Ng v Chong

[2005] NSWSC 270

Reported Decision: (2005) NSW ConvR 56-130

New South Wales

Supreme Court

CITATION:	Ng v Chong [2005] NSWSC 270
HEARING DATE(S):	24 - 26 May, 17 - 19 August, 3 September, 6 & 9 November 2004
JUDGMENT DATE :	31 March 2005
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Purported termination invalid; contract should be specifically performed. On cross claim against solicitor some breaches of retainer established but no substantial damages.

CATCHWORDS:	CONVEYANCING [60], [62], [63] - Relationship of vendor and purchaser - Matters arising between contract and conveyance - Time - Time of the essence - Generally - Notice to complete - General rule as to entitlement to give - Reasonableness of time - Notice less than 14 days - Efficacy of notice addressed to two of three purchasers but not to the third - EQUITY [70] - General principles - Mistake - Effect on contracts - Mistake as to nature or contents of document - Defence of non est factum - Elements of - ESTOPPEL [29], [42] - Estoppel by convention - Estoppel in pais - The representation - By conduct - Conveyancing cases - Issue of notice to complete - Recipients do not object to notice as defective - Whether estoppel by convention or estoppel by representation arises - TORTS [60] - Negligence - Essentials of action for negligence - Damage - Causation - Generally - Failure to give advice - Onus on plaintiff to establish what would have happened had appropriate advice been given - Necessity to prove causal connection between failure to advise and damage suffered - TRADE AND COMMERCE [84] - Trade practices and related matters - Consumer protection - Misleading, deceptive or unconscionable conduct - Character and attributes of conduct - Silence and concealment - Whether silence can constitute a misrepresentation - Whether duty of disclosure.
LEGISLATION CITED:	Conveyancing Act 1919 s 55(2A) Interpretation Act 1987 s 36(2) Supreme Court Act 1970 s 68
CASES CITED:	Abela v Lawnside Holdings Pty Ltd (1988) 4 BPR 9443 ACCC v CC (NSW) Pty Ltd (1999) 92 FCR 375 Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 Balog v Crestani (1975) 132 CLR 289 Bava Holdings Pty Ltd v Pando Holdings Pty Ltd (1998) 9 BPR 16,295 Brophy v NIAA Corporation Limited (In Liquidation) (1995) ATPR 41-399 Castle Hill Tyres Pty Ltd v Luxspice Pty Ltd (1996) 7 BPR 14,959 Chappel v Hart (1998) 195 CLR 232 Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 Con-Stan Industries of Australia Proprietary Limited v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 Crago v McIntyre [1976] 1 NSWLR 729 Delta Vale Properties Ltd v Mills [1990] 1 WLR 445 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Gore v Montague Mining Pty Ltd [2000] FCA 1214 Hall v Foong (1995) 65 SASR 281 Hankey v Clavering [1942] 2 KB 326 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 Horton v Jones (No 2) (1939) 39 SR (NSW) 305 Louinder v Leis (1982) 149 CLR 509 Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 Metalcorp Recyclers Pty Limited v Metal Manufacturers Limited [2003] NSWCA 213, (2004) ATPR (Digest) 46-243 Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 Petelin v Cullen (1975) 132 CLR 355 Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 Sindel v Georgiou (1984) 154 CLR 661 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 79 ALJR 129 Woods v Mackenzie Hill Ltd [1975] 1 WLR 613 Butterworths Australian Legal Dictionary (1997) 799 "Notice" 42 Halsbury's Laws of England (4th ed Reissue, 1999) tit Sale of Land [121] Carter & Harland, Contract Law in Australia (4th ed, 2002) [1961] Miller's Annotated Trade Practices Act (26th ed, 2005) [1.52.50] Spencer Bower on Estoppel by Representation (4th ed, 2004) III.4.1, III.4.5
PARTIES:	Frank Fat Ng (P1 & XD1) Lin Ying Ng (P2 & XD2) Mei Ching Ng (P3 & XD3) Ha Duk Chong (D & XC) Garry Pickering t/as Garry Pickering Solicitor and Conveyancer (XD4)
FILE NUMBER(S):	SC 2607/02
COUNSEL:	D L Warren (Ps & XDs) A J Bowen (D & XC) T M Faulkner (4XD)
SOLICITORS:	Rankin & Nathan (Ps & XDs) Barclay Benson Lawyers (D & XC) Ebsworth & Ebsworth (4XD)

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 31 MARCH 2005

2607/02 FRANK FAT NG & ORS v HA DUK CHONG

JUDGMENT

1 HIS HONOUR: The plaintiffs are the purchasers under a contract of sale (“the contract”) of a property at 16/110 Kissing Point Road, Dundas (“the property”). The contract originally named the first and second plaintiffs only as purchasers. The third plaintiff was subsequently added to the contract as a purchaser by a “deed of novation”. The defendant is the vendor. The fourth cross defendant is Garry Pickering (“Mr Pickering”), the solicitor who acted for the defendant on the sale. The plaintiffs claim specific performance of the contract. The defendant asserts that he validly terminated the contract pursuant to a notice to complete given by him, which was not complied with. If the plaintiffs succeed against him, he claims damages for breach of duty against the cross defendant.

ISSUES ON CLAIM

2 The issues that arose as between the plaintiffs and the defendant were formulated as follows. This formulation is based upon a listing of the issues contained in the plaintiffs’ written submissions:

(1) Was the deed of novation binding or was the defence of non est factum made out?

(2) If the deed of novation is binding, what is the effect of that on the time at which a notice to complete might be given under the contract?

(3) Was the notice to complete given by the defendant valid?

(4) Are the plaintiffs estopped, by failing to dispute the effectiveness or reasonableness of the notice to complete after it was served, from denying the validity of the notice to complete?

(5) Did the plaintiffs repudiate the contract by the actions pleaded in paragraph 18 of the defence?

(6) Has the contract been validly terminated?

(7) If the contract has not been validly terminated, ought the Court decree specific performance of the contract having regard to the defence of laches, acquiescence and delay?

(8) If the Court refuses to decree specific performance should it award damages pursuant to s 68 of the Supreme Court Act 1970?

(9) If the contract has been validly terminated, then ought the purchasers:


(a) be granted relief against forfeiture of their interest under the contract;

(b) be entitled to an order under s 55(2A) of the Conveyancing Act 1919 for the return of the deposit?

FACTUAL FRAMEWORK

3 The following facts are uncontroversial or easily found.

4 The defendant is a 62 year old cleaner, who migrated from Korea to Australia in 1992. He is the owner of the property. He engaged Mr Pickering to act for him on the sale. Mr Pickering prepared the contract and sent it to the agent, Ray White at Eastwood, for exchange. The contract was in the standard form, 2000 Edition. It was dated 18 July 2001. The purchasers were named as Frank Fat Ng and his wife Lin Ying Ng. The price was $295,000. The contract was exchanged by the vendor's agent. The deposit was held by the agent. Although Mr Pickering swore that he had an invariable practice of adding special conditions to contracts for sale of land, he has no recollection of seeing this contract with special conditions in it. No copy of the contract containing special conditions has been brought forward. I find the contract was exchanged without special conditions. Completion of the contract was to occur 42 days after exchange, that being on 29 August 2001. Time was not of the essence. The omission of the special conditions meant that there was no specification of the period for a notice to complete. After exchange of contracts, Mr Ng retained Rankin & Nathan solicitors to act on the plaintiffs’ behalf.

5 Mr Ng then decided that he wished to add his daughter as a purchaser. Her presence as a purchaser on the contract would enable her salary to be taken into account for the purpose of raising finance. If the defendant did not agree to the addition of the daughter as a purchaser, the first and second plaintiffs would nevertheless still have completed the purchase and then added the daughter to the title, as they were very keen on the property. They did have sufficient funds to complete the purchase in any event, but preferred to keep those funds for investment purposes.

6 Rankin & Nathan wrote to Mr Pickering on 13 August 2001 requesting that the daughter (the third plaintiff) be added as purchaser. Mr Pickering wrote the word “Agreed” on the letter. He considered that such a course of action would not prejudice the vendor. It was not a matter he considered it necessary to raise with the vendor before consenting. I find that he did not do so.

7 On 29 August 2001 (which was the day that the contract was under its terms due for settlement) Rankin & Nathan wrote to Mr Pickering enclosing a "deed of novation" and a transfer. The transfer was to the three purchasers. The operative terms of the deed were as follows:

“2 On execution of this agreement the new purchaser becomes a party to the contract with the original purchasers as purchasers of the land.

3 The new purchaser agrees to perform the contract as purchaser with the original purchasers.

4 The vendor agrees to perform the contract with the original purchasers and the new purchaser.”

8 The defendant signed the deed of novation in Mr Pickering’s office, and probably the transfer at the same time. More will need to be said of the circumstances in which this was done. The executed deed of novation and executed transfer were returned by Mr Pickering to Rankin & Nathan under cover of a letter of 3 September 2001.

9 In “the week commencing 7 September 2001” and before the issue of the notice to complete, the defendant became aware that a third person had been added as a purchaser. The expression “the week commencing 7 September 2001” is rather curious, because 7 September 2001 was a Friday. The defendant deposed that he was upset on learning of the addition of the third purchaser, but he gave conflicting evidence on this point. In any event, no communication of dissatisfaction was made to the purchasers. In fact, there was no complaint to the purchasers relating to the addition of the third purchaser up to the commencement of these proceedings.

10 At 4.07pm on Friday, 14 September 2001 Mr Pickering served a notice to complete. The notice to complete was addressed to Frank Ng and Lin Ng and to Rankin & Nathan. It was not addressed to Mei Ching Ng. The notice to complete required settlement on or before 28 September 2001. It did not nominate a time or a place for settlement. In that case the place for settlement was determined the terms of the contract. On 27 September 2001 Mr Pickering advised Rankin & Nathan by facsimile sent at 11.10am that settlement was to be at 3.00pm, 29 August 2001 [sic] at Commonwealth Bank, 2-12 Rowe Street, Sydney. Rankin & Nathan confirmed the correct date as being 28 September 2001.

11 It is common ground that the notice to complete gave only 13 days notice to settle the contract.

12 By Friday, 28 September 2001 the Commonwealth Bank was ready to settle. Rankin & Nathan believed that the Bank would attend the settlement on 28 September with the appropriate funds. In the events that happened the Commonwealth Bank as incoming mortgagee did not attend the settlement and accordingly settlement did not take place.

13 What passed between the defendant and his solicitor on Friday, 28 September 2001 after settlement had not taken place and on Tuesday, 2 October 2001 (the next working day, Monday 1 October 2001, being a public holiday) is the subject of controversy and more will have to be said of it. On 2 October 2001 Mr Pickering, on the specific instructions of the defendant, gave a notice of termination of the contract, despite the purchasers and their Bank being ready to settle before the day was out.

14 Between mid October and mid December 2001 the purchasers made successive offers to the defendant of an extra $2,000, $3,000, $5,000 and $7,000 to settle the contract. None of those offers was accepted. What passed between the defendant and his solicitor during that period will also have to be further considered. The plaintiffs early in 2002 instructed their solicitors to commence proceedings. Advice was sought from counsel. The summons was filed on 9 May 2002.

WITNESSES

15 The defendant’s mother tongue is Korean and he has never been involved in the sale of a property prior to this transaction. It was submitted on his behalf that the defendant is an unsophisticated individual who has difficulty articulating himself in English. It was further submitted that he has difficulty comprehending conversations in English, as well as documents written in English. He did give evidence with the aid of an interpreter, although he answered some questions without the benefit of interpretation. This is a phenomenon regularly seen in the courts: witnesses with imperfect English find it more difficult to operate in English in the formal court room situation than outside, but lapse back into English from to time. Although Mr Pickering used family members to interpret on some occasions, he deposed that generally he and the defendant could communicate orally in English, and I accept that this was so. The defendant himself said he was better with written than with oral English. Furthermore, I observed him read documents in English in the witness box. It seemed clear from subsequent questioning that he understood them. I find that he can read English quite adequately.

16 He was not a satisfactory witness. There were a number of conflicts in his evidence, some in important regards. They were listed in Mr Pickering’s written submissions. He struck me as an obsessive man, who at times tended to adhere to the version of events that corresponded with the views he took of matters, in the face of evidence that suggested the facts were otherwise.

17 The first and third plaintiffs were straightforward witnesses, who appeared to me to try to recount events as they had happened and had good recall.

18 Mr Pickering conducts a basically conveyancing practice with the aid of a number of non professional assistants. He attends to decisions of principle and leaves the assistants to do the mechanical work of the conveyancing. Ms Minards was the relevant assistant in this case. Mr Pickering’s degree of involvement in individual transactions is generally not high. He conducted himself well in the witness box. He gave evidence in a convincing manner. He was frank about the various matters he could not recall. He did not attempt to suggest that he had seen special conditions in the subject contract or that he had sought the defendant’s instructions about the addition of the third purchaser. He was not an obsessive note taker, but generally kept notes of more important matters. In general terms, I accept his evidence in preference to the defendant’s where they conflict.

19 Ms Minards is no longer in Mr Pickering’s employ and is uninterested in the proceedings. I was impressed by the clear way in which she gave her evidence. Ms Gamble, who witnessed the defendant’s signature to the deed of novation, was a straightforward witness. This was also true of Mr Clarkson, who had the conduct of the matter for the plaintiffs in the office of Rankin & Nathan.

THE DEED OF NOVATION

20 Issue (1) is whether the defence of non est factum is made out in relation to the deed of novation and whether the deed of novation is binding.

21 The modern law as to the necessary elements of the defence of non est factum was set out authoritatively by the High Court (Barwick CJ, McTiernan, Gibbs, Stephen & Mason JJ) in Petelin v Cullen (1975) 132 CLR 355 at 359 – 360:

“The class of persons who can avail themselves of the defence is limited. It is available to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document. To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part. Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence. All this is made clear by the recent decision of the House of Lords in Saunders v Anglia Building Society (Gallie v Lee) [1971] AC 1004, esp at p 1019.”

It is also worth noting what was said by Holland J in Crago v McIntyre [1976] 1 NSWLR 729 at 738:

“I would only add that it would not have saved the plaintiff's case on the present ground to say, as was put on the plaintiff's behalf at one stage, that he was so disinterested in the management of his affairs that he was prepared to sign whatever was put in front of him. If that was the fact he would still fail because, as his intention would have been to sign the document in fact placed before him, whatever it provided, that intention would have been carried out leaving no basis on which to plead non est factum: Saunders v Anglia Building Society [1971] AC 1004, at p 1036, per Lord Pearson.”

Although it was not a case in which there was a plea of non est factum, it is relevant that the High Court (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ) has recently emphasised in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 79 ALJR 129 at [42], [43] the following:

“[42] Consistent with this objective approach to the determination of the rights and liabilities of contracting parties is the significance which the law attaches to the signature (or execution) of a contractual document. In Parker v South Eastern Railway Company (1877) 2 CPD 416 at 421, Mellish LJ drew a significant distinction as follows:
‘In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents. The parties may, however, reduce their agreement into writing, so that the writing constitutes the sole evidence of the agreement, without signing it; but in that case there must be evidence independently of the agreement itself to prove that the defendant has assented to it.’
[43] More recently, in words that are apposite to the present case, in Wilton v Farnworth (1948) 76 CLR 646 at 649 Latham CJ said:
‘In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it. Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it. Any weakening of these principles would make chaos of every-day business transactions.’”

22 There is no doubt that the defendant signed the deed of novation in Mr Pickering’s office and that Ms Gamble witnessed it. This must have occurred at latest on 3 September 2001, when Mr Pickering sent documents including the executed deed to the purchasers’ solicitors. Mr Chong swears that he did not read the deed and there is no reason not to take his word for that. As I have found, Mr Chong can read English. Mr Chong did notice that the document had not been dated and asked Ms Gamble whether he should date it. When the document was given to Mr Chong to sign he says that it was folded, but folded in such a way that the operative part of the document was visible. I find that he could have read it, had he chosen to. Ms Gamble understandably has no independent recollection of witnessing Mr Chong's signature. There is no evidence on which it could be found that she identified the nature of the document to Mr Chong. But she stated that it was her usual practice to allow clients as much time as they wanted to read and sign documents and there is no suggestion in the evidence that Mr Chong was hurried or that any question he had would not have been attended to.

23 In all the circumstances, I find that the defence of non est factum is not made out. There are no circumstances by virtue of which Mr Chong ought escape the consequences of signing the document, albeit he did not read its contents. He has not discharged the onus of establishing that he signed the document in the belief that it was radically different from what it was. The deed is binding on him.

THE EFFECT OF THE DEED ON THE TIME AT WHICH A NOTICE TO COMPLETE MIGHT BE GIVEN

24 Issue (2) is, if the deed of novation is binding, does that affect the time at which a notice to complete might validly be given under the contract? In this regard, there was argument as to whether the deed was properly characterised as a deed of novation or a deed of variation. In my view, this argument is arid and irrelevant.

25 The argument put was that, whatever the characterisation of the deed, immediately before its execution, Mr Chong was entitled to give a notice to complete, because the date stipulated in the contract for completion (29 August 2001) had passed without the contract being completed (Louinder v Leis (1982) 149 CLR 509 per Gibbs CJ at 513 – 514, Brennan J at 532); the execution of the deed made no difference to accrued rights; and the added party came into the situation and had to deal with the matter on the basis that those rights existed and could be given effect to without modification.

26 But if the deed is a deed of novation, there is a new contract and the time for giving a notice to complete under that contract could not yet have arisen. If the deed is a deed of variation, then for reasons set out below, the time for giving a notice to complete is in any event deferred.

27 The reason for this is that the argument set out in [25] above appears to me to be a totally unrealistic approach to the rights of the parties as they ought be taken to stand in light of the events that happened. When the deed was executed, the time for completion had passed. But quite different documentation was now necessary by reason of the addition of a purchaser and time had to be allowed for that situation to be dealt with. In those circumstances it seems to me that Mr Chong, by executing the deed, must be taken to have given away any accrued right to give a notice to complete at that stage.

WAS THE NOTICE TO COMPLETE VALID?

28 As to issue (3), there were four objections taken to the validity of the notice to complete:

(1) that Mr Chong was not entitled to give the notice to complete when he did;

(2) that the notice to complete gave only 13 as opposed to 14 days to complete;

(3) that the notice to complete was addressed in terms to only two of the three purchasers;

(4) that the notice to complete did not specify a place for completion.

29 As to objection (1), the classic statement concerning the entitlement to give a notice to complete is that of Barwick CJ and Jacobs J in Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 at 299:

“In cases where the contract contains a stipulation as to time but that stipulation is not an essential term then before a notice can be given fixing a time for performance, not only must one party be in breach or guilty of unreasonable delay, but also the party giving the notice must himself be free of default by way of breach or antecedent relevant delay. Only then may a notice be given fixing a day a reasonable time ahead for performance and making that time of the essence of the contract.
In relation to such a notice given by a vendor to a purchaser the following questions must be answered: (i) Was the purchaser in breach of any term of the contract or guilty of unreasonable delay? (ii) Was the vendor himself in default by breach of any term of the contract or guilty of any antecedent relevant delay? (iii) Was the time fixed a reasonable time in all the circumstances?”

See also Michael Realty Pty Ltd v Carr [1977] 1 NSWLR 553 per Glass JA at 566; Louinder v Leis supra per Mason J at 523.

30 In light of my finding at [27] that there was no extant breach of contract which Mr Chong was entitled to rely on at the time the notice to complete was given, for the notice to be valid the purchasers must have been guilty of unreasonable delay at that time.

31 Among the matters relied on by the purchasers as establishing that there was no unreasonable delay at the time were the addition of the third purchaser and the need for that purchaser to be placed on mortgage and other documents; for the transfer to be stamped; and for the Bank (which required four clear working days' notice of settlement) to be organised. In all the circumstances prevailing, including those set out in this paragraph, it is my view that an unreasonable delay had not occurred by 14 September 2001, some 11 days after the documents were sent to the purchasers' solicitor and only 9 or 10 days after they were received by that solicitor. I find that an entitlement to give a notice to complete had not arisen when it was given on 14 September 2001.

32 Objection (2) is that the notice to complete gave only 13 days to complete, instead of 14. As to the circumstances in which less than 14 days will be found adequate, the High Court (Mason, Murphy, Wilson, Brennan, Dawson JJ) in its joint judgment in Sindel v Georgiou (1984) 154 CLR 661 said at 670:

“It is our view that strong circumstances must be shown to justify the giving of a notice to complete which allows less than 14 days for completion. In the present case we agree with the conclusion reached by the primary judge that the time allowed was insufficient. The determination of what is a reasonable time for completion of a contract for the sale of land, judged in the light of the circumstances of a particular case, is very much a matter of impression.”

In Castle Hill Tyres Pty Ltd v Luxspice Pty Ltd (1996) 7 BPR 14,959 at 14,964 the formula adopted by Young J (as his Honour then was) was “some special matter that can be pointed to” as to why the shorter time is reasonable. His Honour emphasised that the adequacy of time of a notice to complete must depend on all the circumstances of the particular case.

33 I cannot see any strong circumstances or special matter on the facts as I have found them in this case to justify the giving of less than 14 days notice to complete. The notice was therefore inadequate as to time.

34 Objection (3) is that the notice is not addressed to Mei Ching Ng but only to Frank Ng and Lin Ng as well as to Rankin & Nathan. It was served on Rankin & Nathan. Clause 20.6.3 of the contract provides that a document under or relating to it is served if it is served on the party’s solicitor, even if the party has died. It is argued that service on Rankin & Nathan, who were by this time acting as solicitors for Mei Ching Ng as well as her parents, was effective service on her and the fact that the notice was not directed to her matters not.

35 Notices to complete are not documents of which any great formality is required: Balog v Crestani (1975) 132 CLR 289 at 296 – 299 per Gibbs J; Delta Vale Properties Ltd v Mills [1990] 1 WLR 445 at 452 – 453 per Slade LJ. It should be noted that Slade LJ relied in part on the decision of the Court of Appeal in Hankey v Clavering [1942] 2 KB 326. That decision was disapproved by the majority in the House of Lords in Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 767 - 768, 775 - 776, 780 and 782. Mannai was applied by Santow J (as his Honour then was) in Bava Holdings Pty Ltd v Pando Holdings Pty Ltd (1998) 9 BPR 16,295 at 16,304. Mannai and Bava concerned respectively a notice to break a lease and a notice exercising an option. These cases emphasised that the test as to whether a notice should be regarded as clear and unequivocal in its terms was whether a reasonable recipient of a notice of that type reading it against the background of the dealings between the parties and of all the circumstances of its receipt would have understood the effect of the notice: Bava per Santow J at 16,306. This also emphasises that it must always be borne in mind that each notice must be construed in the light of its nature and of its own peculiar circumstances.

36 In this case, the matter as to which clarity is required is not the effect or operation of the notice, but the identity of the persons to whom the notice is directed. It is a basic requirement of this notice that it convey appropriate information to “the promisor of the obligation”: Carter & Harland, Contract Law in Australia (4th ed, 2002) [1961]; see also “Notice. Contract.” in Butterworths Australian Legal Dictionary (1997) 799. Despite the somewhat relaxed approach to construction of notices in cases such as Mannai and Bava, in my view, for the notice to complete to be valid in the circumstances of this case it must make plain the persons to whom it was directed. It should have been directed to all the persons who were being required to complete the contract. There appears to be a dearth of authority on this subject matter. In 42 Halsbury’s Laws of England (4th ed Reissue, 1999) tit Sale of Land [121] n1 there is a statement that a notice to complete must be “served on” all “joint” purchasers. Reference is made to the decision of Megarry J (as his Lordship then was) in Woods v Mackenzie Hill Ltd [1975] 1 WLR 613 at 615 relating to a notice to complete given by only one of two “joint” vendors. But there the parties agreed that the lack of service by one vendor rendered the notice invalid.

37 Here, two of the purchasers were named as addressees and one was not. The notice was also addressed by name to the solicitors, but not describing them as “the purchasers’ solicitors”. In these circumstances, it is my view that it was not unequivocally clear to whom the notice was directed. The defect constituted by the omission of one of the purchasers from the notice was not cured by the fact that the notice to complete was directed to and served on the solicitors for all the purchasers, bearing in mind that it was directed by name to two of the purchasers, but not to the third. No argument was put that any difference was made by the purchasers agreeing to take as joint tenants, if that be the situation. It is not to the point to say that the notice was likely or bound to be drawn to the attention of the third purchaser by the solicitors. It does seem likely that it would be drawn to her attention. But it may well be drawn to her attention (by reason of its lack of clarity) as a notice not directed to her and therefore invalid. What is in issue here is not the form of service, but the form of the notice. In my view, the notice to complete was defective in form for this reason also.

38 As to objection (4) concerning the place of completion, in view of the findings I have made, it is not necessary for me to determine this objection and I do not propose to do so.

39 In the result, for the reasons that I have given, I find that the notice to complete was invalid.

ARE THE PLAINTIFFS ESTOPPED FROM DENYING THE VALIDITY OF THE NOTICE TO COMPLETE?

40 As to issue (4), the two relevant forms of estoppel are estoppel by representation and conventional estoppel. There is no doubt estoppels can arise from the giving of and response to notices to complete: see Abela v Lawnside Holdings Pty Ltd (1988) 4 BPR 9443; Austral Standard Cables Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524. In this case, for there to be an estoppel by representation, it must be established that the plaintiffs represented to the defendant that they would not take advantage of the defects in the notice to complete and that the defendant relied on that representation to his detriment. For there to be an estoppel by convention, it must be established that relations between the plaintiffs and the defendant were conducted on the basis there was an agreement or assumption that the plaintiffs would not take advantage of the defects, which agreement or assumption the plaintiffs ought not be allowed to depart from: see Con-Stan Industries of Australia Proprietary Limited v Norwich Winterthur Insurance (Australia) Limited (1986) 160 CLR 226 at 244 per Gibbs CJ, Mason, Wilson, Brennan & Dawson JJ.

41 It is clear that the plaintiffs made no express representation to the above effect. The representation alleged was one arising from silence. In face of the defects, the plaintiffs did not complain of them or announce that they regarded the notice to complete as invalid. Rather, they attempted to comply with the notice to complete, although, in the end, they failed to do so. Certainly, there are circumstances in which silence can amount to a representation: see Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477 at 489 – 490 per Bowen CJ; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1988) 39 FCR 546 at 557 per Lockhart J; and see generally Miller’s Annotated Trade Practices Act (26th ed, 2005) [1.52.50]; Spencer Bower on Estoppel by Representation (4th ed, 2004) III.4.1. But silence may be relied on as constituting a misrepresentation (or misleading or deceptive conduct) only “when the circumstances give rise to an obligation to disclose relevant facts”: Henjo ibid; Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84 at 86 – 88 per Samuels JA; Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32 per Black CJ, 40 per Gummow J; Brophy v NIAA Corporation Limited (In Liquidation) (1995) ATPR 41-399 at 40,410 – 40,411 per Handley JA; ACCC v CC (NSW) Pty Ltd (1999) 92 FCR 375 at [204] – [206] per Lindgren J; Metalcorp Recyclers Pty Limited v Metal Manufacturers Limited [2003] NSWCA 213, (2004) ATPR (Digest) 46-243 at [14] per Handley JA.

42 In the circumstances of this case, I am of the view that the plaintiffs were not under an obligation to declare their attitude to the validity of the notice to complete. They could not be said to have been put to an election by the service of an arguably invalid notice to complete, nor could their silence in the circumstances have been taken to be unequivocal: see Spencer Bower III.4.5. There were no facts or circumstances in the light of which the silence could be taken to amount to the representation alleged. As the plaintiffs wished to complete the contract, they were entitled to attempt to complete within the time specified by the notice to complete, but equally entitled to rely upon the invalidity of the notice to complete, if the occasion arose. There was no misrepresentation by silence in this case. I am equally of the view that it is not established that there was any agreement or understanding between the plaintiffs and the defendant that any defect in the notice to complete would never be relied on by the plaintiffs if the occasion arose. The plaintiffs are therefore not estopped from relying on the defects in the notice to complete.

DID THE PLAINTIFFS REPUDIATE THE CONTRACT?

43 As to issue (5), the repudiatory acts alleged are set out in par 18 of the amended defence. Essentially, they are failures by the plaintiffs to do acts necessary for the conduct of the conveyancing transaction or the completion of the contract until late in the day. This line of defence was but faintly argued. In my view, it is quite clear that none of those acts, separately or together, could amount to a repudiation of the contract able to be accepted by the defendant.

HAS THE CONTRACT BEEN VALIDLY TERMINATED?

44 As to issue (6), by reason of the invalidity of the notice to complete, the contract has not been validly terminated.

LACHES ACQUIESCENCE AND DELAY

45 Issue (7) raises the question as to whether, if the contract has not been validly terminated, the court ought refuse specific performance having regard to the plaintiffs’ laches, acquiescence and delay. Laches is pleaded in a half hearted and imprecise fashion in par 21 of the amended defence. Essentially, what is relied on is delay in commencing proceedings. The events between the purported termination of the contract and the commencement of the proceedings are shortly set out in [14] above. They do not in my view constitute laches. The delay was not undue and the defendant was not prejudiced.

REMEDIES

46 Issues (8) and (9) concern remedies. There is no reason why the plaintiffs should not have specific performance, so there is no question of damages as an alternative under s 68 of the Supreme Court Act 1970. As the contract has not been validly terminated, the matters agitated under issue (9) do not arise.

ISSUES ON CROSS CLAIM

47 The first three cross defendants to the cross claim are the plaintiffs. The cross claim against them depends on the allegation that they were in default in completing the contract. As that allegation has not been made out, the cross claim against them cannot succeed.

48 The fourth cross defendant is the defendant’s solicitor, Mr Pickering. He is hereafter referred to simply as the cross defendant. By paragraph 8 of the cross claim the defendant alleges that the cross defendant owed him “a duty of care and a fiduciary duty”. Paragraph 9 alleges against the cross defendant “breach of his retainer and his duty to” the defendant as follows:

(1) That he drafted the contract negligently:


(i) in that he failed to include any special condition for the payment of interest on the purchase price, in the event of failure by the purchaser to complete in accordance with the contract;

(ii) in that he failed to include any special condition specifying the period of notice required for a notice to complete.


(2) That he failed to advise the defendant of the effect of the purported deed of novation and of the possibility of an assertion by the purchasers that it entitled them to delay settlement of the contract.

(3) That he failed to specify a reasonable period of notice (if the period specified was unreasonable, as asserted by the plaintiffs) for completion pursuant to the notice to complete.

(4) That he failed to address the notice to complete to the third plaintiff.

(5) That he failed to advise the defendant prior to the issue of the notice of termination on 2 October 2001 of any possibility of the notice to complete being invalid or of an inability effectively to terminate the contract.

(6) That he advised the defendant throughout October 2001 that there was no problem with the termination of the contract.

During the course of final submissions the defendant applied to amend the cross claim by adding the following further two heads of breach of duty:

(7) That he failed to obtain the defendant’s instructions in relation to the proposed addition of the third purchaser to the contract.

(8) That he consented to the addition of the third purchaser to the contract without instructions.

49 The cross defendant opposed this application to amend. The defendant indicated that, even if the amendments were allowed, he would not call further evidence. I reserved judgment on the application for amendment for consideration at the same time as my reserved judgment in the proceedings generally.

50 There are various additional factual matters that I shall need to advert to, but I shall do this as necessary in conjunction with the discussion of the various heads of negligence (as I shall hereafter refer to them) alleged.

THE LAW

51 An area of the law that falls for consideration in determining these claims is the area of causation, particularly where advice is not given or is wrongly given. In such a case, the plaintiff must establish that he would or may have acted differently if appropriate advice had been given: Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 at 1610 per Stuart-Smith LJ; Chappel v Hart (1998) 195 CLR 232 per Gaudron J at [9], McHugh J at [32]. In the Full Court of South Australia, in Hall v Foong (1995) 65 SASR 281 at 301, the situation was summarised as follows by Debelle J (with whom Doyle CJ agreed):

“The liability of the defendants for the negligence of the defendant Nield existed both in contract and in tort: Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384; Aluminium Products (Qld) Pty Ltd v Hill [1981] Qd R 33. In order to recover other than nominal damages for the lost opportunity, the plaintiff had to prove not only that the defendant was negligent in failing to advise her of the effect of Mr Cameron's opinion but also that the defendant's failure to advise had caused her loss: Sykes v Midland Bank Executor & Trustee Co Ltd [1971] 1 QB 113; Lillicrap v Nalder & Son [1993] 1 WLR 94; [1993] 1 All ER 724; Hanflex Pty Ltd v N S Hope & Associates [1990] 2 Qd R 218. The plaintiff had to prove on the balance of probabilities that, if properly advised, she would have acted differently. If she did not, she was entitled to nominal damages only for the breach of contract: Sykes v Midland Bank Executor Trustee Co Ltd (at 127); Lillicrap v Nalder & Son at 99; 729 [sic] and Hanflex Pty Ltd v N S Hope & Associates (at 228). Once liability is established, the assessment of the plaintiff's loss for the deprivation of a commercial opportunity is to be made by reference to the court's assessment of the prospects of success of that opportunity had it been pursued: Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355. It cannot be emphasised too much that causation must be established before the court is required to assess damages: Sellars v Adelaide Petroleum NL (at 353 and 364).

The plaintiff would not, therefore, succeed simply by proving that the defendant had been negligent in failing to advise her properly as to the effect of Cameron's opinion. The plaintiff had to prove that, had she been properly advised, she might have acted differently on that day, for example, by giving the defendant different instructions before he went to the conference on 15 January. There were two steps to be proved. The first is the advice she should have received. The second is how she would have acted on receipt of that advice.

The plaintiff was not asked either in evidence in chief or in cross-examination, how she would have acted if the plaintiff had correctly informed her of Cameron's preliminary advice. She was asked very few questions indeed as to what advice she received on 15 January. In the absence of direct evidence from the plaintiff, the court can have regard to any contemporaneous facts or documents which might assist in determining how the plaintiff might have acted: Sykes v Midland Bank Executor & Trustee Co Ltd (at 127) per Salmon LJ.”

And see Gore v Montague Mining Pty Ltd [2000] FCA 1214 at [34] – [38].

OMISSION OF SPECIAL CONDITIONS

52 This is the first head of negligence. The special conditions relevantly said to have been omitted are special conditions requiring payment of interest and specifying the period required for a notice to complete. The omission of the special condition relating to interest is of no significance in view of other findings in this judgment. The special condition as to the length of the notice to complete, if inserted, would have specified 14 days as the length of the notice to complete. So far as this special condition is concerned, I find that the cross defendant was in breach of retainer and negligent, by himself or his staff, in omitting from the contract his usual special conditions. I make this finding on the basis that the cross defendant regards the special conditions generally as beneficial to vendors for whom he acts. It is clear from his evidence that it was his intention that the special conditions be included in this contract. Their unintentional and inadvertent omission from the contract as exchanged is, in my view, to be characterised as a breach of retainer and negligent. However, it is not established that any loss was suffered by the defendant by the omission of the special conditions, since the appropriate period for the notice to complete in the absence of the special conditions was 14 days, the same as the period that would have been stipulated by the special condition and the notice to complete served gave only 13 days to complete.

FAILURE TO ADVISE CONCERNING THE DEED OF NOVATION

53 This is the second head of negligence. The failure specifically complained of was a failure to give advice concerning the consequences of the deed of novation and, in particular, that it postponed or might postpone the vendor’s entitlement to give a notice to complete and the purchasers’ obligation to complete the contract. The circumstances in which the deed of novation was executed are dealt with in [22] above. It is clear that no advice was given concerning the deed of novation on that occasion. The cross defendant acknowledges that he gave no such advice. It does seem strange and inappropriate that the defendant was given the deed to sign without an explanation of its nature. It is clear on the evidence that this was not an inadvertent omission, but was a matter of conscious decision by the cross defendant, who thought the addition of the daughter uncontroversial and for the benefit of the defendant, as it would facilitate the obtaining of finance. It is rendered a little less strange, in view of my finding that the defendant had not manifested up to the time the deed was signed any desire not to proceed with the contract: see [54] below. However, in my view it was a breach of retainer and negligent for the cross defendant not to give the defendant any advice concerning the deed of novation, including advice as to its nature and advice concerning the effect on the time of settlement of the deed of novation. Evidence was given by Mr Cornelius, an experienced conveyancing solicitor, that, in common practice, a solicitor properly discharging his retainer would give advice concerning the deed of novation. The advice would include advice that the execution of the deed of novation would or might delay settlement of the contract. Mr Cornelius conceded that there was another view, which the cross defendant espoused, that such advice was unnecessary. Even without Mr Cornelius’ evidence, I should find that such advice was necessary, and his view, which I accept, confirms me in my view.

54 However, as pointed out in [51] above, for a plaintiff to recover damages in respect of negligent advice, the plaintiff must demonstrate that he would have done something other than what he did, had he been given the appropriate advice. The appropriate advice in this case would have been advice that the time for giving a notice to complete and for completion of the contract might be delayed by the addition of the purchaser. In my view, the defendant has not established that he would have refused to sign the deed of novation had he been given this advice at the time he signed it on or shortly before 3 September 2001. The evidence is clear that he desired to sell the property as at 18 July 2001 and for the contract price and that that desire continued for some considerable time thereafter. There is no evidence that he had evinced to his solicitor (or anyone else) any desire or intention not to proceed with the contract up to the time that he signed the deed of novation. He entered into a lease of a new residence on 7 September 2001. One would take it that he was engaged in the process of leasing that new residence at the time the deed of novation was executed. Some time after 7 September 2001, he expressed annoyance at the delay in completion and a desire not to proceed with the sale. That attitude thereafter became an idee fixe. In fact, his views concerning this transaction have come to take on an appearance of obsession. The defendant gave no clear evidence as to what he would have done had he been given appropriate advice. It was certainly suggested in his oral evidence that in no circumstances would he have consented to the addition of a purchaser. However, that evidence was given ex post facto and I do not find it convincing. Exactly when and why he changed his mind is not clear on the evidence, but, in all the circumstances, as I have said, it is not established on the balance of probabilities that on or before 3 September he had changed his mind or would have refused the request for the addition of a purchaser, particularly bearing in mind that the addition of the daughter may have facilitated the completion of the contract.

FAILURE TO SPECIFY A REASONABLE PERIOD OF NOTICE

55 This is the third head of negligence. It seems clear from the evidence that, when the notice to complete was drawn and served, it was not the intention of the cross defendant and his relevant staff that less than 14 days notice should be given. The inference is that the shortness of the period was the result of a miscalculation. I find that the time shorter than 14 days was inserted in the notice to complete by miscalculation and the miscalculation was not discovered before the notice to complete was served. I find that the discovery of this error on the afternoon of 28 September 2001 was the subject of some surprise and chagrin on the part of the cross defendant and Ms Minards. I accept their evidence as to the events of that afternoon in relation to the discovery of and their reaction to the error. I find that it is established that the cross defendant by himself and his staff committed a breach of retainer and was negligent in drawing and serving a notice to complete deficient as to time.

56 However, in my view, it is not established that any loss was caused by this negligence. Had the notice to complete allowed 14 days, it would have expired on Saturday, 29 September 2001. This weekend was a long weekend, the Monday being a public holiday. Had it been realised that a notice to complete expiring on the Friday gave only 13 days, the choice would have been between giving a 14 day notice to complete expiring on the Saturday or one expiring on the Tuesday, the next business day. Either course would have had the same effect. Completion in compliance with a notice to complete expiring on the Saturday could have taken place on Tuesday, 2 October 2001: Interpretation Act 1987 s 36(2). The evidence shows that completion would probably have taken place on the Tuesday. The loss which the defendant claims is alleged to arise from him being held to a contract by which he does not wish to be bound. But it is not established that the defendant would not have continued bound to the contract if notice to complete of the correct length had been given.

FAILURE TO ADDRESS THE NOTICE TO COMPLETE TO THE THIRD PURCHASER

57 This is the fourth head of negligence. It flows from what I have said in [37] above, that the notice to complete as drawn should have been directed to the third purchaser as well as to the original two. The omission was fairly clearly inadvertent. In the circumstances, I find that it was a breach of retainer and negligent. However, I am of the view that it is not established that any loss flowed from the breach. Perhaps one need not go beyond the fact that the notice to complete was invalid for other reasons, namely, that the occasion to give it had not yet arisen and that it was deficient in time. In view of these defects, the additional defect arising from the failure to address the notice to complete to the third purchaser did not cause the defendant any damage.

FAILURE TO ADVISE OF POSSIBILITY OF INVALIDITY OF NOTICE TO COMPLETE AND ADVICE THAT NO PROBLEM WITH TERMINATION

58 The fifth and sixth heads of negligence relate to the cross defendant’s alleged failure to advise of the possibility of the invalidity of the notice to complete prior to the giving of notice of termination on 2 October 2001 and the advice he allegedly gave throughout October 2001 that there was no problem with the termination of the contract. These heads of negligence are the subject of the most considerable conflict of evidence between the defendant and the cross defendant.

59 The defendant’s version is that on 28 September 2001, the cross defendant contacted him by telephone and said:

“’The purchasers do not have loan approval. You can cancel the settlement and we will issue a Notice of Termination’. I replied ‘yes cancel the Contract’. My solicitor then replied with words to the effect ‘I will issue a Notice of Termination on 2 October 2001’”.

The defendant denies that he went to the cross defendant’s office on 28 September 2001. He says that the cross defendant again contacted him be telephone “on or about” 2 October 2001 and said words to the effect:

“I issued the Notice of Termination of Contract, on 2 October 2001. Please come to the office to collect the deposit. I will release the deposit funds to you.”

He went to the cross defendant’s office on the same day. While he was there the cross defendant received a fax advising that the purchasers would not release the deposit.

60 The cross defendant’s version is totally different. He tells of a somewhat dramatic interview in his office on the afternoon of 28 September 2001 shortly after he had learnt that the matter would not complete that day, had obtained the notice to complete from the file, noticed its deficiency as to time and discussed this with Ms Minards. Ms Minards did not hear the conversation between the defendant and the cross defendant, but swears that she saw the defendant in the office with the cross defendant. The cross defendant swears that he told the defendant that there was at least a possibility that the notice to complete was not valid and urged him to complete the contract on 2 October 2001, when he believed that the purchasers would be in a position to do so. The defendant instructed him to give a notice to terminate, but the cross defendant counselled him to consider the situation over the weekend. The cross defendant says that he made a contemporaneous file note of this conversation. He had Ms Minards set up an appointment for completion of the contract on Tuesday, 2 October 2001. He spoke to the defendant again on the Tuesday. The defendant came to his office and saw him and he also had a subsequent telephone conversation with the defendant. He again advised the defendant of the possibility that the notice to complete was invalid and again urged him to complete the contract, but received implacable instructions to give the notice of termination, which was then done. He made a file note concerning 2 October 2001.

61 I accept the cross defendant’s version of these events. I have already found that the cross defendant was a more satisfactory witness than the defendant. Ms Minards corroborates that the defendant was in the cross defendant’s office on 28 September 2001 and had a conversation there with the cross defendant. She corroborates that before that conversation the cross defendant had discussed with her the defect as to time in the notice to complete. She is no longer employed by the cross defendant and has no interest in the outcome of these proceedings. It seems to me inherently improbable that, after discovering (no doubt to his discomfiture) the length of the notice to complete, a solicitor would advise his client that his right to terminate the contract was undoubted or fail to advise that there were difficulties in pursuing that course. I find that the cross defendant did not on that day advise the defendant in the terms deposed to by the defendant. I find that the cross defendant’s file note was made on that day and regard the file note as substantially corroborative of the version given by the cross defendant in evidence.

62 Equally, I do not accept the defendant’s version of the conversation and events of 2 October 2001. I do not accept that the cross defendant summoned the defendant to his office to collect the deposit. I accept the cross defendant’s version that he again counselled the defendant to complete and repeated his advice that the notice of termination may be invalid.

63 It was submitted that the cross defendant’s file note dated 2 October 2001 was not contemporaneous and did not support his version of the events of 2 October 2001. I do not accept those submissions. It was probably not made on 2 October 2001, because made on a fax probably not received until 3 October. But I find that it was made within a business day or two after 2 October to record the conversation of that day. I also regard this note as substantially corroborative of the version given by the cross defendant in evidence.

64 Further, I simply do not accept that the cross defendant at any time advised the defendant that there was no problem about the termination.

65 For those reasons, the defendant cannot succeed in respect of the fifth and sixth heads of negligence.

FAILURE TO SEEK INSTRUCTIONS RE ADDITION OF THIRD PURCHASER: APPLICATION TO AMEND

66 These are the seventh and eighth heads of negligence proposed to be added by amendment. It is a basic principle that amendments will not be allowed if they would be futile: see per Jordan CJ in Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 310. It is apparent from what I have said in [54] and [54] above concerning the second head of negligence that the plaintiff could not succeed in recovering for any loss arising from these allegations. In those circumstances the addition of these heads of negligence would be futile and the application to amend in that regard will be refused.

BREACH OF FIDUCIARY DUTY

67 I have dealt with the defendant’s complaints against the cross defendant under the rubrics of breach of retainer and breach of duty of care. In par 8 of the cross claim the defendant alleges that the cross defendant owed him “a fiduciary duty”. The “duty” alleged in par 9 to have been breached presumably includes this fiduciary duty: see [48] above. The relationship being that of solicitor and client is undoubtedly a fiduciary relationship. However, the content of the fiduciary duty alleged to have been breached is nowhere set out. The acts and omissions complained of appear to sound in breach of retainer and duty of care, rather than in breach of fiduciary duty. In any event, in my view, no breach of fiduciary duty is made out.

CONCLUSIONS

68 For the foregoing reasons, the plaintiffs are entitled to specific performance of the contract by the defendant, there will be judgment for the plaintiffs on the defendant’s cross claim against them and the defendant fails in his claims to recover any substantial damages from the cross defendant. Short minutes should be brought in to give effect to these decisions. Questions of costs and any ancillary relief can be attended to at that time.

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