future and you’re in a position to renegotiate the purchase and we haven’t yet sold the property, we are happy to re-enter negotiations accordingly.
Thank you and regards,
Patricia Varga
Finance Manager
TERMINATION OF CONTRACT
RE:Contract for the Sale of Land Residential Property dated 7^th November 2012 for the sale and purchase of 91 Mount Barker Road, Hahndorf SA 5245 being the whole of the land comprised in Certificate of Title Register Book Volume 6003 Folio 623 (“the Contract”)
PARTIES:Simon Roger Dwyer and Patricia Nancy Varga (the Vendor) and Sandra Joy Berry and/or nominees (the Purchaser)
WHERE AS:The Deposit amount of $20,000.00 (by way of bank guarantee) was due and payable by the Purchaser on the next day following the expiration of the “cooling off period”, being 20^th November 2012.
The Deposit Guarantee has not been provided by the Purchaser by 20^th November 2012 as per the terms of the Contract.
All rights and obligations under this Contract cease and the Contract is hereby terminated, effective immediately.
SIGNED by the Purchaser:
………………………
Sandra Joy Berry
In the presence of                …………………….... (witness signature)
……………………… (witness name)
Dated this……..day of …………... 2013
SIGNED by the Vendor:  signed
Simon Roger Dwyer
Signed
Patricia Nancy Varga
In the presence of  Signed              (witness signature)
Lisa Scott(witness name)
Dated this8 day of February 2013
Ms Varga gave evidence that she attended the defendant’s office moments later and served the documents personally by giving them to a member of the defendant’s staff, and seeing that member of staff hand the documents to the defendant. The defendant says she was out of the office at the time but that moments later she returned to the office and received the documents then. It is common ground she received the email, and was handed the hard copy documents by her staff shortly after. I find service was effected.[19]
[19] W R Pty Ltd v Birdseye [2008] SASFC 321 at [157]-[159]
The defendant argues that the documentation amounted to a request that she agree to terminate, and as such did not in any event amount to a termination by the plaintiffs for non-payment of deposit. It is therefore necessary to closely analyse the document.
The covering email says that “to allow us to move forward with the property” it is attaching a termination of contract which the defendant is requested to sign and return. It is a little equivocal, however on balance the tenor of the email tends towards the character of a request that the defendant sign and return an agreement to end the contract so that the plaintiffs can move forward with the property.
The attached document is not phrased as a notice by the plaintiffs to the defendant that they are exercising their rights under the contract to terminate, rather it is set out like a contract, with a preamble, then providing that the contract “is hereby terminated” and provides for all parties to sign. If it were a notice by the plaintiffs to the defendant pursuant to their termination rights per the contract, you would expect it to say that. If it were a unilateral termination on the part of the plaintiffs, you would not expect it to have mutual attestation clauses for all parties to sign. Rather, you would expect it to be signed only by the plaintiffs, perhaps with somewhere for the defendant to sign an ‘acknowledgement of receipt.’ The tenor of the document is that of a contract whereby it is envisaged both parties will sign for it to be effective. In short, it has the character of an agreement rather than a notice.
It would have been a simple matter to, with legal advice, properly draft a notice of termination of contract and serve it, but the simple fact is that is not what the document is.
The character of the communication is on balance that of a request that the defendant agree to and sign a termination of the contract, mutually ending the contract. It does not amount to a termination by the vendor within the meaning of clause 9.1 of the contract. Accordingly it did not terminate the contract pursuant to clause 9.1 and the plaintiffs are not thereby entitled to maintain an action for breach of contract pursuant to clause 9.1.
It is common ground that on 8 February 2013, shortly after the plaintiffs served the defendant with the email and attached document just discussed, the defendant replied by email, attaching a memorandum from her finance broker. The defendant contends this communication terminated the contract.
From: Sandra Berry [mailto:[email protected]]
Sent: Friday, 8 February 2013 5:00 PM
To: Russell Gwynne
Subject: Finance Declination
Hi Russell,
Attached is the Finance declination form the Broker for your contract records.
Patricia Varga just came barging through the office door with a signed document to try and cancel the contract. I’m not sure your clients follow instruction very well. I wonder if Patricia has any understanding of the fact that her indiscretional conversation with Duncan’s wife and her breach of confidentiality to me in regards to my purchase, has potentially cost her the sale?
I don’t know who drafted the letter but it’s not written in relation to items and paragraphs etc on the contract.
So I won’t be signing it anyway.
The Finance letter attached will automatically cancel the contract correctly as we previously discussed.
Sandra
Sandra Berry    Property Advisor
  Sandra Berry Real Estate
Modbury, Adelaide, Hahndorf and Plympton
HG 8/977 North East Road Modbury SA 5092
M 0488 165 908
T 1300 799 119
T 08 8395 4124
F 08 8395 2122
E [email protected]
TO:        Sandra Berry
ATT:        Miss Sandra Joy Berry
PAGES:        1
SUBJECT:        Finance Application – 91 Mount barker Road Hahndorf
FROM:        Nick Foale
DATE:        05/02/2013
Dear Sandra,
Unfortunately your finance application to purchase 914 Mount Barker Road Hahndorf SA 5245 has been unsuccessful.
Kind Regards,
Nick Foale
0488 165 908
[email protected]
>
As the defendant had not obtained finance by the contracted date, she had the right to terminate the contract. She did not have to do so. Until she did so, she was still bound by the contract. Indeed she could proceed with the contract no matter how many finance declinations she received and forwarded to the plaintiffs. Accordingly the acts of telling the plaintiffs’ agent that finance had been declined (as she claimed she did on 5 February) or simply forwarding a finance declination document (as she did on 8 February) would of itself not have any effect on the contract, apart from giving either party notice that they had grounds to terminate it if they wished to then do so. The defendant’s communication I find was not sufficient to terminate the contract.
How the contract actually came to an end
It is common ground that the plaintiffs placed the property on the market again, then leased the property to another party to whom they eventually sold on 26 June 2014. Those actions amounted to a repudiation of the contract at bar, which the defendant accepted.
It is also common ground that on 17 October 2014, no doubt on legal advice, the defendant served a cooling-off notice on the basis that as no valid Form 1 had been served time to cool off was still running. If the plaintiffs had not already repudiated the contract by their actions of selling the property to another, that notice would likely also have been effective to terminate the contract.
Conclusion
For the reasons given, the purported Form 1 served by the plaintiffs’ agent was inaccurate and incomplete such that it was invalid. Hence the time for the deposit to be paid never commenced to run and the deposit never became due. Hence in not paying the deposit the defendant did not breach the contractual term requiring the payment of a deposit, and the plaintiff has no claim for a breach of that term.
Further, the documentation served by the plaintiffs on the defendant purporting to terminate the contract for non-payment of the deposit did not amount to a termination or notice of termination but rather amounted to a request that the defendant agree to a mutual termination of the contract. Accordingly the plaintiffs did not in any event terminate the contract for non-payment of deposit and therefore do not have a claim under the contractual provision that would otherwise entitle then to claim damages where the contract is terminated for non-payment of deposit.
Orders
The plaintiffs’ claim is dismissed.