Masters v Belpate Pty Ltd
[2001] NSWSC 169
•20 March 2001
Reported Decision:
(2001) NSW ConvR 55-988
New South Wales
Supreme Court
CITATION: Masters & Ors. v. Belpate Pty. Ltd. [2001] NSWSC 169 CURRENT JURISDICTION: Equity Division FILE NUMBER(S): SC 4148/98 HEARING DATE(S): 29, 30, 31 January, 1, 2 February, 1 March 2001 JUDGMENT DATE:
20 March 2001PARTIES :
Ray Masters - 1st plaintiff
Rhonda Elizabeth Druce - 2nd plaintiff
Allen Pennington - 3rd plaintiff
Michael Tattersall - 4th plaintiff
Leana Gai Mills - 5th plaintiff
Fadia Najib Matouk - 6th plaintiff
Belpate Pty. Limited - defendantJUDGMENT OF: Hodgson CJinEq at 1
COUNSEL : Mr. C. Harris for plaintiffs
Mr. A. Gruzman for defendantSOLICITORS: Willis & Bowring, Miranda for plaintiffs
McBride Harle & Martin, Hurstville for defendantCATCHWORDS: CONVEYANCING - Vendor and purchaser - Units purchased from plan - Condition that if strata plan not registered within 30 months, either party could rescind - Promise by vendor to do everything reasonably necessary - Strata plan not registered within 30 months and vendor rescinds - Whether delay by architect and engineers involves breach by vendor - Whether failure to register plan caused by breach. CASES CITED: Plumor Pty. Ltd. v. Handley (1996) 41 NSWLR 30
Apollo Shower Screen Pty. Ltd. v. Building & Construction Industry Long Service Payments Corp. (1995) 1 NSWLR 561
Hawes v. Cuzeno Pty. Ltd. (1999) NSWSC 1167
Hunyor v. Tilelli (1997) 8 BPR 15,629
Woodcock v. Parlby Investments Pty. Ltd. (1988) 4 BPR 9568
Sanctuary Investments Pty. Ltd. v. St. Gregory's Armenian School Inc. (1998) 9 BPR 16,823DECISION: See end of judgment
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORAM: HODGSON, CJ in Eq.
Tuesday 20th March 2001
NO. 4148 OF 1998
MASTERS & ORS. V. BELPATE PTY. LIMITED
JUDGMENT
1 In May 1995, the defendant Belpate purchased the property 486-496 President Avenue, Kirrawee, in respect of which the Sutherland Shire Council had, in November 1994, granted development approval for the construction of three blocks of home units, comprising forty five units in all.
2 Later that year, the defendant proceeded to sell units from the plan. On 13th October 1995, the defendant entered into a contract to sell Unit 41 to the first plaintiff Ray Masters for $155,000.00, and a contract to sell Unit 12 to the second plaintiff Rhonda Druce for $155,000.00. On 26th October 1995, the defendant entered into a contract to sell Unit 13 to the third plaintiff Allen Pennington for $155,000.00, and a contract to sell Unit 43 to the fourth and fifth plaintiffs Michael Tattersall and Leana Mills for $155,000.00.
3 It was an express term of each contract that completion was conditional on the registration of a strata plan at the Land Titles Office within thirty months from the date of the agreement, and that, if registration was not effected within that time, either party could rescind the contract. By a letter dated 10th July 1998, Belpate purported to rescind each contract, on the ground that the strata plan had not been registered within thirty months.
4 In these proceedings, the plaintiffs seek a declaration that the purported rescision was invalid, specific performance of the contracts, and/or damages. Belpate has put on a cross-claim, claiming damages arising out of caveats lodged by the plaintiffs against the title to the units.
OUTLINE OF FACTS
5 Development approval was granted to Belpate’s predecessor in title on 23rd November 1994. The approval contained many conditions, including conditions requiring particular plans and specifications to be submitted with the building application.
6 Most important for these proceedings are conditions concerning drainage, and these involved inter alia relocation of a Council stormwater pipeline running across the site. This matter was dealt with in Conditions 15-20, which were in the following terms:
15. A depression shall be formed over the full width and length of the drainage easement to provide a stormwater escape route. The escape route shall be designed to have a capacity to carry the difference between a 1 in 100 year flow and the flow in the pipe.
16. A detailed drainage design prepared by a suitably qualified Civil Engineer in accordance with The Institution of Engineers “Australian Rainfall & Runoff" (1987) shall be submitted to Council with the Building Application. The submission is to incorporate:
(a) Certification from the Engineer that the design has been prepared in accordance with Australian Rainfall & Runoff (1987).
(b) A detailed drainage design supported by a catchment area plan and drainage calculations (including a Hydraulic Grade Line Analysis).
(c) A layout of the drainage system showing existing and proposed pipe sizes, type, class, grades, lengths, invert levels, finished surface levels and location of all pipes with levels reduced to Australian Height Datum.
(d) A longitudinal section of the pipeline within the road reserve including existing natural surface levels, design surface levels design invert levels of the proposed pipeline and the location and level of all services where those services cross the proposed drainage line.
(e) Measures for controlling the rate of discharge of stormwater from the site to a drainage system under Council’s control such that the site discharge does not exceed the pre-development rate of discharge. This may require on-site detention to limit the flow. Calculations detailing the existing site run-off along with the calculations for on-site detention are to be included in the submission.
(f) If the natural fall of the land is towards the rear or side boundaries of the site then an easement to drain water over adjoining properties shall be created under s.88B of the Conveyancing Act to allow discharge of stormwater through adjoining properties to a drainage system within the natural catchment under Council's control. The easement shall be created prior to release of the Building Application.
(g) The design floor level including the level of any opening in the wall adjacent to the drainage easement shall be set above the level of the overland flow of stormwater generated by a storm of design recurrence interval of 1 in 100 years, flowing along the overland escape route within the drainage easement within or adjacent to the site.
(h) Erosion control measures which shall be undertaken during the course of construction to prevent sediment discharge from the site, in accordance with Council's standards and specifications, along with measures to be undertaken to stabilise all disturbed areas by revegetation at the completion of building construction.
17. The pipeline within the site shall be reconstructed to a location clear of the proposed building to Council's standards and specifications.
18. A 3m wide easement for drainage shall be created over the line of Council’s pipeline to a design to be approved by Council.
20. A design shall be submitted to Council for approval along with the Building Application for the relocated pipeline. The design shall include a hydraulic grade line analysis of the stormwater system.19. The relocated Council pipeline within State Rail Authority land shall be designed and constructed to that authority’s satisfaction along with the depression over the pipeline to carry any overland flow of stormwater.
7 The development approval also contained conditions concerning noise restriction. The first sentence of Condition 22 was in the following terms:
- Plans and specifications prepared by a qualified Acoustical Engineer showing details of the acoustical treatment of the building shall be submitted with the Building Application and approval obtained from the Council prior to the commencement of any work.
Condition 36 dealt with mechanical ventilation systems, and was in the following terms:
- Plans and specifications indicating details of all mechanical ventilation systems must be submitted with the Building Application and approval obtained from the Council prior to the commencement of the installations.
8 The stormwater from the site discharged onto adjoining railway property. The relocation of the Council pipeline also required relocation of the continuation of that pipeline across Rail Estate land, and that matter was referred to in Condition 19, set out above. It appears that the alteration of the drainage arrangements onto the railway property meant that the consent of Rail Estate was required. On 26th July 1994, Rail Estate had written to consultants for Belpate’s predecessor in title, indicating agreement in principle to discharge of stormwater onto its property, subject to certain conditions. That letter was in the following terms:
I refer to your letter of application to drain into the Authorities land at the rear of President Avenue and Acacia Road, Sutherland, and subsequent discussions.
Your application has been the subject of site investigations by our District Civil, Signals and Electrical Engineers to ascertain whether any railway infrastructure would be affected by your drainage proposal.
I am pleased to advise that there is no objection, in principle, to the discharge of stormwater from the proposed development subject to the following conditions.
The following conditions however would need to be met prior and during construction:
1. A fee of $200 which covers initial engineering investigation costs to date is payable to “District Civil Engineer, CityRail, Hurstville”.
2. All work is to be carried out to the satisfaction of the District Civil Engineer, Hurstville. An SRA site supervisor/flagman will be required for the duration of work on Authority land at an estimated cost of $15/hr.
3. A structural detailed design is required to be submitted for the alterations to the existing concrete spillway at 26.240km on the downside of the Cronulla line.
4. A hydrological study is required showing run off details of the development is to be submitted prior to any Drainage Agreement being entered into. This needs to identify existing and proposed run off figures and prove the culvert under the Cronulla Railway Line is capable of increased run off.
5. The shaped overland flowpath on SRA land at top of cutting is to have a concrete apron to prevent erosion and allow vehicular traffic to cross.
6. The following persons are to be contacted at least fourteen (14) days prior to any works or excavations being commenced on State Rail Land:
Mr M Meehan District Works Engineer 5637-0640
Mr P James District Signals Engineer 5637-0420
Mr R Walsh District Electrical Engineer 5637-0729
As mentioned earlier, all works on State Rail land are to be supervised by authority staff at your expense.
Your company will be required to complete a Drainage Agreement which will provide for an establishment fee of $750 (once only), together with an annual fee of $52.00. The Company will be responsible for the continued payment of this fee until such time that a separate agreement may be entered into by the Body Corporate. A security deposit of $500.00 is to be lodged by the Company to ensure this is done and will be refunded on completion of a new agreement by the Body Corporate.
On receipt of your acceptance, I will advise the Engineers accordingly and arranged (sic) the preparation and submission of the Drainage Agreement.If your Company is prepared to proceed on this basis, please let me have your written acceptance together with appropriate advices in respect of points 3 & 4 above.
No written acceptance of these terms was ever provided.
9 Belpate lodged a building application for the project with Sutherland Shire Council on 28th June 1995. The plans had been prepared by an architect Frank Smith, who had been the architect employed by Belpate’s predecessor in title in connection with the development application. However, certain plans and specifications, including those of the drainage system and of the mechanical ventilation system, were not lodged with the building application as had been required by conditions of the development approval.
10 Some of these additional plans and specifications were lodged with the Council under cover of a letter dated 6th September 1995, signed by Mr. Smith and also by Garry Crockett, the managing director of Belpate. That letter enclosed drainage details prepared by an engineer Toby Fiander, and also an acoustic report prepared by acoustic engineers referred to elsewhere as PKA. However, the letter advised that mechanical ventilation system details would be submitted prior to the commencement of the trade by the builder.
11 On 3rd October 1995, a Council officer sent a facsimile to Mr. Smith, advising inter alia that Condition 36 (relating to mechanical ventilation systems) could not be overcome, and that he would need to submit details.
12 Meanwhile, Belpate had been negotiating with a builder and with financiers. It appears that the terms of a building contract were negotiated with a builder Samrani Developments Pty. Limited in about August and September 1995. It appears that about this time, there were also negotiations with financiers, including the National Australia Bank, which ultimately provided finance for the project.
13 On 14th August 1995, the National Australia Bank wrote to Mr. Crockett and his wife regarding documentation required to proceed with an application for finance. One requirement was “confirmation of pre-sale of sufficient units to ensure that the proposed bank funding can be cleared in full from the net settlement proceeds of those pre-sales”.
14 On 12th September 1995, Mr. Crockett sent a facsimile to an officer of the National Australia Bank in the following terms:
We have now presold (sic) sufficient units at Kirrawee to cover the proposed construction advance for the above development.
Would you please peruse the following documentation to ensure that it will comply with NAB requirements. As soon as we receive written advice from you we will sign the building contract and exchange contracts on the units pre-sold.At this stage we will not be commencing construction until May (or until sufficient units are sold at Caringbah to clear pre-existing loan facilities) however we want to lock the builder in now to bed the whole project down.
15 As mentioned earlier, the subject contracts were entered into during October 1995. The contract contained special conditions, and Special Conditions 1, 2 and 8 were in the following terms:
1. This Agreement and completion thereof is subject to and conditional upon the registration by the Land Titles Office of a Strata Plan pursuant to the Strata Titles Act, As Amended, not later than thirty (30) months from the date hereof and in the event of such registration not being effected before or on that date then either party shall have the right to rescind this Agreement by notice in writing to the other.
2. The dimensions shown on the plan annexed hereto and marked "A” are provisional only and are subject to alteration upon completion of final survey and preparation of a Strata Plan and registration of that plan as a Strata Plan by the Land Titles Office. The Vendor will, as soon as possible, take steps to have the plan registered by the Land Titles Office and the Vendor reserves the right to make such alterations to the plan, annexed hereto and marked with the letter "A” as may be required to obtain its acceptance by the Land Titles Office and no objection requisition or claim for compensation shall be taken or made by the Purchaser in respect of any minor discrepancies between the Plan which is annexed hereto and the plan of subdivision as registered by the Land Titles Office. Provided, however that in the event of the position dimensions or area in any of the lot or lots hereby said as shown on the annexed plan being more than a minor variation from those as shown on the plan so registered by the Land Titles Office then the Purchaser shall have the right by notice in writing to the Vendor and provided such notice is given within ten (10) days of the Purchaser having received written notification of such variation to rescind this Agreement which shall thereupon be at an end and the provisions of Clause 19 hereof shall apply.
8. Any defects or faults due to faulty materials or workmanship which may appear in the property and which are notified in writing to the Vendor immediately prior to the expiration of three (3) months after the date of completion of this Contract shall be amended and made good by the Vendor or caused to be amended and made good by the Vendor at his own cost within a reasonable time after the receipt of such notice PROVIDED THAT this shall not apply to nor include normal maintenance, wear and tear and minor shrinkage or minor settlement cracks. This Clause shall not merge upon completion and shall continue in full force and effect notwithstanding completion of this Contract. The Vendor warrants that the quality of materials, fixtures and workmanship in the property shall be of no less quality than that of the other Lots in the Strata Plan. The Purchaser will proceed to completion in accordance with the terms of this Contract notwithstanding that there may be works to be carried out after completion by the Vendor pursuant to the terms of this Clause.It is agreed that a minor variation shall be a variation of 2½% or less of the area of the Lot.
The printed terms of the contract included Annexure Clause A6, which was in the following terms:
- A6 Unregistered plan
If any of the property is described as a lot in an unregistered plan -
A6.1 the vendor must do everything reasonably necessary to have the plan registered within the plan registration time, with or without any minor alteration to the plan or any document to be lodged with the plan validly required or made by a statutory authority or the Registrar-General;
A6.2 normally, either party can rescind if the plan is not so registered;
A6.3 the purchaser must serve the form of transfer within 14 days after either party serves notice of the registration of the plan and every relevant lot and plan number;
A6.4 the completion date becomes the later of that date and the date which is 21 days after that service;
A6.5 clauses A6.1 and A6.2 apply to any prior plan which is to be registered before the plan is registered; and
A6.6 the purchaser cannot make a claim, objection or requisition or rescind or terminate in respect of a boundary adjustment plan making only one or more minor adjustments.
16 At about this time, Mr. Crockett requested another architect, Barry Greig, to assist in obtaining building approval from the Sutherland Shire Council: it appears that he was more experienced than Mr. Smith in dealing with this Council. It appears that Mr. Greig in fact had quite frequent contact with officers of the Council on behalf of Belpate, particularly during January to March 1996 and August to December 1996.
17 It appears that the drainage plans which had been prepared by Mr. Fiander and submitted in September 1995 conflicted with the architectural plans submitted with the building application: the basement floor levels shown in Mr. Fiander’s plans were 1.5 metres higher than those shown in the architectural plans. It seems that this led to some requirement from Council officers for amended plans. The version of Mr. Fiander’s plans which is in evidence shows the original plans as being dated 10th August 1995, and a first amendment having been made on 15th February 1996. It would seem that this is the amendment which lowered the floor levels to make the plans consistent with the architectural plans. It would seem that these amended plans were forwarded to the Council under cover of a letter from Mr. Fiander dated 26th February 1996. This is not altogether clear however: that letter refers to instructions received on 23rd February 1996, and there is other material suggesting there was a letter from the Council to Mr. Smith on 5th February 1996, and also a letter from Mr. Smith to Mr. Fiander on 28th February 1996.
18 The version of Mr. Fiander’s plans which is in evidence shows a further amendment “to Council’s requirements” as having been made on 25th March 1996. It is not clear what those amendments were. It appears also that there was a letter from Mr. Fiander to the Council dated 1st April 1996.
19 There is in evidence an internal memorandum of Sutherland Shire Council dated 28th March 1996, referring to receipt of a facsimile from PKA re acoustic treatment, and recommending approval of the building application subject to conditions. There is also in evidence a further internal memorandum of the Council dated 18th April 1996, which, with some handwritten amendments in the third paragraph, commences as follows:
A meeting on the 2nd of April was held with Frank Smith (applicant), Toby Fiander (engineer), Mike Gagan an (sic) myself to attempt to resolve present inadequacies with the engineering design. The supplementary (amended) plans should soon be received by Council and if all of the following issues are resolved, the application would be ready for release:This application has been with Council for quite a while and although there are still outstanding engineering issues a deferred commencement may be justified as all other issues seem to be resolved. The hold up in the processing has been equally contributed to by both a backlog of applications to be assessed and delays by the applicant in submitting additional information for assessment.
20 There is in evidence a letter dated 21st April 1996 from Mr. Smith to Mr. Crockett, advising that the building approval was expected in the next day or two, and that it would be “subject to final drainage pit details by Toby Fiander (due in any day now)”. The letter complained about problems created by the Council.
21 On 24th April 1996, Belpate determined Mr. Smith’s retainer, and required the return of documents by him.
22 On 24th April 1996, a deferred building approval was issued by the Sutherland Shire Council. It contained eighty conditions, but only one of them, Condition 72, required compliance before a final building approval could issue. Conditions 66 and 72 were in the following terms:
72. Pursuant to Section 95 of the Local Government Act 1993 this approval is a deferred commencement approval and no work shall be undertaken on site until the following matters have been attended to by the applicant and a further approval has been issued by Council in respect to the following:- *Design and construction details of the pit at CH.60, *Construction details of box culvert sections, *Details of the transition from the overland flow path to the overland flow box culvert, *Structural details of the concrete apron for overland flow path.66. Plans and specifications being submitted to Council and approval obtained before work is commenced showing details of the mechanical exhaust system to the carpark.
23 On 30th May 1996, a building contract was signed by Belpate and dated: it appears that it had already been signed some time before by the builder Samrani.
24 On 24th June 1996, the National Australia Bank approved finance for the building.
25 On 8th August 1996, Mr. Crockett wrote a letter to Mr. Greig in the following terms:
Further to our recent telephone discussions we enclose all documentation provided to us by Frank Smith for your information.
This consists of:
1) Original tracing sheets of building & site plans nos 1 - 7 inclusive by Frank Smith & Associates
2) Original tracing sheet of landscaping plan by Kerry Rourke
3) Original plan of lot consolidation by John Holt, Surveyor
4) Copies of site layout & drainage plan, basement drainage plan & longitudinal section being sheets 1 - 3 inclusive by Toby Fiander & Associates. I assume Toby Fiander is holding originals.
5) Copy of approved DA
6) Copy of approved BA
7) Copy of Drainage Report dated 10th August 1995 by Toby Fiander & Associates
8) Copy of letter dated 20th June 1994 from Rickard & Partners to City Rail & copy of letter in response by City Rail dated 27th July 1994
9) Copy of report dated 7th September 1995 by Grant Alexander & Associates Consulting Engineers & Geologists
10) Copy of Acoustic Design Report dated June 1995 by Peter Knowland & Associates
11) Copy of letter dated 6th September 1995 from Frank Smith & Associates to Sutherland Shire Council
12) Copy of release dated 23rd April, 1996 transfering (sic) rights to all documentation from Frank Smith & Associates to Belpate Pty Ltd, and copy of fax from Frank Smith dated 23rd April 1996.
Barry, we are most grateful for the assistance you have given to us. With the benefit of hindsight we should never have involved Frank Smith and hope you can sort out all the loose ends which have apparently been left by him. Again thank you sincerely for your continuing interest and assistance.As you will note we had been assured by Frank Smith that everything had been completed with the exception of drainage pit details by Toby Fiander.
26 Mr. Greig’s first account in relation to this project, dated 30th January 1997, showed that he only commenced charging for his work for this project as from 20th August 1996.
27 On 19th August 1996, Mr. Greig telephoned Mr. Fiander, apparently regarding the preparation of outstanding plans.
28 On 27th August and 28th August 1996, Mr. Greig made contact with State Rail concerning the discharge of stormwater onto its property. On 28th August 1996, Mr. Crockett wrote to Rail Estate a letter in the following terms:
We are the owners of the above site, having purchased the land together with an approved Development Application for 45 units, from the Best Group in March 1995.
Part of the documentation relating to the sale included correspondence between Rickard & Partners (Engineers) and City Rail, dated 27th July 1994, in which City Rail advised approval and provided terms and conditions for the disposal of stormwater onto its property. This information was instrumental in us determining the viability of the project, which at best was marginal given its location between the railway line and two very busy roads - one of which is a major federal highway.
It was considered that the project could work if prices were kept to a minimum and marketed to first home buyers, on the basis of them purchasing a new unit for less than the price of a second hand unit. We believed this would balance the problems of noise, location and the smaller size of the units, as it would provide an opportunity for purchasers to get into the first rung of the home ownership ladder at prices ranging from $125,000.
We were of the understanding that agreement had been reached with City Rail as per the 1994 letter, and were rather shocked to receive a telephone call from our architect Barry Greig, of Barry J Greig and Associates this afternoon. We understand Barry met with you at 10.30am today, and explained that he had recently taken over the project following Building Approval from Sutherland Shire Council. The architect responsible for the DA (Frank Smith), also prepared and gained the recent BA approval, and we understood that everything had been organised by him as part of this process - a process which has taken some 2 years altogether.
We have contracted to commence construction on the project in 2 weeks time and would greatly appreciate any assistance you can give us to maintain this framework.
We would also respectfully request that you give favourable consideration to maintaining the terms and conditions contained in your correspondence, and on which the viability of the project was assessed.
We sincerely thank you for the assistance you have provided to our architect to date, and look forward to your favourable response.Any additional charges will place us under severe financial duress as we will be unable to pass these costs on.
29 Apparently thereafter there was some contact between Mr. Greig and State Rail, because on 10th September 1996, Mr. Fiander sent a copy of discharge calculations which he had made in August 1995 for the building application, apparently to assist Mr. Greig in his dealings with Rail Estate.
30 Rail Estate replied to Mr. Crockett’s letter in a letter dated 19th September 1996, in the following terms:
Reference your letter of 28 August 1996 related to proposed development at the above location.
The original application was made well over two years ago by Rickard & Partners. Since when many changes have occurred particularly this Authority's policy, and the ownership of the applicant developer.
State Rail is not desirous of further loading its stormwater facilities, for other than railway purposes, due to the increasing costs of establishment and maintenance. Costs associated with our infrastructure maintenance etc have risen significantly in the intervening period.
It is assumed that, by your use of the Authorities stormwater system, you will achieve significant cost benefits, even after meeting the Authorities costs. The alternative of course would be to connect to Council's system.
Whilst you refer to property values, it is our understanding that residential values generally have risen by 20%, but that new developments have attained even better results.
Yours (sic) acceptance and early information of the above will enable the matter to be formulated at an early date.To enable you early access as requested and to avoid delays from continuing discussions I am prepared to recommend the following:-
a. An Annual licence at a fee of $350 p.a. With all technical conditions as previously advised.
b. An establishment fee of $25,000
c. Payment of our Engineer’s fees.
d. A security deposit of $1050.
31 On 4th October 1996, Mr. Fiander sent a facsimile to Mr. Greig, which was apparently passed on to Mr. Crockett on 8th October. That facsimile was in the following terms:
Proposed redevelopment - cnr. President Ave. Acacia Road, Kirrawee.
The proposed development will drain to the rear of the property and into a relocated pipe in an easement in favour of Council. The pipe discharges to railway land where a chute takes water down an embankment to an existing box culvert. The current proposal requires that traffic access and parking be provided in a basement area. Part of this proposal is a lowered and slightly relocated Council pipeline. Lowering the pipeline requires that a railway drainage structure be lowered by about 1.1m.
The first design presented for this proposal by this firm suggested that it would be preferable to raise the proposed buildings or otherwise modify the proposal so that it was not required to excavate a significant volume of soil, lower the Council pipeline and the railway drainage structure and the other related matters. We further suggested that a Section 102 variation be pursued with Council or that a new DA be submitted. Neither course was pursued; however we were not privy to early discussions about the development, so this alternative may have been canvassed at that time and found wanting for planning reasons.
With the floor levels of the current proposal it is not possible to drain to any structure except the existing chute and culvert, which will need to be modified for the purpose.
In technical discussions Council’s officers suggested that Council’s drainage pipe was present principally to meet Council drainage requirements.
Discharge on to railway land did not require approval or licensing of the SPA as it was an existing discharge for public purposes.
In short, I think we are stuck with the current arrangements unless the proposal is modified to the point where additional planning approval is required.However, as modification of the SRA structure is required there is no option to avoid co-operation of the SRA.
32 It appears that meanwhile on 30th September 1996, Mr. Greig discussed Mr. Fiander’s drawings with Mr. Fiander. According to a date on the copy in evidence, the final amendment to Mr. Fiander’s plans was made on 30th October 1996, described as “detention system modified”.
33 Satisfaction of Condition 72 also required certain engineering structural drawings, which were contributed by another engineer on the project, John Romanous. According to his affidavit evidence, Mr. Romanous carried out structural drawings for the overland apron slab and the box culvert from about mid-October 1996. However, I note that Mr. Greig apparently did not meet Mr. Romanous to discuss the plans until 18th November 1996, after Mr. Greig had been to Council to enquire about Council’s conditions.
34 An internal memorandum of Sutherland Shire Council dated 4th December 1996 states the following:
This latest submission does not address the requirement of condition #72 of the deferred commencement approval.
1. The design and construction details of the pit have not been submitted, including details of the retaining wall and safety measures to ensure people cannot fall into the drainage easement.
Application should be deferred again until these outstanding matters have been addressed.2. Details have not been submitted of the concrete apron for the overland flow path.
35 It appears that Mr. Romanous completed his drawings on 11th December 1996. They were collected from him on that day by Mr. Greig and taken to the Council. On 13th December 1996, the Council issued a final building approval.
36 Meanwhile, negotiations had been proceeding with Rail Estate. There is in evidence a letter dated 31st October 1996 from Dennis & Co., solicitors acting for Belpate, to Rail Estate. This letter was in the following terms:
We note the alternative suggested by you in paragraph 4 of such letter that our client connect to the Council system. Pursuant to your suggestion, our client will drain into a Council’s relocated pipe in the existing Council easement. This pipe will discharge from the easement onto railway land where a shute (sic) takes water down an embankment to an existing box culvert and Council has advised us that such discharge onto Railway Land does not require approval or licensing by you as it is an existing discharge for public purposes.We act for Belpate Pty. Limited and have been handed your letter of 19th September 1996 addressed to our client company relating to its proposed development at 494-496 President Avenue, Kirrawee.
37 Rail Estate replied to this letter on 15th January 1997, alleging that Belpate’s letter had not been received until 15th January 1997. The reply was in the following terms:
Referring to the above and your letter of 31 October 1996, which was not received by me until 15 January 1997, in the matter of stormwater drainage from your clients site onto SRA property.
We do not agree with your clients comments, and are not prepared to approve the proposed works without your client first accepting the terms and conditions outlined in our letter of 19 September 1996.
The following are noted:-
a. The Council easement runs from President Avenue to State Rail's facility, this does not provide for access by private landholders.
b. Your client's development requires an “overland flowpath" across State rail property, which must be approved and agreed to by us and forms part of our 19 September 1996 letter.
It is considered that significant benefit is gained by your clients access to our stormwater system.
On receipt of your clients acceptance of our terms and conditions and prior payment of our fees and charges, we will obtain approval from our engineers to enable your clients access to our system to be approved.We are concerned that your client may already have intruded onto State Rail property without prior approval, which our engineers will ascertain shortly, however we trust this is not the case, but caution against any intrusion onto our land without approval.
38 The building works commenced on 6th January 1997. However, they had to be suspended on or about 25th January 1997, because Rail Estate would not allow access to its site. As a result, the builder went off the site, and proceeded with another job. Negotiations proceeded between Dennis & Co. and Rail Estate concerning the terms of an agreement, and an agreement was ultimately executed on 27th February 1997. However, because of commitments of the builder, work did not resume on the site until early April 1997.
39 The building works then proceeded, and were completed in May 1998. Council records indicate that a building inspector saw the completed works on 12th May and 19th May, and that the works were completed satisfactorily. The records show that an engineer saw the works on 25th June 1998, and commented that the works had been completed satisfactorily. A town planner commented on 2nd July that the planning works had been completed. On 10th July 1998, the Council executed a certificate for the strata plan, and released the strata plan to Belpate.
40 On 8th July 1998, a letter was sent by Mr. Pennington’s solicitors on behalf of Mr. Pennington to Belpate in relation to Unit 13. The letter asserted that “the following rectification work is required to our unit prior to settlement”, and went on to set out thirteen items.
41 Belpate served notices which purported to rescind all its contracts with the plaintiffs on 10th July 1998.
42 Caveats were lodged by the plaintiffs some time thereafter. On 25th August 1998, the defendant’s solicitors wrote to the plaintiffs’ solicitors demanding that the caveats be withdrawn, and advising that consent would be sought for registration of dealings including the registration of the strata plan. Apparently that consent was forthcoming, because the strata plan was lodged for registration on 7th September 1998, and it appears to have been registered on 23rd October 1998.
43 Belpate served a lapsing notice in September 1998, and these proceedings were commenced on 2nd October 1998. Orders were made extending the caveats, and it was noted on 25th June 1999 that the plaintiffs gave an undertaking as to damages.
ISSUES
44 The principal issue that has been debated in this case is whether Belpate was in breach of cl.A6, and was thereby disentitled to rely on Special Condition 1 to terminate the contract.
45 The next issue is whether the plaintiffs have established readiness, willingness and ability to perform the contracts on their part, so as to be entitled to specific performance. If not, there could be a question whether the plaintiffs are entitled to any relief at all.
46 The third issue is whether Mr. Pennington repudiated his contract with Belpate by his solicitor’s letter of 8th July 1998, with that repudiation being accepted by Belpate’s notice of 10th July 1998.
47 At one stage, it was suggested that the plaintiffs would seek an enquiry as to damages. That has now not been pursued. The plaintiffs also pleaded a case based on estoppel arising out of some dealings with Belpate’s estate agent concerning tenants, but that is now not pursued. The plaintiffs have sought to amend the Statement of Claim in relation to an allegation that Belpate acted unconscionably in rescinding. If I find against the plaintiffs on their other claim, I am requested to consider an application for amendment in relation to this matter.
48 The final issue is whether Belpate is entitled to an enquiry as to damages, arising out of the lodgment of caveats or the undertakings as to damages.
49 In addition, I will need to consider some credit issues, especially concerning the evidence of Mr. Crockett. There will also be issues concerning some expert evidence. For the plaintiffs, evidence was given by an engineer Mr. Barry and a developer Mr. O’Mara; and for the defendant, evidence was given by an architect Mr. Moody. I will deal with that evidence when I address the principal issue in the case.
CREDIBILITY AND DISPUTED FACTS
50 It is necessary first to say a little about the credibility of some witnesses, in particular Mr. Crockett, and to make one finding on a significant disputed fact.
51 I considered Mr. Crockett to be an unreliable and evasive witness, and I find that I am unable to accept his evidence except where it is corroborated. His evidence was unsatisfactory in a number of respects. First, there was evidence on the question whether the National Australia Bank required pre-sale of units. Mr. Crockett’s initial denial of this at p.142 of the transcript could have been a simple mistake, but his letter of 12th September 1995, in response to the bank’s letter seeking confirmation of pre-sale, plainly shows a preparedness to mislead the bank on a significant matter. His answers at transcript pp.201-207 were evasive in the extreme, but they do confirm that, although he understood at the time that the third paragraph of his letter conveyed the impression that he intended to exchange contracts in respect of the sales referred to in the first paragraph of the letter, he had no intention of proceeding to exchange contracts with the person to whom the first paragraph of his letter referred. Next, Mr. Crockett’s evidence at transcript p.382 that he himself pursued Mr. Fiander between April and August 1996 by personally telephoning him was inconsistent with his earlier evidence on p.243, and was in my opinion an invention made for the purpose of assisting his case. Another example of evasiveness and inconsistency appears at transcript p.155. There, Mr. Crockett asserted that in April 1996 he believed that the Rail Estate requirements had been satisfied, although later on the same page he conceded that the Rail Estate requirements required design of culverts etc., which he knew had not been done. There was in fact no basis for a belief that the Rail Estate requirements had been satisfied, when the Rail Estate document of 1994 clearly required the entry into an agreement by the developer, and plainly that had not happened.
52 Mr. Harris for the plaintiffs also criticised Mr. Greig. I thought Mr. Greig gave evidence honestly, although he was vague and unclear on important points: I think this was due to lack of recollection rather than evasiveness or dishonesty.
53 One important disputed fact concerned the question whether, upon receipt of the deferred building approval in April 1996, Belpate gave clear instructions to Mr. Greig and/or Mr. Samrani (the principal of the builder) to pursue the fulfilment of the conditions of that approval, in particular Condition 72, which had to be satisfied before a final building approval could issue.
54 Mr. Gruzman for Belpate submitted that Mr. Greig was given this task in April 1996. He submitted that this was shown by the circumstance that Mr. Greig had been working on drainage issues prior to April 1996 and had the relevant documents in his possession by that time, and by the circumstance that he met with Mr. Samrani as early as May 1996, and understood that Mr. Samrani was dealing with the relevant consultants.
55 However, there is no evidence, even from Mr. Crockett in his affidavits, of clear instructions being given either to Mr. Greig or Mr. Samrani, orally or in writing, around the time of the receipt of the conditional building approval. Mr. Samrani gave evidence, both in his affidavit and at transcript p.334, that he received relevant documents in August 1996. A letter of instructions and documents were sent from Mr. Crockett to Mr. Greig on 9th August 1996, although it is clear that Mr. Greig did have some of the most significant documents prior to that time. Mr. Greig in his affidavit gave his role as that of assisting Mr. Smith until August 1996, and his first account to Belpate showed that he charged Belpate for his efforts only from 20th August 1996. Mr. Fiander’s amended plans were produced on 30th October 1996, and there is no evidence which I accept of any contact with Mr. Fiander after the issue of the deferred building approval until a telephone call from Mr. Greig on 19th August 1996. Mr. Romanous’ plans, which were also necessary to satisfy Condition 72, were not prepared until 11th December 1996, and there is no evidence which I accept of any communication with Mr. Romanous prior to October 1996, and I think it most likely that he was not contacted until he was contacted by Mr. Greig in about mid-November 1996.
56 Having regard to these matters, I am affirmatively satisfied that no clear instructions were given to Mr. Greig or Mr. Samrani to pursue fulfilment of Condition 72 prior to August 1996. I am also affirmatively satisfied that there was no contact made with Mr. Fiander, to get him to deal with Condition 72, or with Mr. Romanous, to get him to deal with Condition 72, until August and November 1996 respectively.
LEGAL PRINCIPLES
57 There has been little dispute as to the legal principles to be applied.
58 In the first place, it is common ground that the legal onus lies on the plaintiffs, that is the purchasers, to prove that Belpate, that is the vendor, has breached condition A6: see Plumor Pty. Limited v. Handley (1996) 41 NSWLR 30.
59 However, because the relevant facts are peculiarly within the knowledge of the vendor, there may be an evidentiary onus on the vendor to lead evidence as to what happened, because if the vendor does not do this, inferences may be drawn against the vendor, for example by unexplained delays: see Apollo Shower Screen Pty. Ltd. v. Building & Construction Industry Long Service Payments Corporation (1995) 1 NSWLR 561 at 565-6; Hawes v. Cuzeno Pty. Ltd. (1999) NSWSC 1167 par.41.
60 It is common ground that the obligation imposed by Condition A6 is objective, that is, it is not conditioned on the subjective knowledge or ability of a particular vendor. However, I accept that breach of the obligation may be more readily shown in the case of a major developer, with enhanced ability to get service from expert consultants. For example, a delay by a small developer in replacing a dilatory consultant might be excusable, although a similar delay by a large developer with an array of consultants on call might not be.
61 There was some debate before me about the situation where delay is caused by independent contractors, rather than by the action or inaction of the developer itself. In Hunyor v. Tilelli (1997) 8 BPR 15,629, McLelland, CJ in Eq. said this, at 15,631:
- For the purpose of considering the question of the defendant’s default, the knowledge, acts and omissions of the defendant’s solicitors or other agents, in that capacity, are to be attributed to the defendant (see CSS Investments Pty. Ltd. v. Lopiron Pty. Ltd. (1987) 76 ALR 463 at 474-5), although the knowledge, acts and omission of independent contractors otherwise than in the capacity of agents for the defendant are not to be so attributed (see Woodcock v. Parlby Investments Pty. Ltd.).
62 However, that case dealt with an implied obligation, rather than the express obligation in Condition A6. In Hawes v. Cuzeno Pty. Ltd. (1999) NSWSC 1167, Bryson, J. was dealing with Condition A6, and at pars.28 and 29 he said this:
When testing contractual compliance it is not relevant whether the defendants' relationship with their architect was an independent contractor relationship: their contractual obligations are the same irrespective of whose agency they act through. There is a test of reasonableness, but it does not relate to the time at which things are done; it relates to identifying which things have to be done; making a Building Application obviously is one of them, and the vendors had an unqualified contractual obligation to do every such thing so as to have the plan registered within the plan registration time. Young J's observations in Woodcock v. Parlby Investrnents about the architect as an independent contractor relate to the operation of the recklessness principle and were not directed to a clause such as cl.A6.It is important for appraising the events that the defendants were under a very strongly worded contractual obligation in Printed Clause A6.1 - "The Vendor must do everything reasonably necessary to have the plan registered within the plan registration time”. Doing everything reasonably necessary included preparing the Building Application, and doing it within a time scale within which the plan registration time could be complied with; preparing the Building Application was necessary to achieve this outcome and it was a contractual obligation of the vendors to do it. Their contractual obligation was not to commission some suitable person to do it; it was a direct obligation to do it and I do not regard it as open to them to point to pressure of other work in their architect's office, as the words used in Printed Clause A6 do not admit of any concession for inattention or attending to other business.
63 It is not clear to me whether, in those passages, Bryson, J. is saying that the principle expressed by McLelland, CJ in Eq. does not apply where there is an express term like Condition A6 in the contract. If so, with respect I disagree. My opinion is that Condition A6 should be read as a promise by the vendor, as a developer, that the vendor will, as a developer, “do everything reasonably necessary” to have the plan registered within the plan registration time. In my opinion, that means that, in relation to matters of the kind usually attended to by a developer, that is, matters not involving specialist expertise, the vendor’s obligation is unqualified. This would, in my opinion, include such things as co-ordinating the documentation necessary for the application, co-ordinating specialist contractors, and negotiating with councils and adjoining owners and the like. In relation to these matters, in my opinion the vendor/developer would be fully responsible for any deficiencies or delays in work done by its agents, if this work is left to agents.
64 However, there are other matters which may be considered matters of specialist expertise, which a developer would normally leave to an architect, engineer or builder: to an architect, the drawing of plans and supervision of building work; to an engineer, similar tasks; and to a builder, actual execution of the work. In those matters, in my opinion the independent contractors should not be regarded as agents of the developer in carrying out the developer’s role in obtaining registration of the strata plan. Accordingly, delays attributable to independent contractors in carrying out those tasks would not ipso facto involve a breach of the vendor’s obligation. Thus, where a builder caused delay by walking off the site because of problems the builder had which were unrelated to the job, that was not considered a breach of the vendor’s obligation: Woodcock v. Parlby Investments Pty. Ltd. (1988) 4 BPR 9568.
65 However, even where delay arises from the conduct of indpenedent contractors in carrying out matters of specialist expertise, there may be associated breaches by the vendor/developer itself, for example in selection of the contractors, in provision of instructions and information, in monitoring progress, and/or in failing to replace the specialist expert when this should have been done.
66 The final matter which requires brief consideration is the relationship between a breach of an obligation, such as Condition A6, and the expiration of the time within which the strata plan has to be registered. In Sanctuary Investments Pty. Ltd. v. St. Gregory’s Armenian School Incorporated (1998) 9 BPR 16,823, Young, J. said that one must “look at whether the person seeking to rescind the contract materially contributed to the non-performance of the condition on which it now bases its rescission. In my opinion, this means that if the time would plainly have expired, even if the breach had not occurred, the breach will not preclude the vendor relying on the condition. However, in my opinion, if one could say that, if the breach had not occurred, there was a substantial chance that the condition would have been fulfilled, that would be enough to deprive the vendor of the right to rescind. If the vendor’s breach has deprived the purchaser of such a substantial chance of this kind, in my opinion, that is enough to enable one to say that the breach has materially contributed to the non-fulfilment of the condition, so that the vendor is precluded from rescinding.
APPLICATION TO THIS CASE
Submissions
67 Both sides have provided written submissions, which I will leave with the papers.
68 Mr. Harris for the plaintiffs submitted that Belpate breached Condition A6 by conduct which caused delay in at least three periods. In the period April to August 1996, no material steps were taken to progress the development. In the period September 1996 to January 1997, there was a four month delay whilst the defendant investigated ways to avoid complying with Rail Estate’s requirements. A further two and a half months were lost from 15th January to 1st April 1997,because consent was not obtained to work on Rail Estate land.
69 Mr. Harris submitted that, if everything reasonably necessary had been done, the drainage plans and structural engineering drawings would have been commenced immediately after the deferred building approval was issued, and should have been completed within eight weeks. The negotiations with Rail Estate should have been commenced immediately after the issue of the deferred building approval, and negotiations should have been completed in a month. The building work should then have commenced in August 1996, and would have been completed in August 1997. Since the final approval and registration of the strata plan should only have taken three months from completion of the construction, the strata plan would then have been registered in November 1997.
70 Finally, Mr. Harris submitted that the evidence of Belpate’s expert Mr. Moody should be rejected. He submitted that it was based in some cases merely on information given to him by the parties, and in other cases was inconsistent with the facts. In particular, paragraph 25 of his affidavit stated that he was of the opinion that every time a problem or design issue arose, reasonable action was taken, yet in the witness box he was unable to identify any action taken between April and August 1996 to satisfy Condition 72 of the deferred building approval.
71 Mr. Gruzman for Belpate submitted that Belpate did everything reasonably necessary to have the plan registered within the plan registration time, by employing competent independent consultants, and diligently pursuing those consultants to advance the project. It was inappropriate to look for detailed matters that could have been done differently, with the benefit of hindsight. Mr. Crockett had to rely on these consultants: he did not delegate functions of the developer, but he did engage appropriate experts to liaise with each other to achieve the result.
72 Upon the issue of the deferred building approval on 24th April 1996, Mr. Gruzman submitted, Mr. Greig remained retained to progress the matter. It was reasonable for him and the builder to consider the conditions for a period of a few weeks, and to consider new requirements of Council as they arose. Further modifications were required by Rail Estate’s requirements in September 1996, which were then dealt with quickly. Mr. Greig and Mr. Samrani were consulting in May 1996, and Mr. Fiander had been retained from the start to liaise with Rail Estate.
Decision
73 In my opinion, Belpate was in breach of Condition A6 in its failure to get a final building approval before 13th December 1996. I make this finding on three grounds, each of which would be sufficient in itself.
74 The most significant cause of the delay between April and December 1996 was Belpate’s failure to pursue satisfaction of Condition 72 with Mr. Fiander and Mr. Romanous prior to 19th August 1996. Belpate contended that it had retained appropriate experts to pursue satisfaction of Condition 72, and it was their task to pursue Mr. Fiander and Mr. Romanous. However, in my opinion, co-ordination of experts such as Mr. Fiander and Mr. Romanous is a task which developers must undertake by themselves or through agents, so that, even if there were defaults by Mr. Greig and Mr. Samrani in pursuing Mr. Fiander and Mr. Romanous, they are faults for which Belpate is responsible.
75 Even if I were wrong on that view, there was in my opinion fault in Belpate itself in relation to the delay to 19th August. I have made the finding of fact that Belpate did not properly instruct Mr. Greig or Mr. Samrani prior to August 1996; and Belpate did not in fact instruct anyone appropriately to deal with Condition 72, or ensure that this was being done, at any time prior to about mid-August 1996.
76 The third basis on which I am satisfied that Belpate was in breach of Condition A6 in failing to get a final approval before 13th December 1996 is that the plans necessary to satisfy Condition 72 were not drawn up until 31st October (Mr. Fiander’s plans) and 11th December (Mr. Romanous’ plans), and no satisfactory explanation is given for that delay. In my opinion, in the absence of reasons to the contrary, both these plans could and would have been completed within about eight weeks after proper instructions had been given; and proper instructions should have been given by about the end of April, so that the satisfaction of Condition 72 and the issue of a final building approval should have occurred by about July 1996 at the latest.
77 Explanations were offered on behalf of Belpate, in particular the allegation that there were new requirements introduced by Rail Estate and/or by the Council, delay by the independent experts Mr. Fiander and Mr. Romanous, and also delay by independent experts Mr. Greig and Mr. Samrani whose job it was to co-ordinate the efforts of Mr. Fiander and Mr. Romanous.
78 There is no explicit evidence of new requirements being introduced by Rail Estate or the Council after April 1996, which would affect the preparation of the drainage plans. Mr. Gruzman submitted that I could infer that there was a new requirement from the Council and/or from Rail Estate, because the third amendment of Mr. Fiander’s plans on 30th October 1996 showed a second box culvert running across Rail Estate land, which had not been in previous plans, and which was not referred to in the deferred building approval, in particular Condition 72 of that approval. That submission has some support from Mr. Moody, who gave evidence that the requirement for this second box culvert was not implicit in the original approvals. On the other hand, an expert called for the plaintiffs, Mr. Barry, gave evidence that such a requirement was implicit in the original approvals, on the basis that, in the absence of a second box culvert, the water retention area on Belpate’s property would not be effective.
79 On this aspect, I did not find Mr. Barry’s evidence so convincing as to preclude the possibility of an inference that there was some new requirement made by Rail Estate or the Council which led to the alteration. However, although such an inference is possible, in my opinion it should not be drawn. Belpate could have led direct evidence of the making of this new requirement, and it did not. In those circumstances, where Belpate was in a position to lead direct evidence of the making of a new requirement, if it was made, but did not do so, I do not think the inference should be drawn.
80 Even if there was a new requirement from Rail Estate or the Council, that new requirement would have been known soon after April 1996 but for other breaches of Condition A6, namely the failure to instruct Mr. Fiander to deal with Condition 72 until mid-August 1996, and the failure to deal appropriately with Rail Estate, which I discuss shortly. Had those breaches not have occurred, the new requirements would have been known shortly after the issue of the deferred building approval in April 1996, and could have been dealt with promptly, because they involved only minimal alterations to Mr. Fiander’s plans.
81 As regards the alleged delay by independent experts, I have already substantially dealt with that matter. The delays by Mr. Fiander and Mr. Romanous that appear in the evidence are not great: it appears that Mr. Fiander was contacted on 19th August, and his plans were completed on 31st October; while Mr. Romanous was contacted on 18th November, and his plans were completed on 11th December.
82 For the reasons given by Mr. Harris, I do not give any significant weight to Mr. Moody’s evidence that problems were dealt with promptly. I considered Mr. Moody’s oral evidence on this matter to be evasive.
83 In my opinion, there was also a breach of Condition A6 in Belpate’s failure to get a final agreement with Rail Estate until 27th February 1997.
84 In the first place, there was a breach in failure to pursue this agreement, after issue of the deferred building approval, until 27th August 1996. Rail Estate’s letter of 26th July 1994 was clear: Belpate could not reasonably have thought Rail Estate’s requirements had been satisfied, given that the requirements included a written acceptance and the making of an agreement. The matter plainly required prompt action, at least by the time the conditional building approval was granted, because there needed to be a final agreement with Rail Estate before the building work started. I accept Mr. O'Mara's and Mr. Barry’s evidence to this effect, and it is common sense. Furthermore, the matter was not a matter of specialist expertise, and so was one which had to be pursued by the developer or its agents; and in any event, there were defaults in the developer itself in failing to give instructions.
85 Furthermore, once Rail Estate’s requirements were made known on 19th September 1996, there was further delay by Belpate in pursuing a hopeless case to avoid these requirements. The case was hopeless, because plainly all drainage from the site was not going to go into the Council’s system, which was the only circumstance in which agreement with Rail Estate was not going to be required. The Council’s system was being moved, and stormwater from the site itself was not going into the Council’s system. The substance of this was pointed out by Mr. Fiander in his October 1996 facsimile.
86 It was claimed for Belpate that it was only following legal advice in trying to avoid having to reach agreement with Rail Estate. However, there is no direct evidence that Belpate had any legal advice supporting its attempt to get around Rail Estate’s requirements, and I do not infer that any such legal advice was given. Mr. Crockett has displayed an attitude generally to the effect that written requirements by other parties such as banks and councils are not necessarily insisted on, and that there can be advantage in trying to negotiate so as not to have to comply with them, and he has pursued that attitude without needing the support of legal advice. In my opinion, where, as here, delays are caused by the unreasonable pursuit of that attitude, there is a breach of Condition A6. And finally, in any event, even if legal advice supporting the attempt had been obtained, I do not think this would fall within the category of a matter of specialist expertise in relation to which the lawyers would not be considered agents of Belpate.
87 In my opinion also, all these breaches materially contributed to the non-fulfilment of the condition relating to the time of registration of the strata plan. But for the first of the breaches, an unconditional building approval would have been obtained by about August 1996 at the latest. But for the second breach, there would have been an agreement with Rail Estate by about August at the latest, so that there would have been no ten week delay such as occurred between about mid-January and 1st April 1997. The work could have commenced in about September 1996, and probably would have concluded in about October 1997, with ample time to register the strata plan before 6th April 1998.
88 Against this, it is put that the builder could not have commenced anyway until about November 1996 because of other commitments, so that the building work would not in any event have been completed before December 1997; and furthermore, it took five and a half months after completion of the building to register the strata plan, so that the strata plan would not have been registered until about May 1998.
89 Even if I accept, for the sake of argument, that, having obtained an unconditional building approval and Rail Estate’s agreement by about August 1996, Belpate would not have breached Condition A6 in choosing to delay commencement of the building until November 1996, to ensure that it was able to use its favoured builder, I would still find that the argument set out in the preceding paragraph fails.
90 In my opinion, if the building work had commenced in November 1996, it would have been completed by about December 1997, and there would have been registration of the strata plan, on the balance of probabilities, before 6th April 1998. There would have been no occasion for the plaintiffs to lodge caveats, and no delay arising from that circumstance.
91 In any event, to put the matter at its lowest, there would have been a very substantial chance that registration would have taken place before 6th April 1988, so that, again to put it at its lowest, the breaches by the developer materially contributed to the failure to have the strata plan registered within the allocated time.
92 For these reasons, in my opinion the purported rescission based on late registration of the strata plan was invalid.
REPUDIATION
93 Mr. Gruzman submitted that the letter written on behalf of Mr. Pennington stated in clear terms that Mr. Pennington would not settle unless certain things were done: that statement amounted to a clear repudiation of the contract.
94 In my opinion, that is not a fair reading of the letter. Although the letter stated that Mr. Pennington required certain defects to be corrected before settlement, it did not in terms say that Mr. Pennington would not settle unless these things were done. If Belpate had replied to the effect that those matters would be attended to within the defects period after settlement, and there had been a response by Mr. Pennington asserting that he would not settle unless they were done before settlement, then there might have been some force in an argument for repudiation. In my opinion, the letter that was actually written could not possibly be taken as that kind of unequivocal assertion. For that reason, the case based on repudiation by Mr. Pennington fails.
READINESS, WILLINGNESS AND ABILITY
95 The readiness, willingness and ability required to justify an order for specific performance does not require that the purchasers have a concluded arrangement with a bank to provide the balance of the purchase price, much less that they have the amount of the balance of the purchase price in a bank account. What is required is readiness, willingness and ability to proceed to completion within the general time frame contemplated by the contract. The contract price in each case is not large, and in my opinion the evidence of financial circumstances given by the plaintiffs, together with the communications received from possible finance providers, is ample evidence of readiness, willingness and ability in this case.
96 The fifth plaintiff did not give evidence. However, she gave instructions to bring the proceedings, and also provided her financial records for inspection. The evidence of the fourth plaintiff satisfies me that they have the financial ability to complete the contract. In those circumstances, I think readiness, willingness and ability is sufficiently proved in the case of the fourth and fifth plaintiffs also.
OTHER ISSUES
97 The contracts do not provide for payment of interest by the purchasers in the events which have happened, and in my opinion, no case is made out for an enquiry as to damages, in addition to specific performance.
98 An order for specific performance in each case will require the vendor Belpate to transfer what is required by the contract, and if what Belpate tenders on completion is not in accordance with the requirements of the contract, then an issue could arise as to compensation or abatement of the purchase price, which could be dealt with under a liberty to apply in these proceedings.
99 At present, I see no reason why Belpate should not pay the plaintiffs’ costs of the proceedings.
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