Love v Simmons
[2016] WASCA 176
•11 OCTOBER 2016
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: LOVE -v- SIMMONS [2016] WASCA 176
CORAM: BUSS P
MURPHY JA
MITCHELL JA
HEARD: 8 SEPTEMBER 2016
DELIVERED : 11 OCTOBER 2016
FILE NO/S: CACV 48 of 2015
BETWEEN: ROSS MAITLAND LOVE
Appellant
AND
PAUL SIMMONS
MARISA GIMONDO
Respondents
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :BEECH J
Citation :SIMMONS -v- LOVE [2015] WASC 79
File No :CIV 1303 of 2014
Catchwords:
Contracts - Contract for sale of land - Delayed settlement - Claim by buyers for liquidated damages for late settlement - Joint Form of General Conditions for the Sale of Land cls 4.2 and 4.7(b) - Whether buyers ready, willing and able to settle on contractual settlement date - Finding by primary judge that buyers not ready and willing - Question of fact - Turns on own facts
Legislation:
Nil
Result:
Cross-appeal dismissed
Category: B
Representation:
Counsel:
Appellant: In person
Respondents : Mr C Stokes
Solicitors:
Appellant: In person
Respondents : Chris Stokes & Associates
Case(s) referred to in judgment(s):
Bishop v Taylor [1968] HCA 68; (1968) 118 CLR 518
Cohen & Co v Ockerby & Co Limited [1917] HCA 58; (1917) 24 CLR 288
Dainford Limited v Smith [1985] HCA 23; (1985) 155 CLR 342
De Medina v Norman (1842) 9 M & W 820, 827; (1842) 152 ER 347
Foran v Wight [1989] HCA 51; (1989) 168 CLR 385
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Green v Sommerville [1979] HCA 60; (1979) 141 CLR 594
Hensley v Reschke [1914] HCA 88; (1914) 18 CLR 452
IGA Distribution Pty Ltd v King & Taylor Pty Ltd [2002] VSC 440
Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180
Mehmet v Benson [1965] HCA 18; (1965) 113 CLR 295
Psaltis v Schultz [1948] HCA 31; (1948) 76 CLR 547
Rawson v Hobbs [1961] HCA 72; (1961) 107 CLR 466
Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91
Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679
Simmons v Love [2015] WASC 79
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401
University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481
Walters v Cooper [1967] VR 583
Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 All ER 571
REASONS OF THE COURT:
Introduction
The court heard the cross‑appeal in this matter on 8 September 2016. The cross‑appeal was dismissed at the conclusion of the hearing. We said that we would subsequently deliver reasons for that decision. These are our reasons.
The respondents had cross‑appealed against a decision of Beech J in Simmons v Love (primary reasons).[1] The original appeal by the appellant had been discontinued.
[1] Simmons v Love [2015] WASC 79.
The primary proceedings involved a dispute over the sale of land. The appellant (the seller) agreed to sell a proposed lot of land in City Beach to the respondents, Mr Simmons and Ms Gimondo (collectively the buyers). The proposed lot was to be created by a subdivision involving the amalgamation of land owned by the seller (Original Land) and an area of land that the seller was purchasing from his neighbour. Conditional approval for the subdivision had been obtained from the Western Australian Planning Commission (WAPC) in 2011. The contract for sale was entered into on 7 March 2013. Settlement ultimately occurred on 10 November 2014. The buyers claimed contractual compensation for the delay in settlement. The judge dismissed the buyers' claim in that regard, and the buyers appealed (by way of cross‑appeal) that decision.
Background[2]
[2] The background is taken from the findings of the primary judge, unless otherwise indicated.
The contract for sale between the buyers and the seller was entered into on 7 March 2013.[3] It incorporated the Joint Form of General Conditions for the Sale of Land (GC) so far as the GC were not varied by or inconsistent with the conditions or special conditions of the contract. The purchase price was $1.03 million, and it was agreed, relevantly, in special condition 1 that settlement would take place 'within 14 days of the title being ready for dealing'.
[3] The agreement was also varied in March, April and May 2013, but these variations are immaterial for present purposes.
On 20 June 2013, KWS Capital Pty Ltd (KWS) lodged a caveat over certain land, including, relevantly, the Original Land (KWS caveat).
By letter of 11 July 2013 the buyers' bank, National Australia Bank (NAB), advised that the buyers' application for finance for $500,000 had been approved, subject to acceptance of the bank's normal terms and conditions.
Just before 19 July 2013, Ms Gimondo told the seller's settlement agent, GPS Property Settlements (GPS), that the buyers were borrowing some of the purchase price from a bank.
On 19 July 2013, GPS emailed Ms Gimondo and referred to the settlement date as being '14 days after title being ready for dealing', and requested her to contact the buyers' bank to ensure that they would be ready for settlement with the application for title. GPS also sought confirmation from Ms Gimondo in that respect.
By letter dated 16 October 2013, GPS advised Ms Gimondo that 'the title is now in order for dealing … as per the attached notification'. The letter also stated that pursuant to the contract, the settlement date was 29 October 2013. The letter requested the buyers to provide the transfer of land document 'in due course', and to contact the agent when they (the buyers) were in a position to schedule settlement.
On 18 October 2013, Mr Simmons on behalf of the buyers met with the seller. Mr Simmons and the seller signed a variation to the contract, dated 18 October 2013.
On 25 October 2013, Ms Gimondo sent GPS an email. Ms Gimondo's email referred to a conversation on 18 October 2013 in which GPS had advised that the application for new titles was prepared, but was still in the file waiting for lodgement. Ms Gimondo's email also requested advice as to when GPS would lodge an application for new titles so that settlement could proceed.
On 25 October 2013, Ms Gimondo called GPS. Ms Gimondo asked if settlement was proceeding on 29 October 2013 and if GPS had lodged the application for new titles. In response, GPS said that settlement would not take place on 29 October 2013 and that no new date had been booked. Ms Gimondo and Mr Simmons agreed that Ms Gimondo would send an email confirming both this discussion, and the earlier discussion of 18 October 2013.
Settlement did not proceed on 29 October 2013.
On 21 January 2014, the buyers' solicitors wrote a letter to the seller enclosing by way of service a notice to complete dated 21 January 2014.
In the days between 21 January 2014 and 7 February 2014 there was email correspondence between the parties' respective settlement agents about possible settlement on 7 February 2014. On 6 February 2014, GPS advised that the seller was not in a position to settle as the certificate of title for the Original Land was subject to dealing, due to the KWS caveat.
On 28 February 2014, the buyers commenced the primary proceedings, seeking specific performance.
On 26 June 2014, KWS removed the KWS caveat.
On 3 October 2014, the seller and the buyers agreed to settle on the contract, on terms that included that the seller give written confirmation that the contract was valid and unconditional, and that settlement would take place in accordance with the terms of the contract. The seller gave written confirmation to that effect.
On 10 November 2014, settlement of the contract took place, and a sum of $95,746.89 was paid by the seller to be held in an interest bearing trust account to abide the outcome of the proceedings.
The contractual requirements for settlement
The judge found, and the finding is not challenged in this appeal, that the contract, as varied, provided for settlement to occur on a date within 14 days of the subdivision plan or diagram for the Original Land being 'in order for dealing', and that settlement did not require production of a certificate of title for each lot of the subdivided land.[4]
[4] Primary reasons [90].
His Honour found (again without challenge) that settlement would occur on the following basis:[5]
(a)the plan or diagram of subdivision is 'in order for dealing';
(b)there is an application for new titles to effect the subdivision, so as to produce, subsequent to settlement, the certificate of title for, relevantly, the proposed lot; and
(c)an instrument of transfer of the proposed lot would be executed and provided at settlement. The transfer would identify the lot and the diagram or subdivision plan, with the certificate of title, volume and folio details to be filled in by Landgate.
[5] Primary reasons [88].
Further, cl 3 of the GC provided as follows:
(a)the buyer must sign the transfer and deliver the transfer to the seller or the seller's representative a reasonable time before the settlement date (GC cl 3.2);
(b)subject to certain exceptions, the buyer must arrange for duty to be paid on the contract and for the transfer to be endorsed to the effect that duty has been paid, before the transfer is delivered to the seller (GC cl 3.3); and
(c)the seller must at settlement give the buyer, relevantly, the transfer signed by the seller (GC cl 3.10).
The essential issues at trial and the reasons of the primary judge
The buyers' claim in the proceedings (although originally framed as a suit for specific performance) ultimately became a claim for compensation under GC cls 4.2 and 4.7(b) in respect of the delay in settlement.
The parties conducted the case at trial on the basis that in order to succeed in any claim under GC cl 4.7(b), the buyers had to satisfy the requirements of GC cls 4.2 and 4.5, namely that the delay in settlement was for a reason attributable to the seller, and that the buyers were ready, willing and able to settle on the settlement date.[6]
[6] Primary reasons [71].
The judge held that in order to succeed in their claim under GC cl 4.7(b), the buyers were required to establish the following propositions:[7]
1.The settlement date for the contract was 29 October 2013.
2.The buyers were ready, willing and able to perform the contract on the settlement date.
3.The non‑occurrence of settlement on that date was for a reason attributable to the seller.
4.On its proper construction, GC cl 4.7(b) entitles an innocent party to claim liquidated damages in the amount equal to interest at the prescribed rate for the period of the delay, and there is no need for that party to prove any loss from the delay in settlement.
[7] Primary reasons [72].
As to the first proposition, his Honour found that settlement was due on 29 October 2013, and that there had been no oral variation of the settlement date as had been alleged by the seller.[8] As to the third proposition, the judge found that the settlement did not occur on 29 October 2013 because the seller was not in a position to settle because of the KWS caveat over the title, and that accordingly the non‑occurrence of settlement was attributable to the seller.[9] His Honour also found for the buyers on the fourth proposition.[10] However, his Honour dismissed the buyers' claim in relation to the second proposition. His Honour found that the buyers had not established that they were 'ready, willing and able' to perform the contract on 29 October 2013,[11] in the sense that, even if they were able, they were not ready and willing.[12]
[8] Primary reasons [94], [146].
[9] Primary reasons [151].
[10] Primary reasons [159].
[11] Primary reasons [96] - [120].
[12] Primary reasons [113] - [119].
His Honour's views in relation to the second proposition were summarised as follows:[13]
(a)the contract required settlement to take place within 14 days of the subdivision plan or diagram for the Original Land being in order for dealing, and did not require the production of a separate certificate of title for each lot of the subdivided land;
(b)in October 2013, the buyers' intention was to use a new bank facility with NAB to pay $500,000 of the purchase price;
(c)NAB required a certificate of title for the proposed lot at settlement; and
(d)the buyers were not willing to settle without the production of a certificate of title at settlement.
[13] Primary reasons [90], [97].
His Honour noted that the buyers contended that they had the ability to settle irrespective of any new NAB facility, but said that:[14]
[A]n ability to settle is not enough. Further, the Buyers' conduct and statements in October 2013 reveal that they were willing to settle only on the basis that a certificate of title for the Subdivided Lot was produced at settlement.
Key findings
[14] Primary reasons [98].
In relation to the question of the readiness and willingness of the buyers, his Honour made, relevantly, the following findings:
(a)in July 2013, Ms Gimondo told GPS that the buyers were borrowing some of the purchase price from a bank;[15]
[15] Primary reasons [99].
(b)in October 2013, the buyers wished to use $500,000 from NAB towards payment of the purchase price;[16]
[16] Primary reasons [100] - [101].
(c)on 18 October 2013, when GPS said that the terms of the contract meant that the seller could settle without the issue of titles, Ms Gimondo said that that was 'ridiculous' because the buyers' bank needed to be able to lodge its mortgage and it required a title, and that the buyers were also contributing their own money and also required a title;[17]
[17] Primary reasons [49] (the references to 16 October 2013 at [102] and [117] appear to be typographical errors).
(d)Ms Gimondo reported her conversation with GPS to Mr Simmons;[18]
[18] Primary reasons [103].
(e)what Ms Gimondo had said to GPS reflected the buyers' shared intention to use the NAB facility for $500,000, and it was that conversation that led Mr Simmons to see the seller on 18 October 2013 to arrange for a variation of contract;[19]
(f)Mr Simmons sought to have the variation of contract signed on 18 October 2013 in circumstances where:
(i)the buyers understood that under the contract, without the proposed variation, settlement could proceed without a certificate of title having been issued; and
(ii)the buyers, in effect, required a certificate of title to be issued because they were intending to use the NAB facility to fund $500,000 of the purchase price and NAB required a certificate of title in order to settle;[20]
(g)Mr Simmons believed that the variation of contract signed on 18 October 2013 would mean that the seller would be required to produce a certificate of title at settlement,[21] and informed the seller on 18 October 2013 that the buyers wanted a title at settlement and wanted the variation signed;[22]
(h)Mr Simmons appreciated the difference between there being an application for new titles and titles being issued, and what he wanted was settlement only when a title was issued;[23]
(i)On 18 October 2013,[24] Ms Gimondo told GPS that the buyers required a certificate of title to be provided at settlement, and Ms Gimondo and Mr Simmons discussed this among themselves, and at no stage during October 2013 did the buyers express any willingness to settle on the contract without the provision of a certificate of title at settlement;[25] and
(j)the judge rejected Mr Simmons' evidence that in October 2013 the buyers would have settled merely on an application for title.[26]
[19] Primary reasons [103].
[20] Primary reasons [104], [109], [113] ‑ [114].
[21] Primary reasons [105].
[22] Primary reasons [108].
[23] Primary reasons [110] ‑ [112].
[24] See footnote 17.
[25] Primary reasons [117].
[26] Primary reasons [118].
His Honour also said of Mr Simmons' evidence:[27]
In Mr Simmons' responsive witness statement he says that he intended to borrow $500,000 from NAB, secured by a mortgage over the Subdivided Lot, but that he did not 'require' those funds in order to carry out settlement. His evidence about what he intended to do supports my conclusion as to the Buyers' intentions. The question is not just whether the Buyers could have settled without using the new NAB facility; it is also whether they were willing to do so. (footnotes omitted)
[27] Primary reasons [113].
In relation to the evidence of Mr Simmons and Ms Gimondo, his Honour also said:[28]
Further, several times in the course of her evidence in cross-examination, Ms Gimondo accepted that the Buyers' intention was to use the new NAB loan to fund $500,000 of the purchase price. I find that that reflected the true position. I do not accept other parts of her evidence in which she said that using the new NAB facility was just one of the Buyers' options, and that they also could have settled without using the NAB facilities as they had other funds available through other accounts that were not fully drawn down. Mr Simmons gave evidence to similar effect. The existence of available accounts from which, potentially, the purchase price could have been paid was the subject of unchallenged evidence from Mr Simmons. I accept that evidence. However, I do not accept that, as at October 2013, the Buyers intended or considered using those other funds. I find that their intention at that time was to use the new NAB funds to the extent of $500,000. That is why Ms Gimondo said what she said to Ms Lukey [of GPS].
In October 2013 no occasion arose for the Buyers to consider whether they would settle without using the new NAB facility.
At no time during October 2013 did the buyers express or manifest any intention to use, or indicate they were considering using, any option that did not include using $500,000 from the new NAB facility towards the purchase price. (emphasis added) (footnotes omitted)
[28] Primary reasons [114] - [116].
The rejection of the evidence of Mr Simmons that he would have settled in October 2013 merely on an application for title rather than upon the issue of a certificate of title, and the rejection of Ms Gimondo's evidence that NAB was 'just one' of their financing options for settlement, occurred in the context that his Honour had earlier found that their evidence on other important matters was 'unconvincing' and 'detracted from [their] credit'.[29]
[29] Primary reasons [111] - [112].
The cross-appeal and the grounds
The cross‑appeal is against the judge's finding in respect of the second proposition referred to in [25] above, ie, the finding that the buyers were not ready, willing and able to settle the contract on 29 October 2013.
The grounds of cross‑appeal are, in effect, as follows:
1.The judge erred in fact in finding that the buyers were only prepared to settle the contract upon the issue of a new title, and not upon the lodgement with Landgate of an application for the issue of a new title.
2.The judge erred in fact and in law in failing to find that irrespective of whether or not the title for the proposed lot had issued as at 29 October 2013, the buyers were ready and willing to settle as at that date.
3.The judge erred in law in failing to have regard to the position that, in an action for specific performance, the question of whether a party is 'ready and willing' to settle is not to be construed in a narrow or technical sense.
4.The judge erred in fact and in law by failing to find that:
(a)as at 25 October 2013, the seller was not in a position to settle on 29 October 2013 by reason of the KWS caveat; and
(b)the buyers were thereby relieved of the obligation to be ready, willing and able to settle on 29 October 2013.
In relation to grounds 1 and 2, the buyers refer to the judge's finding[30] that there was no occasion in October 2013 for the buyers to consider whether they would settle without using the NAB facility. They also refer to the judge's finding[31] that on 25 October 2013, they had been informed by GPS that settlement would not take place on 29 October 2013, and that no new date had been booked.
[30] Primary reasons [115].
[31] Primary reasons [55].
The buyers contend that, accordingly, between 25 and 29 October 2013, there was no occasion where they were confronted with the need to determine whether they were prepared to settle without using the NAB facility, and that their preference to use the NAB facility was not conclusive of an intention not to settle when other methods of finance were available.
In relation to ground 3, the buyers contend that the judge failed to refer to the relevant authorities on the meaning of 'ready, willing and able'. They refer to Mehmet v Benson;[32] Bishop v Taylor[33] and IGA Distribution Pty Ltd v King & Taylor Pty Ltd.[34] Mehmet is cited for the proposition that the question of whether a party is ready, willing and able to perform is one of substance and not to be resolved in a technical or narrow sense. The other two authorities were cited for the proposition that the requirement does not demand that a purchaser should always have the purchase price 'in his pocket'. The buyers also submit that a party may be ready, willing and able to settle despite adopting an incorrect construction of a contract, and refer to a passage from Spry, Equitable Remedies (8th ed, 2010) to the effect that it is 'often a difficult question of fact' as to whether the adoption of an erroneous construction of a contract involves a repudiation.[35] Reference in this regard is made to Woodar Investment Development Ltd v Wimpey Construction UK Ltd;[36] Green v Sommerville[37] and Dainford Ltd v Smith.[38] The buyers contend that the primary judge not only failed to refer to the relevant authorities, but also erroneously failed to find that even if the buyers were erroneous in their construction as to the contractual terms of settlement, they were sufficiently prepared to perform their obligations and had alternative financing in place that did not require the issue of a fresh title.
[32] Mehmet v Benson [1965] HCA 18; (1965) 113 CLR 295, 307.
[33] Bishop v Taylor [1968] HCA 68; (1968) 118 CLR 518, 525.
[34] IGA Distribution Pty Ltd v King & Taylor Pty Ltd [2002] VSC 440.
[35] Spry, Equitable Remedies (8th ed, 2010), 218.
[36] Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 All ER 571, 575 ‑ 576.
[37] Green v Sommerville [1979] HCA 60; (1979) 141 CLR 594.
[38] Dainford Limited v Smith [1985] HCA 23; (1985) 155 CLR 342.
In relation to ground 4, the buyers allege that the existence of the KWS caveat precluded the seller from settling, and that the buyers were thereby relieved of any obligation to settle on 29 October 2013. Reference is made to Cohen & Co v Ockerby & Co Ltd[39] and Killarney Investments Pty Ltd v Macedonian Community of WA (Inc).[40]
[39] Cohen & Co v Ockerby & Co Limited [1917] HCA 58; (1917) 24 CLR 288, 297.
[40] Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180 [119] ‑ [120].
Relevant terms in the GC
The GC included the following provisions:
3.5Completion of Settlement
Each Party must complete Settlement on:
(a)the date for Settlement specified in the Contract[.]
…
4Delay in Settlement
4.1Buyer delay
(a)If for any reason not attributable to the Seller, Settlement is not completed within 3 Business Days after the Settlement Date, the Buyer must pay to the Seller at Settlement interest on:
(1)the balance of the Purchase Price; and
(2)any other money payable at Settlement.
(b)The right of the seller to interest under this clause is in addition to the entitlement of the Seller to Rent under clause 6.6.
4.2Seller delay
If for any reason attributable to the Seller, Settlement is not completed within 3 Business Days after the Settlement Date the Seller must allow to the Buyer at Settlement, as a deduction from the Purchase Price, compensation on:
(a)the balance of the Purchase Price; and
(b)any other money payable at Settlement.
4.3Interest or compensation
Interest payable under clause 4.1 and compensation allowable under clause 4.2 is to be calculated:
(a)at the Prescribed Rate; and
(b)from and including the Settlement Date to but excluding the date on which Settlement occurs,
and will be treated as being in full satisfaction of any claim the Party claiming interest or compensation has against the other Party as a result of the delay in Settlement.
4.4Seller ready, willing and able
(a)If the Seller is not ready, willing and able to complete Settlement on the Settlement Date, the Seller is not entitled to interest under clause 4.1 until:
(1)the Seller is ready, willing and able to complete Settlement; and
(2)the Seller has given Notice of that fact to the Buyer.
(b)If a Notice is given in accordance with subclause (a) within 3 Business Days after the Settlement Date, interest will be calculated and payable from and including the Settlement Date to but excluding the date on which Settlement occurs.
(c)If a Notice is given in accordance with subclause (a), after the period specified in subclause (b), interest will be calculated and payable from and including the day on which the Notice is given up to but excluding the date on which Settlement occurs.
4.5Buyer ready, willing and able
(a)If the Buyer is not ready, willing and able to complete Settlement on the Settlement Date the Buyer is not entitled to compensation under clause 4.2 until:
(1)the Buyer is ready, willing and able to complete Settlement; and
(2)the Buyer has given Notice of that fact to the Seller.
(b)If a Notice is given in accordance with subclause (a) within 3 Business Days after the Settlement Date, compensation will be calculated and payable from and including the Settlement Date to but excluding the date on which Settlement occurs.
(c)If a Notice is given in accordance with subclause (a) after the period specified in subclause (b), compensation will be calculated from and including the day on which the Notice is given up to but excluding the date on which Settlement occurs.
4.6Dispute - Interest or compensation
(a)Where:
(1)the Interest Party claims that the Interest Default Party is liable to pay interest or compensation under clause 4.1 to 4.5; and
(2)the Interest Default Party disputes the entitlement of the Interest Party to the interest or compensation,
the following will apply.
(b)Subject to subclause (h), and if the Interest Party requires the Interest Default Party to pay interest or compensation under clause 4.1 to 4.5 at Settlement, the Interest Party must not later than 2 Business Days before Settlement serve an Interest Notice on the Interest Default Party setting out:
(1)the basis on which the claim for interest or compensation is made; and
(2)the amount claimed, which may include an amount to be calculated on a daily basis.
(c)The Interest Default Party must pay the Interest Amount on Settlement to:
(1)the Representative of the Interest Party; or
(2)if the Interest Party has not appointed a Representative, then to the Representative of the Interest Default Party; or
(3)if subclause (1) and (2) do not apply, then to the Interest Party, to be held by the Representative or the Interest Party subject to and for the purposes specified in this clause.
(d)On the day which is 20 Business Days after Settlement, unless:
(1)the dispute has been resolved between the Parties; or
(2)court proceedings are Instituted by a Party to determine the dispute,
the Representative who holds the Interest Amount must pay the Interest Amount to the Interest Party or, if applicable, the Interest Party may retain the Interest Amount.
(e)If:
(1)court proceedings are Instituted by a Party as specified in subclause (d); or
(2)an agreement is reached between the Interest Party and the Interest Default Party with regard to the dispute,
the Representative who holds the Interest Amount or, if applicable, the Interest Party must pay the Interest Amount, as applicable:
(A)as determined in accordance with the court proceedings; or
(B)in accordance with the agreement between the Parties.
(f)If the Interest Default Party disputes the entitlement of the Interest Party to interest or compensation under clause 4.1 to 4.5:
(1)that dispute does not affect the obligations of the Parties to proceed to Settlement; and
(2)subject to the obligation of the Interest Default Party to pay the Interest Amount on Settlement in accordance with this clause, the Parties must proceed to Settlement.
(g)Each Party authorises a Representative who holds the Interest Amount under this clause to:
(1)pay; and
(2)otherwise deal with,
the Interest Amount as specified in this clause.
(h)The provisions of this clause do not affect the right of the Interest Party after Settlement to claim and if appropriate, institute proceedings against the Buyer to recover an amount of interest or compensation as specified in clauses 4.1 to 4.5.
4.7Restriction on right in case of court proceeding
(a)The right of a Party under this clause to interest or compensation will cease as at and with effect from and including the date on which court proceedings are Instituted by a Party for:
(1)specific performance of the Contract; or
(2)a declaration that the Contract:
(A)has been terminated;
(B)remains valid and enforceable; or
(3)any other order or declaration to the same or similar effect to an order or declaration as specified in subclause (1) or (2); or
(4)other relief based on the Contract having been terminated.
(b)It is the intention of the Parties that where there is a delay in respect to Settlement:
(1)compensation should be paid; and
(2)interest payable at the Prescribed Rate for the period of the delay represents the best estimate that the Parties can give as to the damages sustained arising from the delay.
(c)Where court proceedings are Instituted by a Party in accordance with subclause (a), nothing in this clause or in the Contract:
(1)restricts, limits or prejudices the entitlement of a Party to claim interest under an Act or by way of damages or compensation; or
(2)limits or otherwise affects the discretion of the court. (emphasis added)
Clause 26.1 of the GC defined 'Interest Party' as a party who claims to be entitled to interest or compensation under cls 4.1 ‑ 4.5, and 'Interest Default Party' as the party who the Interest Party claims is liable to pay interest or compensation under cls 4.1 ‑ 4.5. Clause 26.1 of the GC also defined 'Settlement' as the completion of sale and purchase of the property in accordance with cl 3, and 'Settlement Date' as the date each party must complete settlement under cl 3.5 and any other relevant provision in the GC or the contract for sale.
Disposition
Grounds 1 ‑ 3
The legal requirement that a party be 'ready, willing and able' to perform a contract is a comprehensive obligation, and the non‑fulfilment of any one element means that the requirement has not been satisfied: Hensley v Reschke;[41] Universal Cargo Carriers Corporation v Citati.[42]
[41] Hensley v Reschke [1914] HCA 88; (1914) 18 CLR 452, 462 (absence of readiness).
[42] Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401, 437.
The content of the requirement depends upon a proper construction of the contract to which the requirement is applied: Mehmet;[43] Psaltis v Schultz.[44] Once the contract has been construed, the question of whether the party is ready, willing and able to perform the contract is essentially a question of fact: Walters v Cooper.[45]
[43] Mehmet (314).
[44] Psaltis v Schultz [1948] HCA 31; (1948) 76 CLR 547, 560.
[45] Walters v Cooper [1967] VR 583, 587.
Readiness and willingness in this context imports both the capacity to perform, as well as the disposition to perform: De Medina v Norman;[46] Psaltis.[47] The question of a party's disposition to perform involves, essentially, a consideration of the party's intention to perform: Rawson v Hobbs;[48] Universal Cargo.[49] In Rawson, Dixon CJ said:[50]
One must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness. On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete. (emphasis added)
[46] De Medina v Norman (1842) 9 M & W 820, 827; (1842) 152 ER 347, 350.
[47] Psaltis (560).
[48] Rawson v Hobbs [1961] HCA 72; (1961) 107 CLR 466, 481.
[49] Universal Cargo (437).
[50] Rawson (481).
In Foran v Wight,[51] Brennan J observed, with reference to the above passage, that to speak of a resolve or decision which is 'definitive' is to import a test of degree. His Honour said that a test of degree 'inevitably gives rise to differences in the evaluation of facts … Yet, in the great variety of circumstances to which the test might be applied, it is impossible to posit terms of greater precision'.[52]
[51] Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 425.
[52] Foran (425).
The particular passages to which counsel for the buyers referred in his submissions do not materially assist the buyers in the resolution of the factual issues raised in the grounds of appeal, and there is no error in the primary judge not adverting to those particular cases.
The question of the buyers' readiness and willingness essentially turned on a question of their disposition or intention to pay the purchase price, and the conditions on which any disposition or intention to pay the purchase price was subject, on the settlement date, 29 October 2013. That was a question of fact. It was decided adversely to the buyers, and the judge's finding in that regard was, at least to some considerable extent, based on credibility. There is nothing to indicate that the judge approached the question in a narrow or technical way. Further, whilst it may be accepted that difficult questions of fact may arise in determining whether a party is ready and willing to perform in circumstances where they have adopted an incorrect construction of the contract, that proposition underscores the limited scope for appellate review in this context. In that regard, the High Court has recently confirmed in Robinson Helicopter Company Incorporated v McDermott,[53] that a Court of Appeal should not interfere with the primary judge's findings of fact unless they are demonstrated to be wrong by incontrovertible facts or uncontested testimony, or they are glaringly improbable or contrary to compelling inferences.
[53] Robinson Helicopter Co Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 [43].
Also, in Fox v Percy,[54] Gleeson CJ, Gummow and Kirby JJ referred to the 'natural limitations' of an appellate court proceeding wholly or substantially on the record and said:[55]
These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
[54] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118.
[55] Fox [23].
In this case, neither Mr Simmons nor Ms Gimondo gave evidence‑in‑chief that they were willing to settle on 29 October 2013 without a certificate of title. Counsel for the buyers took the court to portions of Mr Simmons' evidence which, if accepted by the judge (and it was not),[56] might have been capable of sustaining a finding that for his part, Mr Simmons would have settled on 29 October 2013 without a certificate of title. However, practice direction 7.4 was not complied with, and 'cherry picking' selective pieces of the evidence in this way could plainly not establish appellable error of the requisite kind. Moreover, a review of the transcript of Mr Simmons' evidence in cross‑examination, read as a whole,[57] suggests that his evidence on the topic of his willingness to settle on 29 October 2013 in accordance with the contract properly construed, was far from coherent. Although in cross‑examination Ms Gimondo said that the buyers did not 'need' the NAB loan,[58] the judge referred to her evidence in which she accepted that the buyers' intention was to use the NAB loan and rejected her evidence that the new NAB facility was 'just one of the Buyers' options'.[59] The judge's findings were plainly open.
[56] Primary reasons [118].
[57] Especially ts 50 ‑ 52, 60, 72.
[58] ts 103.
[59] Primary reasons [114]; The judge in this regard footnoted passages of Ms Gimondo's evidence, including ts 103 where she said that the buyers did not 'need' the loan.
Counsel for the buyers also appeared to contend[60] that the judge's finding of unwillingness was somehow inconsistent with his finding that in October 2013, no occasion arose for the buyers to consider whether they would settle without using the NAB facility.[61] The two are not inconsistent. His Honour's finding in that regard was to the effect that no event had arisen in October 2013 which caused the buyers to reconsider their intended reliance on the NAB facility.
[60] Cross‑Appellants' written submissions, pars 22 ‑ 24.
[61] Primary reasons [115].
Grounds 1 - 3 established no appellable error.
Ground 4
Ground 4(a) alleges that the judge erred in 'failing to find' that, as at 25 October 2013, the seller was not in a position to settle the contract on 29 October 2013. That ground has no merit. His Honour did make a finding to that effect.[62]
[62] Primary reasons [149] - [151].
Ground 4(b) is to the effect that the judge should have found that the buyers were 'relieved of the obligation to be ready, willing and able to settle on 29 October 2013'. That contention also has no merit, for the following reasons.
First, the case was conducted by both parties at trial on the basis that the buyers had to prove that they were ready, willing and able to settle on 29 October 2013.[63] It is elementary that a party is bound by the conduct of their case at trial, and that, except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after the case had been decided against him or her, to raise a new argument that had not been advanced at trial.[64] Counsel for the buyers did not point to any circumstances, let alone exceptional circumstances, which might justify the appeal being conducted on a different basis from that upon which the case was conducted at trial.
[63] Primary reasons [71].
[64] University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481, 483; Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91 [48] ‑ [53].
Secondly, the buyers' case at trial was for compensation under GC cls 4.2 and 4.7(b). The judge made a positive finding to the effect that the buyers had to establish that they were ready, willing and able to perform the contract on the settlement date within the meaning of GC cl 4.5(a).[65] Counsel for the buyers was unable to refer to any provision in the contract which indicated that his Honour's finding in that regard was wrong.
[65] Primary reasons [72].
In our view, the effect of GC cl 4.5(a) is clear. The buyer is not entitled to compensation under GC cls 4.2 and 4.7(b) unless and until the buyer is ready, willing and able to complete settlement. The only basis on which the buyers put their claim in the present case was that they were ready, willing and able to settle on 29 October 2013. If the buyers could not establish that fact, their claim for compensation under the contract necessarily failed.
Thirdly, neither of the decisions to which counsel referred assist the buyers. Cohen was a case in which the seller had agreed to sell flour with delivery against the buyers' tender of shipping documents, FOB Fremantle. Subsequently, the buyers said that they required delivery against payment at their local bank instead. The seller indicated that it would not deliver in accordance with the buyers' substituted delivery requirements. Delivery did not occur as scheduled. The buyers sued the seller for non‑delivery. The High Court found against the buyers. The court held that on the proper construction of the contract, the seller was only obliged to deliver FOB Fremantle. The court, however, considered a further issue arising out of the fact that the buyers had not, in any event, prior to the scheduled delivery, arranged credit with their local bank in accordance with their proposed substituted delivery. The issue was considered on the assumption, favourable to the buyers (and contrary to the court's finding in that regard), that they were entitled to insist upon substituted delivery to the bank. Isaacs J (Rich J agreeing) said that on that assumption, the seller's stated refusal to deliver, which continued across the scheduled delivery period, absolved the buyers from 'incurring any trouble or expense in doing an act that, so long as the refusal continued, would have been nugatory'.[66] His Honour continued:[67]
But does that establish [the buyers'] right to sue? … In my opinion Byrne v Van Tienhoven goes to show that a party so absolved, though he may defend an action against him, by merely showing he was so absolved, yet, if he sues the other party whose refusal he relies on, he must show he was ready and willing to perform his part, had he not been absolved from actual performance. 'Readiness and willingness' is in that case a condition precedent …
[T]he [buyers] here have not shown their readiness and willingness to establish a local credit by which [the seller], on delivering the flour to the Bank, would have got cash in return … and so the [buyers] are left in the result without either the actual establishment of a credit, or proof that they were ready and willing to establish one to meet the altered delivery. (emphasis added) (footnotes omitted)
[66] Cohen (297).
[67] Cohen (298).
Cohen was not a case concerning a claim for compensation of the kind made by the buyers in this case under GC cls 4.2 and 4.7(b). Moreover, nothing can be taken from Cohen, even by analogy, which would support the buyers' contention in this appeal that they could sue under GC cls 4.2 and 4.7(b) for compensation for delayed settlement when they were not ready, willing and able to settle on the contractual settlement date.
Nor does the decision of Killarney Investments assist the buyers. That case concerned a claim by a purchaser under a contract for the sale of land for compensation for delayed settlement under a clause in an earlier version of the GC similar to the one invoked by the buyers in this case. The primary judge dismissed the purchaser's claim for compensation. The appeal to this court was allowed unanimously. Steytler P and McLure JA wrote joint reasons. E M Heenan AJA wrote separate reasons. The joint reasons agreed with the reasons of E M Heenan AJA in various respects.[68] In that case, the parties had agreed that settlement was to be 1 May 2003 (or earlier by mutual agreement).[69] It was not in doubt that the vendor had failed to use its best endeavours to obtain approval of the relevant plan of subdivision, and it was not in dispute that because of this, settlement was delayed until 22 October 2003.[70] The vendor had made it clear to the purchaser prior to 1 May 2003 that it would be most unlikely that the various conditions of the contract would be satisfied on or before 1 May 2003.[71] The purchaser nevertheless wrote to the vendor, prior to 1 May 2003, advising that the purchaser was 'ready, willing and able to proceed with settlement as scheduled on May 1st 2003'.[72]
[68] Killarney Investments [18] ‑ [22].
[69] Killarney Investments [2].
[70] Killarney Investments [4].
[71] Killarney Investments [61].
[72] Killarney Investments [62].
There were a number of issues both at first instance and in the appeal concerning the proper construction and application of certain provisions in the contract, and the question of waiver. Relevantly, for present purposes, the primary judge in Killarney Investments found 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'.[73] In this regard, the primary judge held that the purchaser was released from the obligation to tender a signed and stamped transfer before the settlement date because the vendor had made it plain that they would not proceed with settlement on 1 May 2003 in any event.[74] E M Heenan AJA expressly accepted the correctness of these findings by the trial judge.[75] Steytler P and McLure JA also appear to have accepted the correctness of those findings, and their reasons in that regard included reference to Cohen.[76] Although the matter was not discussed by the court in terms, both the joint reasons and the reasons of E M Heenan AJA, read as a whole, at least implicitly proceeded on the basis that, in order to establish its right to compensation, the purchaser was required to prove that it was ready, willing and able to settle on 1 May 2003.
[73] Killarney Investments [44].
[74] Killarney Investments [44].
[75] Killarney Investments [44].
[76] Killarney Investments [19] ‑ [20], cf [8(2)].
Conclusion
For these reasons, we dismissed the cross‑appeal.
2
22
1