Killarney Investments Pty Ltd v Macedonian Community of WA (Inc)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: KILLARNEY INVESTMENTS PTY LTD -v- MACEDONIAN COMMUNITY OF WA (INC) [2007] WASCA 180

CORAM: STEYTLER P
McLURE JA
EM HEENAN AJA

HEARD: 13 APRIL 2007

DELIVERED : 5 SEPTEMBER 2007

FILE NO/S: CACV 19 of 2006

BETWEEN: KILLARNEY INVESTMENTS PTY LTD (ACN 070 769 416)
Appellant
AND
MACEDONIAN COMMUNITY OF WA (INC)
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :YEATS DCJ
Citation  :KILLARNEY INVESTMENTS PTY LTD -v- MACEDONIAN COMMUNITY OF WA (INC)
File No  :CIV 2604 of 2003

Catchwords:

Vendor and purchaser - Purchaser's claim for interest as compensation for late settlement - Agreement for sale of land other than as a lot - Conditions requiring planning approval issue of new plan of subdivision - Condition that local authority approve land for a specified use - Fixed settlement date - Provision in certain instances for extension of settlement date - Joint Form of General Conditions for Sale of Land 2000 revision (general conditions) - Delay in settlement due to vendor's failure to take steps to commission survey - Completion of contract six months after settlement date - Waiver of one condition for the benefit of purchaser - Alleged inconsistency between express terms of Offer and Acceptance and general conditions - Whether purchaser ready, willing and able to settle on time - Whether tender of executed and stamped transfer a condition of purchaser's entitlement to interest for late settlement

Legislation:

Planning and Development Act 2005 (WA)
Sale of Land Act 1970 (WA)
Town Planning and Development Act 1928 (WA) [repealed]
Transfer of Land Act 1893 (WA)
Transfer of Land Act 1958 (Vic)

Result:

Appeal allowed
Judgment of District Court dismissing appellant's claim set aside
Appellant entitled to judgment for $47,049.18

Category: B

Representation:

Counsel:

Appellant: Mr K E Yin
Respondent: Mr P G McGowan

Solicitors:

Appellant: Murcia Pestell Hillard
Respondent: Vincent Partners

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

Amev‑UDC Finance Ltd v Austin (1986) 162 CLR 170
Bennett v Stone [1902] 1 Ch 226
Bentsen v Taylor, Sons & Co (No 2) [1893] 2 QB 274
Brooke v Champernowne (1837) 4 Cl & Fin 589; (1837) 7 ER 224
Bruce v Wendt [1930] SASR 243
Carr v J A Berriman Pty Ltd (1953) 89 CLR 327
Chandris v Isbrandtsen‑Moller Co Inc [1951] 1 KB 240
Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288
Davies v Littlejohn (1923) 34 CLR 174
Esanda Finance Corporation Ltd v Plessnig (1989) 166 CLR 131
Fletcher v Manton (1940) 64 CLR 37
Gange v Sullivan (1966) 116 CLR 418
Green v Sommerville (1979) 141 CLR 594
Greenwood v Churchill (1845) 8 Beav 413; (1845) 50 ER 162
Gregory v MAB Pty Ltd (1989) 1 WAR 1
Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145
Hain Steamship Co Ltd v Tate & Lyle Ltd [1936] 2 All ER 597
Halkett v Dudley [1907] 1 Ch 590
Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207
Hawes v Cuzeno Pty Ltd [1999] NSWSC 1167; (1999) 10 BPR 18,011
Hensley v Reschke (1914) 18 CLR 452
Holland v Wiltshire (1954) 90 CLR 409
Hungerfords v Walker (1989) 171 CLR 125
IAC (Leasing) Ltd v Humphrey (1972) 126 CLR 131
Imamovic v Kalamalka Constructions Pty Ltd (1975) 49 ALJR 244
Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26
International Railway Co v Niagara Parks Commission [1941] AC 328
Janred Properties Ltd v Ente Nazionale Italiano per il Turismo [1989] 2 All ER 444
Keen v Mear [1920] 2 Ch 574
King v Poggioli (1923) 32 CLR 222
London Chatham & Dover Railway Co v South Eastern Railway Co [1893] AC 429
Maynard v Goode (1926) 37 CLR 529
Morrison v Neill (1875) 1 VLR (L) 287
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India [1990] 1 Lloyd's Rep 391
Mulcahy v Hoyne (1925) 36 CLR 41
O'Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537
Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235
Re Hewitt's Contract [1963] 1 WLR 1298
Re Riley to Streatfield (1886) 34 Ch D 386
Re Young & Harston's Contract (1885) 31 Ch D 168
Roberts v Massey (1807) 13 Ves 561; (1807) 33 ER 404
Sandra Investments Pty Ltd v Booth (1983) 153 CLR 153
Suisse Atlantique Société d'Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Terry v Merriview Pty Ltd [1983] 2 VR 548
Tom the Cheap (WA) Pty Ltd (in liq) v Allied Leasing Corporation Pty Ltd [1980] WAR 47
Tropical Traders Ltd v Goonan (1964) 111 CLR 41
Turner v Labafox International Pty Ltd (1974) 131 CLR 660
Walker v Jeffreys (1841) 1 Hare 341; (1841) 66 ER 1064

STEYTLER P & McLURE JA: We have had the advantage of reading the judgment of EM Heenan AJA. The facts recited by him, which we will not repeat, reveal that the parties entered into a contract for the sale and purchase of land on 13 January 2003. There was a dispute concerning the proper construction of the contract. This appeal arises out of that dispute.
The contract incorporated the Law Society Joint Conditions for The Sale of Land 2000 version (general conditions). There are three conditions in the main body of the contract (Offer and Acceptance) that are of significance. The first of these is cl (v) which provided that the settlement date was to be 1 May 2003 (or earlier by mutual agreement). The second is cl 3, which provides, so far as it is relevant, that the general conditions are to be incorporated into the contract and 'shall apply to this sale so far as they are not varied by or inconsistent with the express terms hereof'. The third is cl 5 which provides that the contract is '[s]ubject to Stirling Council's approval for both the subject parcel [sic] of land to be used for Retirement housing development'.
Three of the general conditions are also material. These are conditions 4(3), 5(2) and 16. They read as follows:
4.(3)The settlement of the sale and purchase shall be effected on the Settlement Date stated in the Contract or if no such date is stated (except in the case of a Terms Contract, and subject to Condition 16 if applicable) the Settlement Date shall be a date 28 days after the Date of Contract or a date 21 days after the date when the Contract ceases to be subject to any condition, the non‑fulfilment of which terminates or gives either party the right to terminate the Contract otherwise than on the ground of default whichever is the later.
…
5.(2)If for any reason attributable to the Vendor, settlement is not effected on or within 3 Business Days after the Settlement Date, the Vendor must allow to the Purchaser on settlement compensation at the Prescribed Rate on the balance of the Purchase Price payable on settlement calculated from and including the Settlement Date but excluding the date upon which the settlement is in fact effected in full settlement of any claim the Purchaser may have against the Vendor arising from that delay. The Purchaser may deduct the amount of compensation from the balance of the Purchase Price payable on settlement. The Purchaser's right to compensation under this Condition is conditional upon the Purchaser being ready willing and able to complete the purchase at the Settlement Date, but if the Purchaser is not, the Purchaser's right to compensation under this Condition commences from the day upon which the Purchaser is and continues to be so ready willing and able to complete the purchase and the Purchaser has given Notice in writing to the Vendor or the Vendor's Representative of that fact.
…
16.Town Planning
(1)If the Land is not a lot or lots … as defined in the Act [which was the fact] this Condition shall apply to the Contract.
(2)For the purposes of this Condition the terms:‑
(a)'the Act' means the Town Planning and Development Act 1928;
(b)'Commission' means the State Planning Commission;
(c)'in order for dealings' means the signing of a diagram or plan of subdivision, or initialling of a diagram or plan of subdivision by or on behalf of an inspector (or an authorised assistant) indicating that the inspector is prepared to sign that diagram or plan (subject to the satisfaction of certain conditions) as an approved diagram or plan; and
(d)'inspector' means in respect of a strata plan the officer of the Titles Office authorised to sign strata plans as approved strata plans and in respect of any other diagram or plan of subdivision the Inspector of Plans and Surveys.
(3)Unless the Land is a Strata Lot, the Vendor shall at the Vendor's expense (if the Vendor has not already done so) within 21 days after the Date of Contract, apply to the Commission for its approval to the subdivision of land from the Land of which it forms part and shall use the Vendor's best endeavours to obtain the approval and to have any necessary diagram or plan of subdivision lodged in the Titles Office and endorsed in order for dealings.
(4)Unless the Land is a Strata Lot, the Contract is conditional on:‑
(a)the written advice of the Commission to the effect that it is prepared to approve (conditionally or unconditionally) the subdivision of the Land from the Land of which it forms part in order to create it as a lot for the purpose of Section 20 of the Act, being obtained before a date 3 Months after the Date of Contract;
(b)the Commission endorsing its approval on the diagram or plan of subdivision before a date 4 Months after the date of its written advice referred to in Condition 16(4)(a) or the Date of Contract, whichever is the later; and
(c)any necessary diagram or plan of subdivision being in order for dealings within 3 Months after the latest date referred to in Condition 16(4)(b).
…
(7)Settlement in terms of Condition 4 is to be effected within 28 days after service of a Notice in writing by either party to the other or the other's Representative that the diagram or plan is in order for dealing, or the date stipulated in the Contract (whichever is the later).
(8)If any condition referred to in this Condition is not fulfilled within the time or respective times stipulated, the Vendor shall repay to the Purchaser the deposit and all other moneys (if any) paid by the Purchaser to the Vendor under the Contract without deduction and upon repayment the Contract will cease to have effect and neither party shall have any claim of any kind against the other.
It is not in doubt, for reasons given by EM Heenan AJA, that the respondent (vendor) failed to use its best endeavours to obtain approval to the subdivision and to have the necessary diagram or plan of subdivision lodged in the Titles Office and endorsed in order for dealings, and thereby breached general condition 16(3). Nor is it in dispute that, because of this, settlement was delayed until 22 October 2003. The appellant (purchaser) consequently asserted a right to compensation under general condition 5(2). It is common ground between the parties that, if it is entitled to compensation under that general condition, the amount to which it is entitled is $47,049.18.
The purchaser failed in its action to recover that sum. In her judgment (the terms of which are more fully set out in the judgment of EM Heenan AJA), the trial judge accepted (at [18]) that the vendor had breached general condition 16(3) and that this had the consequence that it was not possible for settlement to proceed on or before 1 May 2003. However, she found (at [18]) that the only remedy available to the purchaser for the vendor's breach of general condition 16(3) was that provided for by general condition 16(8). She said that, because the parties had chosen to proceed to settlement on 22 October 2003, that remedy had no operation. In the course of arriving at these conclusions, she found that there was no inconsistency between cl (v) of the Offer and Acceptance (providing for settlement on or before 1 May 2003) and general condition 16 (which, on the face of it, appeared to contemplate a later settlement date). She said, in this respect (at [16]), that the 'effect of cl 16(7) is to allow for the date stipulated in the Offer and Acceptance' and that, '[i]f that date had been later than the settlement date following the procedures in cl 16(7) that date would have been the settlement date'.
Although it was unnecessary for her to do so, the trial judge went on to make a number of other findings. The first of these was, relevantly, that the purchaser would not have been ready to settle on 1 May 2003 because it could not meet a responsibility imposed upon it by general condition 4(1) to tender 'a reasonable time prior to the settlement date' a duly executed and stamped Transfer of Land to the vendor, as the plan had not been endorsed as being in order for dealings. Next, she found that condition 5 of the Offer and Acceptance was inserted entirely for the benefit of the purchaser and that, by letters dated 15 April 2003 and 30 April 2003, the purchaser had waived that condition. Thirdly, she found, as we have said, that the vendor had not used its best endeavours, as was required of it by general condition 16(3), to obtain approval and to have the plan of subdivision lodged in the Titles Office and endorsed and in order for dealings. Finally, as we have also said, she found that the ensuing delay was consequently attributable to the vendor.
The grounds of appeal have been reduced by EM Heenan AJA to three essential propositions, which we will gratefully adopt. These are as follows:
(1)The trial judge erred in concluding that there was no inconsistency between the time scale for settlement set by general condition 16, and in particular 16(7), and cl (v) of the Offer and Acceptance to the effect that settlement should take place on 1 May 2003 or earlier. The adaptability of general condition 16(7) to accommodate a date later than 1 May 2003 is said to be incompatible with that express term of the contract.
(2)The trial judge erred in concluding that the vendor's breach of general condition 16(3) did not prevent it from relying on general condition [16(7)] by requiring that a notice to settle within 28 days was a prerequisite to settlement.
(3)The trial judge erred in concluding, despite the vendor's failure to use its best endeavours to secure subdivisional approval within the time required, that the only remedy available to the purchaser was to terminate the contract pursuant to general condition 16(8) without any entitlement to compensation in the form of interest for late settlement.
The terms of the respondent's notice of contention are also set out in the judgment of EM Heenan AJA. The three contentions advanced pursuant to that notice are summarised by him (in words which, once again, we are grateful to be able largely to adopt) as follows (so far as they are still pursued):
(1)At the appointed settlement date of 1 May 2003 several conditions specified by the contract remained unfulfilled. In particular, the approval of the Stirling Council for both subject parcels of land to be used for retirement housing development (condition 5 of the Offer and Acceptance) was not fulfilled until 7 July 2003. The vendor contends that the trial judge erred in concluding that, on or before 1 May 2003, the purchaser had by its letters of 15 and 30 April waived compliance with special condition 5. The vendor also contends that the letters of 15 and 30 April 2003 from the purchaser did not amount to a waiver, in the sense of making a choice between two inconsistent and mutually exclusive rights, but rather, were an erroneous assertion of full compliance with the terms of the contract.
(2)The purchaser failed to tender a duly stamped and signed transfer as required by general condition 4(1) on or before 1 May 2003 but, on the evidence, could have done so at any time on or after 7 July 2003 but failed, or neglected, to do so. Because of this lack of readiness, willingness or ability to settle as at 1 May 2003, the purchaser was not entitled to claim compensation in the form of interest for late settlement by virtue of the terms of general condition 5(2).
(3)Condition 5 of the Offer and Acceptance, dealing with approval from the Stirling Council for both subject parcels of land to be used for retirement housing development, was a condition precedent to the formation of the contract. Because no such approval, and then only conditional approval, was granted until 7 July 2003, the parties could not have intended settlement to occur on or before 1 May 2003.
Before turning to the issues raised by these grounds and contentions, we should mention that general condition 16(4)(a) of the contract was satisfied on 1 October 2002, prior to entry into the contract. However, because of the vendor's delay, the plan of subdivision was in order for dealings only on 7 July 2003. On that date, also, approval for use of the land to be used for retirement housing development was given in satisfaction of condition 5 of the Offer and Acceptance.
As to the first and second submissions advanced by the grounds of appeal, there is, on the face of it, some inconsistency or incompatibility between cl (v) of the Offer and Acceptance and general condition 16 (in particular 16(7)). As we have said, general condition 16(4)(a) had been satisfied, prior to entry into the contract, on 1 October 2002. Consequently, the time for satisfaction of general condition 16(4)(b) was prior to 13 May 2003 (the expiry of four months from the date of the contract) and the time for satisfaction of general condition 16(4)(c) was prior to 13 August 2003, well after the settlement date. However, because condition 3 of the Offer and Acceptance provides that the general conditions are to apply only so far as they are not varied by or inconsistent with the express terms of the Offer and Acceptance, it seems to us that the parties intended that the steps contemplated by general condition 16(4) were to be completed in sufficient time to enable settlement to take place on 1 May 2003. It seems to us, with respect, that the trial judge erred in her conclusion that there is no inconsistency because general condition 16(7) allows for the stipulation of a date in the Offer and Acceptance. The fact that cl (v) of the Offer and Acceptance contemplated a settlement date earlier than, but not later than, the date stipulated seems to us to be in direct conflict with the notion that the parties intended that the settlement date would be that fixed by the Offer and Acceptance or that arrived at by the means specified in general condition 16(7), whichever was the later.
The conclusion that settlement was intended to take place on or before 1 May 2003 is supported by the fact, mentioned in the judgment of EM Heenan AJA, that a period of three months from the date of receipt of the written advice referred to in general condition 16(4)(a) expired by 1 February 2003 and that a period of four months from the date of satisfaction of general condition 16(4)(b) expired by 1 May 2003, the date fixed for settlement.
This conclusion at which we have arrived is also consistent with general condition 4(3), which provides that settlement is to be effected on the date stated in the contract. It is only if no date is stated that settlement is to be effected on the later of the two alternative dates specified in that condition. The words in parenthesis, 'subject to Condition 16 if applicable', seem to us to relate only to the alternative dates identified by general condition 4(3). That is because those words follow the words 'or if no such date is stated'.
Next, it seems to us to be plain that general condition 16(8) was waived by the purchaser (and, if it had any application to the vendor, by it also). That both parties waived the condition is obvious from the fact that they proceeded to settle on 22 October 2003.

It also seems to us that the vendor, being in breach of general condition 16(3), was unable to rely upon general condition 16(8). Counsel for the vendor asserted in this respect that condition 16(8) offers the only remedy provided by the contract for a breach of that kind. As we read them, the words 'any condition referred to in this Condition' relate to the conditions referred to in 16(4) and do not apply to the relevant portion of 16(3). That is because the use of 'best endeavours' is not a condition capable of being fulfilled 'within the time … stipulated'. Also, we very much doubt that the parties could have intended that one of them could take advantage of general condition 16(8) when the failure to fulfil the relevant condition was brought about by its own breach of contract.
As to contentions 1 and 3 of the notice of contention, it seems to us that condition 5 of the Offer and Acceptance was (as it was treated by the parties) a condition subsequent to the formation of the contract, but precedent to an obligation to proceed to completion. In Gange v Sullivan (1966) 116 CLR 418, 441 (Taylor, Menzies & Owen JJ) said that the authorities showed a disposition on the part of courts to treat non‑fulfilment of a condition such as that under consideration in that case (a condition to the effect that the contract was subject to the purchaser obtaining development approval from the local council for specified purposes) as rendering a contract voidable rather than void: see also Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 552 (Mason J); Sandra Investments Pty Ltd v Booth (1983) 153 CLR 153; Gregory v MAB Pty Ltd (1989) 1 WAR 1. There is no relevant distinction between the condition in Gange and that in the present case. Nor is there anything in the words used by the parties in condition 5 of the Offer and Acceptance, read in its context, to suggest that their intention was other than that the condition was to be precedent to the purchaser's obligation to proceed to completion. Rather, it seems to us that, read in its overall context, the condition was, as we have said, intended to be precedent only to an obligation of that kind.
Because general condition 5 appears to us to have been imposed for the exclusive benefit of the purchaser, it was capable of being waived by it. In our opinion there is nothing in the evidence before us to suggest that there was any interrelationship between that condition and the requirement to obtain subdivisional approval such that the waiver of the one carried with it a waiver of the other (and nor was there any suggestion to that effect by either counsel). It also seems to us that, by its letters dated 15 and 30 April 2003, the appellant plainly waived compliance with condition 5 of the Offer and Acceptance. The terms of those letters have been set out in full in the judgment of EM Heenan AJA. Both letters assert a willingness to settle on 1 May 2003. The second of them records the appellant's agreement 'to postpone settlement for a short time', subject to the reservation of all of its rights, including that referred to in general condition 5(2) (mistakenly referred to as 4(2)).
EM Heenan AJA has raised the question whether the waiver was absolute, or merely one of the obligation to satisfy the condition on or before 1 May 2003. In our respectful opinion, the waiver was absolute. We have said that the purchaser asserted, in both letters, a willingness to settle. Both letters also asserted that the purchaser was 'able' to settle on 1 May 2003. Importantly, the first of the letters also advised the vendor that 'all the conditions have been met'. In its context, that must refer to the conditions required to be satisfied by the purchaser. All of these assertions were made at a time when the purchaser must have known that condition 5 of the Offer and Acceptance had not been satisfied.
There is then the question whether the appellant, having waived both the benefit of condition 5 of the Offer and Acceptance and its right to terminate for non‑completion of the contract on the settlement date, was able to recover compensation pursuant to the provisions of general condition 5(2) of the contract. It is enough for us to say, in this respect, that we agree with EM Heenan AJA, for the reasons that he has given, that the appellant's election to affirm the contract of sale and to waive the rights to which we have referred, was done without prejudice to its entitlement to claim compensation under general condition 5(2) and that it remained entitled, in the circumstances that had eventuated, to compensation under that provision.
That leaves the second of the contentions advanced in the notice of contention. The vendor relies, in that regard, upon the fact that the purchaser failed to tender a duly stamped and signed transfer as required by general condition 4(1) on or before 1 May 2003 or at any time prior to 7 October 2003, notwithstanding that, according to the vendor, it could have done so at any time on or after 7 July 2003.
There is no doubt that the purchaser's inability to comply with its obligation in this respect prior to 1 May 2003 was a product of the vendor's breach. As EM Heenan AJA points out, it is settled that the refusal or inability of one contracting party to comply with its contractual obligations, rendering it impossible or pointless for the other party to perform, will absolve the innocent party from the obligation to perform: Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288, 297; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235, 246 ‑ 247 (Dixon CJ). Moreover, there was no suggestion by the vendor, at any time after 7 July 2003, that it required the appellant to tender the transfer before performing its own obligations under the contract or that the performance of its obligations was in any way delayed as a consequence of delay by the purchaser in providing the transfer. Nor is there any suggestion that, if it had been asked to do so on or after 7 July 2003, the appellant would not immediately have been able to comply with its obligation in that respect (as it presumably did, when called upon to do so).
Finally, as EM Heenan AJA has said, there is no suggestion on behalf of the vendor that the effect of general condition 5(2) was to impose an unenforceable penalty rather than to provide a reasonable pre‑estimate of liquidated damages. Also, because no submissions were made either at the trial or in the appeal concerning the equitable principles discussed by EM Heenan AJA, this case does not provide an occasion upon which to consider them.

We would allow the appeal and dismiss the notice of contention. It follows that the judgment of the trial judge should be set aside and that there should be substituted, in lieu, a judgment in favour of the appellant for payment of the sum of $47,049.18.
EM HEENAN AJA: The issue in the District Court in these proceedings was whether or not the appellant (purchaser), Killarney Investments Pty Ltd, was entitled to recover $47,049.18 interest as compensation for the delayed completion of a contract for the sale of land from the respondent (vendor), Macedonian Community of WA (Inc). Her Honour Yeats DCJ decided that the purchaser was not entitled to recover the interest claimed as compensation under the contract and dismissed the purchaser's claim. From that decision the purchaser appeals to this court on the basis that, under the terms of the contract, it was entitled to the interest claimed and should have recovered judgment. There is no dispute that the sum of $47,049.18 is the amount of interest, calculated at the prescribed contract rate for the period of the delay, if interest is recoverable.
The basic facts are that the vendor owned land in Albert Street, Balcatta, and had received conditional approval from the Western Australian Planning Commission (WAPC) for the construction of a retirement housing development on the land. For the land to be sold and conveyed to the purchaser, it was necessary for the planning subdivisional approval to be formally granted; for a new plan of subdivision to be prepared and approved; and, for the two new emerging lots (the subject of the sale) to be approved in order for dealings at the Titles Office, whether or not two new certificates of title had then been granted. As the proposed development had been approved in principle, the vendor and the purchaser each anticipated that the requisite approvals, plans and titles would all be given or issued, as the case may be, in due course.
Consequently, the parties entered into a contract for the sale and purchase of the subject land on 13 January 2003. The contract incorporated the Joint Form of General Conditions for the Sale of Land, 2000 revision (general conditions). The sale price for the land was $870,000, payable by a deposit of $50,000 at the time of the contract and by the balance at settlement which was stated, by cl (v) of the Offer and Acceptance, to occur on '1st May 2003 or earlier by mutual agreement'.
The parties have always agreed that it was a sale of land otherwise than in a lot or lots. Accordingly, the sale was conditional upon subdivisional approval being obtained from the State Planning

Commission in the manner and within the time specified by incorporated general condition 16 which, so far as is material, reads:
(1)If the Land is not a lot or lots (which includes a Strata Lot or Strata Lots) as defined in the Act this Condition shall apply to the Contract.
(2)For the purposes of this Condition the terms:-
(a)'the Act' means the Town Planning and Development Act 1928;
(b)'Commission' means the State Planning Commission;
(c)'in order for dealings' means the signing of a diagram or plan of subdivision, or initialling of a diagram or plan of subdivision by or on behalf of an inspector (or an authorised assistant) indicating that the inspector is prepared to sign that diagram or plan (subject to the satisfaction of certain conditions) as an approved diagram or plan; and
(d)'inspector' means in respect of a strata plan the officer of the Titles Office authorised to sign strata plans as approved strata plans and in respect of any other diagram or plan of subdivision the Inspector of Plans and Surveys.

(3)Unless the Land is a Strata Lot, the Vendor shall at the Vendor's expense (if the Vendor has not already done so) within 21 days after the Date of Contract, apply to the Commission for its approval to the subdivision of land from the Land of which it forms part and shall use the Vendor's best endeavours to obtain the approval and to have any necessary diagram or plan of subdivision lodged in the Titles Office and endorsed in order for dealings.
(4)Unless the Land is a Strata Lot, the Contract is conditional on:-
(a)the written advice of the Commission to the effect that it is prepared to approve (conditionally or unconditionally) the subdivision of the Land from the Land of which it forms part in order to create it as a lot for the purposes of Section 20 of the Act, being obtained before a date 3 Months after the Date of Contract;
(b)the Commission endorsing its approval on the diagram or plan of subdivision before a date 4 months after the date of its written advice referred to in Condition 16(4)(a) or the Date of Contract, whichever is the later; and
(c)any necessary diagram or plan of subdivision being in order for dealings within 3 Months after the latest date referred to in Condition 16(4)(b).

...
(7)Settlement in terms of Condition 4 is to be effected within 28 days after service of a Notice in writing by either party to the other or the other's Representative that the diagram or plan is in order for dealing, or the date stipulated in the Contract (whichever is the later).
(8)If any condition referred to in this Condition is not fulfilled within the time or respective times stipulated, the Vendor shall repay to the Purchaser the deposit and all other moneys (if any) paid by the Purchaser to the Vendor under the Contract without deduction and upon repayment the Contract will cease to have effect and neither party shall have any claim of any kind against the other.

On 27 September 2002, that is, before the contract of sale between the parties, the WAPC endorsed its approval upon a recommendation for the subdivision of the vendor's land and on 1 October 2002 the WAPC imposed conditions on its approval for subdivision of the land.
The next material conditions are contained in the Offer and Acceptance. Special condition 5 provides:
Subject to Stirling Council's approval for both the subject parcel[s] of land to be used for Retirement housing development.
Special condition 7 provides:
Vendor will support Purchaser's application for Retirement project for Council's consideration scheduled on 19/2/03, and assist in all relevant documentation as part of the submission.
This, in effect, is supplemental to special condition 5.
A further relevant condition is general condition 5(2), which provides:
If for any reason attributable to the Vendor, settlement is not effected on or within 3 Business Days after the Settlement Date, the Vendor must allow to the Purchaser on settlement compensation at the Prescribed Rate on the balance of the Purchase Price payable on settlement calculated from and including the Settlement Date but excluding the date upon which the settlement is in fact effected in full settlement of any claim the Purchaser may have against the Vendor arising from that delay. The Purchaser may deduct the amount of compensation from the balance of the Purchase Price payable on settlement. The Purchaser's right to compensation under this Condition is conditional upon the Purchaser being ready willing and able to complete the purchase at the Settlement Date, but if the Purchaser is not, the Purchaser's right to compensation under this Condition commences from the day upon which the Purchaser is and continues to be so ready willing and able to complete the purchase and the Purchaser has given Notice in writing to the Vendor or the Vendor's Representative of that fact.
Time was of the essence in the contract. Vacant possession was to be given and taken on the date settlement was effected, unless given earlier by the vendor. Outgoings, including rates and taxes, were to be paid by the vendor up to and including the settlement or possession date, whichever was the earlier, and to be apportioned at that date if necessary.
It will be noticed that the specified settlement date of 1 May 2003 (cl(v)) was 3 months and 18 days after the date of the contract. Counsel for the vendor pointed out that there may be some significance in this choice because of the maximum time limits set for achieving the steps necessary to secure subdivisional approval for the land and the issue of a diagram or plan of subdivision in order for dealings under general condition 16. The details of this timetable will be examined later.
In fact, approval for the subject parcels of land to be used for retirement housing development was not granted by the City of Stirling on or before the due settlement date of 1 May 2003. Due to its delay in taking steps to engage surveyors, the vendor had not obtained the requisite subdivisional approval, nor had a plan of subdivision been obtained or lodged in order for dealings, by 1 May 2003, the latest date for settlement specified by the Offer and Acceptance (cl(v)).
The purchaser was made aware of these deficiencies before 1 May 2003 but, by correspondence from its solicitors on 15 April and again on 30 April 2003, indicated its readiness, willingness and ability to settle on 1 May 2003, notwithstanding those problems. A question which arises is whether this correspondence from the purchaser's solicitors/agents constituted a waiver of the special condition requiring approval by then from the City of Stirling for the parcels of land to be used for retirement housing development (special condition 5), and of general condition 16 requiring various approvals for subdivision of the proposed lots and readiness for dealings of a plan or diagram of subdivision, also by that due date. It will be necessary to examine that correspondence in detail later in these reasons.
Non‑fulfilment of these two conditions arguably entitled one or both of the parties to terminate, or to treat as terminated, the contract for sale. However, neither of the parties asserted that the contract was terminated for non‑fulfilment of either or both of those conditions on or after 1 May 2003, nor did either party take any steps to rescind or terminate the contract, whether for non‑fulfilment of those conditions or for any alleged breach of the obligation of the vendor to use its best endeavours to secure subdivisional approval. Both parties treated the contract as remaining on foot after 1 May 2003 on the basis that the vendor was making progress in securing the requisite subdivisional approvals and would complete the contract eventually, but much later than the date specified in the contract as the latest date for settlement. Indeed, the contract was duly completed on 22 October 2003 when the purchaser paid the balance of the purchase price, when vacant possession was given and taken, and by which time the vendor had been able to secure the issue of new title deeds for unencumbered estates in fee simple to the two new lots.
Although there is no direct evidence on the point, it is to be inferred that rates, taxes and other outgoings were apportioned between the parties at the later settlement date, with the vendor being responsible for those outgoings until then. Because the subject properties were vacant land, there were no rents or profits arising from them and, consequently, no question of any entitlement to rents and profits for the period during which settlement was delayed arose.
Because neither of the parties sought to terminate the contract for non‑compliance with any of the material conditions on or before the latest due settlement date of 1 May 2003, it is clear beyond any possibility of dispute that there was a waiver, at least to some degree, of general condition 4(3) which required settlement on that date, and of the conditions requiring progressive performance of the steps necessary to achieve subdivisional approval and the issue of a plan of subdivision in order for dealings before the date of settlement. General condition 4(3) provides:
The settlement of the sale and purchase shall be effected on the Settlement Date stated in the Contract or if no such date is stated (except in the case of a Terms Contract, and subject to Condition 16 if applicable) the Settlement Date shall be a date 28 days after the Date of Contract or a date 21 days after the date when the Contract ceases to be subject to any condition, the non‑fulfilment of which terminates or gives either party the right to terminate the Contract otherwise than on the ground of default whichever is the later.
This is of relevance because of the significance which the vendor places upon general condition 16(7).
In these circumstances the crucial issue before the learned trial judge, and on this appeal, was whether or not the purchaser was entitled to relief under general condition 5(2). Consequently, at issue at the trial, and again on this appeal, was the question of whether or not general condition 16 was inconsistent with the contractual provision for settlement not later than 1 May 2003. This was thought to be of critical importance because of an assumption (which itself requires examination) that general condition 16 made provision for an extension of the date for settlement in the events which happened.
The learned trial judge formulated the issues for decision on the basis that, unless general condition 16 was inconsistent with the latest specified date for settlement of 1 May 2003 in the contract of sale, performance after that date would, in the events which occurred, be acceptable and that the purchaser's claim for interest under general condition 5(2) must fail. Alternatively, if general condition 16 were inconsistent with the latest date specified for settlement, being 1 May 2003, further questions would arise; namely, whether or not the purchaser was ready, willing and able to settle on 1 May 2003; secondly, whether the two letters to the vendor in April 2003 constituted a waiver of the benefit of special condition 5 of the Offer and Acceptance (the approval of the City of Stirling to the use of the land for retirement housing development); and, thirdly, whether or not the purchaser had proved that the reason for the failure to settle on 1 May 2003 was attributable to the vendor.

Decision of the trial judge

The learned trial judge posed four questions, set out above, arising from the pleadings and from the contest between the parties at the trial which, in her Honour's view, would determine the entitlement of the purchaser to compensation in the form of interest for late settlement as claimed.
As already noted, the Offer and Acceptance provided (by cl (v)) that the settlement date was to be 1 May 2003 or earlier by mutual agreement. General condition 16 set a conditional timetable for compliance with various steps in the procedure necessary to secure approval for subdivision of the subject land, and the endorsement of a plan or diagram of subdivision at the Titles Office in order for dealings. It is unnecessary to detail the sequential stages of those conditional steps in the progress towards securing subdivisional approval and readiness of a plan in order for dealings. It is enough to say that this timetable also allowed for settlement at a date on or before 1 May 2003, depending on the progress in the various steps in the necessary sequence. However, general condition 16(7) provided that settlement was to be effected within 28 days after service of a notice in writing by either party to the other that the diagram or plan was in order for dealings, or the date stipulated in the contract (whichever was the later). No such notice was ever given, nor was a plan of the subdivided lots endorsed in order for dealings until 7 July 2003. Accordingly, if general condition 16(7) applied, the vendor was not outside the progressive time limits for events necessary to lead to the availability of a plan endorsed in order for dealings before settlement and no entitlement to compensation in the form of interest for late settlement could arise. For this reason, the learned trial judge considered that the first question was whether or not general condition 16 was inconsistent with, or varied by, cl (v) in the Offer and Acceptance.
Her Honour took the view that general condition 16 was specifically designed to deal with the sale of unsubdivided lots, which were the subject matter of this contract, and that it was not inconsistent with cl (v) of the Offer and Acceptance. This conclusion was sufficient to result in the dismissal of the purchaser's claim. It amounted to a rejection of the purchaser's submission that the terms of cl (v) in the Offer and Acceptance, which specified 1 May 2003 as the latest date for settlement, were inconsistent with, and thereby excluded, the potential timetable prescribed by general condition 16, at least to the extent that this permitted a settlement date after 1 May 2003.
There were no submissions, it seems, before the learned trial judge, and no submissions to this court, about the possibility of a partial inconsistency between cl (v) of the Offer and Acceptance and general condition 16. However, that potentiality requires examination because, if general condition 16 were to be wholly excluded, the effect would be that the contract would be an unconditional sale of unsubdivided lots and that would be unlawful because of contravention of s 20(1) and s 20B of the Town Planning and Development Act 1928 (WA) (now repealed and replaced by Planning and Development Act 2005 (WA)). General condition 16 makes the sale of these unsubdivided lots conditional upon subdivisional approval being sought and obtained, as the law requires. However, the timetable which it sets is potentially more liberal than the latest settlement day of 1 May 2003 specified in the Offer and Acceptance and, therefore, the inconsistency, if there be one, must be restricted.
The learned trial judge then identified the three questions which would have arisen had general condition 16(7) been excluded as being inconsistent with cl (v). As observed above, these were:
(1)Was the purchaser ready, willing and able to settle on 1 May 2003?
(2)Did the purchaser, by letters to the vendor dated 15 and 30 April 2003, waive the benefit of special condition 5 of the Offer and Acceptance?
(3)Has the purchaser established that the reason for the failure to settle on 1 May 2003 was attributable to the vendor?
Her Honour addressed each of these questions, although, strictly speaking, these were superfluous in the light of the decision about the applicability of general condition 16(7). Her Honour concluded that the purchaser was, in all material respects, ready, willing and able to settle on 1 May 2003, notwithstanding that it did not tender to the vendor before then a signed and stamped transfer of the subject land as required. Her Honour took the view, in my respectful opinion correctly, that the purchaser was released from the obligation to tender such a stamped and signed transfer before that date. This was because the conduct of the vendor had meant that it was impossible, by then, for the purchaser to prepare a transfer with the requisite title details due to the delay of the vendor in progressing requisite subdivisional approvals; and, further, because by then the vendor had already unequivocally demonstrated that it was not ready, willing and able to provide a good title to the subject land on or before 1 May 2003.
In relation to the second of these questions, the learned trial judge concluded that, by its April 2003 correspondence, the purchaser had waived the benefit of special condition 5 of the Offer and Acceptance, and was entitled to do so because that was a condition solely for its benefit. For reasons which follow, I am of the view that this question failed to distinguish between a waiver of the right to terminate the contract because of non‑compliance with the condition for settlement on 1 May 2003, and a waiver of the right to claim damages or other relief in the form of compensation in the nature of interest for late settlement because of the vendor's breach of contract in delaying settlement. I agree, with respect, that the purchaser waived the right to terminate the contract because of the vendor's inability to settle on 1 May 2003. However, the real question upon which the purchaser's claim for interest depends, is whether or not there was also a waiver of the right to claim compensation in the nature of interest under general condition 5(2). This is a far more complicated issue and one which received little attention at trial and only limited attention in the submissions to this court. It is dealt with, however, more fully later in these reasons.
The third issue identified by the learned trial judge was whether or not the purchaser established that the reason for the failure to settle on 1 May 2003 was attributable to the vendor. Her Honour found that it was. I agree, with respect, with that conclusion.

Grounds of appeal

The notice and grounds of appeal are lengthy, but can be reduced to the following essential propositions:
(1)The learned trial judge erred in concluding that there was no inconsistency between the time scale for settlement set by general condition 16, and in particular 16(7), and cl (v) of the Offer and Acceptance to the effect that settlement should take place on 1 May 2003 or earlier. The adaptability of general condition 16(7) to accommodate a date later than 1 May 2003 is, so the submission goes, incompatible with that express term of the contract.
(2)The learned trial judge erred in concluding that the vendor's breach of general condition 16(3) - that is, its failure to use its best endeavours to obtain subdivisional approval and have any necessary diagram or subdivision lodged in the Titles Office and endorsed in order for dealings - did not prevent the vendor from relying on general condition [16(7)] by requiring that a notice to settle within 28 days was a prerequisite to settlement.
(3)The learned trial judge erred in concluding, despite the vendor's failure to use its best endeavours to secure subdivisional approval within the time required, that the only remedy available to the purchaser was to terminate the contract pursuant to general condition 16(8) without any entitlement to compensation in the form of interest for late settlement.

Notice of contention

In addition to relying upon the findings of the learned trial judge, the vendor filed a notice of contention seeking to support the dismissal of the purchaser's claim on additional grounds. These were:
(1)At the appointed settlement date of 1 May 2003 several conditions specified by the contract remained unfulfilled. In particular, the approval of the City of Stirling for both subject parcels of land to be used for retirement housing development (special condition 5 of the Offer and Acceptance) was not fulfilled until 7 July 2003. The learned trial judge erred in concluding that, on or before 1 May 2003, the purchaser had, by its letters of 15 and 30 April 2003, waived compliance with special condition 5. The vendor contended that the letters of 15 and 30 April 2003 from the purchaser did not amount to a waiver, in the sense of making a choice between two inconsistent and mutually exclusive rights, but, rather, were an erroneous assertion of full compliance with the terms of the contract (see Exhibits 1.5 ‑ 1.8).
(2)The purchaser was not, contrary to the finding of the learned trial judge, ready, willing and able to complete as at 1 May 2003 because the evidence did not support a finding that the purchaser had cash funds available for the payment of the balance of the purchase price due at that date (this was not pursued at the hearing of the appeal). Furthermore, the purchaser failed to tender a duly stamped and signed transfer as required by general condition 4(1) on or before 1 May 2003 but, on the evidence, could have done so at any time on or after 7 July 2003 but failed, or neglected, to do so. Because of this lack of readiness, willingness or ability to settle as at 1 May 2003, the purchaser was not entitled to claim compensation in the form of interest for late settlement by virtue of the terms of general condition 5(2).
(3)Special condition 5 of the contract, dealing with approval from the City of Stirling for both subject parcels of land to be used for retirement housing development, was a condition precedent to the formation of the contract. Because no such approval, and then only conditional approval, was granted until 7 July 2003, the parties could not have intended settlement to occur on or before 1 May 2003. The whole point of the contract was to allow the purchaser to develop the land for retirement housing and, had such approval not been granted, the purchaser could have terminated the contract.
In view of the terms of the notice of contention, it is necessary to record that neither on 7 July 2003, when a plan of the proposed subdivided lots was first approved and in order for dealings, nor at any time thereafter, did the purchaser give notice in writing, or at all, to the vendor of the fact that from then on the purchaser was, and continued to be, ready, willing and able to complete the purchase.
It has already been noted that application for subdivisional approval had been made by the vendor to the WAPC in September 2002 and that conditional approval for the subdivision had been granted by the WAPC on 1 October 2002. Accordingly, it was unnecessary for the vendor to do anything further in this regard except, of course, to use its best endeavours to secure compliance with the conditions imposed by the WAPC and to secure the approval of the necessary diagram or plan of subdivision for endorsement in order for dealings.
General condition 16(8) is the provision relied upon by the vendor, in its notice of contention, for the submission that in the events which happened the learned trial judge was in error in concluding that the purchaser had waived compliance with special condition 5 of the Offer and Acceptance and had been able to do so because that condition was solely for the purchaser's benefit. This involves two propositions; the first is whether the purchaser's letters of 15 and 30 April 2003 did constitute an attempt by the purchaser to waive the benefit of special condition 5, and, secondly, if they did, whether that was a condition which the purchaser could unilaterally waive. This latter aspect of the question of waiver entails a consideration of the interrelationship of general condition 16(8), and other conditions in the contract, in view of the express provision in general condition 16(8) that late compliance with a step in the process for subdivisional approval, or a failure to obtain the subdivisional approval, could, at the most, give either party the right to terminate the contract with repayment of all monies paid, to the exclusion of all other claims.
It is, perhaps, not insignificant that because the WAPC had given conditional approval to subdivision of the subject land on 1 October 2002, the maximum four month period for the WAPC to endorse its approval on a diagram or plan of subdivision, as specified by general condition 16(4)(b), meant that the endorsement of the approval of the plan of subdivision was required by 1 February 2003. This, in turn, meant that the latest date for the availability of a necessary diagram or plan of subdivision in order for dealings, as specified by general condition 16(4)(c), was 1 May 2003.
Recognition of those dates provides some theoretical support for the inference, which counsel for the vendor invited this court to draw, that the choice of 1 May 2003 as the latest date for settlement was a choice made by the parties informed by the timetable in general condition 16 and related back to the pre‑contractual date when conditional approval for the subdivision was first granted by the WAPC. This is a feature of the case which was not explored in the evidence, nor addressed in the written submissions. It has certain attraction as a course of proposed deductive reasoning, but even if it were to be accepted, it leads no further than the conclusion that on 1 May 2003 both the vendor and the purchaser might have become entitled to rely on general condition 16(8) and to have treated the contract as terminated, with an obligation on the vendor to repay all monies received and after repayment that neither party should have any claim against the other. A pertinent question, but one not addressed in the evidence or in the submissions, is whether or not the parties waived reliance on general condition 16(8) on or after 1 May 2003 and, whether, if only the purchaser did, this was a condition exclusively for its benefit, having regard to the fact that the condition contains a limitation on any potential liability of either party for damages or other relief.
General condition 4(1) imposed an obligation on the purchaser to tender, a reasonable time prior to the settlement date, a duly executed and stamped transfer of the land to the vendor. Importantly, it provides:
A reasonable time prior to the Settlement Date, the Purchaser must at the Purchaser's expense tender a duly executed and stamped Transfer of the Land to the Vendor or the Vendor's Representative.
With regard to the vendor's position that the fixed settlement date was extended because of the combined operation of general condition 4(3) and general condition 16(7), the purchaser submits that because the contract specified settlement on or before 1 May 2003, there was no scope for a settlement date to be extended until after 21 days when the contract ceased to be subject to any condition. This was not a terms contract; namely, a contract so defined in the Sale of Land Act 1970 (WA) (see general condition 25(1)). Effectively, therefore, the potentiality for the extension of the stated date occurs only for a terms contract subject to conditions. This is a point which would exclude the benefit of preserving the life of a contract for the sale of unsubdivided land for any period beyond a fixed date of settlement without liability in damages to either party arising if the requisite approval is not by then secured.

Progress towards securing compliance with the conditions

When reviewing the progress of events towards compliance with the various conditions of this contract, it is necessary to distinguish between the contractual conditions relating to securing subdivisional approval for the proposed lots and obtaining an approved plan or diagram of subdivision in order for dealings at the Titles Office (general condition 16), on the one hand, and compliance with special condition 5 in the Offer and Acceptance that the subject parcels of land were to be approved by the City of Stirling for use for a retirement housing development, on the other. Unlike the timetable prescribed for securing necessary subdivisional approval contained in general condition 16, special condition 5 - relating to the approval for use of the land for retirement housing by the local council - did not contain any express time limit for fulfilment. In the circumstances, therefore, I consider that the inevitable implication is that, in this respect, the contract was conditional upon securing approval from the City of Stirling for use of the land for retirement housing development on or before the latest date for settlement - a date which the appellant submits was 1 May 2003, but which the respondent submits would be potentially later, due to the operation of general condition 16(7). In the event that the contract remains subject to special condition 5, and it is not fulfilled by the latest date for settlement, then, the effect would be that the contract would be subject to termination by either party, if not in default, as in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 and Gange v Sullivan (1966) 116 CLR 418.
I consider that the present situation closely resembles the position examined in those two decisions. Consequently, the correct construction of this contract is that automatic termination for want of compliance with special condition 5 in the Offer and Acceptance would not occur unless one party - namely, the party not in default for failing or neglecting to take steps which that party was obliged to take to secure the approval - chose to terminate the contract. In any event, there was no suggestion that this contract was terminated for want of compliance with special condition 5. But whether this result occurred because of the proper meaning of the contract, which I have just attempted to distil, or whether it depended on the effect of that condition being waived by the purchaser, as the purchaser has asserted, has some significance for the questions of whether or not the contract remained subject to that condition and whether the vendor was in breach of contract by failing to settle on or before 1 May 2003, as the purchaser contends.
In relation to special condition 5, the learned trial judge found that the purchaser had applied on 21 January 2003 to the municipality, the City of Stirling, for approval to commence retirement housing development on the subject land and that on 17 February 2003 the planner of the municipality responded positively to that proposal but imposed 10 conditions on the development. The purchaser was notified of these conditions on 20 March 2003. One of the conditions imposed was a requirement for a 20‑metre‑wide strip being ceded for a right of way over part of the vendor's remaining land. The purchaser sought the vendor's agreement for the dedication of such a right of way, but the vendor refused.
In the events which happened, land for the proposed right of way was never ceded to the municipality by the vendor and the result was that, although approval for retirement housing development was eventually granted by the municipality on 7 July 2003, the approval was for a smaller number of residential units than had originally been sought. Accordingly, fulfilment of special condition 5 had not been achieved by 1 May 2003 and, as already noted, this gives rise to the question of whether or not the contract remained subject to this condition from then on, or whether it had been waived by the purchaser as submitted and as found by the learned trial judge.

Turning to the question of whether or not there was fulfilment of the conditions relating to subdivisional approval of the land by the dates prescribed in the contract, one goes again to general condition 16 and its timetable. The purchaser maintains that the latest date for subdivisional approval and the availability of a plan or diagram in order for dealings was 1 May 2003, regardless of whether the formula in general condition 16 is applied or the latest date for settlement specified by the Offer and Acceptance is adopted. Again, however, it was not until 7 July 2003 that a plan of subdivision of the property was endorsed in order for dealings. The evidence of an Assistant Registrar of Titles, accepted by the learned trial judge, was that any transfer of land for the subdivided lots could have been lodged with the Titles Office at any time after 7 July 2003 and would have been accepted for registration, notwithstanding that new duplicate certificates of title had not been issued until 10 September 2003. This means that no dealing on the subdivided lots at the Land Titles Office was possible before 7 July 2003.
From then on there were further delays because the vendor did not apply for new titles until 18 August 2003 and the purchaser did not tender a duly stamped transfer of the land for signing until 7 October 2003, leading to eventual settlement on 22 October 2003. But, as already noted, the purchaser did not give any written notice of its readiness, willingness or ability to complete on or after 7 July 2003, as contemplated by general condition 5(2), or at all.
The learned trial judge found that the failure to have the plan of subdivision lodged in order for dealings at the Titles Office by 1 May 2003, and it follows before 7 July 2003, was due to the failure by the vendor to use its best endeavours to secure that result. In particular, the finding was that this delay was due to the vendor's failure to instruct a surveyor to commence the necessary survey until about 11 April 2003. This must mean that the breach of contract alleged by the purchaser, and found to have been committed, was a breach of the obligation to use best endeavours to secure endorsement of the necessary diagram or plan of subdivision in order for dealings, as specified by general condition 16(4)(c). That points up the importance of the consequential issue about the significance of general condition 16(8) which prescribed that the consequence of a breach of the conditions is to give rise to the termination of the contract, with an obligation for the refund of monies, but to the exclusion of other claims.

Purchaser's asserted waiver of the benefit of special condition 5 of the Offer and Acceptance

The fact that the vendor did not engage a surveyor to undertake the necessary survey until 11 April 2003, quite evidently, made it clear to the purchaser that it was most unlikely that the various conditions of the contract would be satisfied on or before 1 May 2003. The learned trial judge referred (at [10]) to discussions about this between the parties. A director of the purchaser, Mr Lee, spoke to the chairman of the vendor in the period leading up to 1 May 2003 and was told that the vendor was still on track but might be a few weeks late because the surveyor had just started the job. Mr Lee said that he told the vendor's chairman that if the vendor were late, the purchaser would charge interest. Mr Lee agreed that when he was told that the vendor was not going to cede the right of way, Mr Lee responded by saying that he would sue the vendor for penalty interest for late settlement.
The purchaser's position in relation to the imminent prospect that settlement would not occur on 1 May 2003 emerges from Exhibits 1.10 and 1.15 - the purchaser's letters of 10 and 15 April 2003. The first of these, the letter of 15 April 2003, is as follows:
RE: Part Lot 140, Albert St., Balcatta
As per the contract for the purchase of the above property dated 13^th January 2003, I hereby inform you that all the conditions have been met and that Killarney Investments Pty Ltd is now willing and able to settle by May 1^st 2003.
Regards
Adrian Lee

Director
The second letter, of 30 April 2003, provides:
RE: Part Lot 140, Albert Street, Balcatta
Further to my letter dated 15^th April 2003 and subsequent telephone conversations, I confirm again that Killarney Investments Pty Ltd is ready, willing and able to proceed with settlement as scheduled on May 1^st 2003.
You have indicated to me that you are not able to settle on May 1^st 2003 but will be able to do in a few weeks time. I want to formally inform you that Killarney is happy to postpone settlement for a short time but that Killarney reserves all its rights under the Joint Form of General Conditions for the Sale of Land 2002, including obviously, but not limited to, those rights under condition 4.2.
Regards
Adrian Lee

Director
The express reference to 'condition 4.2' is to that provision in the general conditions which requires settlement to take place at a location reasonably specified by the purchaser, unless otherwise mutually agreed. This does not appear to be relevant and it must be taken to be a mistaken reference to general condition 5(2) which, as previously described, is the provision imposing an obligation, in certain circumstances, for a vendor to pay to the purchaser compensation in the form of interest for late settlement.
The first of these letters is simply wrong in asserting that all conditions under the contract had been met by 15 April 2003. Similarly, the second letter is not correct in stating that the purchaser was then ready, willing and able to proceed with settlement as scheduled on 1 May 2003, because it was not then in a position to provide a stamped transfer and there was no title to either of the lots then available for dealing. Furthermore, the City of Stirling had not then granted approval for use of the land for retirement housing development purposes.
The submissions of the purchaser, at trial and on appeal, were that these letters amounted to a unilateral waiver by the purchaser of the benefit of special condition 5. The learned trial judge accepted this submission and found that, properly construed, the letters amounted to a waiver of the benefit of special condition 5. Her Honour seems to have found that this amounted to an absolute waiver of the benefit of special condition 5, rather than a waiver of the obligation to satisfy that condition on or before 1 May 2003. It would seem to be surprising if the purchaser had intended an absolute waiver of special condition 5, because the land was only ever being proposed for use as a retirement residential complex; indeed, approval for that purpose was ultimately granted on 7 July 2003 and the eventual settlement occurred with the benefit of that approval. However, nothing at this point turns on whether the waiver of the benefit of special condition 5 was total or limited to the time for compliance with that special condition, as fixed by the contract, being 1 May 2003.
Unfortunately, the position of the purchaser in relation to this issue of waiver and, consequently, the decision of the learned trial judge, did not deal with all the consequences of the delay in settlement after 1 May 2003. The general condition relating to the granting of subdivisional approval and the availability of a plan or diagram of the subdivision in order for dealings on or before 1 May 2003 remained as another vital term of the contract. There could be no completion unless and until there was an approved plan of subdivision in order for dealings, and this did not occur until 7 July 2003.
It follows from this that the purchaser's correspondence of 15 and 30 April 2003, and indeed the whole of the purchaser's conduct, must also be treated as a waiver of, or a readiness to extend beyond 1 May 2003, the time for compliance with the conditions imposed by general condition 16. It is inconceivable that the purchaser ever agreed, or for that matter could have agreed, to settle before there was an approved plan of subdivision available for dealings. For this reason, therefore, these letters and the conduct of the purchaser must also be regarded as waiving its right to terminate the contract under general condition 16(8) because of the lack of availability of a plan or diagram of subdivision in order for dealings. This can only mean that the purchaser intended to, and did, keep the contract on foot, notwithstanding the delay in compliance with the date for settlement, whether fixed by the terms of the contract or by the timetable contained in general condition 16. Nevertheless, in doing so it is evident that the purchaser purported to keep open its rights to relief, consequent upon breaches of the contract by the vendor in failing to take steps necessary to secure the availability of a plan of subdivision by the stipulated contract date - one right being, as specified, the ability to claim liquidated damages in the nature of compensation as interest for late settlement.
At last, this brings me to the critical question in the case of whether or not this objective was capable of achievement by the purchaser and was achieved by the course followed. This requires consideration of the effect of the specification of 1 May 2003 as the latest date for settlement in the Offer and Acceptance, combined with the effect of general condition 4(3) in specifying that date for settlement, and general condition 16(7), which provides:
Settlement in terms of Condition 4 is to be effected within 28 days after service of a Notice in writing by either party to the other or the other's Representative that the diagram or plan is in order for dealing, or the date stipulated in the Contract (whichever is the latter).
Not the least of the problems associated with this issue of alleged inconsistency between the terms of the Offer and Acceptance and general condition 16, and in particular condition 16(7), is the incongruity that if the contract were to be terminated for want of compliance with any of the conditions relating to the securing of subdivisional approval or the availability of an approved plan or diagram in order for dealings at the Titles Office, no matter whether that occurred at the stipulated settlement date of 1 May 2003 or some later date, the consequences of the termination would be that, apart from the purchaser being entitled to be repaid all monies paid to the vendor, the contract would then cease to have effect without either party having any claim of any nature against the other. Yet, if, notwithstanding want of timely compliance with general condition 16, neither party sought to terminate the contract but kept it on foot until the conditions had been satisfied, and settlement then took place, there is, according to the purchaser's argument, an entitlement to relief in the nature of liquidated damages as specified by general condition 5(2), if its terms are satisfied. That potential incongruity appears to me to be the chief obstacle facing the purchaser. It can only be addressed, in my view, by attempting to discern the meaning of these passages in the contract of sale as a whole, having regard to established principles.
The fact that the conditions relating to the availability of a plan or diagram of subdivision in order for dealings had not been fulfilled by 1 May 2003 meant that the contract was terminable at that date, under the provisions of general condition 16(8), by a party who sought to rely on that condition and was entitled to do so. In the circumstances, this meant that the purchaser would have been entitled to terminate the contract for non‑compliance with that condition at 1 May 2003 but, obviously, the purchaser declined to do so, instead sought to keep the contract alive and, in fact, completed later in October 2003.
Despite the availability of general condition 16(8), the vendor would not have been able to terminate for non‑fulfilment of the condition relating to the provision of an available plan or subdivision of the subject land in order for dealings by that date because the vendor was in breach of its obligation to use best endeavours and to co‑operate in achieving compliance with the requisite conditions: Hawes v Cuzeno Pty Ltd [1999] NSWSC 1167; (1999) 10 BPR 18,011. In any event, the vendor did not attempt to terminate the contract but accepted that it should be kept on foot, but that the date for eventual settlement be delayed. The position, therefore, which clearly emerges is of a contract which required completion on a particular date, with a conditional entitlement by the purchaser to compensation in the nature of interest for delay in settlement, but, otherwise, that was subject to defeasance for want of compliance with conditions. Because the purchaser kept the contract on foot, the question is whether it is entitled to rely upon the contractual entitlement for compensation in the form of interest for late settlement. This requires other considerations to be examined.

Entitlement to interest as between vendor and purchaser

It has long been accepted that the rights and duties of vendor and purchaser in respect of rents and profits and outgoings on property, on the one hand, and interest, whether before or after the due settlement date or from the date when possession should have been given, on the other, are correlative: Fletcher v Manton (1940) 64 CLR 37, 46 (Starke J). In that case Dixon J referred (at 48) to the 'well‑established rule of equity that, when a valid contract for the sale of land is made and the vendor in the event makes a good title, then, as from the date of the contract, the purchaser is to be considered the owner of the land'. Starke J also made reference (at 46) to authorities which, in the absence of other stipulations, establish the vendor's duty to pay outgoings until the purchaser takes possession.
The origin of the rule, and the explanation of the principles from which it is derived, appears from the judgment of Isaacs J in Davies v Littlejohn (1923) 34 CLR 174, 185 ‑ 186, a case which concerned whether or not the Crown held a vendor's lien over certain conditionally purchased land which formed part of the estate of a deceased testator. His Honour said:
The doctrine of 'vendor's lien' is one created by equity as part of a scheme of equitable adjustment of mutual rights and obligations applying, unless negatived, to every ordinary contract of the sale of land. In Re Thackwray and Young's Contract (1888) 40 Ch D 34 at 38 Chitty J says:-
'As is well known, where there is a contract for sale which is valid and can be specifically performed the equitable interest in the lands at once passes to the purchaser subject to his payment of the money, and, on the other hand, the vendor has a lien on the land for the unpaid purchase‑money. That is the law, and it is scarcely necessary to refer to Shaw v Foster (1872) LR 5 HL 321 for that proposition.'
Again, equity, in the absence of express terms, regulates the mutual rights as to interest on the one hand and rents and profits on the other.
...
[In] Maung Shwe Goh v Maung Inn (1916) LR 44 Ind App 15 at 19 Lord Buckmaster LC said:-
'In the English Courts a contract for the sale of real property makes the purchaser the owner in equity of the estate and from this principle it follows that, where the rights as to payment of interest on the purchase‑money are not regulated by the terms of the contract, the purchaser is deemed to be entitled to the rents and profits of the property as from the time when he did take, or could safely have taken, possession; and interest on the purchase‑money runs in favour of the vendor from that time.' [original emphasis]
In the absence of provision as to the time from which any obligation to interest may arise, the rule is that an entitlement to interest in favour of the vendor runs from the date for completion: see Davies v Littlejohn, 186; and Halkett v Dudley [1907] 1 Ch 590; or if completion does not occur on the due date, from the time when the purchaser ought to have taken possession; that is, from the time when the purchaser could safely complete having been shown good title. This liability of the purchaser to interest from such a date is matched by a counterbalancing right, in the absence of any provision to the contrary; namely, of an entitlement to the rents and profits of the land from that point on. Consistently with this principle, where a purchaser takes possession or enjoys the benefit of the rents and profits of the land from some early date, equity imposes an obligation to pay interest on the purchase money from that point on: Brooke v Champernowne (1837) 4 Cl & Fin 589; (1837) 7 ER 224. If there is an act or entitlement to possession before completion, the act of taking possession gives rise to the implied equitable obligation to pay interest from that time until payment: International Railway Co v Niagara Parks Commission [1941] AC 328, 345; Tom the Cheap (WA) Pty Ltd (in liq) v Allied Leasing Corporation Pty Ltd [1980] WAR 47.
However, assuming cases where, despite the delay in completion, a purchaser does not obtain possession until after the late completion, authority demonstrates that the vendor will be liable to the purchaser in damages for interest, for delay due to his conduct or neglect (for example, an omission or delay in making title), upon the purchase money which the purchaser has had to keep ready for the imminent settlement: Morrison v Neill (1875) 1 VLR (L) 287; King v Poggioli (1923) 32 CLR 222.
At issue in the latter case was the question of whether or not a purchaser who had refused to pay the entire balance of the purchase price at the due completion date because of the vendor's refusal to give vacant possession of all the property on the completion day, was entitled, at the later completion date, to withhold from the purchase price, by way of abatement, an amount equivalent to the damages suffered by his inability to depasture cattle on the land from the agreed settlement date. Knox CJ and Starke J, constituting the majority, decided that the purchaser was entitled to damages for failing to receive possession of the whole of the property on the due settlement day, but unliquidated damages and not compensation for a diminution or deterioration in the value of the property sold, so that damages of that nature could not give rise to an abatement of the purchase price. The principles were explained by Starke J, as follows:
But even if possession were dependent upon payment of the purchase‑money, the purchaser might still, I apprehend, obtain damages for the loss occasioned by the delay in giving possession, if such delay were due to the wilful default of the vendor (see Jaques v Millar (1877) 6 Ch D 153). Some cases hold that the principle extends somewhat further (cf Jones v Gardiner (1902) 1 Ch 191; Royal Bristol Permanent Building Society v Bomash (1887) 35 Ch D 390). But a note on these cases in Webster's Conditions of Sale, 3rd ed, p 335, is worth attention.
In the present case the learned Judge found that possession was not given of the whole property owing to the wilful default of the vendor (see In re Hetling & Merton's Contract (1893) 3 Ch 269 at 281; In re Wilsons & Stevens' Contract (1894) 3 Ch 546 at 550). ... The purchaser did not, in fact, obtain physical possession or enjoyment of the whole of the property on the agreed date, notwithstanding the urgent need he had for country on which to run his stock. Consequently, in my opinion, the purchaser is entitled to damages for breach of his contract.
But these damages are 'really unliquidated damages arising out of non‑delivery of possession according to the conditions' (In re Wilsons and Stevens' Contract at 552). They are not 'compensation' properly so called (ibid; and see Webster's Conditions of Sale, 3rd ed, pp 335 ‑ 336). The nature of compensation properly so called is indicated in Dart on Vendor and Purchaser, 7th ed, vol I, p 672. Substantially, compensation is given for some diminution or deterioration in the value of the property contracted to be sold: the purchaser 'has not got the whole of what he contracted to buy' (Clarke v Ramuz (1891) 2 QB at 461; Rutherford v Acton‑Adams (1915) AC 866). A property may, no doubt, be deteriorated or lessened in value by the removal of the soil, and perhaps by the use of the herbage growing thereon, but a claim for loss due to delay in giving possession is not, in my opinion, of the nature of a claim for compensation, even though it be measured by the value of the herbage which has been eaten or destroyed (245 ‑ 246).

Waiver of condition for the benefit of one party

A major question in this case is whether or not, by agreeing to allow the contract to remain on foot after the date due for settlement on 1 May 2003, and instead proceeding to settlement on 22 October 2003, the purchaser waived any entitlement to interest for late settlement under general condition 5(2). At the trial this issue was considered from a different aspect; namely, whether or not the purchaser had waived the benefit of special condition 5 of the Offer and Acceptance (that the contract was subject to the municipality's approval for the subject land to be used for retirement housing development). That, in turn, was related to cl (v) of the Offer and Acceptance providing for settlement on 1 May 2003 or earlier by mutual agreement.
General condition 16 provided, inter alia, that if any of the conditions relating to subdivisional approval was not fulfilled within the respective times stipulated, the vendor should repay to the purchaser the deposit and all other moneys, if any, paid by the purchaser, without deduction, and upon repayment the contract would cease to have effect and neither party would have any claim against the other. This must be regarded as a contractual provision for the termination of the contract in the event that the timetable for subdivisional approval was not achieved. Neither party attempted to terminate the contract on that ground and the sale was kept on foot in the expectation, as duly materialised, that the eventual subdivisional and other approvals would be granted and that completion could proceed. There was, therefore, an opportunity for both the purchaser, and the vendor, to terminate the contract for non‑compliance with this condition, but neither sought to avail itself of that. The proper conclusion must be that each party decided to waive any right to treat the contract as being terminated because of the delay in obtaining subdivisional approval or other requirements of general condition 16.
That treatment of the contract also, necessarily, involves an agreement, at least by the purchaser, that completion after 1 May 2003 would be acceptable and that termination of the contract for failure to complete on 1 May 2003 would not be attempted or effected. The question which, therefore, arises is whether or not the purchaser's conduct in these circumstances amounts to a waiver of any right to insist upon settlement on 1 May 2003, and the associated right to 'compensation' under general condition 5(2) for late payment, or whether it is no more than a waiver of the right to seek to terminate the contract for the vendor's failure to complete on 1 May 2003. At trial this issue was treated by the parties as involving the question of whether or not special condition 5 of the Offer and Acceptance was a condition solely for the benefit of the purchaser which the purchaser could, therefore, waive without prejudice to any of its other rights, leaving the vendor liable to damages/compensation for eventual late completion. This, too, is an issue involving interrelated and interdependent obligations.
In the manner in which this case was decided by her Honour at first instance, it was unnecessary to decide whether there had been a waiver of special condition 5 or not. Nevertheless, her Honour did address this issue and concluded that, by reason of the purchaser's letters of 15 and 30 April 2003, the purchaser did waive the condition that the City of Stirling should grant approval for use of the land for residential retirement on or before 1 May 2003, and that this was a condition inserted entirely for the benefit of the purchaser which, therefore, could be so waived unilaterally. In effect, this meant that her Honour was satisfied that the purchaser was ready, willing and able to purchase the land without this approval from the City of Stirling. However, no attention was given to the question of the degree, if any, to which compliance with that condition was tied up with compliance with conditions relating to subdivisional approval to allow the subject land to be divided into two lots to allow a particular retirement housing development to proceed.
A condition relating to settlement of the transaction by a particular date, here 1 May 2003, could not in my view be regarded as a condition entirely for the benefit of the purchaser. The earlier the settlement, and the sooner the payment of the balance of the purchase price is received by the vendor, are matters which plainly redound to the benefit of the vendor. Similarly, apportionment of outgoings, such as rates and taxes, at an early settlement date is also advantageous to a vendor. Any waiver of a condition relating to payment of the purchase price on a particular date, and so tolerating a delay in payment of the purchase price, will have impacts on both purchaser and vendor, usually advantageously and disadvantageously respectively, but not always, as the consequences may be mixed for both parties. It is clear, therefore, that her Honour was not referring to a waiver by delaying the settlement date, as being the waiver of a condition solely for the benefit of the purchaser but, rather, was referring only to a waiver of the condition requiring approval from the City of Stirling for use of the property as a retirement housing project before the settlement date.
If that were the only consequence of special condition 5, which called for approval of the City of Stirling, then a condition affecting the use to which the property might be put in the future could clearly be regarded as a condition solely for the benefit of the purchaser. After all, if the condition is not insisted upon, and the property is sold and the eventual approval is not forthcoming, the consequences fall entirely on the purchaser. The vendor who, by then, has been paid the whole of the purchase price and has transferred the title, will suffer no prejudice.
If, however, special condition 5, relating to the grant of approval by the City of Stirling for the use of the land for a retirement housing project, is related to and inseverable from the conditions relating to subdivisional approval, the position is changed. Waiver of special condition 5 would amount to a waiver of the condition that the land be sold as subdivided lots with separate titles to each and it was never suggested that the purchaser was prepared to, or did, waive compliance with that condition. That was a condition which affected both the vendor and the purchaser because, in the absence of compliance with it, the sale could not proceed and the vendor would not be entitled to the balance of the purchase price but, rather, would be obliged to treat the contract as terminated and to repay the deposit. Clearly, that is not a condition which was solely for the benefit of the purchaser and it was never treated that way.
It seems, with respect, that there is much to be said for the view that waiver of compliance with the condition, that the City of Stirling should, on or before 1 May 2003, have granted approval for use of the subject land for a retirement home complex, also amounted to a waiver of the purchaser's right to seek termination of the contract for the failure to obtain subdivisional approval by that date and an election to keep the contract on foot until subdivisional approval, at least, was forthcoming, as indeed happened.
What effect did this have on the contractual obligation to settle on or before 1 May 2003? The purchaser's director, Mr Lee, asserted that he intended to hold the vendor liable in interest if settlement was not completed on the original date. The situation at the due date of settlement was that the vendor was unable to provide a title to two subdivided lots, nor was there then the approval of the City of Stirling for use of the lots for retirement residential housing. The purchaser may have been ready, willing and able to purchase two subdivided lots without the approval of the City of Stirling for use of the land for retirement residential housing, but there was no suggestion that the purchaser was willing, or able, to take a transfer of unsubdivided land at that date. Instead, the purchaser kept the contract on foot, maintaining an entitlement to purchase subdivided land if, and when, the requisite subdivisional approval was obtained - and that was indeed eventually done. That decision, inevitably, as it seems to me, involved an election to waive insistence upon settlement on 1 May 2003 and it is the nature and consequences of that decision which then become important.
The remaining question is whether or not this was a waiver only of the right to seek rescission or termination of the contract for failure to settle by 1 May 2003, or whether it was a waiver of all rights in respect of the obligation to settle by 1 May 2003, including a right to claim 'compensation' pursuant to general condition 5(2). Again, that is a distinction which was not addressed at trial or in argument on the appeal; an omission which makes it more difficult to determine now.
That a condition solely for the benefit of one party in a contract may be waived by that party, either before compliance or in the event of non‑compliance, is not in doubt: Maynard v Goode (1926) 37 CLR 529; and Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, 543, 552, 560, 565.
A situation with marked similarities to the present arose in Gange v Sullivan (1966) 116 CLR 418 where it was held that a special condition in a contract for the sale of land, subject to the purchaser obtaining development approval by a specified date, was a condition for the benefit of the purchaser which could be waived by the purchaser. However, the purchaser did not waive compliance with that condition in that case and the vendor rescinded. The purchaser failed in his subsequent action for specific performance. Windeyer J concluded (at 443) that unless before the date set for obtaining the council's approval the approval was in fact given, or unless the purchaser expressly waived the condition, the vendor could avoid the contract because the time within which the approval was to be obtained had been specified: 'unless that stipulation was expressly waived by the purchaser it would [endure] ... for the benefit of both parties, the vendor being interested to know for how long this liability was to remain unresolved'.
In this present case, if the benefit of special condition 5 were to be waived but not the requirement to obtain subdivisional approval by the requisite date, it was plainly not possible for the parties to settle by 1 May 2003. Waiver of one without the other meant that the vendor was in default in being able to give separate titles to two subdivided blocks by the due date, a default which would entitle the purchaser to terminate the contract. If all that was waived was a right to terminate the contract for non‑completion on 1 May 2003, leaving open a right to other relief for late settlement, does this affect a contractual entitlement to 'compensation' calculated from the fixed settlement date?
It is at this point that the distinction between the so‑called claim for 'compensation' and the right to damages for breach of contract becomes of significance. It is one thing to conclude that a right to actual proved damages has not been waived in these circumstances and that a purchaser should be entitled to recover its actual loss sustained by reason of the delay (after taking into account countervailing benefits), but it is another to conclude that a contractual right to liquidated damages based on a formula running from the settlement date, which has been waived, should also endure. If, in reality, this is a contractual benefit, as the purchaser contends, rather than an entitlement to damages, then it seems that the waiver of the contractual settlement date could easily also involve the waiver of the date for the commencement of the period during which 'compensation' shall be calculated. It is difficult to see how a right which depends for its very existence on settlement at a particular date can endure unqualified if, in other respects, waiver of the obligation of settlement due on that date has occurred.
On this analysis it becomes immaterial to consider whether or not a condition for securing approval from the City of Stirling for use of the land for retirement housing purposes was one exclusively for the benefit of the purchaser or not, because more than that one condition itself was in fact waived. Indeed, the question of whether or not such a condition must be exclusively for the benefit of the party proposing to waive it, or whether it may be waived even if the other party's interests are to some extent affected, is an issue that was noticed by Wilson J in Sandra Investments Pty Ltd v Booth (1983) 153 CLR 153, 165 ‑ 166; where it was said that it should await fuller exposition by the High Court.
The problem which here arises is whether the condition is waived for all purposes or only in respect of rights of rescission. Sandra Investments Pty Ltd v Booth is an example of a situation in which waiver, by affirming a contract which was voidable, also involved a waiver of the right to rely upon associated conditions. This accounts for the conclusion in Sandra Investments Pty Ltd v Booth that once the purchaser chose to exercise its option by allowing the contract to remain on foot, it was implied that the completion was to take place within a reasonable time after the exercise of the option. In the course of discussing the decision in Gange v Sullivan, Gibbs CJ, in Sandra Investments Pty Ltd v Booth, said of that earlier authority:
The judgments of all members of the Court in that case support the view that a condition may be for the benefit of a purchaser, who may insist on performance of the contract regardless of the fulfilment of the condition, notwithstanding that the contract expressly fixes the date for completion only by reference to the time when the condition is fulfilled (161).
Gibbs CJ thereby accommodated the point made by Windeyer J in Gange v Sullivan, that the time for settlement or completion is a factor of significance to a vendor. The effect of the waiver was, or would have been, to permit the purchaser to succeed in the claim for specific performance when ready, willing and able to settle, notwithstanding the vendor's assertion that the contract had been brought to an end for non‑fulfilment of the specified condition. In the present case, as noted, both parties treated the contract as remaining on foot and there was no attempt to rescind nor any allegation that it had been terminated.
The waiver of the condition, so giving rise to a new obligation to complete within a later reasonable period, therefore, inescapably, accepts, at least for some purposes, that the contract will not be settled at the original date. The question becomes whether that can be done only for one purpose, namely for keeping the contract on foot, and not for another, that is to modify a contractual claim to compensation under a special condition as in general condition 5(2). This will be so even if the waiver or the abandonment of the right to terminate by a party, such as the purchaser in the present case, is of a continuing right to rescind or whether it may result in a revival of the right to rescind because of further delay. In such a case, one waiver or abandonment of a right to rescind may be limited only to the circumstances arising at that date, rather than abandoning a right completely if the default continues: see Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26.

Ability, readiness and willingness of purchaser to complete

Another special feature of this case is that the contract of sale expressly made time of the essence (see general condition 17).
The decision of the purchaser to keep the contract on foot when the vendor was unable to settle on 1 May 2003, therefore, also involved the waiver of general condition 17 which itself supports the conclusion, otherwise derived, that the obligation on the defaulting vendor then became to settle within a reasonable period. No attempt was ever made to re‑establish time as being of the essence of the contract, whether by the service of a notice by the purchaser specifying that from a later date time would again be of the essence, or at all: see Green v Sommerville (1979) 141 CLR 594. Again, the effect of acceptance of performance by late completion by the vendor waives all strict entitlements to terminate because of delayed performance on time, as distinct from any rights to damages for breach of contract. Again, the question becomes whether this involves a waiver of an entitlement to compensation which is predicated upon performance on the designated date.
Of course, any late performance by a vendor, accepted by a purchaser, may have this same effect, but it will not be every late performance which will involve a waiver of the benefit of general condition 5(2). Respect must be given to the particular terms accepted by the parties as controlling their bargain, including a general condition providing for an entitlement to pre‑estimated liquidated damages in the event of delay 'for any reason attributable to the vendor'.
By the express terms of general condition 5(2), the purchaser's right to compensation for late settlement for any reason attributable to the vendor is conditional upon the purchaser being ready, willing and able to complete the purchase on the settlement date, or, if not then ready, willing and able to complete, commencing from the day upon which the purchaser is, and continues to be, so ready, willing and able to complete after having given the vendor notice of that fact.
This corresponds to the general law which makes the readiness, willingness and ability of a party to a contract for the sale of land an essential ingredient, which the claimant must prove, whether seeking damages for breach of contract, rescission of the contract on the ground of the other's default, or specific performance: Hensley v Reschke (1914) 18 CLR 452, 467 ‑ 468. In the present case, this required the purchaser to show that it was ready, willing and able to complete the contract for the purchase of the land on 1 May 2003. What was required of the purchaser was to tender to the vendor a duly executed and stamped transfer of the land at a reasonable time prior to settlement (general condition 4), and to tender payment of the balance of the purchase price, namely $820,000, on the day appointed for settlement.
Although the question of the ability of the purchaser to pay the balance of the purchase price at the due date of settlement was in issue at the trial, the learned trial judge found on the evidence that the appellant had, or had access to, sufficient available funds to tender the balance and could have done so at that date. That finding is not now contested and it was plainly open on the evidence at trial. However, the vendor points out that the purchaser failed to tender, a reasonable time prior to the due settlement date, or at all in April 2003, a duly executed and stamped transfer of the land to the vendor or to its representative. The purchaser concedes that this is so and offers, by way of explanation, the assertion that it would not have been possible to have had a transfer prepared and stamped because of the absence of the approval of a plan or diagram of subdivision and the issue of new certificates of title for the subject lots at that date. To this the vendor replied, by adducing evidence, that, notwithstanding the absence of new certificates of title with a full land description, the approval of a plan of subdivision was endorsed in order for dealings - on 7 July 2003 - and that, therefore, the purchaser could not have tendered a transfer with the requisite detail before 1 May 2003.

Her Honour held that the purchaser's inability to tender a transfer with the requisite detail before 1 May 2003 was because of the vendor's failure to use its best endeavours to obtain subdivisional approval and to have the plan of subdivision lodged at the Titles Office and endorsed in order for dealings under general condition 16(3). Her Honour held that had the vendor used its best endeavours to do so, following the formation of the contract of sale in January 2003, the necessary title particulars would have been available before 1 May 2003.
It is well accepted that if the inability of an innocent party to perform a contract at the due date is due to the breach of some obligation by the other party, or the failure of the other party to take steps in co‑operation with the innocent party to secure a result which the contract requires, or if the party in default makes it plain that he is unable or unwilling to perform even if the innocent party in all respects tenders performance, this will show that the innocent party is prevented from, and absolved from, performance so long as the necessary co‑operation or participation by the opposing party is withheld. Refusal or inability of the vendor to complete on the due date, made manifest to the purchaser, 'absolved the [purchaser] from incurring any trouble or expense in doing an act that, so long as the refusal continued, would have been nugatory' - per Isaacs J in Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288, 297. To the same effect are the observations of Dixon CJ in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235, 246 ‑ 247, where the learned Chief Justice observed:
But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention.
Accordingly, her Honour found, and in my respectful opinion correctly, that had there been an entitlement to interest under general condition 5(2), there had been no failure by the purchaser to establish readiness, willingness or ability to settle on the due date which would have prevented or reduced that entitlement under the terms of general condition 5(2). The same rule applies in relation to a suit for specific performance, where an applicant must show that it was ready, willing and able at the due date to perform; but that requirement may be relaxed if strict application would work injustice: Walker v Jeffreys (1841) 1 Hare 341; (1841) 66 ER 1064; and, generally Spry ICF, Equitable Remedies (6^th ed, 2001) 217 ‑ 221.

Waiver of right to terminate or waiver of right to damages

The distinction between the waiver by a purchaser of a right to terminate the contract of purchase because of a failure to comply with some condition by the stipulated time, on the one hand, and a waiver of a right to some other form of relief, such as damages, arising from a breach of the condition or other provision of the contract, on the other, has already been highlighted. So far the authorities examined have dealt chiefly with waiver of a right to terminate, whether because of anticipatory breach or because of some want of compliance with a condition in due time. Waiver of such a right to terminate the contract will leave the contract in force, still obliging performance of the mutual obligations required of all parties and also leaving open any right to damages or other relief for breach of the contract. Conduct consistent with the continued existence of the contract will leave it in effect, removing only any right to terminate which might then have arisen: Carr v J A Berriman Pty Ltd (1953) 89 CLR 327; Turner v Labafox International Pty Ltd (1974) 131 CLR 660; although, it is also the case that an act consistent with the reservation of a right to terminate, even though it involves a conditional continuation of the basis of the contract, will not result in the loss of the right to terminate: Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26, 30 (Brennan J).
A party who has an opportunity to terminate a contract because of non‑compliance with some condition or other anticipatory breach, may decide not to do so, and in that case all parties to the contract continue to be bound by it. From then on the obligation is to perform the contract, although the actual nature and the degree of performance required may be modified by the effect of the conduct of the other party who was in breach or had failed to comply with the condition - as in this case. The effect of such conduct may be to extend the time for performance by the purchaser. One of many examples of a situation where there had been a breach of the terms of a contract, entitling the innocent party to terminate the obligation, but who instead waived the breach, resulted in the contract being enforceable, subject to the effects of the breach: Hain Steamship Co Ltd v Tate & Lyle Ltd [1936] 2 All ER 597, 608 (Lord Wright MR) - a case dealing with an unauthorised deviation by a ship subject to charter party, but which was waived by the charterers, leaving the charter party in force.
It is at this point that the use of the term 'waiver' is apt to be misleading because, as these authorities exemplify, the waiver of a right to terminate a contract because of some anticipatory or other breach will, generally speaking, leave the contract enforceable and preserve other rights of the innocent party, such as, importantly, the right to claim damages in respect of the breach. Postponement by the innocent party of the time for performance by the party in default will not, unless accompanied by some consideration given for the variation of the contract, or by an effective estoppel, create a basis to excuse the defaulting party from the consequences of the delayed performance - see Mulcahy v Hoyne (1925) 36 CLR 41, 55 ‑ 56 (Isaacs J); although, the situation is frequently complicated by the existence of mutual releases from performance of the obligation upon the stated date or by some form of estoppel which will have that effect.
That the former position - namely, postponement of the time for performance without release of the vendor from the consequences of late performance - has occurred here is demonstrated by the correspondence from the purchaser (Exhibit 1.15, the letter of 30 April 2003) which shows that the readiness to complete after the due time preserved the right to claim interest: cf Holland v Wiltshire (1954) 90 CLR 409; Tropical Traders Ltd v Goonan (1964) 111 CLR 41.
Another example of a situation where an innocent party waived its right to terminate the contract, because of the breach of condition or repudiation of the other party, but did not abandon its right to claim damages for the loss suffered as a result of the breach, is provided by Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India [1990] 1 Lloyd's Rep 391, 397 ‑ 398. Chitty on Contracts, vol 1 (29^th ed, 2004) [22‑046] refers to a waiver of such limited effect as a waiver by election and the latter as a species of waiver by estoppel, sometimes known as 'total waiver' - cf Benjamin's Sale of Goods (7^th ed, 2006) [12‑034] ‑ [12‑037]. The learned authors of Chitty explain this as follows:
Two types of waiver are relevant here. The first type may be called 'waiver by election' and waiver is here used to signify the 'abandonment of a right which arises by virtue of a party making an election.' Thus it arises when a person is entitled to alternative rights inconsistent with one another and that person acts in a manner which is consistent only with his having chosen to rely on one of them. Affirmation is an example of such a waiver, since the innocent party elects or chooses to exercise his right to treat the contract as continuing and thereby abandons his inconsistent right to treat the contract as repudiated. It is important to appreciate that, in this context, the party who makes the election only abandons his right to treat the contract as repudiated; he does not abandon his right to claim damages for the loss suffered as a result of the breach [24‑007]. (footnotes omitted)
Other examples of situations where the innocent party to the contract, faced with an opportunity to discharge the contract because of the other's breach, decides to continue the contract and by doing so elects to affirm it, but does not relinquish his or her claim for damages for any loss sustained as a result of the breach, can be found in Bentsen v Taylor, Sons & Co (No 2) [1893] 2 QB 274; Hain Steamship Co Ltd v Tate & Lyle; Chandris v Isbrandtsen‑Moller Co Inc [1951] 1 KB 240, 248; and Suisse Atlantique Société d'Armement Maritime SA v NV Rotterdamsche Kolen Centrale [1967] 1 AC 361, 395.
Accordingly, I am satisfied that in the present case the purchaser unequivocally elected to affirm the contract of sale, notwithstanding that compliance with subdivisional conditions was not forthcoming within the time stipulated; but, in doing so, intimated that this was without prejudice to the purchaser's entitlement to claim interest under general condition 5(2).
This has been treated as being acceptable because of the principle that the condition for the benefit of the purchaser alone could be waived by it. As earlier discussed, there is quite some room for controversy over whether or not this condition was exclusively for the benefit of the purchaser, because the ability of the vendor to have the contract terminated at that date for want of compliance with the condition was not an immaterial advantage to the vendor if one of the consequences of proceeding was to expose the vendor to a liability for compensation for late completion. However, the vendor never attempted to assert that it was relieved from the obligation to complete the contract at a later date and proceeded to completion.
The real difficulty in this case comes from the fact that the purchaser's claim to an entitlement to compensation in the nature of interest for late completion under general condition 5(2) was never met by any plea from the vendor for adjustment or modification of the contractual entitlement because of the accrual of other advantages to the purchaser which, in part at least, must have defrayed any loss or damage due to the purchaser by the late completion. As previously identified, these include the payment by the vendor of rates, taxes and other outgoings for the land at the later date of settlement, rather than at the contract date for completion, and the fact that the vendor did not seek any adjustment of the rights of parties in equity having regard to whether or not the purchaser actually suffered loss or expense by reason of the delay in settlement, but instead enjoyed the advantage of delaying payment of the balance of the purchase price until the later date.
The fact that these issues were not raised, and therefore were not addressed at the trial or in the course of the appeal, means that the present result that the purchaser can maintain its contractual claim for compensation, without any form of adjustment, having regard to the real nature of benefits or detriment suffered by the respective parties because of the delay in settlement, has produced a situation where the long‑established common law and equitable principles relating to such a situation have not been invoked. The consequence is that the purchaser is left with the entitlement to compensation without countervailing factors ever having been raised or examined. Because the parties have left a number of the legal and equitable doctrines applying to this situation untouched, and since there is no sufficient evidence to enable the court to apply them having regard to the manner in which the case was conducted, this cannot be an occasion, in contrast to other cases where these issues might be raised, either to accept or to reject that general condition 5(2), providing for an entitlement to compensation in the nature of interest for late settlement in favour of a purchaser, will always have the effect asserted by the purchaser in this case.
The result, however, is that I am satisfied that because the purchaser has affirmed the contract and waived any right for its termination because of a failure of the vendor to settle on the appointed day, but kept open its contractual right to liquidated damages under general condition 5(2), this means that that right endures and can be enforced. As no challenge was made to the quantification of the claim as formulated by the general condition, or because of the benefits which were conferred on the purchaser because of the delay, the only question for decision is whether or not the contractual claim is enforceable. In my view it is, and the purchaser should succeed and recover the sum of $47,049.18. I would, accordingly, allow this appeal.

[2007] WASCA 180

5 SEPTEMBER 2007

Key Legal Topics

Areas of Law

Contract Law

Legal Concepts

Contract Formation

Breach of Contract

Waiver

Compensatory Damages

Unconscionable Conduct