Kalamen v Al Aubodi

[2010] NSWSC 544

CITATION:	KALAMEN v AL AUBODI [2010] NSWSC 544
HEARING DATE(S):	19-21/05/2010
JUDGMENT DATE :	28 May 2010
JURISDICTION:	Equity
JUDGMENT OF:	Bryson AJ at 1
DECISION:	1. A declaration that on 6 May 2009 the plaintiff validly terminated the contract for the sale of land comprised in Lot 15 of Deposited Plan 860350 and known as 311 Wilson Rd, Green Valley with the first defendant and dated 5 March 2009. 2. A declaration that the first defendant has forfeited the deposit paid to the second defendant as stakeholder to the plaintiff, being the sum of $37,500 3. An order that the second defendant pay to the plaintiff the sum of $37,500 plus interest from 6 May 2009. 4. An order that the first defendant to do all that is reasonably required to cause the second defendant to release to the plaintiff the sum of $37,500 plus interest from 6 May 2009. 5. An order pursuant to section 74MA(2) of the Real Property Act 1900 (NSW) that the first defendant remove caveat number AE664381B 6. Order that the first defendant pay the plaintiff's costs of the proceedings assessed as if the hearing had taken two days. 7. Order that the first defendant pay the second defendant's costs as a submitting defendant. 8. Dismiss the cross-claim with costs.
CATCHWORDS:	VENDOR and PURCHASER - Notice to Complete - Contract authorised notice to complete of 14 days - notice required completion at 2.00 pm on 14th day - HELD the notice was not a 14 day notice as authorised by the Contract but in the circumstances in fact allowed reasonably sufficient time Deposit - forfeiture - relief under Conveyancing Act 1919 s55(2A) - Purchaser could not complete in time because of delays by his Mortgage Broker - Vendor did not contribute to causes of Purchser's default - on review of facts, relief against forfeiture refused.
LEGISLATION CITED:	Conveyancing Act 1919, s 55(2A) Real Property Act 1900, s 74MA(2)
CATEGORY:	Principal judgment
CASES CITED:	Amaya v Estate Property Holdings Pty Ltd) [2010] NSWSC 32 Buchanan v Dunstan (2007) NSWSC 248 Butts v M’Donald (1896) 7 QLJ 68 Lohar Corporation v Dibu Pty Ltd (NSWCA unreported 11 May 1976) Mackay v Dick (1881) 6 App Cas 251 Mulkearns v Chandos Developments Pty Ltd (2005) 12 BPR 22,993 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Sindel v Georgiou (1984) 154 CLR 661 Tabbouch v Devlin (2008) NSWSC 600 Zaccardi v Caunt (2008) NSWCA 202
PARTIES:	Irene Kalamen - Plaintiff Nassir Al Aubodi - First Defendant Dreamhome Real Estate Pty Ltd - Second Defendant
FILE NUMBER(S):	SC 2009/000289353
COUNSEL:	N Allan - Plaintiff C Lawrence - Defendant/Cross-claimant
SOLICITORS:	JT Legal - Plaintiff Simon O'Toole - First Defendant/Cross-claimant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON AJ

Friday 28 May 2010

2009/000289353 Irene Kalamen v Nassir Al Aubodi and Dreamhome Real Estate Pty Ltd t/as Richardson & Wrench Liverpool

JUDGMENT

: These Vendor and Purchaser proceedings relate to a contract of sale dated 5 March 2009 of a house in Wilson Road, Green Valley, for $375,000. The first defendant (the Purchaser) paid a deposit of $37,500 in two payments, first of $1000 on the date of exchange and the second payment a few days later. The deposit is held by the second defendant (the Real Estate Agent), who has filed a submitting appearance and taken no part in the hearing. The contract uses the 2005 edition of the Law Society's contract form with some Special Conditions and many annexures. After paying the first $1000 of the deposit and exchanging contracts the Purchaser through his solicitor exercised or indicated he would exercise his cooling-off right and asked for several amendments. Some amendments were agreed. His solicitor also made one or two enquiries of kinds to which requisitions sometimes relate. The contract provides for completion within six weeks from its date, that is by 16 April 2009, and also provides for interest on the purchase money if this date is not kept; the interest was first 12% but after negotiation became 8%. Special Condition 34 deals with completion and interest in default, and after providing for completion within six weeks, provides in SC 34(3):

34.3 If the purchaser fails to complete this agreement within the said period, then the vendor may at any time after the expiration thereof by written notice to the purchaser require him to complete this agreement within fourteen (14) days from the date of such notice and may make time of the essence for completion within the said fourteen (14) day period. The purchaser hereby expressly acknowledges that the said fourteen (14) day period shall be sufficient notice of the purposes of any notice to complete given by the vendor to the purchaser pursuant to the provisions of the Clause or of any other provision of this agreement.

2 SC 43 is entitled "Finance Approval - Purchaser's Warranty" and subcll 43(a) and 43(b) are as follows:

43(a) The purchaser expressly warrants to the vendor that it either holds a current loan approval in an amount and upon terms which it considers to be reasonable and fully satisfactory and sufficient to enable completion of this Contract within the time stipulated and upon the terms and conditions set out herein or does not require finance to complete this Contract.
43(b) The purchaser acknowledges that the vendor relies upon this warranty in entering into this Contract and that the vendor may enter into further contractual obligations on or after the date of this Contract in reliance upon this warranty.

3 The principal claims of the Vendor in the Statement of Claim seek to establish her entitlement to the deposit after forfeiture. There are also claims for removal of the Purchaser's caveat, for damages and costs. The Defence puts much in issue, the principal position being its denial of the effectiveness of Notice to Complete. The Purchaser also cross-claims for specific performance and related relief, and alternatively for relief against forfeiture of the deposit under s 55(2A) of the Conveyancing Act 1919.

4 Notice to Complete was given on 21 April 2009 for completion at 2 p.m. on the 14th day, 5 May 2009. The Notice to Complete was served by fax transmission a little before 11 a.m. on 21 April 2009. A contractual provision provides for notices to be given that way. What the notice requires is in these words:

As Solicitors for and on behalf of the Vendor WE HEREBY GIVE YOU NOTICE:

1. You are required to complete the purchase of the property at MacGillivrays, Level 9, 68 Pitt Street, Sydney at 2.00 pm on 5 May 2009.

2. If you fail to comply with this notice the Vendor shall by notice in writing to you forfeit the deposit paid by you and terminate the Contract for Sale and thereafter either sue you for breach of contract or re-sell the property as owner and recover from you as liquidated damages, the deficiency (if any) arising on such resale and all expenses of and incidental to such resale or attempted resale and your default.

5 There is a well-established state of opinion in the Equity Division that a notice in these terms, requiring completion at 2 p.m. and before the expiry of ordinary business hours on the 14th day, does not comply with a provision such as SC 34(3). These authorities were referred to, reviewed and approved by Einstein J in Tabbouch v Devlin (2008) NSWSC 600 at paras [43-53]. I follow this opinion, which is readily applicable to the references to times in SC 34(3), in terms of dates and days, not of hours. The whole of the 14 days referred to should have been available between service of the Notice to Complete and expiry of the opportunity to complete which it offers; in practicality this means that the appointment indicated in the Notice to Complete should be on the 15th or later day after service.

6 If at all possible and having regard to the purposes of Notice to Complete, a Notice to Complete and reference in it to an appointment should be read as requiring completion on or before the last day referred to, and indicating that completion at a nominated appointment is available, although doing so only as a matter of convenience and leaving the appointment open to rearrangement to some other time during business hours on that day or an earlier day. That reading is not available in the present case because the words of the notice intractably require the appointment at 2.00 pm to be complied with and leave no alternative. A Notice to Complete which fixes a time for compliance on the 14th day but does no more than indicate a convenient time, leaving open an opportunity for further reasonable arrangement, may have been valid; but this notice cannot be read that way. Looking backwards it seems markedly unfortunate that an extra one or two days were not allowed when the notice was prepared.

7 In this case settlement of the contract would have involved the attendance of five parties. They were the Vendor (by her solicitor), the Vendor’s discharging mortgagee who was to be repaid, the Purchaser (by his solicitor), the Purchaser’s incoming mortgagee who was to advance funds, and the Real Estate Agent, who was either to attend or to delegate the Vendor’s solicitor to bring a bank cheque for part of the deposit to the settlement; this was necessary because the balance of purchase money was a little less than the amount required to pay out the Vendor's mortgagee. Making an appointment which a number of different persons are to attend involves the need for flexibility, a reasonable approach and accommodating other peoples’ needs and convenience. The place for settlement nominated was the office of the Vendor’s mortgagee's solicitor in the Sydney Central Business District; of course that solicitor should have had the Certificate of Title and was in a strong position to nominate where settlement was to take place. The Vendor’s solicitors’ office was in Parramatta and the Purchaser's solicitors’ office was in Liverpool. Each party had an implied but altogether clear contractual obligation to join co-operatively in arrangements of matters which can only be attended to co-operatively so as to achieve the main purpose of their contract, completion of the sale, payment and transfer of title; See Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607-8, (Mason J) citing Mackay v Dick (1881) 6 App Cas 251 at 243 (Lord Blackburn) and Butts v M’Donald (1896) 7 QLJ 68 at 70-71 (Griffith CJ).

8 The Notice to Complete does not comply with SC 34(3); the time available is a few hours too short. It is curious that SC 34(3) deals only with Notice to Complete given by the Vendor, saying nothing about a Notice to Complete given by the purchaser. The terms of SC 34(3) support the view that a 14 day notice is ordinarily reasonably sufficient, whichever party gives it. SC 34(3) is not prescriptive or exhaustive and leaves it open to the Vendor to show that the notice allowed a reasonable time for completion in the context of the party's dealings and of the underlying purpose of giving reasonable notice to comply after failure to comply with a contractual obligation to complete, so that equitable remedies can be founded on a failure to comply in an essential respect.

9 In Sindel v Georgiou (1984) 154 CLR 661 the High Court of Australia dealt with Notice to Complete which allowed 13 days, and upheld Waddell J at first instance, affirmed on appeal, who found that 13 days were not sufficient. The High Court reviewed the circumstances and the findings below at 669 and 670. In that case there was no express contractual provision which established when completion was to take place; it would appear that the contract left that to the implication of a reasonable time. Waddell J dealt (see 670) with the need to consider the answers to requisitions and any further action which the answers suggested, and found that the period which might be regarded as normal for completion had only just expired and it was reasonable to assume that final arrangements for finance including answering mortgagee’s requisitions might reasonably take more than 13 days. The High Court's conclusion was as follows:

“Although in Ajit v. Sammy [1967] AC 255, the Privy Council held that a six day notice to complete was reasonable in the circumstances of that case, it is our view that strong circumstances must be shown to justify the giving of a notice to complete which allows less than fourteen days for completion. In the present case we agree with the conclusion reached by the primary judge that the time allowed was insufficient. The determination of what is a reasonable time for completion of a contract for the sale of land, judged in the light of the circumstances of the particular case, is very much a matter of impression. And we have not been persuaded the primary judge and the Court of Appeal were wrong on this issue.”

10 In the present case there were no outstanding requisitions; the state of the evidence is such, as the Purchaser's counsel conceded in final address, that it should not be found that requisitions were delivered; the Vendor's solicitor and his paralegal or conveyancing clerk did not know of any, and their files did not contain any, while the Purchaser's solicitor’s records did not show that requisitions had been sent. The contractual period for completion was not left as a question of reasonableness; it was a defined period of six weeks which had expired five days before Notice to Complete was given. There were no requisitions on title delivered by the mortgagee which required to be complied with. There was no need for consideration of concerns relating to the arrangements for Purchaser’s finance because the Purchaser warranted in SC 43(a) and (b) that finance was available. The High Court’s observations that strong circumstances must be shown to justify giving a notice which allows less than 14 days relate to the circumstances in Sindell v Georgiou, where the notice was one of 13 days and Waddell J found that this was insufficient in a context of facts and contractual obligations quite different to those of the present case.

11 The function of Notice to Complete and the concept of a reasonable time were recently addressed in Zaccardi v Caunt (2008) NSWCA 202 at 87 to 94 (Campbell JA). Courts do not require Notices to Complete in order to generate closely reasoned arguments about the significance of two or three hours at the end, but that is often what they get. The object is to specify a period within which to act, not a topos of debate about the end of the period. The requirement to settle at 2 p.m. on the last afternoon was an altogether reasonable requirement.

12 In this Contract the sufficiency of 14 days is established by SC 34. In point of fact more hours than 14 days occupy were available between service and 2 p.m. on 5 May. More importantly, 2.00 pm on 5 May was, in relation to an appointment for a conveyancing settlement, relatively late in the day; such settlements do not usually take place late in business hours or much after 3.00 p.m., because of the need for attendances of banks and searches of registries. If the Purchaser had not been in default and had done what he had warranted about finance, the steps required for completion were relatively simple. They included establishing the adjustments which should have been made to the balance of purchase money; this requires careful attention but it is essentially arithmetical. This is usually undertaken by a Purchaser's solicitor who in the ordinary course will have recent information from rating authorities about the charges which are to be adjusted. However it is not especially the duty of either party to calculate the adjustments; both parties have that duty and should proceed co-operatively. Calculation of adjustments, exchanges of draft settlement statements and agreement on the calculations can be accomplished without difficulty in the last one or two days before settlement, and almost always are; sometimes even on the morning of settlement. There were no outstanding requisitions. The transfer had been submitted, stamped and executed well before 16 April.

13 The only aspect of the settlement which was a little unusual was the need for the Vendor to draw on part of the deposit at settlement to be able to pay out her mortgagee. In most cases it is not necessary to draw on the deposit to effect settlement, the Vendor obtains an order signed by the Purchaser authorising the Real Estate Agent to account for the deposit, and the Real Estate Agent accounts for the deposit within one or two days, deducts commission and pays the remainder to the Vendor. This procedure is dealt with in Printed Clause 16.9. Clause 16.10 provides: "On completion the deposit belongs to the Vendor." Ms Susan Clegg, a Paralegal and Conveyancing Clerk to the Vendor's solicitor described what frequently happens, although it is not the usual practice, in which arrangements are made for the stakeholder agent to furnish a bank cheque for part of the deposit to be available on settlement for payment to an outgoing mortgagee. To make such arrangements it is necessary to have the concurrence of the Real Estate Agent, and of the Purchaser as well as the Vendor, and for the Purchaser to furnish the Real Estate Agent with appropriate written authorisation. In this case Ms Clegg established, a short while before 16 April, that the Real Estate Agent and the Purchaser's solicitor were prepared to join in such arrangements; but she did not make such arrangements and prepare the necessary documents because there were indications before 16 April that the Purchaser would not settle on that day. Although she did not make arrangements for the same procedure to be followed for 5 May, her not doing so should also be attributed to altogether clear indications, on 4 May, that the Purchaser would not complete on 5 May. If there was to be completion, for the Purchaser and his solicitors to join in in these arrangements and ensure that the Real Estate Agent made part of the deposit available on settlement was no more than compliance with the requirement of reasonable co-operation in matters necessary to attain the main object of the contract.

14 It is after all expressly provided by cl 16.10 that on completion the deposit belongs to the Vendor; it would be altogether unreasonable for a purchaser not to join in directing the agent to act in ways which would give effect to this entitlement and would also enable the main purpose of the contract to be achieved. There is little doubt of a Real Estate Agent participating in this case; the Agent had agreed to participate before 16 April and had a strong interest in the completion of the contract so that entitlement to commission would be perfected. Co-operation could be relied on, as a matter of high probability.

15 The Purchaser's counsel pressed me with the absence of any arrangements of these kinds by Ms Clegg on or before 5 May. In my finding the absence of such arrangements does not show inability to settle on 5 May; it was the obligation of the Purchaser to act reasonably and co-operatively in this respect, as in other arrangements relating to settlement. A Purchaser cannot deprive a Vendor of ability to complete by withholding reasonable co-operation. This is no more a demonstration of lack of ability to complete than was the fact that the Vendor’s solicitor did not attend at the appointed time and place for settlement; there would have been no purpose in doing so, in the presence of an altogether clear indication that the Purchaser would not do so.

16 Observations in Lohar Corporation v Dibu Pty Ltd (NSWCA unreported 11 May 1976) show that a merely ceremonial attendance at an obviously futile appointment for a settlement which was not to take place was not required; see the observations of Hutley JA at p11. The observation of Glass JA at p 17 is applicable – “There is no universal rule that conveyancing performance is to be ‘measured out by coffee spoons’”, an allusion to T S Eliot’s “Love Song of J Alfred Prufrock” which depicts futility. The practice now has been shaped by Hutley JA's observations; see for example Buchanan v Dunstan (2007) NSWSC 248 (White J). The practice before 1976 was different. On attending the appointment see Amaya v Estate Property Holdings Pty Ltd) [2010] NSWSC 32 (White J) at [62] to [65].

17 The grant of specific performance, as generally with equitable remedies, has a discretionary element, and it has long been established that Courts consider whether a person who seeks specific performance was ready, willing and able to perform the contract when he was contractually obliged to do so; and entitlement to specific performance, including compliance with the need to have been so ready, willing and able is in its turn an element in entitlement to terminate another party’s claim to specific performance. There is no statutory or contractual definition of ability: if ability is qualified, as it must be when a party’s ability to complete a sale of land is being tested in the absence of the participation by the other party in respects where only operative action can achieve performance, ability refers to sufficient ability to support a favourable discretionary decision to grant relief, and there is necessarily a hypothetical element in addressing ability to do something which could only have been done if there had been co-operation which was not forthcoming. Unduly exacting tests of ability tend to involve departure from the hypothesis and disregard of the reality that there cannot be a conveyancing settlement without cooperative action on a reasonable basis. The Judges who participated in Lohar v Dibu had practised in an earlier period, which I witnessed, when the requirement to prove ability to complete was treated as extremely exacting, to the point, for example, of requiring a party to calculate settlement amounts and adjustments, purchase bank cheques, prepare necessary directions, withdrawals of caveat and other documents and secure the attendance of incoming mortgagors and other interested parties at appointments for settlement which it was known that another contracting party would not attend. The observations of Hutley JA had a resonance in their time which their brief and confident disposal of ceremonial attendances does not reveal. Since that time ability to complete has not been a mountainous difficulty but has usually been addressed in the hypothetical context which it truly occupies, and regard has usually been paid to probabilities of conduct if all had met their implied contractual duties of cooperation and pursued what were their interests and duties if judged by their contractual obligations.

18 When regard is paid to the terms of the parties’ contract and to the requirement for settlement on 16 April, and to the additional period which had passed before 21 April, and to the attendances required of the Purchaser, I find that the Notice to Complete in fact allowed a reasonably sufficient time for the Purchaser to comply with his contractual obligations. The fact that he could not comply because his warranty about finance was wrong is not relevant to determination of a reasonably sufficient time. There was one certificate of title, no lease, no subsidiary interest to be re-released or re-granted, no land tax, only one mortgage to discharge and only one mortgage to be granted. Conveyancing settlements cannot be much simpler than that. What were to be calculated was interest for late settlement, a discharge of mortgage fee, adjustment of rates and water charges by reference to the amount outstanding and apportionment of the rated period to the date of settlement; there may be others but it was not complicated. In my finding the Notice gave a reasonable period for completion and was fully effective.

19 In the earlier history of the parties’ dealings surprisingly little happened during six weeks from exchange of contracts. There was early attention to contract variation, and after that there was little to communicate about. In particular, the Purchaser and his solicitors did not tell the Vendor of any difficulties about their finance, or ask for any concession, while five and more weeks went by. There was a reference to requisitions – “Subject to requisitions” in the letter of 26 March forwarding the transfer for execution; this did not necessarily indicate that requisitions had earlier been given, and did not evoke any attention on behalf of the Vendor’s solicitor or his Paralegal. No reference was made to outstanding requisitions in the communications and events leading up to the failure to complete on 16 April, or to the crisis of 4 and 5 May and the failure to comply with Notice to Complete.

20 On 8 April Ms Clegg made arrangements with Ms Do of the Purchaser’s solicitors and with the mortgagee’s solicitors for fixing an appointment for completion on 16 April 2009. Miss Do said “I am still waiting for our bank to confirm” and there were other discussions. Nothing was said to indicate that settlement would not take place or that an appointment should not be made, and Ms Clegg proceeded with arrangements for the appointment. On 15 April Miss Do telephoned Ms Clegg and told her "We can't settle tomorrow. Our client is having problems with his banker. Can we put settlement for the time being?" And when asked when the Purchaser wanted to settle said "Don't book it in yet. I will get back to you."

21 Miss Kalamen learnt of this. She dealt with this in her evidence in cross-examination (t.28, line 31):

“But unfortunately on 15 April my agency called me up and said:
‘Would you be able to give an extension for Mr Al Aubodi?’ and I was quite concerned. I was quite concerned, but he assured me that it was just the a few hiccups, nothing major, and that he should be able to settle in one week. So I granted him that extension.
Q. Did he tell you why there were hiccups?
A. No, he just told me ‘there’s just a few that the works that the bank could manage to arrange’ and ‘no big problem in.’ and then I agreed to give Mr Al Aubodi the extension.”

22 A seven day extension from 16 April would run to Wednesday 23 April. On the following Monday 21 April Miss Kalamen spoke to Ms Clegg, received an explanation of events and gave instructions to send the Notice to Complete. Ms Clegg also learnt from the agent Mr Tjin that the Purchaser’s valuer had been through the property on 20 April.

23 On 29 April Ms Clegg spoke to Mr Do and referred to the expiry of the Notice to Complete and the need to make a booking for settlement with the mortgagee. Ms Do said "We are supposed to receive mortgage documents this week." This was not an indication that settlement would not take place. Ms Clegg made an appointment for 2 p.m. on 5 May with the incoming mortgagee’s solicitor and notified the Purchaser's solicitor.

24 On 4 May the Vendor’s solicitors by a fax letter called on the Purchaser's solicitors for provision of settlement figures and for advice whether the Purchaser would be attending settlement "in order that we may provide you with a Direction to Pay." A reply message on 4 May indicated that the Purchaser signed the loan documents that day and that the funds should be available for settlement in one week, asked for allowance of an additional week to completion and offered to pay $5,000 as well as penalty interest for an additional week’s extension. This was an altogether clear indication that the Purchaser would not attend settlement appointed for 5 May.

25 The difficulties confronting the Purchaser and his solicitors were and were only extremely slow action by the people with whom he had arranged finance. He said in oral evidence that he already had an approval when he signed the Contract on 5 March. He received a document dated 11 March 2009 from the mortgage brokers he had been dealing with, stating that he had unconditional approval for an advance of $337,500, the sum he needed to complete; but the lending bank was not named. Mr Al Aubodi and also his solicitors tried many times over the coming weeks to contact the mortgage broker and get further information about the lender and the lender's requirements. The Purchaser's solicitor sent the Purchaser a letter of advice with some warnings on 9 April. By 16 April nothing significant had been received. However the Purchaser himself received, it would seem on 18 April 2009, a letter from SunCorp Metway indicating, in some detail and with conditions, preliminary approval of the loan. This was followed by an approval document in more concrete terms sent to the Purchaser at the office of his solicitors on 30 April 2009. There were a number of conditions and requirements but this represented a relatively concrete basis on which to assume there was to be finance. This was followed by a further letter of 1 May furnishing many documents for execution, including a mortgage. The Purchaser completed these at his solicitors’ office on 4 May. However it was of course not possible to complete on 5 May. The documents were given by the solicitor to SunCorp Metway’s office in Liverpool. The documents seem to have been satisfactory to SunCorp Metway; in any event they did not say otherwise, and to all appearance finance was available to the Purchaser from 7 May for four months, that is to some time in September 2009. He did not ever ask for any extension.

26 On 4 and 5 May the Purchaser took matters into his own hands, in an unfortunate way. On the afternoon of 4 May he called at the address shown for the Vendor in the contract; she no longer lived there. Her brother and her mother were there, and they regarded his conduct as threatening; whether or not this was a correct interpretation, his attendance there and his conduct were obviously very unwelcome. He was given the Vendor’s mobile telephone number, but not her then address. He telephoned her number four times in an hour and a half; it was indicated to him on the first occasion that his call was unwelcome, but he telephoned three more times. He also spoke to Ms Clegg by telephone on 5 March, and on her interpretation he used a threatening tone towards her. Obviously there is a large cultural gulf between the Purchaser and the people he was dealing with, and markedly different concepts of appropriate behaviour. However the inappropriate aspects of of his behaviour can have only a very small part in any discretionary decision which I have to make. The Purchaser was in a state of crisis, threatened with the loss of what is to him a very large sum of money, the discretion to reverse a forfeiture is not punitive and loss of the deposit would be a disproportionate judicial response to lapses in his behaviour. His conduct in these respects can have no real part in the exercise of that discretion.

27 My conclusion is that the Vendor was ready, willing and able herself to comply with her Notice to Complete and to settle on 5 May, or indeed earlier during the nominated period, subject to reasonable and cooperative arrangements which it was the duty of both parties to make about mechanical aspects of the settlement. She did not depart from the arrangement of the week's extension to which she agreed on 15 April; the Notice to Complete conferred a much longer extension of the Purchaser, and her agreement to a week’s extension had no influence on the Purchaser's conduct and certainly did not in any way work to his disadvantage. There was no relevant alteration of position in reliance on it; indeed no indication of reliance of it.

28 The Vendor terminated by a notice given on 6 May 2009. When she did so she was in my opinion entitled to terminate having regard to the contractual mechanism, the delivery and expiry of effectual Notice to Complete and the Purchaser's inability to comply.

29 Throughout the whole narration no indication was ever given by the Vendor that time was unimportant or could be readily extended. There were negotiations from 4 to 6 May with a view to an agreed extension for payment of additional money; plainly these negotiations came very close to agreement but it is also clear that agreement was not reached. This is most unfortunate; indeed the litigation is most fortunate in many ways, and has involved attention and expenditure disproportionate to the amount in dispute, which should have readily lent itself to compromise. It was only on 4 May that objections to the arrangement for completion on 5 May began. By the time the notice to terminate was given the contractual six weeks had expired, a further five days had passed and then a further 14 days had also passed, and the Purchaser had not been able to complete at any time. The Purchaser's ability to complete came into existence it would seem on or about 7 May, subject to a few more days to make an appointment, by which time the Vendor had had enough and had effectively terminated the agreement.

30 I conclude that the Vendor effectually terminated the contract and is contractually entitled to the deposit, and I turn to address the claim for relief under s 55(2A).

31 The plain fact is that the Purchaser could not complete because his financier and mortgage broker were dilatory. The Purchaser was given indications of willingness to lend but the preparation of documents took much longer than it ordinarily would, and by the time the documents were available there was not enough time to comply. This was nothing to do with the Vendor, and was in no sense her responsibility or concern. She could not improve matters by any intervention and she had the benefit of the warranty in SC 43.

32 The plaintiff has a contractual entitlement to the deposit. The deposit mechanism and the provision for its forfeiture are important for the effective working of the Vendor and Purchaser relationship in land sales. It is outside the law of penalties; there is no element of penalty. The forfeiture of deposits strongly tends to be regarded as an entire dealing with remedies for the failure of a Purchaser, and in practical terms puts to rest questions of damages for breach of contract and damages relating to caveats. In the scale of interests involved in this case it is extremely unlikely that if the Vendor recovers the deposit with its mitigating effect, the Vendor would be entitled to or would claim damages under other heads. Her counsel did not at the hearing proceed with claims for other such remedies. The Vendor has been put to considerable trouble and attendances and a long delay, during which because of the caveat she has not been able to sell her house which in March 2009 she wished to do. She has also been put to significant expense. Her contractual rights are of an altogether usual kind and she has not been in default in any way, nor have her lawyers. The Vendor and her lawyers have nothing to let the Purchaser down to withhold any contractual right from him or to defeat any reasonable expectation. They have not misled him and they have done what he should have been ready for them to do. They have not shaped his conduct in any way or done anything to lead him into his troubles or to make it difficult for him to avoid them. The Vendor has every reason to think that no such problem could arise having regard to the warranty in SC 43.

33 The Purchaser had legal advice from the beginning. He got more or less the contract variations he asked for. He was confident of his own arrangements for finance, which were made by himself with a mortgage broker. He did not depend on his lawyers for his financial arrangements and of course he did not depend on the Vendor. He was badly let down by the mortgage broker of his choice, who took many weeks to bring about bank approval dated 19 April; and then there was further delay before the bank produced its documents and requirements on 1 May. The Purchaser was unable to inspire them to higher activity at times when it was very important. Once SunCorp Metway became active its requirements were attended to promptly, when it was not possible to meet the time for completion. The Purchaser kept the Vendor tied up with the caveat long after his SunCorp Metway approval expired and for months after interest rates reached the point at which he no longer wished to borrow money. He knew clearly that his caveat prevented the Vendor from selling her house, but he maintained it until the hearing. Keeping the caveat on for such a long time, after a claim for specific performance became unfeasible, was inappropriate.

34 My judgment overall is that there are no grounds on which I should set aside the forfeiture. The Purchaser did not keep to his contract, he forfeited the deposit in a perfectly regular way, this is in no sense the Vendor's fault, and she has not done anything unjust. The deposit forfeited is not a disproportionate amount and there is no occasion to address terms relating to damages which might reduce the amount of the forfeiture; such as were discussed in Mulkearns v Chandos Developments Pty Ltd (2005) 12 BPR 22,993 (Young CJ in Eq) at 133 to 140. The Purchaser has lost his deposit and that is that.

35 The hearing took over two days: the costs have probably exceeded the amount in dispute. The plaintiff's case was not appropriately prepared for the first hearing day, and this caused delays and less than effective use of time when witnesses whose attendance had not been arranged eventually attended. The costs recoverable should be limited to a hearing of two days.

36 I was told by counsel that a withdrawal of caveat had been signed shortly before the hearing began: I was not told that it had been lodged. To be sure that the caveat is removed I will make an order for removal.

37 My orders are

1. A declaration that on 6 May 2009 the plaintiff validly terminated the contract for the sale of land comprised in Lot 15 of Deposited Plan 860350 and known as 311 Wilson Rd, Green Valley with the first defendant and dated 5 March 2009.

2. A declaration that the first defendant has forfeited the deposit paid to the second defendant as stakeholder to the plaintiff, being the sum of $37,500

3. An order that the second defendant pay to the plaintiff the sum of $37,500 plus interest from 6 May 2009.

4. An order that the first defendant to do all that is reasonably required to cause the second defendant to release to the plaintiff the sum of $37,500 plus interest from 6 May 2009.

5. An order pursuant to section 74MA(2) of the Real Property Act 1900 (NSW) that the first defendant remove caveat number AE664381B

6. Order that the first defendant pay the plaintiff's costs of the proceedings assessed as if the hearing had taken two days.

7. Order that the first defendant pay the second defendant's costs as a submitting defendant.

8. Dismiss the cross-claim with costs.

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