Generosity Beverages Pty Ltd v Mare Custodian Company Pty Ltd

[2022] NSWSC 484

Supreme Court

New South Wales

Medium Neutral Citation:

Generosity Beverages Pty Ltd v Mare Custodian Company Pty Ltd [2022] NSWSC 484

Hearing dates:

17-18 November 2021, 4 and 31 March 2022

Date of orders:

26 April 2022

Decision date:

26 April 2022

Jurisdiction:

Equity

Before:

Darke J

Decision:

See at [92].

Catchwords:

LAND LAW – contract for the sale of land – notice to complete – obligations of vendor and purchaser under contract for the sale of land – where purchaser issued notice to complete making time of the essence – where purchaser itself then failed to complete within the time specified in the notice to complete – where vendor terminates the contract – whether vendor validly terminated contract for sale by reason of purchaser’s failure to complete – whether vendor in breach of contract by failing to provide keys to facilitate inspection of property – whether conduct of vendor a default that materially contributed to the failure of the purchaser to complete – whether vendor was itself ready, willing and able to perform its obligations to complete within the time specified in the notice to complete – held that vendor was entitled to terminate the contract – held that vendor is entitled to deposit

Cases Cited:

Abourjaily v Parkview Estate Pty Ltd [2017] NSWSC 1256

Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (2016) 18 BPR 35,759; [2016] NSWCA 32

Cumberland Consolidated Holdings, Ltd v Ireland [1946] 1 KB 264

Falconer v Wilson [1973] 2 NSWLR 131

Frankcombe v Foster Investments Pty Ltd [1978] 2 NSWLR 41

Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553

Point Glebe Pty Ltd v Lidofind Pty Ltd (1988) 5 BPR 11,427

Psaltis v Schultz (1948) 76 CLR 547

Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd (in liq) (2021) 20 BPR 41,497; [2021] NSWSC 550

Sharjade Pty Ltd v Commonwealth (2009) 15 BPR 28,443; [2009] NSWCA 373

Category:

Principal judgment

Parties:

Generosity Beverages Pty Ltd (Plaintiff/Cross-Defendant)
Mare Custodian Company Pty Ltd (Defendant/Cross-Claimant)

Representation:

Counsel:
Mr A Hourigan with Mr M Isaac (Plaintiff/Cross-Defendant)
Mr P B Walsh (Defendant/Cross-Claimant)

Solicitors:
A C Dunstan Lawyers (Plaintiff/Cross-Defendant)
Crompton & Walsh Pty Ltd (Defendant/Cross-Claimant)

File Number(s):

2021/123165

Publication restriction:

None

Judgment

Introduction

1. By a Summons filed on 3 May 2021 the plaintiff, Generosity Beverages Pty Ltd, seeks orders in the nature of specific performance of a contract for the sale of land it entered into with the defendant, Mare Custodian Company Pty Ltd. The plaintiff is the purchaser under the contract and the defendant is the vendor. The land the subject of the contract is a vineyard located in Palmers Lane, Pokolbin. It is located across the road from a property owned by the plaintiff.

2. The purchase price under the contract is $2,950,000. A deposit of $295,000 that was paid by the plaintiff is held by the former solicitors of the defendant as stakeholder. The plaintiff’s claim is resisted by the defendant. It claims to have validly terminated the contract on 12 April 2021 on the basis that the plaintiff failed to complete the contract by 8 April 2021. 8 April 2021 had been nominated as the last date for completion in a Notice to Complete served by the plaintiff on 25 March 2021. By its Cross-Summons filed on 29 July 2021, the defendant seeks declarations that it validly terminated the contract and that it is entitled to recover the deposit. The plaintiff disputes the validity of the termination, essentially on the basis that the defendant was in breach of the contract and not ready, willing and able to complete.

The Contract for Sale

3. The contract takes the form of the 2019 edition of the Law Society/Real Estate Institute standard form, supplemented by a number of additional clauses. The contract is dated 5 February 2021. The completion date is expressed to be 42 days after that date (i.e. 19 March 2021). The defendant vendor is obliged to give the purchaser vacant possession on completion. The improvements included in the sale, as recorded on the front page of the contract, are “Cellar door building, vines, fences, dams”.

4. The vendor’s solicitor is named as O’Brien Connors & Kennett of Dee Why; the purchaser’s solicitor is named as Dunstan Lawyers of Five Dock.

5. The contract provides that the conveyancing transaction is to be conducted as an electronic transaction.

6. Clause 7 (as amended by additional clause 36.1) provides:

7   Claims by purchaser

Normally, the purchaser can make a claim (including a claim under clause 6) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion –

7.1   the vendor can rescind if in the case of claims that are not claims for delay –

7.1.1   the total amount claimed exceeds 1% of the price;

7.1.2   the vendor serves notice of intention to rescind; and

7.1.3   the purchaser does not serve notice waiving the claims within 14 days after that service; and

7.2   if the vendor does not rescind, the parties must complete and if this contract is completed –

7.2.1   the lesser of the total amount claimed and 10% of the price must be paid out of the price to and held by the depositholder until the claims are finalised or lapse;

7.2.2   the amount held is to be invested in accordance with clause 2.9;

7.2.3   the claims must be finalised by an arbitrator appointed by the parties or, if an appointment is not made within 1 month of completion, by an arbitrator appointed by the President of the Law Society at the request of a party (in the latter case the parties are bound by the terms of the Conveyancing Arbitration Rules approved by the Law Society as at the date of the appointment);

7.2.4   the purchaser is not entitled, in respect of the claims, to more than the total amount claimed and the costs of the purchaser;

7.2.5   net interest on the amount held must be paid to the parties in the same proportion as the amount held is paid; and

7.2.6   if the parties do not appoint an arbitrator and neither party requests the President to appoint an arbitrator within 3 months after completion, the claims lapse and the amount belongs to the vendor.

7. Clause 9 relevantly provides:

9   Purchaser’s default

If the purchaser does not comply with this contract (or a notice under or relating to it) in an essential respect, the vendor can terminate by serving a notice. After the termination the vendor can –

9.1   keep or recover the deposit (to a maximum of 10% of the price);

8. Clause 12 relevantly provides:

12   Certificates and inspections

The vendor must do everything reasonable to enable the purchaser, subject to the rights of any tenant –

…

12.3   to make 1 inspection of the property in the 3 days before a time appointed for completion.

9. Clause 15 provides:

15   Date for completion

The parties must complete by the date for completion and, if they do not, a party can serve a notice to complete if that party is otherwise entitled to do so.

10. Additional clause 33 provides:

33.   Notice to Complete

The Vendor and the Purchaser agree that a Notice requiring completion of this Agreement within fourteen (14) days of the date of such Notice shall be deemed both at law and in equity to be sufficient time to make time the essence of this Agreement. Any Notice to Complete which may be issued pursuant to this clause may be withdrawn at any time by the party giving such notice. If the purchaser does not complete this contract by the completion date and the vendor issues a notice to complete, then the purchaser is obliged to pay an additional amount of $330 (inclusive of GST) to cover the vendor’s legal costs and disbursements incurred by the vendor’s solicitor and, as a genuine pre-estimate of the additional expense. This amount is to be allowed as an additional adjustment on completion and is an essential term of this contract.

(Clause 21.6 provides that normally the time by which something must be done is fixed but is not essential.)

11. Additional clauses 37, 39 and 40 provide:

37.   Objections, requisitions and claims for compensation

The Purchaser shall take title subject to and must not make any objection, requisition or claim for compensation or rescind or terminate this contract in connection with:

(a)   the identification of the Property or the position of any improvements on it;

(b)   any latent or patent defects in the Property;

(c)   any non-compliance with the Local Government Act (NSW) 1993;

(d)   anything else disclosed or referred to in this Contract,

and the making of such claim, objection or requisition will entitle the Vendor to rescind this Contract.

…

39.   State of Repair and Condition

The Purchaser acknowledges that:

(a)   The property including all fixtures included in and forming part of this sale (“the fixtures”) is being purchased in its present condition and state of repair and with all faults and defects (apparent or latent) and subject to any infestation and dilapidation and as a result of the Purchaser’s own inspection and investigation, and the Vendor has not nor has anyone on the Vendor’s behalf made any representation or warranty:

(i)   as to the condition or state of repair of the property (including the fixtures);

(ii)   as to the fitness for any particular purpose of the whole or any part of the property (including the fixtures); or

(iii)   the use to which the property may be put,

other than as expressly set out in this contract and will make no objection requisition or claim for compensation or delay completion, rescind or terminate in connection with any matters stated in this clause; it is expressly agreed between the parties that this clause will not merge on completion.

40.   Asset Purchase Agreement – sale and purchase of items

The parties covenant that the items the subject of the annexed Asset Purchase Agreement (“the Agreement”) do not form a part of this contract of sale but that payment by the purchaser and transfer of ownership by the vendor of the schedule of items annexed to the Agreement shall occur simultaneously with settlement of this contract by way of a separate payment direction made by the purchaser on PeXA to the account of Malor Wines Pty Ltd. The purchaser acknowledges that it will not make any objection, claim or requisition in relation to the condition of any of the items or any minor variations in the number of items.

12. Additional clauses 49 and 50 concern certain water rights that attach to the property and a water access licence.

13. The title search annexed to the contract shows no mortgage or other encumbrance over the property.

14. The unexecuted Asset Purchase Agreement (referred to in additional clause 40) that is annexed to the contract is stated to be between Marlor Wines Pty Ltd (a company associated with the defendant) as vendor, and Waverley Estate Wines Pty Ltd (a company associated with the plaintiff) as purchaser. The various assets that comprise the subject matter of the agreement are described in the Schedules to the agreement. They include a wine inventory, items of farm equipment, a trademark and a liquor licence.

15. The Asset Purchase Agreement that was actually executed on 5 February 2021 also refers to another company associated with the defendant, namely, Sun Zapper (Aust) Pty Ltd. That company was added to the agreement as a vendor “for the purpose of assigning/transferring the Trademark 1830913”.

16. It is common ground that the contract for sale was exchanged, and the Asset Purchase Agreement entered into, on 5 February 2021.

Relevant events following the exchange of contracts

17. Requisitions on title were sent by the plaintiff’s solicitors to the defendant’s solicitors on 17 February 2021.

18. It is apparent from text messages exchanged between Mr Guy Fens (a director of the plaintiff) and Mr Frits Mare (a director of the defendant) that issues arose concerning the plaintiff having access to the property. On 22 February 2021 Frits Mare sent a message to Guy Fens stating that he did not want him on the property any further until settlement. On 12 March 2021 the defendant’s solicitors sent a letter to the plaintiff’s solicitors in relation to the issue. The plaintiff’s solicitors responded on 16 March 2021, and the defendant’s solicitor replied to that on 18 March 2021. It is not necessary to set out the detail of these letters. It is sufficient to note that the parties remained at odds on the matter.

19. On 15 March 2021 the defendant’s solicitors sent a Foreign Resident Capital Gains Tax Withholding Certificate to the plaintiff’s solicitors.

20. On 16 March 2021 the plaintiff’s solicitors sent a letter to the defendant’s solicitors in relation to the water access licence. It was noted that a land tax clearance certificate and replies to requisitions on title were yet to be received. Also on 16 March 2021 the plaintiff’s solicitors sent a letter to the defendant’s solicitors that included the following:

We confirm that we act for Waverley Estate Wines Pty Ltd, the purchaser of the abovementioned assets from Marlor Wines Pty Ltd pursuant to Contract dated 5 February 2021.

Accordingly, we now attach the following documents for your client to sign in readiness for settlement on Friday, 19 March 2021:

Deed of Assignment of Trademark in respect of Waverley Estate Estd 1973 registration number 1830913.

Request for a Full Assignment of Trademark.

Online Liquor Licence transfer declaration by existing licensee in relation to Liquor Licence Number LIQW824013545.

We note that your client is to provide to our client log-ins, usernames and passwords with respect to the domain name Instagram account and Facebook account. Further, your client is to provide to our client on settlement the Waverley Wine Inventory, mailing list in paper form, however preferably on a USB memory stick and the wine vats.

…

Finally, in relation to the stocktake with respect to the wine at Hunter Bottling Company and First Creek Wines both in the Hunter Valley, could you please advise as to a suitable time on Thursday, 18 March 2021 in which to undertake a stocktake of same.

21. The plaintiff’s solicitors sent further letters on 17 March 2021 and 18 March 2021 in relation to matters to be attended to for the proposed settlement on 19 March 2021.

22. An issue arose concerning the wine located at Hunter Bottling Company and First Creek Wines. Frits Mare, who is also a director of Marlor Wines Pty Ltd, objected to a proposed stocktake of the wine. The defendant’s solicitors sent a letter to the plaintiff’s solicitors on 18 March 2021 to that effect. Later on 18 March 2021 the plaintiff’s solicitors replied, querying “how a final inspection will be conducted in accordance with clause 12.3 of the contract”. The plaintiff’s solicitors also provided a settlement adjustment sheet, and noted that replies to the requisitions on title were still outstanding.

23. Further settlement adjustment statements were sent by the plaintiff’s solicitors to the defendant’s solicitors later on 18 March 2021 in respect of the Asset Purchase Agreement. The plaintiff’s solicitors also sent lists of matters to be attended to by each party at the settlement, which was evidently intended to occur at 2:00pm on 19 March 2021.

24. However, at about 9:30am on 19 March 2021, the defendant’s solicitors sent a letter to the plaintiff’s solicitors in the following terms:

We refer to the above matter and advise that settlement will not proceed today. We will provide you with further advice once we receive further instruction from our client.

25. Settlement did not occur on 19 March 2021.

26. On 24 March 2021 the defendant’s solicitors sent a facsimile to the plaintiff’s solicitors in the following terms:

We refer to the above matter and are instructed that our client will be in a position to settle this matter on Tuesday 6 April 2021 at 2pm.

We will update PEXA accordingly.

27. On 26 March 2021 the defendant’s solicitors revised the settlement date and time accordingly.

28. In the meantime, on 25 March 2021, the plaintiff’s solicitors served a Notice to Complete upon the defendant’s solicitors. The Notice to Complete was relevantly in the following terms:

WHEREAS:

A. By Contract for the Sale of Land dated 5 February 2021 (“Contract”) you contracted to sell to Generosity Beverages Pty Ltd ACN 608 921 991 as Trustee for Palmers Lane Trust (“Purchaser”) ALL THAT property known as 207 Palmers Lane, Pokolbin and being the whole of the land in Certificate of Title Folio Identifier 1/789785 (“Property”).

B. You have failed to complete the Contract by the completion date provided in the Contract.

NOW A C DUNSTAN LAWYERS of Suite 2, Level 1, 156 Great North Road, Five Dock as solicitors for the Purchaser give you notice:

1.   The Purchaser is ready, willing and able to complete the purchase of the Property in accordance with the Contract;

2.   You are required to complete the sale to the Purchaser on or before Thursday, 8 April 2021 and in this respect, time is of the essence of the Contract;

3.   The Purchaser appoints 3.00pm on Thursday, 8 April 2021 in the Property Exchange Australia Limited (PEXA) electronic settlement platform in accordance with clause 30.11.2 of the Contract as the time and place for completion; and

4.   Unless you complete within the time specified in this notice, the Purchaser will without further notice to you, take proceedings to compel you to specifically perform the Contract and will claim damages arising from your breach of Contract.

29. On 30 March 2021 the defendant’s solicitors sent an email to the plaintiff’s solicitors stating that they were in the process of finalising the matter for settlement on 6 April 2021. That email was superseded by a further email sent by the defendant’s solicitors on 31 March 2021 which included the following:

Please note that settlement of this matter has been further delayed to 2pm 8 April 2021 due to the distress and disruption caused to our client during the settlement period.

Our client will facilitate a date and time for the purchaser to attend upon the various warehouses to undertake a stocktake. Please provide dates and times that your client maybe [sic] available for that purpose. Please also propose a date and time for the final inspection of the property.

30. On 1 April 2021 the plaintiff’s solicitors sent a letter to the defendant’s solicitors in the following terms:

We refer to settlement of the abovementioned matter on Thursday, 8 April 2021 and advise that we will forward to you amended settlement figures early next week, however in the meantime we would appreciate if you could please advise as to whom will be present at a final inspection of the property which our client’s representatives propose to undertake at 12 noon on Thursday, 8 April 2021.

31. On 7 April 2021 the defendant’s solicitors sent a letter to the plaintiff’s solicitors in the following terms:

We refer to the above matter which is due to settle tomorrow at 2pm.

Property Settlement:

Please provide us with an updated settlement statement and accompanying water certificate so that we can confirm the adjustments for the sale of the property and finalise the PeXA workspace accordingly.

Referring to the vendor signed contract we note that the execution annexure was not attached to the exchanged contact, and we attach execution annexure for the second director Jacqueline Mare. Please confirm your approval to annex to the vendor signed contract that you hold.

We also attach copy of executed WAL Transfer.

We confirm that the Vendor will make keys to the property available to the purchaser on the morning of 8 April 2021 and give the Purchaser consent to collect these keys from our office for the purposes of undertaking a final inspection of the property. We understand that the Purchaser will be attending upon the office to pick up settlement documents at 2pm that afternoon and upon completion of settlement the keys to the property will vest with the Purchaser.

Asset settlement:

With respect to the Assets, we attach the following to hold in escrow pending settlement. Original forms will be handed over at settlement:

1.   Wine invoices and stocktakes

The purchaser must provide to the Vendor an approved ATO "purchase under quote” form at settlement. Without this form the Purchaser is obliged to pay 29% Wine Equalisation Tax on the value of the wine inventory sold before applying GST.

2.   Telstra change of ownership Form;

3.   Online Liquor licence transfer declaration;

4.   Mailing List; and

5.   Letters in draft to the Bottling Warehouses.

With respect to social media accounts, we are instructed as follows:

6.   Domain Name Transfer

The Purchase [sic] must create an account with Netregistry and provide the Vendor with their account details. The Vendor will then transfer the domain name across to the Purchaser at settlement.

7.   Facebook

The Purchaser must provide the Vendor with its personal email account. Once this is received the Vendor will assign the Purchaser as administrator of the Facebook Account and the Purchaser will take control of the page.

8.   Instagram

Username:…

Password:…

This will be activated at settlement.

9.   We will provide you with a copy of the Request for Assignment of Trademark Form as soon as it is received from the vendor. Note that the Vendor does not agree to execute a Deed of Assignment and will instead complete the Letter attached to the Form.

We attach amended settlement adjustments for your review.

Copyright

Marlor Wines Pty Limited (Marlor) puts the Purchaser and Mr Fens on notice that it is and remains the owner of all of the Waverley label artwork and professional product photography, including the Stubborn Ox and Solitary Man labels.

Marlor specifically does not give consent for the unauthorised use or reproduction of any of the artwork or photography and relies upon the Copyright Act 1968 (Cth) to protect its rights.

Marlor is agreeable to:

a.   enter into a licence agreement with the Purchaser for future use of the Copyright artwork and photography; or

b.   sell the copyright material to the Purchaser for $50,000.00.

Please seek your clients' instruction in this regard.

Please let me know if there are any other matters outstanding

The covering email stated that a section 47 (land tax) certificate and replies to requisitions would be provided shortly. Replies to the requisitions on title, and a clear land tax certificate, were in fact provided later that afternoon.

32. It seems that late on 7 April 2021 the settlement date and time was revised in PEXA to 2:00pm on 8 April 2021. The revision appears to have been effected by the plaintiff’s solicitors.

33. Contrary to the statement made in the defendant’s solicitors’ letter of 7 April 2021, the keys were not available for collection at their office on the morning of 8 April 2021. Guy Fens had arranged for his son, Mr Jordan Fens, to collect the keys from the solicitors’ office. Jordan Fens attended there, but was informed that he would need to pick up the keys from the office of Frits Mare in Dee Why. Jordan Fens arrived there at about 9:15am. Frits Mare and Jordan Fens give conflicting accounts of what occurred thereafter, in particular in relation to the handover of the keys. It will be necessary to return to this issue later in these reasons. For now, it is enough to note that Frits Mare deposed that Jordan Fens left his office with the keys at about 11:55am, whereas Jordan Fens deposed that this occurred at about 1:00pm. It is clear that a considerable amount of time was spent that morning discussing and dealing with issues relating to the Asset Purchase Agreement, such as the transfer of a domain name and social media accounts. There was also discussion about the purchase of some additional barrels of wine not included in the existing agreement.

34. In the meantime, at 10:41am on 8 April 2021, the plaintiff’s solicitors sent a letter to the defendant’s solicitors in the following terms:

We refer to your letter of 7 April 2021 and reply as follows:

Property Settlement

1.   We enclose Settlement Adjustment Sheet together with section 603 Certificate (dated 7 April 2021) and Water NSW Financial Statement for settlement today.

2.   We note that the Contract for sale and purchase of land was exchanged on 5 February 2021 in your office and is validly executed and hence nothing further is required.

3.   Our client's representatives or its agent will collect the keys from your office at 9.00 am this morning for the purpose of conducting a final inspection at approximately 11.30 am - 12 noon at the property 207 Palmers Lane, Pokolbin, whereafter settlement keys will vest in our client. We will contact you should the property not be in the same condition as at the date of exchange of contracts.

4.   Our client's representatives or its agent will attend your office at approximately 1.30 pm - 1.45 pm to further verify the documents and matters set out in the enclosed document headed "Matters to be attended to by the parties on settlement". We note that you will hold all such documents in escrow pending settlement.

On confirmation of settlement in PEXA we will forward you on the vendor's solicitor.

Asset Purchase Agreement

1.   We enclose further copy of ATO "Purchase under-quote" form which our client's representative has already provided to your client's representative. The form is to be held in escrow pending settlement.

2.   Noted, subject to our client receiving the original signed Telstra Change of Ownership form on settlement.

3.   Note, subject to our client receiving the original On-line Licence Transfer Declaration form on settlement.

4.   Noted.

5.   Noted, subject to our client receiving on settlement the four (4) original signed letters on your letterhead.

6.   This will be provided in your office in order to allow the transfer to be effected at such time simultaneously with the settlement.

7.   This will be provided in your office in order to allow the transfer to be effected at such time simultaneously with the settlement.

8.   Noted.

9.   In respect to the Trademark we note that we have provided to your office approximately 3 weeks ago the Deed of Assignment of Trademark and Request for Full Assignment of Trademark form for execution by your client, yet not only has your client now refused to sign same but proposes to forward to our office a letter to attach to the Request for Full Assignment of Trademark form which our client has not been provided with time to approve or verify and hence in all the circumstances our client requires on settlement the executed Deed of Assignment of Trademark and accompanying form signed by all relevant vendors. Further we require a copy emailed to our office by 12.00 noon today for verification in readiness for settlement later this afternoon. Such conduct, we are instructed, is simply a means of attempting to further delay settlement of the matter.

10.   Our client entered into an agreement dated 5 February 2021 to purchase significant wine bottles branded with labels "Stubborn Ox" and "Solitary Man" and yet your client purports that the brand names are owned by Marlor Wines Pty Ltd and are implying that they do not form part of the trademark, however a search of such names does not confirm or support your client's assertion they are owned by such entity and in fact the name "Solitary Man" appears to be owned by a business registered in Victoria.

In any event the entitlement to use the benefits, goodwill and entitlement in the trademark and copyright vests in all names under the trademark.

Your client's representative Mr Frits Mare made representations to our client's representative, namely Mr Fens, at the time the agreement was entered into whereby he indicated that more money was required for the wine bottles because he was going to be out of the industry altogether and in this respect you will note the handmade amendments to the agreement whereby there was a change in consideration.

Further, your client has had direct correspondence with our client regarding the trademark which we assume he has not made you a party to and it is for all these reasons that again, these are further means of attempting to delay settlement of the matter.

11.   Our client's representatives or agent will attend your office at approximately 1.30pm - 1.45pm to collect the documents set out in the enclosed document headed "Matters to be attended to by the parties on settlement". We will note that you will hold all such documents in escrow pending settlement.

On confirmation of settlement in PEXA we will provide you with an Order on the vendor's solicitor.

12.   We note that you have provided our office with a Settlement Adjustment Sheet in respect to the Asset Purchase Agreement, which sheet relied upon your client's stocktake when our client has not been provided with the opportunity to conduct their own inspection of third-party venues where all the wine stock is held even after numerous requests have been made.

We note your email of 7 April 2021 at 4.23 pm which purports to provide a warranty however our client requires a written and signed undertaking and warranty by your client and its representatives that both it and they will reimburse and compensate our client for any shortfall in the stock numbers provided by your client to our client and the actual number by such third parties in the event that there is a shortfall. We look forward to receiving a copy for verification by 12.00 noon in order that we may verify same.

If the matter does not settle by close of business today our client reserves its rights to apply to the Supreme Court of NSW for specific performance.

The letter was accompanied by various documents including a settlement adjustment sheet for the contract for sale and two documents headed “Matters to be attended to by the parties on settlement” – one for the contract for sale and one of the Asset Purchase Agreement.

35. At 1:21pm on 8 April 2021 the defendant’s solicitors sent an email to the plaintiff’s solicitors which referred to a discussion between the solicitors on that day, and attached two documents. These documents were a Request for a Full Assignment or Transmission of a Trade Mark form, signed by Frits Mare as a director of Marlor Wines Pty Ltd and as a director of Sun Zapper (Aust) Pty Ltd, and an undertaking signed by Frits Mare on behalf of Marlor Wines Pty Ltd to reimburse Waverley Estate Wines Pty Ltd if there was any inaccuracy in stocktake numbers in respect of the wines to be transferred. The email also referred to a fee of $119 for the transfer of the domain name. It was said that the purchaser had agreed to pay that fee, and that it was to be added to the settlement adjustment sheet.

36. It seems that the discussion between the solicitors that is referred to in the email occurred at around 12:50pm, and concerned the further agreement that had been reached between the parties for the sale of additional wine and other property that was not the subject of the Asset Purchase Agreement.

37. At 2:03pm on 8 April 2021 the defendant’s solicitors sent a letter to the plaintiff’s solicitors in the following terms:

We refer to the above matters which are due to settle today at 2pm.

We confirm that we are willing, ready and able to settle upon the property and assets.

In particular we confirm that we hold a Full Assignment/Transmission of Trademark signed by the Vendors and available to be handed over at settlement in accordance with the Asset Sale Agreement.

Please confirm that the purchaser is in a position to now settle this matter.

38. At 2:08pm on 8 April 2021, the defendant’s solicitors entered a message on PEXA in the following terms:

Please balance workspace for settlement. Note that $119.00 has been added on account of the cost to transfer the domain name to the purchaser.

39. Frits Mare and Guy Fens had a telephone conversation shortly before 2:30pm on 8 April 2021. Mr Fens was at that time in the course of driving towards the property with the keys, intending to carry out an inspection of the property. The accounts of the conversation are in conflict. In any event, at 2:52pm Frits Mare sent an email to Guy Fens in the following terms:

Please find attached a copy of the signed letter you requested.

You gave [sic] called for settlement to take place at 3pm and it is fast approaching.

We are ready willing and able to settle.

The attached letter was relevantly in the following terms:

This is to confirm the matters which you have agreed to with me via the intervention of your son Jordan.

We are doing this as a side agreement to the settlement which is to occur a[t] 3pm so as not to disrupt and/or delay the property and asset purchase settlement.

You have agreed to pay an amount of $10,000 and I have agreed to transfer to you the following extra wine barrels which do not form part of the Asset Purchase Agreement – They are in addition to those in Schedule C of the agreement.

2 x 500 Ltr Puncheon (1 unused)

10 x 225 Ltr Barriques (2 unused)

For clarity and for the avoidance of doubt there will still remain 3 x 225 Litre barrels (2014 vintage) plus 8 x 1,000 litre stack vats at the Agnew Winery – they are not included in any sale to you, and remain our property, this has been clearly disclosed to you via Jordan.

We have discovered that we own an additional domain name – – which we will transfer to you as part of this agreement – subject to you paying the transfer fee of $119 to us which we will be charged to us by Netregistry.

I will also assign all copyright in all Waverley Labels, which include the Stubborn Ox Label and the Solitary Man Labels.

Please transfer the $10,119.00 to our account as follows:

…

As a sign of good faith and relying on Jordan’s assurance of your agreement with me I have provided Jordan with keys to the property and the manuals to the machinery.

On your part you will need to transfer the $10,119.00 as payment for this agreement prior to settlement which is to occur at 3pm.

For the record I state that Sun Zapper (Aust) Pty Ltd would not have assigned the Trademark to you if this agreement was not reached and honoured by you.

40. At 2:57pm on 8 April 2021 the plaintiff’s solicitors sent a letter to the defendant’s solicitors in the following terms:

Further to our letter of even date and subsequent telephone conversation between Nicole Davis of your office and the writer Anthony Dunstan at approximately 12.50 pm today we understand the parties have had discussions about an agreement whereby your client/clients will sell and or assign to our clients a number of wine barrels (numbers to be confirmed) and assign the copyright for Solitary Man and Stubborn Ox and artwork for the Waverley label to our client. Your client is also to assign to our client the domain name this respect please advise as to the nature of the copyright (i.e. works, drawings etc).

In order to effect the assignment of any copyright it is required to be in writing pursuant to the Copyright Act.

In the circumstances our client will require a Deed of Assignment for the copyright to confirm such nature similar to the Deed of Assignment of Trademark (provided to your office 3 weeks ago) which our client requires, as it provides warranties and guarantees given ownership will vest in our client and assurances need to be provided that there have been no breaches or infringement of same by the vendor.

Further, there will be a requirement for a Deed of Assignment of all Waverley label artwork and professional product photography, including that of Solitary Man and Stubborn Ox. While finally there will need to be agreement with respect to the sale of the wine barrels.

We await your urgent reply with respect to each of the abovementioned matters and that settlement in accordance with our client's Notice to Complete is to be effected by 3.00pm today.

We note that your client is not ready, willing and able to settle given the matters raised in our earlier letter today with respect to the Deed of Assignment of Trademark which was provided to you 3 weeks ago and is required with respect to the assignment of the trademark.

Further, our client or its representative was provided with the keys by your client's representative at 1.00pm today in Dee Why to conduct a final inspection of the property at 207 Palmers Lane, Pokolbin. It will take our client's representative over 2 hours travelling time and hence such inspection will not be conducted until after 3.30pm today. This is entirely unreasonable especially in circumstances where settlement has previously been unilaterally delayed by your client. This right is provided in accordance with clause 12.3 of the Contract. We will contact you once the inspection has been conducted to advise if the property is not in the same condition as at the date of the exchange of Contracts, namely 5 February 2021.

Our client's representative is currently enroute to conduct the final inspection and has been advised by your client's representative Mr Frits Mare in a telephone conversation this afternoon, that if the final inspection is conducted after 3.00 pm today he will be contacting the police. We hereby put you on notice that our client is exercising their contractual right and the delay in providing such keys is a result of your client's conduct which our client's representative will convey to the police in the event of allegation of trespass and or nuisance.

Our client reserves all rights.

41. At about the same time that letter was sent, the defendant’s solicitors entered a message on PEXA in the following terms:

Please urgently attend to settlement of this matter noting that we are ready willing and able to complete and have original documents ready to hand over at settlement.

42. At 3:34pm on 8 April 2021, Guy Fens sent an email to Frits Mare in response to his earlier email. Mr Fens’ email was in the following terms:

It was 2pm and you handed keys over at 1pm. Not reasonable. We are inspecting now.

43. At 4:04pm Guy Fens sent an email to Frits Mare in the following terms:

This is a personal note and possibly needs sign off by the entity that owns each of the assets, copyright, domain name etc.

For the record Sun Zapper were always a party to the agreement so the last paragraph is irrelevant and needs removing.

Lastly, we have just now completed the final inspection and there is a bathroom mirror (fixture) that has been removed and holes poorly patched in the bathroom tiles that we want returned and reinstalled prior to settlement.

We are also concerned about the removal of the cellar door counter which may have also been considered a fixture given the discolouring of the tiles.

44. At 4:33pm the plaintiff’s solicitors sent a letter to the defendant’s solicitors in the following terms:

Further to our letter to you this afternoon, we advise that our client’s representative completed a final inspection at approximately 3.45pm this afternoon and instructs us that the mirror in the bathroom of the cellar door had been removed and not repaired in a proper and workmanlike manner.

Further, we are instructed that the cellar door counter had been removed and we are instructed that both the mirror in the bathroom and cellar door counter be returned and installed.

Please confirm by reply that both the mirror in the bathroom and cellar door counter will be returned and installed if still in your client’s possession otherwise we will obtain instructions with respect to compensation sought for the replacement of such fixtures.

Again we note the vendor is still not ready, willing and able to complete the sale.

45. The contract for sale (and the Asset Purchase Agreement) failed to complete on 8 April 2021.

46. The PEXA records indicate that at no stage during 8 April 2021 was the Workspace in a Ready or Locked status before the settlement cut-off time of 5:00pm.

47. On 9 April 2021 the plaintiff’s solicitors sent a further letter to the defendant’s solicitors. The letter was in the following terms:

Further to our letter of 8 April 2021 regarding the matters raised as a result of our client’s final inspection late yesterday afternoon of the abovementioned property we are instructed that:

Vacant possession has not been provided in that debris and rubbish has not been removed from the property. Please [see] attached photograph.

Damage has been caused to the gassed [sic] surface adjacent to the cellar door by what appears to be heavy machinery which our client assumes was the result of large sandstone blocks having been removed from the property which your clients representative had agreed to leave at the property for our clients. This damage was [sic] did not exist at the time of exchange of contracts. Please see attached photograph.

The cellar door was not cleaned.

We are instructed that all outstanding matters are to be attended to by no later than 3pm today which include:

reinstatement of the mirror in the bathroom and front counter of the cellar door;

repair to the grassed surface adjacent to the cellar door;

cleaning of the cellar door;

providing to our office copy of signed Deed of Assignment of Trademark as provided to your office over 3 weeks ago;

providing to our office documentation with respect to the assignment of the copyright for Solitary Man and Stubborn Ox and all art and professional work; and

providing to our office agreement with respect to the sale of further wine barrels.

In the event that the abovementioned matters are not rectified and or documents provided so your client is ready, willing and able to settle then we are instructed to apply to the Supreme Court of NSW for specific performance or such other relief as is appropriate and to reply upon this letter in relation to the question of costs.

A number of photographs accompanied the letter.

48. There was no communication from the defendant or its solicitors until the morning of 12 April 2021 when the defendant’s solicitors served upon the plaintiff’s solicitors a Notice of Termination in respect of the contract for sale. The notice was relevantly in the following terms:

RECITALS:

A:   By contract for the sale of land dated 5 February 2021 between Mare Custodian Company Pty Ltd ACN 613 017 440 ATF the Mare Family Trust of 8-32 Campbell Avenue, Dee Why NSW 2099 (Vendor) and Generosity Beverages Pty Ltd ACN 608 921 991 ATF Palmers Lane Trust of 212 Palmers Lane Pokolbin NSW 2320 (Purchaser), the Vendor agreed to sell and the Purchaser agreed to purchase the property known as 207 Palmers Land, Pokolbin being the whole of the land in Certificate of Title Folio Identifier 1/789785 (Property) for $2,950,000 (Contract).

B:   The Purchaser paid a deposit of $295,000.00 (Deposit).

C:   The Purchaser served a Notice to Complete dated 25 March 2021 on the Vendor requiring completion of the Contract on or before 8 April 2021 and making, in that respect, time of the essence (Notice to Complete).

D:   In the Notice to Complete, the Purchaser appointed 3.00pm on 8 April 2021 in the Property Exchange Australia Limited (PEXA) electronic settlement platform as the time and place for completion.

E:   As at 3.00pm on 8 April 2021, the Vendor was ready, willing and able to complete the Contract, of which notice of such had been given to the Purchaser. In particular:

(a)   by, email sent at 1.21pm from the Vendor’s solicitor to the Purchaser’s solicitor, the Vendor provided the Purchaser with a copy of the signed “Request for a Full Assignment or Transmission of a Trade Mark” (Assignment Document) in relation to the Asset Purchase Agreement referred to in condition 40 of the Contract, being the final document necessary to be provided by the “Vendor” under the Asset Purchase Agreement to the “Purchaser” under the Asset Purchase Agreement pursuant to clause 1.1 of that agreement;

(b)   by letter dated 8 April 2021 sent by email from the Vendor’s solicitor to the Purchaser’s solicitor at 2.03pm on 8 April 2021, the Vendor confirmed to the Purchaser that the Vendor was willing, ready and able to settle upon the Contract and the Asset Purchase Agreement and the Vendor’s solicitor held the signed Assignment Document which was available to be provided at settlement; and

(c)   by PEXA message sent at 2.57pm on 8 April 2021, the Vendor’s solicitor requested that the Purchaser’s solicitor urgently attend to settlement and advised that the Vendor was ready, willing and able to complete the Contract and the Vendor’s solicitor had the original documents ready to provide at settlement.

F:   The Purchaser failed to complete the Contract at 3pm, or any later time, on 8 April 2021.

TAKE NOTICE AS FOLLOWS:

1.   The Vendor was ready, willing and able to complete the Contract within the period nominated for completion by the Notice to Complete.

2.   The Purchaser did not complete the Contract within the period nominated for completion by the Notice to Complete.

3.   The Vendor hereby terminates the Contract pursuant to clause 9 of the Contract.

4.   Pursuant to Clause 9.1 of the Contract, the Vendor is entitled to keep the Deposit.

5.   The Vendor requires the return of the keys to the Property and the equipment manuals which were handed to the Purchaser on 8 April 2021 in anticipation of settlement within 24 hours of service of this Notice.

6.   The Vendor reserves all its rights.

49. Later on 12 April 2021, the plaintiff lodged a caveat (AQ953131) against the title to the property the subject of the contract for sale, claiming an interest pursuant to the contract. On 14 April 2021, the plaintiff’s solicitors sent a letter to the defendant’s solicitors disputing the validity of the termination. The letter referred to the Notice to Complete issued on 25 March 2021 and confirmed that the defendant did not dispute the validity of the notice. The letter went on to assert that the defendant was not entitled to rely upon the Notice to Complete to terminate the contract, including because the defendant was not ready, willing and able to complete at 3:00pm on 8 April 2021 “or at any other relevant time”. The plaintiff’s solicitors stated that the purported termination of the contract amounted to a repudiation of the contract, but the plaintiff elected to affirm the contract, and appointed 3:00pm on 16 April 2021 as the time for completion.

50. However, the defendant has maintained the position that it validly terminated the contract and that it is thereby entitled to forfeit the deposit. The deposit of $295,000 remains in the trust account of the defendant’s solicitors pending the outcome of these proceedings.

Determination

51. The central issue is whether the defendant’s Notice of Termination given on 12 April 2021 was effective to terminate the contract for the plaintiff’s breach. The termination was based upon the failure of the plaintiff to complete the contract on 8 April 2021. That failure is alleged to be a breach of the contract in an essential respect because the Notice to Complete served by the plaintiff, which called for completion to occur on or before 8 April 2021, made time of the essence in that respect.

52. As the contract was not completed by the completion date of 19 March 2021, the plaintiff was entitled to serve a Notice to Complete (see cl 15). There is no suggestion that the plaintiff was not so entitled. The notice it served on 25 March 2021 required completion within 14 days of that date, and thus complied with Additional Clause 33 of the contract. After service of the notice, no challenge was made to its validity, and the parties proceeded in a manner consistent with the notice being valid. In these proceedings, neither party suggested that the notice was not effective to make time of the essence in respect of completion by 8 April 2021.

53. It is well settled that a valid Notice to Complete issued in respect of a contract for the sale of land binds both parties to the contract (see Falconer v Wilson [1973] 2 NSWLR 131 at 143; Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (2016) 18 BPR 35,759; [2016] NSWCA 32 at [39]). Further, under a contract for the sale of land, the obligations of the parties in respect of completion are regarded as interdependent and concurrent, such that a failure to perform is not generally regarded as a breach unless the other party has itself tendered performance (see Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 at 571; Frankcombe v Foster Investments Pty Ltd [1978] 2 NSWLR 41 at 48; Sharjade Pty Ltd v Commonwealth (2009) 15 BPR 28,443; [2009] NSWCA 373 at [55]).

54. In the present case, the plaintiff apparently accepts that it failed to perform its obligations in respect of completion by 8 April 2021, but contends that the defendant was in various ways in breach of the contract or otherwise not ready, willing and able to complete by 8 April 2021.

55. The plaintiff contends that by failing to hand over the keys to the property in a timely fashion, the defendant breached its obligation under cl 12.3 of the contract to enable the plaintiff to make an inspection of the property in the 3 days before the time appointed for completion. The plaintiff further says that this conduct of the defendant was a default that materially contributed to the failure of the plaintiff to complete within the stipulated time (see Abourjaily v Parkview Estate Pty Ltd [2017] NSWSC 1256 at [21]-[28]; see also Barrak Corporation Pty Ltd v Jaswil Properties Pty Ltd (supra) at [58]). It was thus submitted that it was not open to the defendant to rely upon that failure to exercise the right of termination under cl 9 of the contract (see Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd (in liquidation) (2021) 20 BPR 41,487; [2021] NSWSC 550 at [65]-[67]).

56. The plaintiff further contends that the defendant, by its conduct, showed itself not to be ready, willing and able to complete. In this regard, the plaintiff pointed to:

1. the defendant’s unwillingness to sign a Deed of Assignment of Trademark;

2. the demand made on 8 April 2021 for payment of an additional sum of $10,119;

3. the unilateral addition of $119 to the Financial Settlement Schedule (“FSS”) in PEXA on 8 April 2021;

4. a failure to engage with the plaintiff on 8 April 2021 to achieve balance in the FSS;

5. the removal of fixtures from the property, and the leaving of rubbish on the property; and

6. the failure to respond to the plaintiff’s solicitors letters sent at 2:57pm and 4:33pm on 8 April 2021.

57. I will deal first with the conduct of the defendant concerning the handing over of the keys to the property. As mentioned earlier (at [33]), Frits Mare deposed that Jordan Fens left his office with the keys at about 11:55am, whereas Jordan Fens deposed that this occurred at about 1:00pm. In cross-examination, Jordan Fens said that the keys were given to him between about 12:30pm and 12:50pm. He further said, by reference to his telephone records, that at 12:50pm he was in his car after having left Mr Mare’s office in Dee Why. He said that he was travelling toward North Sydney.

58. I think it is likely that Jordan Fens left the office with the keys at about 12:45pm as he said, rather than at about 11:55am as claimed by Mr Mare. Jordan Fens was in frequent telephone contact with Guy Fens throughout the day, and I note that Guy Fens stated in an email sent to Mr Mare at 3:34pm that the keys had been handed over at 1:00pm. I infer that Guy Fens had been informed by Jordan Fens that the keys had been handed over around that time. In any event, I do not think that much turns on whether Jordan Fens left with the keys at about 11:55am or at about 12:45pm.

59. By cl 12.3 of the contract, the defendant was obliged to do everything reasonable to enable the purchaser to conduct an inspection of the property in the three days before a time appointed for completion. On 1 April 2021, the plaintiff’s solicitors informed the defendant’s solicitors that the plaintiff proposed to undertake a final inspection of the property at 12 Noon on 8 April 2021. That date had, by then, been appointed for completion to occur. The defendant’s solicitors’ letter of 7 April 2021 indicated that the keys to the property would be made available to the plaintiff on the morning of 8 April 2021 at the solicitors’ office for the purpose of undertaking a final inspection. However, the keys were not at the solicitor’s office when Jordan Fens attended there early on the morning of 8 April 2021. He was directed to instead collect the keys from Mr Mare’s Dee Why office. Jordan Fens arrived there at about 9:15am.

60. Had Jordan Fens obtained the keys and left with them at about that time, he could have had the keys at the property well in time for an inspection to occur at Noon. However, Jordan Fens remained at the office and engaged in various discussions with Mr Mare until about 12:45pm. The discussions ranged across numerous subjects, including the effecting of transfers of a domain name and social media accounts, and the negotiation of a further agreement to transfer property that was not the subject of the Asset Purchase Agreement.

61. The general tenor of Jordan Fens’ account is that these discussions occurred at the insistence of Mr Mare, who was not prepared to part with the keys until various matters were resolved to his satisfaction. Mr Mare, on the other hand, suggests that these matters (in particular the transfer of a domain name and social media accounts, and the negotiation of a further agreement) were raised by Jordan Fens. I do not think it is necessary to resolve that particular controversy. I am satisfied that, whoever initiated the various discussions, they were freely and voluntarily engaged in by both Mr Mare and Jordan Fens. It is further apparent that Guy Fens, who had a number of telephone conversations with Jordan Fens (including a 7 minute conversation from 10:44am and a 14 minute conversation from 11:45am), was aware that such discussions were taking place. In these circumstances, I do not accept the suggestion that Jordan Fens only participated in the discussions because it was necessary to do so in order to obtain the keys to the property. It was to the plaintiff’s benefit to deal with the practicalities involved in the transfers of the domain name and social media accounts, and it is evident from the discussion about the purchase of additional vats of wine that the plaintiff wanted to reach an agreement to that effect. Guy Fens accepted in cross-examination that he wanted to have those additional vats. It was open to the plaintiff to terminate the discussions at any time and, if necessary, demand the keys in order to facilitate the carrying out of the final inspection. I infer that the plaintiff chose, in its own interests, not to do so. As I have said, at the conclusion of the various discussions, the keys were made available to Jordan Fens, who left the Dee Why office with them at about 12:45pm.

62. I am not prepared to find that the defendant’s conduct concerning the handing over of the keys amounted to a breach of cl 12.3 of the contract. The delay in the actual handing over of the keys on 8 April 2021 was not the result of a refusal on the part of the defendant to make the keys available; it was the result of the intervention of the discussions between Mr Mare and Jordan Fens, which were freely engaged in by both parties. Moreover, whilst the handing over of the keys at about 12:45pm rendered it practically impossible to employ the keys as part of an inspection to be carried out before the then scheduled settlement time of 2:00pm, it remained possible to employ the keys as part of an inspection to be carried out well prior to 5:00pm. That is demonstrated by what actually occurred on 8 April 2021.

63. Jordan Fens drove to Ourimbah and there gave the keys to his father shortly after 2:00pm. Guy Fens gave evidence that he arrived at Palmers Lane, Pokolbin at about 3:15pm. He and others proceeded to conduct an inspection of the property. It appears from emails sent by Guy Fens to Mr Mare that the inspection was in progress at 3:34pm, and by 4:04pm the inspection had “just now” been completed.

64. It seems that the inspection may have in fact been completed by about 3:45pm. The plaintiff’s solicitors’ letter sent at 4:33pm contains a statement to that effect. Guy Fens accepted in cross-examination that the letter had been written on his instructions. The statements contained in the emails and letter sent on the afternoon of 8 April 2021 are likely to be reasonably accurate. I note further that in his affidavit of 2 May 2021, Guy Fens stated that he sent his 4:04pm email after having conducted the final inspection of the property.

65. I do not accept the evidence given by Guy Fens in cross-examination that the inspection was only partially complete by 4:04pm. I note in this regard that the letter sent by the plaintiff’s solicitors at 10:41am on 8 April 2021 suggests that only about half an hour may have been required for the final inspection. I also note that no request was made for any additional time to complete the inspection.

66. It is clear from the email sent at 4:04pm that Guy Fens, based on the inspection that occurred, was not prepared to settle unless the defendant attended to certain matters first. He conceded in cross-examination that this was his view at the time. Furthermore, it is evident from the plaintiff’s solicitor’s letter sent at 4:33pm that the plaintiff, having stated that it had completed the final inspection, considered that the defendant was “still not ready, willing and able to complete the sale”. In that regard, the plaintiff was relying upon the matters stated in the 4:33pm letter as well as the matters stated in the earlier letter sent at 2:57pm. In his affidavit of 11 June 2021, Guy Fens deposed that on the basis that the defendant was apparently not ready, willing and able to settle, he instructed the plaintiff’s solicitors “not to sign off on the PEXA workstation to be completed pending the vendor advising that it was ready, willing and able to settle”.

67. The evidence does not reveal any reason why the plaintiff could not have proceeded to complete the contract for sale by the PEXA settlement cut-off time of 5:00pm on 8 April 2021. It seems that the necessary funds (including those required for stamp duty) were available. Guy Fens said in cross-examination that “he” was ready, willing and able to settle on that day.

68. However, the plaintiff’s solicitors did not respond to the defendant’s solicitor’s PEXA message sent at 2:08pm, and thereafter maintained that the defendant was not ready, willing and able to complete. Consistently with the plaintiff’s instructions, they did not take steps to “sign off on the PEXA workstation”. In my opinion, the failure of the plaintiff to complete the contract for sale on 8 April 2021 was the result of the plaintiff’s deliberate decision not to proceed to completion. It was not the conduct of the defendant concerning the handing over of the keys. I do not think that it can be said that such conduct materially contributed to the plaintiff’s failure to complete. The conduct did not deprive the plaintiff of a substantial chance to complete the contract for sale on 8 April 2021.

69. I turn now to consider the matters referred to at [56] above, which are relied upon by the plaintiff as showing that the defendant was itself not ready, willing and able to complete the contract for sale on 8 April 2021. For convenience, I will set those matters out again as follows:

1. the defendant’s unwillingness to sign a Deed of Assignment of Trademark;

2. the demand made on 8 April 2021 for payment of an additional sum of $10,119;

3. the unilateral addition of $119 to the Financial Settlement Schedule (“FSS”) in PEXA on 8 April 2021;

4. a failure to engage with the plaintiff on 8 April 2021 to achieve balance in the FSS;

5. the removal of fixtures from the property, and the leaving of rubbish on the property; and

6. the failure to respond to the plaintiff’s solicitors letters sent at 2:57pm and 4:33pm on 8 April 2021.

70. The matter in (a) above can be dealt with briefly. The assignment of the trademark was the subject of the Asset Purchase Agreement, not the contract for sale of land. It was not shown that execution of a Deed of Assignment, as sought by the plaintiff, was required under the Asset Purchase Agreement. Nor was it shown that what was proposed by the defendant, namely, a Request for Assignment of Trademark form which has a Letter of Assignment attached, was not in accordance with that agreement. Moreover, in circumstances where Additional Clause 40 of the contract for sale states that the items the subject of the Asset Purchase Agreement do not form part of the contract for sale, and where the parties to the two contracts differ, I do not think that any breach of the Asset Purchase Agreement can itself amount to a breach of the contract for sale. That is so even if it was contemplated that settlement of both contracts would occur at the same time, with payment pursuant to the Asset Purchase Agreement also to occur on PEXA.

70. As for the matter in (b) above, it is true that Mr Mare, in his email to Guy Fens at 2:52pm on 8 April 2021, stated that he wanted $10,119 transferred into an account “prior to settlement which is to occur at 3pm”. That sum consisted of:

1. the amount of $10,000 that was earlier that day agreed to be paid for additional barrels of wine and other property (including a domain name) not included in the Asset Purchase Agreement; and

2. the amount of $119, being a fee that would be charged by Netregistry on the transfer of the additional domain name.

72. However, it is clear from Mr Mare’s email that he regarded the agreement made earlier that day as a “side agreement” that would not “disrupt and/or delay the property and asset purchase settlement”. In that regard, I accept the evidence given by Mr Mare in his affidavit to the effect that he told Jordan Fens that it was “a totally separate side deal from the settlement today”. I also accept his denial, given in cross-examination, that unless the $10,119 was paid he was not going to allow settlement to go through. In these circumstances, I do not see how the demand for $10,119 can be considered to be in any way contrary to the defendant’s obligations under the contract for sale, or indicative of a lack of readiness, willingness or ability to complete that contract.

73. As for the matter in (c) above, it is clear that the email sent by the defendant’s solicitors at 1:21pm on 8 April 2021 referred to a fee of $119 that would be payable by the defendant upon transfer of a domain name to the plaintiff. It was further stated that the plaintiff had agreed to pay the charge, and that the amount was to be added to the settlement adjustment sheet. Shortly thereafter, the defendant’s solicitors added $119 to the FSS in PEXA. This was referred to in the message entered on PEXA at 2:08pm.

74. When regard is had to the documents attached to the email sent at 1:21pm, and to the earlier correspondence between the solicitors, it is likely that the $119 fee referred to related to the domain name ( which was the subject of the Asset Purchase Agreement, rather than the additional domain name ( which was the subject of the further agreement reached on 8 April 2021. If that is so, and if the plaintiff had agreed to pay the fee, it would have been appropriate for the amount to be added to the FSS. As already mentioned, Additional Clause 40 contemplated that payment pursuant to the Asset Purchase Agreement would occur on PEXA at the time of settlement of the contract for sale of land.

75. If the plaintiff had not agreed to pay the fee, and was not prepared to do so, it would have been open to the plaintiff’s solicitors to respond to the defendant’s solicitors accordingly. However, as was made clear by the evidence of the defendant’s solicitor, Ms Nicole Davis, the plaintiff’s solicitors did not respond to her on 8 April 2021 in relation to the $119 fee or to her request to balance the FSS for settlement. In these circumstances, the addition of the $119 to the FSS cannot be considered either a breach of the contract for sale or indicative of a lack of readiness, willingness or ability on the part of the defendant to complete that contract.

76. It also follows from the above that the complaint made by the plaintiff, as referred to in (d) above, cannot be sustained.

77. I turn to (e) above. The plaintiff complains that the inspection on 8 April 2021 revealed that a mirror and counter had been removed from the “cellar door” area of the vineyard. Both items are claimed to be fixtures, and hence part of the subject matter of the contract for sale. Guy Fens deposed, in relation to the mirror, that the “fixture holes” were poorly repaired. In relation to the counter, he deposed that a residue of “glue marks” remained on the floor. These matters are referred to in the email sent by Guy Fens at 4:04pm on 8 April 2021 and the plaintiff’s solicitors’ letter sent at 4:43pm. The plaintiff also complains that the cellar door area was filthy, that considerable rubbish and waste had been left on the property, and that a grassed area near the cellar door had been damaged. Most of the abovementioned matters are depicted at least to some extent in photographs that accompanied the letter sent by the plaintiff’s solicitors on 9 April 2021.

78. Mr Mare deposed:

The mirror referred to was hanging on its own weight on a hook (of the type normally used to hang such items on walls) screwed into the wall; it was not affixed, or connected, to the wall permanently or otherwise.

The counter which had previously stood in the cellar door area was a piece of furniture which sat on the floor by its own weight. It was not affixed, or connected, to the floor (or the building), permanently or otherwise.

79. Mr Mare further deposed:

The cellar door was permanently closed in February 2020 and, at the time of Guy’s inspection, had not been used for open [sic] for 14 months. At most it may have had some dust on the window sill – it was otherwise clean.

…

With the exception of the stack of timber shown in the photographs included in Document 40, the items which I had allowed to remain on the Property as at 6 April were items of equipment or similar which I considered could be used in and about the operation of the Property. For example, the photograph within Document 40 of hose shows “drop line” which is used to irrigate grapes, short lengths of which are regularly needed to make repairs, and which was purchased in spring 2019 and which I estimate would cost in the order of $2,500 to purchase.

(The above references to Document 40 are to photographs attached to the plaintiff’s solicitors’ letter sent at 4:33pm.)

The photos submitted by Guy were taken from a spot approximately 146 meters from the homestead/cellar door (not adjacent to the cellar door as alleged) on a track regularly used by the tractor. Document 41 is a copy of an aerial map of the Property provided by the NSW Government Spatial Information Exchange. The usual tractor route is marked.

The tyre marks referred to were made by the tractor, as always occurs in that spot after heavy rainfall, and regular movement of the tractor is essential as the Property contains a working vineyard. Such tyre tracks always repair themselves, once the area dries, by the grass growing back, and that occurred on this occasion, as shown in Document 42, which is photograph taken at the same spot on 14 May 2021 at 13:21pm.

80. I accept the evidence given by Mr Mare that is referred to above. I also accept his evidence in cross-examination about those matters. This includes: his evidence concerning the counter (referred to as the “cellar bar”) and his denial that it had been glued to the tiles; his evidence concerning the cleanliness of the cellar door area; and his evidence about items left at the property.

81. I conclude that neither the mirror nor the counter was a fixture. As neither was stated to be an inclusion in the sale, the defendant was entitled to remove those items.

82. Further, even assuming that the plaintiff was entitled to complain about the state of cleanliness, items of rubbish, or the state of the grassed area, the extent of such deficiencies was not shown to be anything other than relatively minor. Those matters plainly did not amount to an inability on the part of the defendant to give, or a failure on the part of the defendant to provide, vacant possession of the property. The deficiencies were not such as to give rise to a substantial prevention or interference with the enjoyment of the property or a substantial part of it (see Cumberland Consolidated Holdings Ltd v Ireland [1946] 1 KB 264 at 271; Point Glebe Pty Ltd v Lidofind Pty Ltd (1988) 5 BPR 11,427). In my view, the state of the property as at the time of the final inspection on 8 April 2021 was not such as to indicate any lack of readiness, willingness or ability on the part of the defendant to complete the contract for sale on that day.

83. It should be added that it would have been open to the plaintiff to make a claim under cl 7 of the contract in respect of the mirror and counter, and the other matters complained of. For claims not exceeding 5% of the price (i.e. not exceeding $147,500), cl 7 contains a procedure whereby the contract is completed, with the amount claimed held by the depositholder pending the determination of the claim. The plaintiff instead chose to rely upon the matters complained of as a reason not to proceed to completion.

84. The final matter to consider is (f) above, namely, the failure of the defendant to respond to the plaintiff’s solicitors letters sent at 2:57pm and 4:33pm on 8 April 2021.

85. The earlier letter is mainly directed to issues arising under the Asset Purchase Agreement, but does refer to cl 12.3 of the contract and the final inspection which was still to occur. The later letter is directed to matters said to arise from that inspection. As I have found, those matters did not in fact indicate a lack of readiness, willingness or ability on the part of the defendant to complete the contract on 8 April 2021. Moreover, in circumstances where the plaintiff, through its solicitors, had not responded to the requests made by the defendant’s solicitors (at 2:08pm and 2:57pm) to balance the FSS for settlement, and urgently attend to settlement, the mere failure of the defendant to respond to the plaintiff’s solicitors letters does not indicate that the defendant was not ready, willing and able to complete the contract.

86. In my view, the various matters relied upon by the plaintiff, whether viewed individually or cumulatively, do not establish that the defendant, by its conduct, showed itself not to be ready, willing and able to complete the contract on 8 April 2021. Indeed, I am satisfied on the whole of the evidence, including the evidence given by Ms Davis, and the evidence given by Mr Peter Rosier concerning the operation of the PEXA system, that the defendant was relevantly ready, willing and able to complete the contract on 8 April 2021 (see Psaltis v Schultz (1948) 76 CLR 547 at 560). I accept the evidence of Ms Davis, including her evidence to the effect:

1. that the only matter remaining to be done on the vendor’s part was for her as the vendor’s representative to “sign off” for the vendor (see cl 30.10 of the contract);

2. that the only reason she had not signed off was because the purchaser had not balanced the FSS, or responded to her requests that that be done and settlement be attended to; and

3. that she remained ready, willing and able to sign off and settle the matter until 5:00pm on 8 April 2021.

87. The defendant was not obliged to do more than it actually did in preparation for settlement of the contract for sale. The $119 added to the FSS by Ms Davis was not an amount that would be payable under the contract for sale, so even if the plaintiff had not agreed to pay it, or if the plaintiff was unwilling to pay it, a dispute about the payment would not be a reason why completion of the contract for sale should not proceed. The evidence of Mr Rosier was clear that it was not uncommon for issues in relation to the FSS to be resolved quite close to an agreed settlement time. Had the plaintiff engaged with the defendant about the FSS following completion of the final inspection, there would have been ample time to deal with the matter to enable a settlement to occur at either 4:30pm or 5:00pm. However, the plaintiff did not engage with the defendant about the FSS, taking the erroneous position that the defendant was required to attend to certain matters before the plaintiff would settle.

88. For the above reasons, it is my opinion that the failure of the plaintiff to complete the contract on 8 April 2021, the time for which was made essential by the plaintiff’s Notice to Complete, was a breach of the contract in an essential respect. The defendant was therefore entitled under cl 9 of the contract to terminate the contract by serving a notice. The defendant did that on 12 April 2021.

89. The plaintiff submitted that the Notice of Termination was itself invalid because it referred in its recitals to the Asset Purchase Agreement which, it was submitted, is neither part of the contract for sale nor related to the contract for sale. Whilst it was not necessary for any reference to be made to the Asset Purchase Agreement, I do not think that the references to it in the recitals renders the notice invalid. The notice, read as a whole, makes it clear that the defendant was terminating the contract pursuant to cl 9 by reason of the plaintiff’s failure to complete the contract within the period nominated for completion by the Notice to Complete (i.e. by 8 April 2021). The notice was a valid notice for that purpose.

90. Upon the exercise of the right of termination pursuant to cl 9, the defendant became entitled to recover the deposit of $295,000 (see cl 9.1). The defendant should have declaratory relief to that effect as sought in its Cross-Claim. The plaintiff’s claim for specific performance of the contract must be dismissed, and an order will be made for the withdrawal of its caveat. The Court will further order that the plaintiff/cross-defendant pay the defendant/cross-claimant’s costs of the proceedings.

91. I should note that the plaintiff, in its closing submissions, sought to raise an argument that if it were unsuccessful on its claim for specific performance, an order should be made for relief against forfeiture or, in the alternative, an order should be made under s 55(2A) of the Conveyancing Act 1919 (NSW) for the return of the deposit. The plaintiff made an application to introduce a claim under s 55(2A) of the Conveyancing Act at the commencement of the hearing. That application was opposed by the defendant and was refused. I agree with the submission made by the defendant that it was too late in closing submissions to seek to reintroduce such a claim, and to seek to introduce a claim for relief against forfeiture. Accordingly, the submissions made in support of such claims have not been entertained.

92. The Court will make the following orders:

1. Declare that on 12 April 2021 the defendant/cross-claimant validly terminated the contract for sale of land dated 5 February 2021 entered into with the plaintiff/cross-defendant, pursuant to cl 9 of the contract;

2. Declare that the defendant/cross-claimant is entitled to the deposit of $295,000 that was paid by the plaintiff/cross-defendant under such contract;

3. Order that caveat No AQ953131 be withdrawn by the plaintiff/cross-defendant within 7 days;

4. Order that the Summons be dismissed;

5. Order that the plaintiff/cross-defendant pay the defendant/cross-claimant’s costs of the proceedings.

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