Primepoint Asset Pty Ltd v Fabray Pty Ltd

[2010] WASC 366

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CIVIL

CITATION:   PRIMEPOINT ASSET PTY LTD -v- FABRAY PTY LTD [2010] WASC 366

CORAM:   KENNETH MARTIN J

HEARD:   6 AUGUST, 26 & 27 OCTOBER 2010

DELIVERED          :   13 DECEMBER 2010

FILE NO/S:   CIV 2318 of 2008

BETWEEN:   PRIMEPOINT ASSET PTY LTD

Plaintiff

AND

FABRAY PTY LTD
First Defendant

KNIGHT FRANK (AUSTRALIA) PTY LTD
Second Defendant

(BY ORIGINAL ACTION)

FABRAY PTY LTD
Plaintiff

AND

PRIMEPOINT ASSET PTY LTD
First Defendant

WESTMAIN CORPORATION PTY LTD
Second Defendant

(BY COUNTERCLAIM)
 

Catchwords:

Contract - Contractual construction - Special condition - Purported termination of contract for the sale and purchase of land by purchaser corporation - Notice of termination disputed by vendor - Forfeiture of deposit - Counterclaim by vendor for forfeiture of deposit and damages - Issues of contractual construction of special condition

Legislation:

Transfer of Land Act 1893 (WA)
Planning and Development Act 2005 (WA)

Result:

Plaintiff's claim dismissed
Judgment for first defendant on counterclaim

Category:    B

Representation:

Original Action

Counsel:

Plaintiff:     Mr R M Garratt QC & Mr S Leslie

First Defendant             :     Mr C L Zelestis QC & Mr M Feutrill

Second Defendant         :     Submitting appearance

Solicitors:

Plaintiff:     Metaxas & Hager

First Defendant             :     Clayton Utz

Second Defendant         :     DLA Phillips Fox

Counterclaim

Counsel:

Plaintiff:     Mr C L Zelestis QC & Mr M Feutrill

First Defendant             :     Mr R M Garratt QC & Ms S Leslie

Second Defendant         :     No appearance

Solicitors:

Plaintiff:     Clayton Utz

First Defendant             :     Metaxas & Hager

Second Defendant         :     Talbot Olivier

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

Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119; (2008) 66 ACSR 594

Aussie Invest Corporation Pty Ltd v Pulcesia Pty Ltd [2005] VSC 362; (2005) 13 VR 168

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99

Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650

Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160

Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850

McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579

McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457

Process Minerals International Pty Ltd v Consolidated Minerals Pty Ltd [2010] WASC 266

Rossdene Pty Ltd v Carolina Corporate Properties Pty Ltd [1987] ANZ ConvR 403

Suttor v Gundowda Pty Ltd (1950) 81 CLR 418

Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315

Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514

KENNETH MARTIN J: 

Overview

1. This is a dispute between Fabray Pty Ltd (the Vendor) and Primepoint Asset Pty Ltd (the Purchaser) arising out of a sale of land contract initially entered on 19 October 2007, in respect of three parcels of land at Ellen Stirling Boulevard in the suburb of Innaloo, Western Australia.  The original contract was subsequently varied between the parties by a further agreement of 18 February 2008. 

2. The Vendor and Purchaser are both corporations. The contractual arrangements involved a further party, Westmain Corporation Pty Ltd, as guarantor to the obligations of the Purchaser. However, the guarantor is now in liquidation and a counterclaim against it is effectively stayed. I was told that there has been no application by the Vendor seeking leave to proceed against the guarantor, under s 587(2) of the Corporations Act 2001 (Cth).

3. Knight Frank (Australia) Pty Ltd is second defendant in the proceedings, on the basis that it is stakeholder of $2 million in deposit moneys paid by the Purchaser in respect of the acquisition of lot 214 ‑ one of three component properties the subject of acquisition under the contractual arrangements.  The Purchaser, as plaintiff in these proceedings, seeks to recover that deposit.  The Vendor, as first defendant, seeks by counterclaim to have the deposit declared forfeit to it.  The second defendant, as stakeholder, has submitted to the ultimate decision of this court and has not otherwise participated in the action.

4. The action then is essentially an inter partes dispute between Vendor and Purchaser, initiated by the Purchaser seeking to recoup its $2 million deposit for lot 214, but resisted by the Vendor, on the basis that the deposit is forfeit and, further, that the Purchaser is additionally entitled to loss of bargain damages upon its December 2008 termination (upon the Purchaser's alleged serious breach or renunciation) of the contract of sale, as varied. 

5. The essential issue in dispute relates to the validity of an earlier notice of termination, sent on behalf of the Purchaser to the Vendor (by the Purchaser's then solicitor, Mr Josland) at about 5.42 pm on 6 May 2008. 

6. The Purchaser's notice sought to invoke, as the basis for its attempted termination, the non‑fulfilment by the Vendor of a condition raising the need for the issue of separate certificates of title for the land components of the transaction; see special condition 3(a) found within the contract of sale at annexure A.  Special condition 3(a) provided:

   This Contract is conditional on a separate Certificate of Title for each lot comprising the Property with the Seller as the registered proprietor being issued by the Latest Date.

7. Special condition 3(c) stipulated that if special condition 3(a) was not satisfied, then either party would have the right to terminate the contract by written notice of termination. 

8. The Purchaser argues that the 'Latest Date' (agreed to be 30 April 2008) passed without there being a separate certificate of title 'issued' (a word of key importance) for one of the three components of the property under acquisition (part lot 213) and the Purchaser was thereby entitled to terminate all future obligations of performance on 6 May 2008, by the written notice given on its behalf by its solicitor.  On that basis, the Purchaser claims its $2 million deposit on lot 214 back, with interest.

9. The first sub‑issue is a temporal dispute over precisely when, as a matter of fact, a separate certificate of title in respect of the component land, being part lot 213, actually issued.  The Purchaser contends that the separate certificate of title (for what then became lot 222) did not issue until a State land agency concerned (Landgate) had actually created and then caused, in a physical sense, a duplicate certificate of title to be available for collection by the Vendor's representatives at about 7.00 am on 7 May 2008 from Landgate's premises at Midland, Western Australia.  Alternatively, the Purchaser says, by what is seen on the face of the digital record of certificate of title for lot 222, that the duplicate certificate issued (at the earliest) at a date seen to be stipulated on the record of certificate of title: namely 6 May 2008.  (The duplicate certificate of title for lot 222 is also seen to stipulate 6 May 2008 as the 'date duplicate issued'.)  Of course, these alternate dates of 6 or 7 May 2008 are both well after the 'Latest Date' (30 April 2008) set by special condition 3(a) and so, on the Purchaser's case, either will suffice. 

10. On the other hand, the Vendor, invoking provisions in the Transfer of Land Act 1893 (WA) to support what it says is the true understanding of the system for digital certificates of title (in place in Western Australia since 1996), contends that the Purchaser's focus upon the issue of the duplicate (certificate of title), is misconceived. The Vendor argues that special condition 3(a) was satisfied on 28 April 2008 (therefore, before the Latest Date expired). The argument invokes as applicable a date at which the Vendor is recorded on both the record of certificate of title and on the duplicate certificate of title as being registered, by reference to the Vendor's application for separate titles (AF K578500).

11. The Vendor's application for a new title in respect of lot 213 on deposited plan 51152, was lodged with Landgate on 28 April 2008 at 2:23:33 pm. 

12. The Vendor therefore asserts that the Purchaser's purported notice of termination on 6 May 2008, reliant upon special condition 3(a) was ineffective, because a separate certificate of title in respect of lot 222 had issued before the Latest Date.

13. Alternatively to that temporal dispute of fact as regards the Latest Date passing or not, the Vendor also contends that, as a matter of the proper construction of the contract of sale as varied, the contractual arrangements, properly understood, involved three separate sales and settlements over three separate land components.  This is the second essential sub‑issue of controversy.

14. The end consequence of the Vendor's alternate argument is that even if the separate certificate of title (being lot 222) did issue in early Mary 2008 after the Latest Date, nevertheless the Purchaser was still not excused under special condition 3(a) in all the circumstances that prevailed, from being required to effect settlement on the other two components of the sale of land transaction, namely on lots 214 and 212. 

15. Settlement on lot 214 (uncontroversially) had been due on 17 March 2008 (before the Purchaser's attempted notice of termination of 6 May 2008).  But settlement was not effected by the Purchaser.  The Purchaser does not dispute it had been obliged by the contractual arrangements to settle upon its acquisition of lot 214 on 17 March 2008, and so, that it was in continued default of its obligation to do so on 6 May 2008, at the time its solicitor gave notice of termination.  In fact, the Vendor had also given a notice of default to the Purchaser through solicitors (Freehills) on 19 March 2008, allowing the Purchaser 28 days to remedy its settlement default on lot 214 (see exhibit F, pages 282 ‑ 283).  The parties had remained in ongoing negotiations in the last weeks of April 2008, as the Latest Date (30 April 2008) approached.  The Vendor had not, by that time, acted upon its notice of 19 March 2008, although 28 days had passed, on 17 April 2008. 

16. The Purchaser says, however, that the intervening failure of the Vendor to satisfy special condition 3(a), as regards the issue of a separate certificate of title for lot 222 by 30 April 2008, allowed either party by election, to terminate all obligations of future performance under the contract of sale agreements.  One of those obligations included, so it is put, any unmet future obligation to settle on the acquisition of lot 214.  The Purchaser's entitlement to terminate by giving notice grounded on the failure to meet special condition 3(a) was unaffected, it argues, by its own default on its obligation to settle on lot 214 which had subsisted for over six weeks before it gave notice of termination on 6 May 2008.

17. Accordingly, the Purchaser seeks the return of its $2 million deposit in respect of lot 214, currently held by the stakeholder.  It says that special condition 3(d)(2) confers the express right to a refund of its deposit, in the wake of a valid termination of the contract of sale (as varied) on 6 May 2008.  Alternatively, the Purchaser seeks the return of its deposit as a matter of implication of  a contractual term to that effect, or on the basis of a restitutionary right.

18. A third sub‑issue arises in the event it were to be found as a fact that a separate certificate of title had issued in respect of lot 222 on 6 May 2008, at a time on that day (around 2.00 pm) that preceded the Purchaser's notice of termination (given around 5.00 pm at the close of business that same day).  The Vendor, in that scenario, seeks to argue that, notwithstanding the Latest Date stipulated as 30 April 2008, the Purchaser would be inhibited from issuing a valid notice of termination under special condition 3(a), once the separate certificate of title for lot 222 had already issued.

19. Having identified the three main sub‑issues, I would observe that at the trial, there was almost no factual disputation between the parties over the core facts underlying these issues.  I propose then to set out most facts in chronological order by reference to the parties' submissions, particularly by reference to an unchallenged chronology, filed on behalf of the Purchaser. 

20. The documentary trial evidence essentially comprised two volumes of documents, exhibits F and G, being volumes 1 and 2 respectively of the agreed trial bundle. 

21. Three witness statements were submitted into evidence at trial on the basis that the evidence within those statements would not be challenged by cross‑examination.  This evidence comprised, on behalf of the Purchaser, a statement from its solicitor, Mr Stephen John Josland (which became exhibit C (pars 1 ‑ 15, 34 ‑ 35 only)) and a statement of a director of the Purchaser, Mr Graham Kenneth Iddles, exhibit D.  On behalf of the Vendor there was submitted an amended witness statement of a director, Mr Adriano Giacomo Fini, exhibit E.  I refer, in due course, to aspects of this uncontroversial witness evidence. 

22. The only witness actually called during the trial, Mr Stephen John Crowe, is the supervisor in the Complex Dealings Section of Landgate.  Mr Crowe essentially was called as an expert witness by both parties.  Mr Crowe's two witness statements and their attachments were exhibits A and B, respectively.  Mr Crowe's evidence bears upon the controversy concerning the satisfaction, or otherwise, of special condition 3(a) by the Vendor.

23. Before proceeding to consider the facts, it is convenient to address the expert evidence elicited from Mr Crowe.

Evidence of Stephen John Crowe

1. In his witness statement (exhibit A), filed 6 January 2010, Mr Crowe related that he was employed by the Western Australian Land Information Authority (Landgate).  He held the position of supervisor, Complex Dealing Section.  Landgate is a body corporate  established under the Land Information Authority Act 2006 (WA). Mr Crowe has been employed by Landgate or its predecessors for 36 years. He has held the position of supervisor, Complex Dealings Section, for about eight years.

2. By reference to application K578500, Mr Crowe explained that the Vendor's solicitors had lodged with Landgate, on 28 April 2008, at 2:23:33 pm, an application to register certificates of title from deposited plan 58517 (see attachment A to Mr Crowe's statement, also found at page 384 of vol 1 of the trial bundle, exhibit F).  Mr Crowe explained that the lodging process for K578500 involved:

   3.1A representative of Freehills, Barristers and Solicitors attending at Landgate's Midland office which is situated at 1 Midland Square, Midland, WA 6056 handing to the counter staff the Application together with duplicate certificate of title volume 2677 Folio 752 (Title Deed) and payment of the registration fee which at that time was $97.00.

   3.2Landgate's counter staff then bar‑coded the Application with alpha‑numeric K578500.  This number is the Application's identifier/Landgate reference for the purposes of tracking the Application and creating the new titles for lots 221 and 222 on deposited plan 58517 (the New Titles).

   3.3Once bar‑coded the Application and Title Deed were placed into a holding location and processed in lodging order.  Land transactions lodged prior to the Application were processed in the usual manner and five and a half working days after lodgement Application K578500 was then marked to examiner location NTC24 for examination.

3. From attachment B to his statement, Mr Crowe explained that at 1:55:45 pm on 6 May 2008, a Landgate examiner (referred to as NTC24), commenced the examination of application K578500.  The process involved the examiner ensuring that all statutory and other requirements for an approval of the Deposited Plan were met. 

4. A copy of Deposited Plan 58517 is to be found at exhibit F, page 391A. 

5. The record of certificate of title in respect of lot 213 on Deposited Plan 51152, was registered on 5 December 2007, with a duplicate certificate issued on 20 December 2007, and being the subject of certificate of title vol 2677 folio 752 (found at exhibit F, page 340).  Deposited Plan 58517 further subdivides lot 213 on certificate of title vol 2677 folio 752 into two further lots, namely a (smaller) lot 221 of some 2,400 sqm and (residual) lot 222 of some 6,543 sqm (see exhibit F, page 391A).  Deposited Plan 58517 explains the reference in the contract of sale, as varied, to the Purchaser acquiring only 'part' lot 213 (ie the proposed future lot 222).

6. Mr Crowe (at par 5) explained that completion of the examination of the application K578500 by reference to Deposited Plan 58517 was at 2:00:12 pm on 6 May 2008.  Essentially then, the examination process took less than five minutes.  Completion of that process resulted in 'the simultaneous updating of the SmartPlan data base and the creation of the New Titles by the SmartRegister data base', at Landgate.

7. From this point in his statement Mr Crowe explains some intricacies of the system of land registration relating to digital titles, a system introduced by amendments under the Transfer of Land Act, under amending Act No 81 of 1996.

8. The impact of introducing a registration system by digital title into the Torrens system of land registration under the Transfer of Land Act can be found in amendments to the Act, seen for example at s 14, s 48(1)(b) and s 52(1a), to which greater reference will be made.

9. At par 6 in this statement, Mr Crowe explains the process for creation of digital certificates of title:

   6.1Certificates of title are created as digital files in a computer based application called SmartRegister.  Duplicate certificates of title are hard copy print‑outs of these files.

   6.2Certificates of title volume 2688 Folio 790 and volume 2688 Folio 791 are the new title numbers allocated to the New Title lots 221 and 222 the subject of deposited plan 58517.

   6.3At the time the new titles were created, the duplicate certificates of title (duplicates for the New Lots) were designated to print at Landgate's Perth Branch Office (PBO).

10. In contrast to digital records of certificates of title, Mr Crowe explained that the process for the physical issue of 'duplicate' certificates of title by Landgate (see s 48B of the Transfer of Land Act) was that:

    7.1The Duplicates are printed in hard copy format at Landgate's PBO on the next business day after their creation [Landgate's PBO is located in the outer Perth eastern suburb of Midland].  When printed the Duplicates are put into a locked and numbered issuing box which can only be accessed by the appropriate Landgate staff and an employee of the issuing party (lodging party of the document). 

    7.2The Duplicates issued on list number 740183 and were printed in Landgate's PBO on 7/05/2008 at 7:02:27 AM.  The Duplicates were placed into Freehill's issuing box 116D (the Box). 

11. By reference to the verification slip receipt, Mr Crowe could say here that the duplicate certificate of title for lot 222 was collected by the Vendor's solicitors (Freehills) at 3:05:03 pm on 7 May 2008 from Landgate's Perth Branch Office (PBO).  A copy of the duplicate certificate of title in respect of lot 222 (vol 2688 folio 791) may be found at exhibit G, page 595 (by way of contrast, see the record of certificate of title for the same lot 222, at exhibit G, page 718).

12. Mr Crowe explained:

    9.A search (copy) of certificates of title volume 2688 folio 790 and volume 2688 folio 791 were available from the start of business on 7/5/2008.  The New Titles were uploaded as images to the Landgate Image Viewer System and were available either remotely or on request from Landgate in facsimile or PDF format from the start of business on 7/05/2008.

    In his evidence given at trial, Mr Crowe explained that the start of a business day at the PBO was 8.30 am. 

1. In his second witness statement of 2 August 2010 (exhibit B), this being prepared at the instigation of the Vendor, Mr Crowe explained, by reference to the certificate of title for lot 222, that the Vendor had been recorded as registered as the proprietor of land the subject of the digital certificate of title being lot 222 on Deposited Plan 58517 as register number 222/DP58517 and vol 2688 folio 791 (attachment F to Mr Crowe's statement, also found at exhibit G, page 718), as of 28 April 2008. 

2. What has emerged from Mr Crowe's evidence is that there was a backdated attribution by Landgate of the date 28 April 2008 (seen on the digital certificate of title for lot 222), on 6 May 2008 at approximately 2.00 pm, at the instigation of examiner NTC 24.  That transpired at the end of that examiner's completion of its examination of application K578500 for separate titles on 6 May 2008.

3. Mr Crowe explained:

   8.As I also noted in my statement of 15 December 2009 the Application was subjected to an examination process in which the examiner ensured that all statutory and other requirements for approval of Deposited Plan 58517 had been met.  As the Application was for new titles on the subdivision of land, new titles could not have been created and registered unless Deposited Plan 58517 was in order for dealings.  A plan that has been approved by the West Australian Planning Commission and subject to the Plan Examination Process by the Inspector of Plans and Surveys may be endorsed 'in order for dealings'.  This signifies that Landgate will accept and register an application A6 for new titles at which time the plan is official approved.

   Deposited Plan 58517 was marked in order for dealings on 24 April 2008 (see attachment G to Mr Crowe's second statement exhibit B and exhibit F page 391A).

4. At par 11 in exhibit B, Mr Crowe explained the processes concerning applications for new titles, by reference to the practices of Landgate towards 'follower' dealings.  Mr Crowe related:

   12.In such circumstances, provided that the relevant plan of subdivision is in order for dealing, Landgate's usual practice is to register the application for new titles, create the titles on the Register with effect from the date on which the application was lodged and then, provided the application and the followers are all in order and have not either been rejected or withdrawn from registration, register the transfer.  In this scenario, the transfer would be registered with effect from the date on which it was lodged as would be any mortgages or other interests set out in documents lodged with the transfer.

5. A digital title is allocated a reference number (called a register number) by the Landgate SmartRegister database.  The register number for lot 222 (which may be seen on the face of exhibit G, page 718) was '222/DP58517'.  That number is allocated 'when the examination of an application for new titles is completed'.  In other words, by reference to Mr Crowe's earlier evidence, the register number for lot 222 was actually allocated at approximately 2.00 pm on 6 May 2008.  Mr Crowe continued:

   13.This unique identifying number referred to as the register number is the Lot number marked on the Deposited Plan ('the DP') combined with the DP number.  In the case of the New Title, that  number is 222/DP58517.

   The register number for lot 222 is seen in the top right‑hand corner of the duplicate certificate, or on the record of certificate of title (pages 595 and 718 of exhibit G.)

6. The continuing use of volume and folio numbers in regard to certificates of title is something left over from practices employed during an era of paper titles.  Mr Crowe said (par 15, exhibit B):

   Landgate also allocates a title volume and folio number to each certificate of title.  The volume and folio numbering system is a continuation of the pre‑digital title numbering system used by Landgate (and its predecessors).  The title number for the New Title is volume 2688 Folio 791.  This number is linked to the parcel identifier and is shown in centre of the beginning of the Duplicate Certificate of Title or a record of certificate of title.

7. Mr Crowe confirmed that information concerning the creation of a register number and the volume and folio numbers for what emerged as lot 222 were not available until the work of the Landgate examiner had been completed at approximately 2.00 pm on 6 May 2008.

8. In answer to some questions at the commencement of his re‑examination by senior counsel for the Purchaser (see ts 152 ‑ 153), Mr Crowe agreed that it was theoretically possible for applications for new titles to be 'rejected' by Landgate, to 'lapse', or to be 'withdrawn'.  He also explained (ts 153) that the date seen in a top right‑hand corner box under a registered number on the duplicate certificate of title (exhibit F, page 595) for the date at which the duplicate issued was 'added by the system ... on the day that [it was] processed or the time that [it was] processed at 2 o'clock on the 6th [of May 2008]'.  The following ensued:

   So at the same time as the identifying numbers are allocated that date is entered in that box?‑‑‑Correct.

   Therefore it's not necessarily an accurate guide to when the duplicate title is in fact issued by Landgate, is it?‑‑‑Physically issued, no.

   In all likelihood that could be the next day?‑‑‑That's correct.

9. Here it has already been seen from the evidence of Mr Crowe (see his first statement, exhibit A, explained by reference to his attachment C), that the paper duplicate certificate of title for lot 222 was actually printed out at Landgate's PBO at 7:02:27 am on 7 May 2008, before it was collected by the Vendor's solicitors (Freehills) at 3:05:03 pm.

10. Mr Crowe gave some evidence about the commencement of a capacity for external persons (such as solicitors) to search (by reference it would seem to Landgate's digital database) and thereby obtain details for the new (separate) certificate of title created in respect of part of lot 222. 

11. Before that however, I will mention some unchallenged evidence from the Purchaser's solicitor, Mr Josland, concerning his Landgate search inquiries on 1 May 2008.  This evidence, in Mr Josland's witness statement (see exhibit C, par 9), was accepted without controversy, Mr Josland (like Mr Fini and Mr Iddles) not being required to be cross‑examined.

12. Mr Josland said (by reference to two documents he identified at pages 578 ‑ 579 of exhibit G):

    9.On 1 May 2008 I conducted Landgate searches which confirmed the new title for Lot 213 had not issued.

13. Returning then to Mr Crowe's evidence, it is apparent, from a perspective of what might be ascertained by a search, that relevant basic information concerning new certificate of title details for a lot 222, such as register number and volume and folio details, was not available until the commencement of the business hours of Landgate, on the morning of 7 May 2008.  Mr Crowe's evidence is consistent with Mr Josland's negative search outcomes on 1 May 2008. 

Legal principles of construction

1. There was no dispute between the parties about these well established principles.  My reasons for decision in Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160 [594] ‑ [595] and in Process Minerals International Pty Ltd v Consolidated Minerals Pty Ltd [2010] WASC 266 [38] ‑ [44] collect the significant authorities. I repeat, only because of their abiding assistance, the words of Sir Harry Gibbs in Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109 ‑ 110 (ABC v APR):

   It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied.  Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another.  If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different.  The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust.  On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v Dunlop (1888) 39 Ch D 387, 393, which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case (1880) 16 Ch D 681, 686. Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503, 514, that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429, 437

Vendor's submissions on sub‑issue one concerning issue of a new certificate of title before the Latest Date (30 April 2008)

1. This argument was introduced into the proceedings at a late stage as part of the Vendor's case in the alternative, by an amendment to par 5 of the Vendor's defence and counterclaim.  The late amendment occasioned a need for the trial, which had commenced on Friday 6 August 2010, to be adjourned.  The full implications of the changes, needed to be properly digested and addressed by the Purchaser's advisers. 

2. Paragraph 5 of the Vendor's defence is in these terms:

   5(a)On the proper construction of the Contract as varied, the reference in condition 3(a) to a separate certificate of title issuing is a reference to the registration of a new certificate of title taking effect, alternatively to registration of a new certificate of title, under the Transfer of Land Act 1983, whereby the land the subject of such certificate of title is available for dealing under that Act.

   5(b)A new certificate of title for Part Lot 213 (which became Lot 222) was registered, under the Transfer of Land Act, with effect from 28 April 2008, alternatively a new certificate of title was registered at approximately 2.00 pm on 6 May 2008, whereby the land the subject of such certificate of title was available for dealing under that Act and was issued under the varied Contract.

3. The argument is elaborated upon by the Vendor's written amended outline of opening submissions of 9 August 2010, between pars 63 ‑ 78, in the following terms:

   63.Alternatively, if the sale and purchase of lot 214 (and the other 2 lots) was conditional upon a separate certificate of title issuing in respect of part lot 213 by 30 April 2008, that condition was fulfilled, having regard to the proper construction of that requirement. 

   64.That is so because, on the proper construction of that (assumed) condition, what it required was that a new certificate of title for part lot 213 should take legal effect as a registered certificate of title by the Latest Date (ie, 30 April 2008). 

   65.Special condition 3 must be understood in the context of the varied contract and also the context of the Transfer of Land Act and other applicable statutes and regulations and the registration practice adopted by the Registrar in the application of those provisions.  Those provisions and that practice are outlined in Fabray's separate submission. 

   66.As the agreement for the sale and purchase of each lot related to a lot which was to be created by subdivision, General Condition 13, as expressly modified by special condition 6, applied separately in relation to settlement of each lot. 

   67.The modifications to General Condition 13 included a new clause 13.4(b), which required Fabray to use its reasonable endeavours to arrange for the Subdivision Plan to be endorsed as In Order for Dealing by the Latest Date: special condition 6.5.  As has been explained, under the General Conditions, that refers to the plan being approved by an Inspector in order to enable the issue of a separate certificate of title for the lot:   General Condition 26.1. 

   68.Once a plan has been endorsed as in order for dealings, the final step to be taken by the applicant for subdivision is the lodgement of an application for a new certificate of title. 

   69.Once such an application has been made, the new certificate of title, when actually entered in the register thereafter, takes legal effect (ie, is registered with effect from) the date of the application for the new title.  The legal effect of registration is not delayed or impaired by any time taken by the Registrar in actually entering the new certificate of title in the register, whether it be a paper register or a digital register. 

   70.Thus, once a plan is endorsed as in order for dealings and an application for new titles is lodged, it is known that the new certificate of title will take registered effect from the date that such application was lodged. 

   71.It is in this context that special condition 3 must be construed. 

   72.Special condition 3(a), in referring to a separate certificate of title plainly referred to an original certificate of title, not a duplicate.   That is so because of the ordinary meaning of those words in relation to Torrens system land.  A duplicate certificate of title is something quite different.  There are no words in special condition 3 which describe such a certificate of title. 

   73.In the case of an original digital certificate of title, nothing 'issues' in the sense of being distributed or sent out by the Registrar.  Thus, the reference to a separate certificate of title being issued is a reference to the occurrence of a legal event.  That event is the new certificate of title taking legal effect as registered. 

   74.Further, it is significant that special condition 3(a) refers to a separate certificate of title comprising each lot 'with the Seller as the registered proprietor' being issued by the Latest Date.  This emphasis upon Fabray becoming the registered proprietor reflects an intention to focus upon the time from which such registration takes effect.  It is from that time that subdivision is legally complete. 

   75.It is also necessary to consider special condition 3 in light of the applicable General Conditions.  Each of the lots to be sold was to be created by subdivision.  In that regard, General Condition 13 imposed various conditions, the last of which related to endorsement of a plan of subdivision as being in order for dealing.  The General Conditions also refer to a new certificate of title being issued thereafter, but that provision does not operate as a condition: cl. 13.9(a). 

   76.Those provisions recognise the fact that when a plan is in order for dealing, a new certificate of title will issue once an application for it is made (as explained in Fabray's separate submissions.) The point is that special condition 3 is also concerned with the finalisation of subdivision.   Subdivision is finalised from the point of view of an applicant when, following a plan being endorsed as in order for dealing, an application for a new title is lodged.  That completes the steps which are within an applicant's power and fixes the date from which registration of the certificate of title for the new lot will take effect. 

   77.Accordingly, if (contrary to Fabray's primary contention), special condition 3(a) applied to lot 214 (or to any lot), it was satisfied by the new certificate of title for part lot 213 taking effect as registered on and from 28 April 2008.

   78.Alternatively, if the varied contract referred to the procedural step of a new certificate of title being entered in the register maintained under the Transfer of Land Act, that occurred at about 2pm on 6 May 2008. 

4. In summary, the submissions of the Vendor upon this sub‑issue emphasise:

   (a)the surrounding statutory context of the Transfer of Land Act, as part of relevant mutually known surrounding facts and circumstances in which special condition 3(a) must be construed, viewed in the context of the whole of the contract of sale as varied.  There is no controversy about the scope for a relevant surrounding statutory background or regulatory environment, to form part of the context in which an exercise in contractual construction is to occur:  see  Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Company Ltd [2008] WASCA 119; (2008) 66 ACSR 594 [113] (Buss JA) to which I refer as part of this aspect of principles of contractual construction in Hughes v St Barbara [595(11)].

   (b)the absence of any reference in special condition 3(a) to a 'duplicate' certificate of title.  The omission, it is put, conveys the clear intention of the parties (objectively assessed) to refer to another subject matter.  This can only be the original certificate of title (par 72 of written submissions extracted above) which, in overall context, must mean the digital record of the certificate of title.

   (c)the key distinction between a duplicate certificate of title and an original (digital) certificate of title.  The distinction may be witnessed within the definition and interpretation clause, cl 26.1, in the 2002 Joint Form of General Conditions for the Sale of Land (the 2002 General Conditions), which have been incorporated into the contract of sale as varied (as annexure B), save to the extent that they are inconsistent with, or are expressly modified by, the contract of sale and its special conditions (special condition 6). 

5. On the other hand, the Purchaser refutes this construction of special condition 3(a).  Essentially, the Purchaser submits that the Vendor's approach to construction involves a prolix and wholly artificial application of retrospectivity to events that transpired at about 2.00 pm at Landgate on 6 May 2008 - to conjure a manufactured conclusion that a separate certificate of title for lot 222 had 'issued' eight days back in time. 

6. The Purchaser contends that the Vendor's advocated construction mistakenly overlooks, or undervalues, the natural and ordinary meaning of the word 'issued' as deployed in special condition 3(a), which terminology should surely connote, particularly by its past tense, the physical emergence or emanation of 'something'.  The underlying bedrock in special condition 3(a) of a separate certificate of title for part lot 213 must sensibly, in context, and with proper regard to the language employed, only mean, it is said, a physical issue of the duplicate certificate of title. 

7. The Purchaser says this physical event only occurred at just after 7.00 am (post printing) at Landgate on 7 May 2008.  On its other alternative case, the relevant event happened shortly after 2.00 pm on 6 May, when the Landgate examiner's work was completed and when the designation as to the duplicate certificate of title being issued upon 6 May 2008 followed (seen in the top right corner box completed with that information, exhibit G, page 595, by reference to the words, 'Date Duplicate Issued' followed by '6/5/2008'). 

Special condition 3(a) evaluation as regards a separate certificate of title being issued for part lot 213 before the Latest Date (30 April 2008)

1. In my assessment, the force of the Purchaser's submissions on this issue must be accepted, with the qualification that I construe (as a process of reasonable construction on an objective basis) the phrase 'being issued', as regards the subject matter of a separate certificate of title for part lot 213, to be a reference to the date information found on the face of the certificate of title (exhibit G, pages 595, 718) as the 'date duplicate issued', or in other words, 6 May 2008. 

2. I agree that the Vendor's arguments of construction, pay insufficient regard to the force of the draftsperson's deployment of the verb 'issued' and its ordinary meaning (see dictionary definitions of 'issue' in Macquarie Dictionary (4th ed): '2. that which is issued'; '11. something proceeding from any source, as a product, effect, result, or consequence'; '23. to send out; discharge; emit'; and '26. to come or proceed from any source'). 

3. I reach this conclusion, essentially on the basis that the Vendor's elaborate argument of construction, calling in aid sections of the Transfer of Land Act as context for a system of digital title, presents to me, as overrefined.  Its complications render insufficient weight to the actual language used in special condition 3(a), namely the phrase 'being issued'.

4. The Transfer of Land Act s 48 refers to a registrar's record in respect of land the subject of a digital title, and mentions a 'record' of the endorsement of the particulars of dealings. Section 48A(1) invokes the concept of a certificate of title being 'created', seen in the phrase 'created for registration'. But 'registration' and 'creation' are not the touchstones invoked by the draftsperson of special condition 3(a). Rather, the temporal cut‑off point (Latest Date) set by the draftsperson, is implemented via the concept of the separate certificate of title 'being issued'.

5. But the Transfer of Land Act s 48B(1), in reference to duplicate certificates of title, does use the word 'issue'. Section 48B(1) provides:

   Where a certificate of title has been registered the Registrar shall issue a duplicate certificate of title to the proprietor of the land that is the subject of the certificate of title unless the proprietor requests, in an approved form, that -

   (a)a duplicate certificate of title not be issued; or

   (b)the duplicate certificate of title be issued to a person named and authorised by the proprietor, in which case the Registrar shall issue the duplicate certificate to that person.  (emphasis added)

6. The 2002 General Conditions, incorporated as annexure B into the contract of sale as varied, also refer to a subject matter of 'issue of title - settlement date' at cl 13.9 (see cl 13.9(a)(1)).

7. The Vendor's arguments, by reference to the Transfer of Land Act's concepts of registration (s 52(1)(a)), or priority (and indefeasibility), by reference to registration (s 53), once again stray, I think, from the draftsperson's selected criterion.  Special condition 3(a) was fashioned to create a discernable cut‑off date by which something was to happen.  Its work was an attempt to specify a tangible event (about which, hopefully, there would be little disputation).  'Issued', used in the context of the expression 'being issued', indicates a notion of an event that occurred.  The concept seems to envisage parties being able to ascertain when a specified event has happened.  The contrary construction advocated by the Vendor, is notional in concept and inconsistent with the identification of an event, in real time. It requires an eight day exercise in retrospectivity (from 6 May back to 28 April 2008), which is simply too theoretical to deliver the certainty as to an event in time that the draftsperson (objectively assessed) had in contemplation for the ascertainment of the 'Latest Date'.

8. The 2002 General Conditions probably inadequately address all ramifications arising from the introduction in 1996 of digital certificates of title.  But even s 52(4)(a) of the Transfer of Land Act itself appears to inadequately cater for the new system.  Section 52(4)(a), as senior counsel for the Vendor correctly pointed out, seems to do its deeming work only towards certificates of title the subject of a paper title.  Yet it would seem inconceivable that like protections were not also intended to be rendered towards a digital title the subject of s 52(1)(a).  This curiosity in drafting simply illustrates the difficulties arising in attempting to superimpose a digital title system over the top of a paper based Torrens system of land registration, previously operative for over a century. 

9. Attempting to apply a sensible commercial approach (see McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579, and the wisdom of Sir Harry Gibbs in ABC v APR) to special condition 3(a), within the context of the contract as a whole, as well as the surrounding statutory and regulatory environment, it seems to me overall that the parties here, viewed objectively, must be assessed as having had in mind the duplicate certificate of title.  Its issue date, without controversy, would be ascertained by reference to the date appearing in the box headed 'Date Duplicate Issued' on the duplicate certificate of title (see exhibit G, page 595), and being of course the same date as appears on the record of the certificate (see exhibit G, page 718).  Objectively assessed, the parties are unlikely to have intended the need for a descent into a factual evaluation as to the precise second (assuming the printer was working) the hard (paper) copy of the duplicate certificate actually emerged upon a printer tray at Landgate (in this case, shortly after 7.00 am on 7 May 2008).  The draftsperson's need for certainty is answered by the 'issue' information which is unambiguously to be found on the face of both the duplicate and the record of the certificate of title itself, as to this selected event. 

10. The evidence is that a reference number and the volume and folio details for the separate certificate of title (lot 222) did not materialise until approximately 2.00 pm on 6 May 2008 (but might never have emerged, had the Vendor's application for titles been rejected, lapsed or been withdrawn).  That being so, the Vendor's proposed issue date of 28 April 2008 cannot be accepted as a satisfactory outcome.  The Vendor's hypothesis, on my assessment, has been elaborately reverse engineered, so as not to fall foul of 30 April 2008, as the Latest Date deadline.  Occam's Razor points to the more obvious date, ascertained by reference to the issue of the duplicate certificate of title.

11. This construction conclusion upon the first sub‑issue renders it necessary to briefly consider the Vendor's (third) sub‑argument to the effect that, even on this conclusion, if a separate certificate of title in respect of part lot 213 (for lot 222) did issue at shortly after 2.00 pm on 6 May 2008 (after the stipulated Latest Date set by special condition 3(a)), that nevertheless the Vendor was not relieved of its obligation to settle on lot 214, because, temporally speaking, the certificate of title had issued before the Purchaser's termination notice was served at approximately 5.00 pm, on the same day. 

Two happenings on 6 May 2008

1. The Vendor's argument, by reference to its written submissions, was:

   79.If the settlement of any lot was conditional on a separate certificate of title for part lot 213 issuing by the Latest Date and if such did not occur until about 2pm on 6 May 2008, it is necessary to consider whether Primepoint was entitled to avoid the varied contract by notice given after that time.

   80.As a matter of general principle, where a contract is subject to a condition which is not fulfilled by the stated date, the contract continues on foot unless and until a party who is entitled to terminate it does so:  Havenvar Pty Ltd v Butterfield (1974) 133 CLR 449 at 456-457; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR at 545, 554.

   81.A right of avoidance is provided by special condition 3(c).  The effect of that provision must be considered in the context of the varied contract as a whole.

   82.By General Condition 13.4(b), as inserted by special condition 6.5, Fabrary was required to use reasonable endeavours to have the subdivision plan endorsed as in order for dealing by the Latest Date.  By General Condition 13.9(a), after such endorsement, Fabray was obliged to apply and arrange for the issue of a separate certificate of title for each lot.  The latter obligation did not cease on the Latest Date.  It continued.

   83.It is thus apparent that the varied contract contemplated that Fabray may be obliged to make an application for the issue of a separate certificate of title after the Latest Date.  In other words, the varied contract plainly contemplated the existence of such an obligation while the contract remained on foot after the Latest Date. 

   84.From this it follows that the intention of the parties was that the varied contract should remain binding, particularly as regards obtaining separate certificates of title, after the Latest Date.  That intention necessarily limits the effect of special condition 3(c). 

   85.Where a contract imposes a continuing obligation on a party with respect to an event which is the subject of a condition, it would be inconsistent for the contract to disregard the occurrence of the intended event an allow termination for non‑fulfilment of the condition after the event has actually occurred. 

   86.In the result, the evident intention is that the right of avoidance conferred by special condition 3(c) may only be exercised before a relevant separate certificate of title has been issued.  This construction achieves harmony between the various provisions of the varied contracts. 

   87.In the present case, on any view, the certificate of title for part lot 213 was issued before Primepoint purported to avoid the varied contract.  That purported avoidance was ineffectual.

2. However, the Purchaser, invoking a long series of case authorities, says that the Vendor's arguments do not withstand serious scrutiny:  see Mardorf Peach & Co Ltd v Attica Sea Carriers Corporation of Liberia [1977] AC 850; Union Eagle Ltd v Golden Achievement Ltd [1997] AC 514; Gilbert v Healey Investment Pty Ltd [1975] 1 NSWLR 650. Also see Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; Aussie Invest Corporation Pty Ltd v Pulcesia Pty Ltd [2005] VSC 362; (2005) 13 VR 168; Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 and Rossdene Pty Ltd v Carolina Corporate Properties Pty Ltd [1987] ANZ ConvR 403 (Kennedy J).

3. The Purchaser says that once the Latest Date passed, with the condition unmet, the mutual right to terminate, enjoyed by both parties, was held as a contractual right open to be exercised by either party.  A subsequent late fulfilment of the condition, after the Latest Date, is irrelevant.  Whilst in other cases considerations going to issues such as acquiescence, waiver, estoppel, or abandonment could arise, that was not the case here. 

4. In my assessment, the Purchaser's submission must again be accepted on this issue.  No issues were raised against the Purchaser by arguments raising estoppel, waiver, acquiescence or abandonment as regards its issue of a notice of termination on 6 May 2008.  Whilst such considerations might potentially emerge as issues of fact in other scenarios with a mutual termination clause that is not self‑executing, that was not the case here.  Accordingly, there is nothing to ameliorate the force of the mutual contractual right enjoyed to terminate, once the Latest Date passed without the condition being met.  Here, each party held the right to terminate by special condition 3(a), once there was no separate certificate of title issued in respect of part lot 213 by the Latest Date. 

5. The fact that a separate certificate of title in respect of part lot 213 (lot 222) did not issue by the Latest Date conferred, from that time, a mutual right, held by both the Vendor and the Purchaser, to elect as to whether or not they would give notice of termination. 

6. The vested right in both was not lost to the Purchaser by reason of what transpired at Landgate at 2.00 pm on 6 May 2008.  Absent any considerations to raise issues such as waiver, acquiescence, estoppel, election or abandonment against this Purchaser, it had every right to issue a notice of termination, as it did at approximately 5.00 pm on 6 May 2008. 

7. The Purchaser's termination notice, if otherwise valid, had the effect of terminating all parties' obligations of future performance under the contract of sale as varied, from that time.  Absent considerations dealt with next by reference to the Vendor's last alternative argument, upon termination the Purchaser was thereby no longer required to settle in respect of lot 214, in respect of part lot 213 (lot 222) which, under the contract of sale as varied, was a settlement obligation otherwise falling due on 15 May 2008, and on lot 212 (which was due to be settled on 15 September 2008).

Lot 214

1. The conclusions to date, however, lead me to a need to evaluate the Vendor's last alternative argument that the Purchaser's notice of termination given on 6 May 2008 could not and did not excuse the Purchaser from performing on its subsisting and then unmet obligation to settle on its acquisition of lot 214.

2. In respect of lot 214, a separate certificate of title had uncontroversially issued, on any view, during December 2007, and the due date for settlement, under the contract of sale as varied, had been fixed for 17 March 2008. 

3. To apprehend the force of the arguments addressed on the Vendor's contentions regarding the Purchaser's obligation to settle on lot 214, and the asserted irrelevance of the Purchaser's termination on 6 May 2008 to that obligation, it is necessary to set out in some further facts.  It is also necessary to assess, at greater length, further contractual provisions, particularly in the variation agreement of 18 February 2008. 

4. This exercise once again involves an exercise in contractual construction, by reference to orthodox legal principles, to which I have earlier referred. 

5. It is very necessary to appreciate in all this, however, that what now is being subjected to the exercise in construction, is the contract for the sale of land as varied at 18 February 2008, and not as at 19 October 2007. 

6. The significance of a later temporal point is that the exercise may pick up some later developments arising as between the contracting parties (between October 2007 and February 2008), as mutually known surrounding circumstances transpiring in the period leading up to the 2008 contractual variation, and contributing significantly relevant context, to a construction exercise.  In other words, had the construction exercise been merely directed towards the unvaried contract of sale of 19 October 2007, the construction conclusions may differ. 

7. Essentially the underlying facts are not the subject of any dispute between the parties.  Because of that, I will proceed by reference predominantly to a chronology of events provided for the trial by the Purchaser, and delivered with its amended opening written submissions of 26 October 2010.  I will, however, add some adjustments and elaboration of my own.

Background events:  period 5 May 2007 ‑ 19 October 2007

1. The Purchaser's chronology of events for this period uncontroversially provides as to the following matters of fact, which I find:

05.05.2007	Land the subject of Lot 215 registered to first defendant
Mid July 2007	Initial contact between John Corbett of Knight Frank and Graham Iddles of the plaintiff
13.08.2007	Knight Frank provides the plaintiff with information memorandum
12.09.2007	The plaintiff provides first expression of interest to Knight Frank
12.09.2007	Knight Frank provide further information and plans to the plaintiff
About 14.09.2007	Draft contract provided by Knight Frank to the plaintiff
18.09.2007	The plaintiff provides its second expression of interest to Knight Frank
18.09.2007	Email from the plaintiff to Knight Frank amending second expression of interest
21.09.2007	Knight Frank provide the plaintiff with two versions of draft contract of sale
02.10.2007	Meeting between Graham Iddles and John Corbett of Knight Frank and Hamish Beck of Beck advisory
02.10.2007	Email from the Plaintiff to Knight Frank with further amendment to second expression of interest
19.10.2007	Contract of Sale by Offer and Acceptance between the plaintiff and the first defendant

1. In elaboration to the above, Mr Fini, on behalf of the Vendor, by his witness statement (exhibit E) identified the land of which he says that the Vendor in 2007 was registered proprietor (par 3).  He addressed that land as lot 212, part lot 213 and lot 214.  Mr Fini said:

   4.Lot 212, Part Lot 213 and Lot 214 comprised approximately 23,952 square metres of vacant development land forming part of the strategic Stirling Regional Centre.  The land is zoned 'Stirling City Centre' and situation in Precinct Four - Mixed Used Office and Entertainment under City of Stirling Town Planning Scheme No. 38.

   5.The land is close to the Stirling Central rail/bus station and across the road from the new IKEA store along Ellen Stirling Boulevard, Innaloo.

   6.The separate lots were created following a two stage subdivision of land.  The first stage was commenced earlier in 2007 and resulted in the creation of Lots 212, 213 and 214.  The second stage involved the further subdivision of Lot 213 to create the part that was to become Part Lot 213.  This was necessary because the smaller part of Lot 213 (lot 221 on deposited plan 58517) had been previously sold to another entity.  This second stage was commenced around September or October 2007.

   7.At the time the Contract was executed, the physical subdivision of Lots 212, 213 and 214 had been completed [ie as at 19 October 2007]. This included the construction of roads and connection to power, sewerage and water. Fabray was awaiting receipt of clearances from the local council and other relevant entities in order to be able to apply to Landgate for new titles for each part of the subdivision.  Some minor physical works were required to enable part Lot 213 to be connected to existing services (electricity, sewerage and water). 

   I accept all this, as uncontroversial background facts.

2. For the Purchaser, Mr Graham Kenneth Iddles (exhibit D) explained how the Purchaser's earliest knowledge of this land arose in July 2007, when he was contacted by Mr John Corbett of Knight Frank, commercial real estate agents for the Vendor.  (Knight Frank is the second defendant by way of stakeholder in this action, as I have mentioned.)

3. Mr Iddles said that Mr Corbett told him that Knight Frank had been appointed to sell a large development site that may be of interest.  A meeting was arranged in about the middle of July 2007.  Mr Iddles refers to an executive summary document containing some limited details of the land - provided by Mr Corbett (exhibit F, pages 1 ‑ 4).  The fourth page of the summary document shows, as shaded areas on a site plan, lots 214 and 212, and also what is referred to as 'parcel B' (part lot 213 of some 6,543 sqm).  The first page of the document is an aerial photograph showing Ellen Stirling Boulevard, Innaloo comprising lots 212, 213 and 214 - showing the land in the lower portion of the photograph (seen in green, east of the Mitchell Freeway).

4. Mr Iddles explained how Mr Corbett provided him with further information under an Information Memorandum in August 2007 (exhibit F, pages 6 ‑ 71).  The Purchaser, in due course, lodged an expression of interest. 

5. Mr Iddles says (par 17) he was told by Mr Corbett at the time that there was strong interest in the site with at least six proposals from some 'major players'.  At par 18 Mr Iddles relates:

   Despite what the information memorandum said, it was clear from my discussion with John that in order to be competitive Primepoint had to make a bid for all of the land together as one parcel.

1. The eventual contract of sale by offer and acceptance of 19 October 2010 contains a comprehensive entire agreement clause (annexure A, special condition 16).  Clause 16.2 records that each party acknowledges that they have not relied upon any oral statement, representation, undertaking or agreement before the contract date (19 October 2007) relating to the subject matter of the contract and not contained in the contract.  Statements made in the context of negotiations leading up to 19 October 2007 must be viewed in the light of that clause.

2. At par 19 of his statement, Mr Iddles mentions plans he had under consideration for the land, by reason of its location.  A development opportunity for the land to become a business park is mentioned.  At par 20 of his statement, Mr Iddles explains what he means by his use of 'business park', as a reference to a coordinated development.  However, this evidence as to Mr Iddles' subjective state of mind at the time, regarding his future 'plans' for the land, does not, in my assessment, rise to a level of demonstrating mutually known relevant surrounding facts and circumstances, which can possibly bear upon the exercise in contractual construction, that is required.  Accordingly it is of no moment in that exercise.   

3. In September 2007, the Purchaser delivered an expression of interest, at $52.7 million plus GST, for the three parcels of land.  Subsequently, Mr Iddles was advised that the Purchaser had been shortlisted as one of the preferred potential purchasers for the property. 

4. As is fairly typical in a transaction of this nature, there followed more negotiations and discussions, addressing matters such as an increased purchase price and deferred or staggered purchase price payments. 

5. At par 26, Mr Iddles mentions something he says he told the Vendor's agent, Mr Corbett, namely that the Purchaser was only interested in a commercial/business park development at that time (September 2007).  I accept the statement was made to the Vendor's agent, Mr Corbett.  However, a statement about what a putative purchaser is 'interested in', is, I think, in the overall context to be assessed as inherently in the nature of a statement made in negotiations, rather than what I would characterise as a mutually known surrounding fact or circumstance capable of bearing upon construction. 

6. In the middle of September 2007, the Purchaser provided a second expression of interest, this time at a higher purchase price (now $59,880,000.00), on the basis of staggered settlement dates applicable to the payments of the increased price (par 31).  This proposal was for the three lots to be settled separately to facilitate staggered settlements on each.  Mr Iddles explained (at par 32) that 'this meant Primepoint could pay by instalments'.  A revised payment formula gave the Purchaser an opportunity to increase its offer price. 

7. More negotiations followed, mainly through Mr Corbett, as part of the Vendor's efforts to obtain an even higher offer price. 

8. On 21 September 2007, electronic copies of a proposed contract were received by email by Mr Iddles.  Deferred payment of the purchase prices, as proposed in the Purchaser's second expression of interest was taken up in one version of a proposed contract discussed with Mr Corbett (exhibit F, pages 121 ‑ 158).  Mr Iddles observes (at par 35):

   I noticed that one of the condition precedents in the draft contract was that the seller had to have individual titles issued for all lots prior to a set date.  If this was not achieved either party could have the right to terminate the contract in its entirety.

9. The significance of that observation by Mr Iddles, presumably, is that the ultimate special condition 3(a) under consideration here, was fashioned by the drafting of the Vendor's representatives, rather than by the Purchaser, a fact relevant to a residual argument by the Purchaser, predicated upon invoking in aid, the contra proferentem rule.  As we shall see, I do not believe that, in the end, the contractual arrangements were so ambiguous, in my view, as to require the resort to that rule.

10. The draft contract was reviewed by Mr Josland on behalf of the Purchaser.  Even further negotiations followed, again chiefly focused at obtaining an increased purchase price.  Mr Iddles related that Mr Corbett told him that 'we [the Purchaser] were competing with two other purchasers for the property'. 

11. On 2 October 2007, after a meeting involving a Mr Hamish Beck of Beck Advisory (who was acting as a consultant for the Vendor), the Purchaser made further adjustments to the terms of its proposal, essentially by the proposed settlement date for the third lot (lot 212) and by an extra $1 million deposit. 

12. In early October 2007, Freehills became involved on behalf of the Vendor in concluding negotiations with the Purchaser's solicitor Mr Josland.  This generated some drafting changes in the proposed contractual arrangements. 

13. The Purchaser, by Mr Iddles and his co‑director Mr Brian Swain, signed a formal offer to purchase, along with Westmain, as the Purchaser's guarantor.  This offer was accepted, although close scrutiny of the ultimate contract of sale by offer and acceptance does not explicitly mention the Vendor's acceptance.  (However, acceptance as an issue, was not at all controversial.)

14. I turn to the content of the contract of sale instrument of 19 October 2007. 

Contract of sale by offer and acceptance of 19 October 2007 (exhibit F, pages 160 ‑ 231)

1. It is convenient to set out pars 1 though to 7 of the contract of sale, together with items 5, 6, 7 and 8 of the schedule. 

   Offer to purchase

   1.The Buyer offers to purchase from the Seller the Property.

   Settlement representative

   2The Buyer nominates the solicitor or settlement agent referred to in Item 3 of the Schedule as the Buyer's Representative to act on its behalf in respect of this transaction and consents to the giving of notices by facsimile to the facsimile number specified in Item 3 of the Schedule.

   Acceptance of Offer

   3.If the Buyer's offer to purchase the Property is accepted by the Seller, the Buyer will buy and the Seller will sell the Property for the Purchase Price, and otherwise in accordance with this Contract.

   Purchase Price

   4.The Purchase Price is payable as follows:

   (a)The Deposit for Lot 214 is payable to Knight Frank (WA) Ply Ltd or CB Richard Ellis (C) Pty Ltd (Seller's Agent) on the days described in Item 7 of the Schedule. The Deposit for Lot 214 is to be held by the Seller's Agent in accordance with this Contract.

   (b)The Deposit for Part Lot 213 and Lot 212 is payable to the Seller's Agent on the days described in Item 7 of the Schedule.  The Deposit for Part Lot 213 and Lot 212 is to be held by the Seller's Agent in accordance with this Contract.

   (c)The Purchase Price and other money payable in respect to an adjustment of the Outgoings is payable on the Settlement Dates in accordance with this Contract.

   Settlement

   5.The parties must effect Settlement of each of Lot 212, Part Lot 213 and Lot 214 on the respective Settlement Dates.

   Deposit

   6.For the avoidance of doubt the parties agree and confirm the following:

   (a)it will be a requirement for Settlement of the sale of Lot 214 for the Buyer to pay the Deposit for Part Lot 213 and for Lot 212 on the Settlement Date for Lot 214;

   (b)the Seller will be entitled to be paid the Deposit for Lot 214 held by the Seller's Agent on Settlement of the sale of Lot 214;

   (c)the Seller will be entitled to be paid the Deposit for Part Lot 213 held by the Seller's Agent on Settlement of the sale of Part Lot 213;

   (d)the Seller will be entitled to be paid the Deposit for Lot 212 held by the Seller's Agent on Settlement of the sale of Lot 212;

   (e)if the Buyer does not pay any part of the Deposit when due, the Seller will be entitled to exercise its rights under this Contract, and in particular, under clause 24 of the 2002 General Conditions; and

   (f)if the Seller exercises its rights and forfeits the Deposit, the Seller will be entitled, without prejudice to any other rights or remedies, to forfeit and retain the full amount of the Deposit held by the Seller's Agent.

   Annexures

   7Annexures 'A' to 'I' attached to this Contract are incorporated in and form part of this Contract.

   Schedule

...	...	...
5	Property	(a)   Lot 212 on Deposited Plan 51152 as shown on the plan at Annexure C being part of the land comprised in Certificate of Title Volume 2632 Folio 194, Certificate of Title Volume 1705 Folio 67, Certificate of Title Volume 1705 Folio 68 and Certificate of Title Volume 2188 Folio 928 (Lot 212); (b)   Part of Lot 213; on Deposited Plan 51152 shown as Lot B on the plan at Annexure D, being part of the land comprised in Certificate of Title Volume 2632 Folio 194, Certificate of Title Volume 1705 Folio 68, Certificate of Title Volume 2188 Folio 928 and Certificate of Title Volume 2148 Folio 304 (Part Lot 213); and (c)   Lot 214 on Deposited Plan 51152 as shown on the plan at Annexure C being part of the land comprised in Certificate of Title Volume 2632 Folio 194, Certificate of Title Volume 1705 Folio 67 and Certificate of Title Volume 1705 Folio 68 (Lot 214).
6	Purchase Price	(a)   In respect of Lot 214 - $12,809,500 (inclusive of GST) (b)   In respect of Part Lot 213 - $17,992,700 (inclusive of GST) (c)   In respect of Lot 212 -$35,065,250 (inclusive of GST)
7	Deposit	(a)   In respect of Lot 214 - $2,000,000 (inclusive of GST) of which $1,000,000 (inclusive of GST) is to be paid within 7 days of execution of this Contract and $1,000,000 (inclusive of GST) is to be paid on 15 December 2007; (b)   In respect of Part Lot 213 - $1,799,270 (inclusive of GST) to be paid on the actual Settlement Date of Lot 214; (c)   In respect of Lot 212 - $3,506,525 (inclusive of GST) to be paid on the actual Settlement Date for Lot 214.

8 Settlement Dates (a)   In respect of Lot 214, the later of: (i)   10 Business Days after the issue of a separate Certificate of Title for Lot 2l4; and (ii)  15 February 2008 or any other date agreed by the Seller, and the Buyer in writing; (b)   In respect of Part Lot 213, 15 May 2008 or any other date agreed by the Seller and the Buyer in writing. (c)   In respect of Lot 212, 15 September 2008, or any other date agreed by the Seller and the Buyer in writing.

1. It will be observed that cl 7 refers to annexures 'A' to 'I', attached on the basis that they be incorporated in and form part of the contract.  Annexure A contained the special conditions. 

2. Special condition 1 refers to the status of the special conditions in the contract and their relationship to the 2002 General Conditions. The 2002 General Conditions were incorporated, as annexure B. 

3. Clause 2 of the special conditions contains a number of definitions.  These definitions are framed to be applicable on a basis that the respective identified meanings applied, 'unless the context otherwise requires'.  I will set out, for convenience, definitions in the special conditions of the terms 'Deposit', 'Latest Date', 'Lot 212', 'Lot 214', 'Part Lot 213', 'Property', 'Purchase price' and 'Settlement Dates': 

   Deposit means the amount described in Item 7 of the Schedule
   ...

   Latest Date means 31 March 2008

   Lot 212 means that part of the Property described in Item 5(a) of the Schedule

   Lot 214 means that part of the Property described in Item 5(c) of the Schedule

   Part Lot 213 means that part of the Property described in Item 5(b) of the Schedule

   Property means the each of the properties severally described in Item 5 of the Schedule

   Purchase Price means the amounts described in Item 6 of the Schedule
   ...

   Settlement Dates means the dates described in Item 8 of the Schedule

4. What may now be observed to be carefully drawn aggregate definitions used for 'Deposit', 'Property' and 'Purchase Price', are strongly relied upon by the Purchaser as buttressing its core construction submission, that these contractual arrangements essentially laid down a scenario by which there was but one sale of the aggregate property components in three settlement stages.  It is firmly contended that, correctly understood, there was but one sale by one contract, notwithstanding provision for three separate staged settlements on the land components making up the 'Property'. 

5. This global analysis is fundamentally at odds with the construction approach of the Vendor, which contends, equally firmly, that the arrangements must be assessed as three separate sale and purchase situations, involving three discrete land acquisitions, three settlements and three distinct parcels of land. 

6. The end consequence of the Vendor's interpretation approach, is that the obligation of the Purchaser to settle on the sale and purchase of lot 214 was, after December 2007, no longer conditional upon the issue of a separate certificate of title for part of lot 213 issuing by 30 April 2008.  It is not controversial that on 20 December 2007 separate certificates of title did actually issue in respect of lots 214 and 212 (see exhibit F, page 233 (lot 214) and page 232 (lot 212) - by reference to duplicate certificates of title there seen.

7. For convenience, I will now set out special condition 3 in full:

   (a)This Contract is conditional on a separate Certificate of Title for each lot comprising the Property with the Seller as the registered proprietor being issued by the Latest Date.

   (b)The Seller must use reasonable endeavours to have a separate Certificate of Title for each lot comprising the Property issued by the Latest Date.

   (c)If the condition in Special Condition 3(a) is not satisfied, either party will have the right to terminate this Contract by giving written notice of termination to the other party.

   (d)If a party gives a notice under Special Condition 3(c), then:

   (1)this Contract will terminate;

   (2)the Deposit will be refunded to the Buyer; and

   neither party will have any rights or claims against the other party in respect to termination of this Contract.

8. Clearly, the right to terminate, as allowed for under special condition 3(c), in the event that special condition 3(a) was not satisfied, is a right afforded to either contracting party, by written notice to the other.  In other words, the termination right is mutual, for the benefit of Purchaser and Vendor, alike. 

9. The event of a termination is not self‑executing.  Future contractual obligations do not end unless either the Vendor or the Purchaser make the decision to proceed to invoke the clause, by giving written notice. 

10. Special condition 3(d) proceeds on the basis that an effective notice may be given by either party in reliance upon special condition 3(c).  Reference in special condition 3(d)(1) to 'this contract will terminate', in my view, is to be read as meaning that the obligations of future performance of both Vendor and Purchaser under the contractual arrangements will be ended, at that point.  The clause, if and when invoked, is not to be read as delivering a destruction of the contract:  see McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457, 476-77 (Dixon J).

11. By special condition 3(d)(2), provision is made for a refund of the 'Deposit'.  As has been seen, the term 'Deposit' has also been defined (under special condition 2) in the aggregate, by reference to item 7 of the schedule. 

12. The Vendor places considerable reliance upon cl 5 and cl 6 of the contract, especially when read in conjunction with the provision in special condition 6, under which the 2002 General Conditions are said to apply separately to each component land parcel.  It argues that, although provision is made for the refund of the deposit in the event of a valid termination, no provision at all can be seen to be made for a full refund of the purchase price, once it is paid over to the Vendor, and assuming an earlier land component settlement had been effected. 

13. These features, coupled particularly with the definition of 'Property', which refers to 'each of the properties severally described' support, it is put, the conclusion that even if there was a valid termination notice given on 6 May 2008 by the Purchaser, in respect of the event of a non‑issue by 30 April 2008 of a separate certificate of title for part lot 213 (lot 222), that notice cannot undermine the Purchaser's subsisting obligation to settle upon lot 214 (and, also, it is put, on lot 212), if separate certificates of title have issued in respect of those two land components (as did occur uncontroversially, in December 2007).

14. I now set out special conditions 6 and 9:

    62002 General Conditions

    The 2002 General Conditions, as they apply to this Contract, are amended as follows.

    6.1Clauses 7.3, 7.5, 7.6(a), 9.1(e) and 26.5(a)(2) are deleted and do not apply to this Contract.

    6.2For the purposes of clause 13.2(b), the period of time specified is the period from the Contract Date and expiring on the Latest Date, in lieu of 6 months after the Contract Date.

    6.3For the purposes of clause 13.3(a)(1), the period of time specified is the period from the Contract Date and expiring on the Latest Date, in lieu of 6 months after the approval for subdivision by the Planning Commission.

    6.4The period of time specified in clause 13.4(a) is amended by deleting the words '15 Business Days' and substituting the words '3 months'.

    6.5Clause 13.4(b) is deleted and replaced with the following:

    'The Seller must use reasonable endeavours to, subject to the approval of the Planning Commission to the subdivision, arrange for the Subdivision Plan to be endorsed as In Order for Dealing by the Latest Date'

    The 2002 General Conditions shall also apply separately in relation to the Settlement of each of Lot 214, Part Lot 213 and Lot 212 for each of the Purchase Prices respectively described in Item 6 of the Schedule on each of the Settlement Dates respectively described in Item 8 of the Schedule.

    ...

    9Caveats

    The Buyer must not, before the issue by Landgate of separate Certificates of Title for the Property, lodge any caveat against the title to the Property or any part of the Property to protect the Buyer's interest under this Contract.

    (Special condition 9 is seen to use the terminology 'issue', by reference to separate certificates of title for 'the property'.) 

15. Special conditions 15 and 16 provide:

    15Severance

    If any part of this Contract is, or becomes void or unenforceable, that part is or will be, severed from this Contract to the intent that all parts that are not, or do not become, void or unenforceable remain in full force and effect and are unaffected by that severance.

    16Entire Agreement

    16.1This Contract constitutes the entire agreement between the Parties with respect to the subject matter of this Contract and contains all of the representations, warranties and agreements of the Parties in relation to the subject matter of this Contract as at the Contract Date.

    16.2Each Party acknowledges that it has not relied on any oral statement, representation, undertaking or agreement made before the Contract Date relating to the subject matter of this Contract and not contained in this Contract.

16. With regard to the 2002 General Conditions (found in annexure B), cl 1.2 contains provisions applicable to a deposit holder or stakeholder, particularly circumstances which apply, if one party contends that it is entitled to payment of the deposit on the basis that the contract has been terminated:  see special condition 1.2(b). 

17. Further deposit provisions under cl 1.4 ‑ cl 1.6 of the 2002 General Conditions provide:

    1.4Notice of non-payment

    If:

    (a)the Buyer does not pay the Deposit in full as required by the Contract; or

    (b)the Buyer pays the Deposit by cheque and that cheque is dishonoured on presentation,

    the Seller may give the Buyer a Notice requiring the Deposit to be paid or the cheque to be honoured within 48 hours of service of the Notice.

    1.5Termination for non‑payment

    (a)If a Notice under clause 1.4 is not complied with:

    (1)the Buyer is in default; and

    (2)the Seller may terminate the Contract giving notice of termination to the Buyer.

    (b)The provisions of clause 23.1 do not apply where clause 1.4 and this clause apply.

    1.6Terms Contract and other right

    Clauses 1.4 and 1.5 do not:

    (a)apply if the Contract is a Terms Contract; or

    (b)limit any other right of the Seller.

    (No party submitted to me during the course of this hearing that the contract of sale as varied was 'Terms Contract'.  Accordingly it is unnecessary to pursue any issues in that respect.) 

1. By reference to general condition 1.4, a purchaser's failure to meet an obligation regarding payment of a deposit in full is of key significance.  Breach would entitle the vendor to exercise distinctly given termination rights for non‑payment of a deposit, as identified within general condition 1.5(a)(2).  In a case involving non‑payment of a deposit, the provisions of general condition 23.1 are inapplicable, under cl 1.5(b).  The effect of these deposit breach provisions effectively truncates the period of notice of breach required to be given, in respect of a deposit breach, to within 48 hours of service of notice of a deposit default.  The truncated notice period for a deposit breach is seen to be in contrast to the standard required minimum period of notice of 10 business days, as set by the definition of 'Default Notice' by cl 26.1 (subject to some qualifications).

2. Subdivision condition provisions are found within cl 13 of the 2002 General Conditions.  The standard time periods set by cl 13.2 ‑ cl 13.3 are reset and amended by the effect of special condition 6, by reference to 'Latest Date'. 

3. I will set out general condition 23, as regards default notices (having already noted a qualification delivered to those obligations under general condition 1.5(b) in respect of defaults associated with non‑payments of a deposit):

   23.1Requirement for Default Notice

   Neither Party may terminate the Contract as a result of the other Party's default nor may the Seller forfeit any money paid by the Buyer or retake possession of the Property because of the default of the Buyer, unless:

   (a)the Non Default Party gives a Default Notice to the Default Party; and

   (b)the Default Party fails to remedy the default within the time required under the Default Notice.

   23.2No limit on right to issue further Notice

   The giving of a Default Notice under clause 23.1 does not prevent the Non Default Party from giving a further Default Notice.

   23.3No Default Notice required for Repudiation

   Clause 23.1 does not apply if the Default Party repudiates the Contract. 

4. Clause 24.1 ‑ cl 24.4 inclusive of the 2002 General Conditions carry conditions applicable in respect of a buyer's default (see particularly cl 24.3(a) and cl 24.4):

   24.1Buyer Default

   If the Buyer:

   (a)is:

   (1)in default under the Contract; and

   (2)has failed to comply with a Default Notice; or

   (b)repudiates the Contract,

   the Seller has each right in cl 24.2, in addition to any other right or remedy of the Seller.

   24.2Seller right on default or repudiation

   If cl 24.1 applies, the Seller may:

   (a)affirm the Contract and sue the Buyer for damages for default;

   (b)affirm the Contract and sue the Buyer for:

   (1)specific performance of the Contract; or

   (2)damages for default in addition to or instead of specific performance;

   (c)subject to clause 23.1, retake possession of the Property;

   (d)subject to cl 23.1, terminate the Contract by Notice to the Buyer, but only if the Default Notice given under clause 23.1 includes a statement that if the default is not remedied within the time specified in the Default Notice the Contract may be terminated; or

   (e)where the Buyer repudiates the Contract - terminate the Contract by notice to the Buyer.

   24.3Further Seller right on termination

   If the Seller terminates the Contract under clause 24.2(d) or 24.2(e), the Seller may, subject to the further provisions of this clause, elect to exercise any one or more of the following.

   (a)Forfeit the Deposit.

   (b)Sue the Buyer for damages for default.

   (c)Resell the Property.

   24.4Deposit exceeds 10% of Purchase Price

   If the Deposit exceeds 10% of the Purchase Price:

   (a)the Seller may under clause 24.3 forfeit only that part of the Deposit which does not exceed 10% of the Purchase Price; and

   (b)any money paid by the Buyer in excess of 10% of the Purchase Price is to be treated as a payment of an Instalment for the purposes of this clause only. 

5. Here, by reference to general condition 24.4(a), the $2 million deposit in respect of lot 214 represented 15.625% of the stipulated purchase price for lot 214, being (initially) $12,809,500.00.  However, general condition 24.4 is inconsistent with cl 6(f) of the contract of sale, which enables the Vendor in such a breach situation to 'forfeit and retain the full amount of the Deposit held by the Seller's Agent'.  Clause 6(f) therefore prevails.

Period between 19 October 2007 and 1 January 2008

1. By reference to the Purchaser's chronology of events, I find these facts, between 30 October and 20 December 2007:

30.10.2007	First deposit payment of $1,000,000
05.12.2007	Land comprised in Lot 212 registered to the first defendant
05.12.2007	Land the subject of part Lot 213 registered to the first defendant
17.12.2007	Second deposit payment of $1,000,000
20.12.2007	Certificate of title 2677/7514 (for Lot 212) issued
20.12.2007	Certificate of title 2677/753 (for Lot 214) issued

1. On the earlier view I have expressed as to the true construction of special condition 3(a), separate certificates of title issued for lots 214 and 212 by reference to the nominated dates to be found in the duplicate certificates of title for each of lots 214 and 212, namely 20 December 2007 in each case (see exhibit F, pages 232 ‑ 233 respectively). 

2. Those December events left only an unmet need for the issue of a separate certificate of title in respect of part lot 213.

3. Also on 20 December 2007, a duplicate certificate of title issued in respect of an aggregate title for all of lot 213 on deposited plan 51152 (see exhibit F, page 340 and the deposited plan between ensuing pages 341 ‑ 343).  But required further subdivision (eventually into lots 221 and 222) for this lot 213, was still to occur.

4. Therefore at commencement of 2008, special condition 3(a) had only been partly satisfied in respect of the two separate certificates of title issued in respect of lots 214 and 212, as of 20 December 2007.  But as a result, the Purchaser, by reference to cl 5 and cl 6(a) of the contract of sale, read with item 8(a) of the schedule concerning settlement dates, from then had become obliged to settle in respect of lot 214, on 15 February 2008 (as the later date, as between items 8(a)(i) and (ii) of the schedule). 

5. Prior to 20 December 2007, there had been potential for the latter of the two scenarios, set by items 8(a)(i) or (ii) of the schedule, to generate a settlement date in respect of lot 214 at a time later than 15 February 2008 - depending upon the date of issue of a separate certificate of title for lot 214.  However, the issue of the duplicate certificate of title in respect of lot 214 on 20 December 2007 generated a certainty in outcome, whereby 15 February 2008 became fixed as the required settlement date for lot 214 (subject to any other later date being set by a mutual variation as between Vendor and Purchaser). 

6. By 15 February 2008 then, the Purchaser was obliged to pay over the balance of the purchase price due in respect of lot 214, namely $10,809.500.00 (inclusive of GST). 

7. And also as of 15 February 2008 (see cl 6(b)) the Vendor would become beneficially entitled to the $2 million deposit paid earlier in respect of lot 214, but which to that point was being held under the stakeholder agreements.

8. Further, on 15 February 2008, by reference to cl 4(b) and cl 6(a) of the contract (prior to variation) the Purchaser was at that time also obliged to pay to the stakeholder deposits then due in respect of part lot 213 and lot 212 - respectively amounts of $1,799,270.00 and $3,506,525.00 (inclusive of GST).

Period between 1 January 2008 to 18 February 2008

1. On 7 January 2008 at 11.39 am (see exhibit F, pages 234 ‑ 235) Mr Poeta, a partner at Freehills, the solicitors for the Vendor, communicated advice to a Ms Kirsten Rhoades, an employee of Beck Advisory, another agent acting on behalf of the Vendor.  Mr Poeta advised:

   Hi Kirsten

   The titles for Lots 212, 213 and 214 issued last week. 

   We will be formally writing to the buyer and notifying them that settlement for the sale of Lot 214 is due on 15 February 2008.

2. Mr Iddles for the Purchaser, was advised of these events, by Mr Beck forwarding him the email chain on 7 January 2008 at 1.41 pm.  Mr Iddles was advised:

   Graham,

   Please see below the status of titles as advised by Frank Poeta.

3. It is interesting to see that the chain of emails commenced on 4 January 2008 with an inquiry by Mr Iddles to Mr Beck in these terms (exhibit F, page 236):

   Hamish,

   Can you please advise if titles have issued yet?

4. Addressing the same subject, Mr Poeta, on behalf of the Vendor, advised Mr Josland as solicitor for the Purchaser by a letter sent as an email attachment at 2.23 pm on Monday 7 January 2008 (exhibit F, pages 237 ‑ 238), in terms:

   Lot 212, Part Lot 213 and Lot 214 - Ellen Stirling Boulevard, Innaloo

   We confirm that a separate certificate of title for Lot 214 issued on 20 December 2007. 

   A copy of the certificate of title for Lot 214 is attached.

   (From ensuing page 239 in exhibit F, it is seen that what Mr Poeta attached was a copy of the duplicate certificate of title for lot 214, which of course carries the endorsement in the box in the top right hand corner, by reference to the duplicate certificate issue date of 20 December 2007). 

5. Mr Poeta's advice to Mr Josland concluded:

   Accordingly, under the Contract of Sale, settlement in respect of Lot 214 is due on 15 February 2008.

6. I earlier resolved the issue of construction for the word 'issued', used in special condition 3(a), by reference to that clause's subject matter of a 'separate certificate of title for each lot comprising the Property'.  That required an exercise in pure contractual construction and was resolved without reference to any subjective views on the issue, expressed on the issue of the parties, or their legal advisers.  Therefore, any observations by Mr Poeta found in these emails carrying his subjective understanding as to the date of issue of a separate certificate of title in respect of lot 214, are irrelevant to an exercise in objective contractual construction.  Nevertheless, it will now be seen that the construction conclusion I reached earlier does accord with the like understanding reflected in communications at the time of Mr Poeta, a partner in the Vendor's then solicitors, albeit not the meaning contended for at trial by the Vendor. 

7. On 6 February 2008, with a required settlement on lot 214 only nine days away, the Purchaser's solicitor advised the Vendor's solicitors in these terms:

   Dear Frank / Andrew,

   LOT 214 - ELLEN STIRLING BOULEVARD, INNALOO

   FABRAY PTY LTD TO PRIMEPOINT ASSET PTY LTD

   I am advised by my client that unfortunately, there is likely to be an unavoidable delay in the settlement of this transaction due to a delay in the settlement of another transaction that my client is involved in.

   My client believes this situation would be best resolved by agreement between the Seller and the Buyer on acceptable terms.

   My client has instructed me to ask you to request your client to consider the following options in relation to the settlement of this transaction:

   1.your client agree that the Settlement Date pursuant to the Contract be extended by 30 days on the basis that my client will pay to your client upon the eventual settlement an additional $100,000; or

   2.your client agree that the Settlement Date pursuant to the Contract be extended to the Settlement Date for the second Lot to be settled pursuant to the Contract, namely 15 May 2008, on the basis that the $2 million deposit is released to your client on 15 February 2008 and my client pay to your client upon the eventual settlement an additional $500,000.

   Could you please take your client's instructions in this regard and let me have your advice at your earliest convenience.

   I look forward to hearing from you.

   Yours sincerely,

   S. J. Josland

8. Subsequently, a variation agreement of 18 February 2008 was agreed between the parties. Its brief content provided:

   This agreement is made on 18 February 2008 between the following parties:

   1Fabray Pty Ltd

   ACN 009 011 581 of 104B Stirling Highway, Nedlands, Western Australia

   (Seller)

   2Primepoint Asset Pty Ltd ATF Forth Trust

   ACN 115 983 189 of Suite 28, Crossways, 180 Rokeby Road Subiaco, Western Australia

   (Buyer)

   3Westmain Corporation Pty Ltd

   ACN 108 289 121 of 10 Red Wattle Place Churchlands, Western Australia

   (Guarantor)

   Background

   A.The Buyer and the Seller entered into a contract on 19 October 2007 (Contract) for the sale by the Seller to the Buyer of Lot 212, Part Lot 213 and Lot 214 Ellen Stirling Boulevard, Innaloo Western Australia as is more particularly described in the Contract.

   BThe Buyer has requested an extension to the Settlement Date for Lot 214

   CThe parties have agreed to vary the Contract in accordance with the terms of this agreement.

   The parties agree as follows,

   1Unless the context otherwise requires, terms and expression used in this agreement which are defined in the Contract have the same meaning as in the Contract.

   2Item 8(a) of the Schedule is deleted and replaced with;

   '(a)    In respect of Lot 214, 17 March 2008'

   3Item 6(a) of the Schedule is amended by deleting '$12,809,500' and replacing it with '$12,909,500'.

   4The definition of 'Latest Date' in Annexure A is amended by replacing '31 March 2008' with '30 April 2008'

   5.The Deposit payable by the Buyer to the Seller in respect of Part Lot 213 in accordance with Item 7(b) of the Schedule will be released to the Seller on Settlement of Lot 214 and the Seller and the Buyer authorise the Seller's Agent holding the Deposit for Part Lot 213 (Knight Frank (WA) Pty Ltd) to release and pay the Deposit for Part Lot 213 to the Seller on Settlement of Lot 214.

   6The amendments to the Contract do not affect the validity or enforceability of the Contract and each party is bound by the Contract as amended by this agreement.

   7The Guarantor confirms its obligation under the Contract as amended by this agreement.

   8.Nothing in this agreement prejudices or adversely affects any right, power, authority, discretion or remedy arising under the Contract before the date of this agreement or discharges, releases or otherwise affects any liability or obligation arising under the Contract before the date of this agreement.

Observations concerning the terms of the contract of sale as varied

1. In summary, it will be noted that the variation of 18 February 2008 delivered these main adjustments to the arrangements earlier perfected, at 19 October 2007:

   (a)the settlement date in respect of lot 214 was pushed back by just over 30 days, to 17 March 2008;

   (b)the purchase price in respect of lot 214 was increased by a further $100,000, up to $12,909,500.00;

   (c)to the advantage of the Vendor, the 'Latest Date' set by special condition 2 was pushed back a month - from 31 March 2008 to 30 April 2008.  That adjustment is of relevance, not only to its obligations in respect of an issue of a separate certificate of title in respect of part lot 213 (lot 222), but also in reference to its subdivision requirements under cl 13.2(b) and cl 13.3(a)(1) and the replacement provision for cl 13.4(b), which were the subject matter of special conditions 6.2, 6.3 and 6.5, in the unvaried contract of sale.  The adjustment of Latest Date back by a month to 30 April 2008, was to the advantage of the Vendor in terms of extending its timeline window in the subdivision process, by reference to its application for subdivision, obtaining a grant of approval for subdivision from the Western Australian Planning Commission (WAPC) and the taking the steps required for a subdivision plan to be endorsed by Landgate as in order for dealing.  Endorsements as seen on deposited plan 58517 (exhibit F, page 391A) show that these issues were all addressed by the Vendor across April 2008 as the variation allowed;

   (d)clause 5 in the variation carried a structurally significant alteration to the parties' arrangements in respect of the former deposit arrangements in respect of part lot 213.  By the unvaried contractual arrangements, item 8(b) of the schedule had stipulated that settlement in respect of part lot 213 was to be 15 May 2008.  That settlement date did not change.  The 10% deposits due by reference to items 7(b) and (c) of the schedule, required payment of the 10% deposits in respect of part lot 213 and lot 212 (approximately $5.305 million) on the actual settlement date for lot 214.  Those deposit amounts were payable to the stakeholder, under the unvaried arrangements, on 15 February 2008.  But under the adjustments, by the variation to the settlement date for lot 214, those deposits also now became payable later, at 17 March 2008.  Significantly, however, cl 5 of the variation adjusted the stakeholder provisions otherwise applicable to those deposit amounts under cl 4(b) of the contract (ie held by the seller's agent).  Whereas the Vendor was previously to have only received the benefit of deposits payable in respect of part lot 213 (by cl 6(c)) at settlement on 15 May 2008 (sch item 8(b)), that situation was altered by cl 5 of the variation.  This change now accelerated the Vendor's full beneficial entitlement to the deposit moneys ($1,799,270) payable in respect of part lot 213 - by an earlier beneficial release of those deposit moneys to the Vendor, at the time of the settlement on lot 214 (ie now set as 17 March 2008).

2. So there may be seen as emerging, significant variation benefits for the Vendor as a result of the changes carried by the variation of 18 February 2008.  They are commercially understandable, having regard to the foreshadowed inability of the Purchaser to settle on lot 214 at 15 February 2008, as otherwise required, and then also bearing in mind the exposures the Purchaser faced under the parties unvaried contractual arrangements - both as to forfeiture of its $2 million deposit on lot 214, and against its other rights under the contractual arrangements. 

3. It is necessary to conclude the chronology towards finding relevant events that transpired after 18 February 2008.

Period between 18 February 2008 and 3 December 2008

1. These facts can again be found and stated briefly, mainly by reference to the Purchaser's chronology.  Essentially, these facts are all confirmed in documents found in exhibits F or G:

18.02.2008	Variation to Contract executed by the plaintiff and the first defendant
17.03.2008	Settlement Date for Lot 214 under Contract as varied
19.03.2008	Notice of Default issued by the first defendant to the plaintiff
31.03.2008	Latest Date under Contract (before variation)
24.04.2008	Application K578500 registered at Landgate to registered deposit plan 58517
28.04.2008	First defendant lodges application for new certificate of title for Lot 213
30.04.2008	Latest Date under Contract after variation

01.05.2008	Title searches by the solicitor for the plaintiff indicate new title for Lot 213 has not issued
06.05.2008	Notice of Termination issued by the plaintiff
06.05.2008	Duplicate Certificate of Title 2688/791 (for Lot 222) issued
15.05.2008	Settlement Date for Part Lot 213
15.09.2008	Settlement Date for Lot 212
19.09.2008	The deposit holder notice issued by the plaintiff
24.09.2008	Deposit holder notice issued by the first defendant
07.10.2008	These Supreme Court proceedings issued
29.10.2008	Notice to complete settlement issued by the first defendant
14.11.2008	Statement of Claim filed by plaintiff
03.12.2008	Notice of Termination issued by the first defendant

1. It will be observed that the revised settlement date for lot 214, namely 17 March 2008, passed without settlement being effected. 

2. On 19 March 2008, Freehills, on behalf of the Vendor, despatched a notice of default to the Purchaser's solicitor, Mr Josland (see exhibit F, pages 281 ‑ 283).  The time allowed in the notice to remedy the default was 28 days.  This time period appears to have been generous, bearing in mind a 10‑day minimum requirement for a notice of default provided for under cl 23 of the 2002 General Conditions, by reference to the definition of notice of default. 

3. The default notified was in respect of the Purchaser's failure to pay the balance of purchase price and to settle, in respect of lot 214 on 17 March 2008.

4. Notwithstanding some passing communications, it was not contended that the contract of sale, as varied, was further varied as between the parties, after 18 February 2008.

Construction observations as regards the contract of sale as varied

1. As observed, the construction exercise in respect of the contract of sale as varied, is to be undertaken in the context of any relevant mutually known surrounding circumstances, as they existed at a temporal point which is now, some four months subsequent to the entry of the contract of sale by offer and acceptance on 19 October 2007. 

2. Of contextual significance, in my view, to the construction exercise undertaken at the latter point of mid‑February 2008, are intervening mutually known surrounding facts and circumstances, as had then emerged, and which I summarise broadly, as:

   (a)the payment by the Purchaser of the $2 million deposit in respect of lot 214, during 2007;

   (b)the issue on 20 December 2007 of the separate certificates of title in respect of both lots 214 and 212;

   (c)the issue of a certificate of title for all of lot 213 on 20 December 2007, as part of what was progress towards a further subdivision of lot 213 into two parcels of land (lots 221 and 222) to follow;

   (d)the emerged certainty as to the date 15 February 2008 for a required settlement in respect of lot 214, by reference to item 8(a)(ii) of the schedule to the contract of sale;

   (e)a consummation of a binding agreement under the initial contract of sale of 19 October 2007, which changed the status of the property from unsold to sold, thereby removing opportunity for any other potential purchasers in the market to acquire the property by reason of the acceptance of the Purchaser's offer at that time;

   (f)the looming requirement for the Purchaser to pay on 15 February 2008 the balance of the purchase price in respect of lot 214 ($10,809,500), together with (to the stakeholder) 10% deposits applicable in respect of part lot 213 and lot 212 ($1,799,270 and $3,506,525 = $5,305,795);

   (g)the communicated inability of the Purchaser to meet the 15 February 2008 settlement deadline for lot 214, as expressed by Mr Josland in his communication of 6 February 2008, events constituting, unless excused, a looming anticipatory breach of the unvaried contractual arrangements by the Purchaser;

   (h)time being of the essence in the parties' arrangements (general condition 22);

   (i)a vulnerability in the Purchaser, as from 15 February 2008, to receiving a default notice under the 2002 General Conditions issued by the Vendor, by reference to any failure to settle on lot 214 and from that, to the consequences of  potential forfeiture of a $2 million deposit paid on lot 214 - by a giving of a default notice under general condition 23.1, with the ensuing vulnerability of the Purchaser by reason of general condition 24.3 (see the definition of 'Default Notice') after 10 business days;

   (j)over and above the Purchaser's vulnerability as regards any failure to settle on 15 February 2008 on lot 214 and to lose that deposit, was a further exposure under general conditions 1.4 and 1.5 in respect of any failure to pay sizeable deposit amounts, due to be paid to the stakeholder on 15 February 2008, in respect of part lot 213 and lot 212.  For non‑payment of these deposit amounts (of over $5 million in aggregate), a notice of default requiring the deposit default to be corrected within 48 hours of service of notice, would have exposed the Purchaser under general condition 1.5(a)(2), to a potential termination of all rights under the contractual arrangements of 19 October 2007.  In other words, in the lead up to 18 February 2008, the Purchaser was potentially exposed not only to losing its $2 million deposit paid in respect of lot 214, but also to a wholesale termination by the Vendor, which would deprive the Purchaser of all its rights to acquire the other property components.

Determination on construction analysis for contract of sale as varied on 18 February 2008

1. The Vendor argues that, as a matter of the proper construction of the contract of sale as varied, the Purchaser's obligation to settle on the sale and purchase of lot 214 was not conditional upon a separate certificate of title issuing for part lot 213 (lot 222) by 30 April 2008.  By amended written submissions dated 9 August 2010, it identifies the matters which it contends carry that conclusion.  Most significant, to my mind, is the provision for the beneficial receipt of an additional sum by the Vendor, by reference to receipt of the deposit amount ($1,799,270), due in respect of the deposit on part lot 213, on 17 March 2008.  The Vendor says that adjustment for payment of the additional deposit amount to the Vendor absolutely, on the occasion of a delayed settlement on lot 214, reflects the clear intent in the parties (assessed objectively) that the obligation upon the Purchaser to settle on lot 214, had now become unconditional, at least from 18 February 2008.  I agree.  That submission accords with my assessment, arrived at particularly in light of the mutually known contextual facts I identified which emerged after the original contract had been consummated in October 2007.  I mention particularly the looming anticipatory breach of the Purchaser, as communicated by Mr Josland on 6 February 2008, and the Purchaser's extreme vulnerability to forfeiture of its $2 million deposit, and its other contractual rights, at that time. 

2. Of further significance to my construction analysis is the sheer impracticality of an unravelling, after the event, of earlier settlements had they been effected under the staggered settlement arrangements, as provided for. 

3. It is accepted by the Purchaser that it had been obliged to settle on lot 214, initially on 15 February 2008, then again on 17 March 2008.  Had that happened, the Vendor was to be beneficially entitled to all purchase moneys (including deposits on lot 214 and part lot 213) from the time of settlement.  And the Purchaser, post‑settlement, was fully at liberty then to charge, mortgage, encumber or even dispose of its acquired property absolutely (subject to special condition 9, as regards caveats before the issue of separate certificate of title). 

4. But a theoretical unravelling of a settlement on lot 214, in the wake of a subsequent failure by the Vendor to satisfy special condition 3(a), as regards part lot 213, presents to me as highly problematic and unworkable.  It is not addressed under special condition 3(d)(2), in reference to a refund for only 'the Deposit'.  Here, a post-settlement unravelling exercise upon lot 214, was only avoided due to the Purchaser's default in failing to settle on 17 March 2008 and by it continuing that default to the end of April 2008. 

5. The Purchaser's mooted unravelling solution by implied terms, or restitutionary relief, is not a sufficient answer to all the difficulties posed by a wholesale unwinding of a settlement on a completed real property acquisition, which would have been required once 30 April 2008 passed without, on its argument, satisfaction of special condition 3(a) by the issue of all separate certificates of title in respect of the Property.  But I cannot accept that these parties, assessed objectively as at 18 February 2008, would have accepted that outcome.  It seems to me to be overwhelming that, had any neutral observer articulated to these parties as at 18 February 2008, that in the event that what was then, the only further outstanding separate certificate of title (for part lot 213) not issuing before close of business on 30 April 2008, that there would then be no further obligation upon the Purchaser to settle on lot 214 (that is, assuming the Purchaser failed to settle between 17 March and 30 April 2008), or that the settlement on lot 214 if it had been completed, would need to be unwound in every respect, such hypothesis would have been dismissed by both parties, as fanciful.

6. However I do not, on this analysis, go so far as to accept to the fullest extent the Vendor's submission under its characterisation of the contractual arrangements as being three entirely separate sales of three separate properties.  There was, in my view, a degree of interrelationship as between the sale of the three land components comprising the 'Property', until a settlement on each property component had been perfected and implemented.  So in the present case, settlement in respect of lot 212 was due at 15 September 2008, under item 8(c) of the schedule.  But settlement on lot 212, in my view, was a future performance obligation ended by the Purchaser's notice of termination, sent by Mr Josland on 6 May 2008 - by reason of the Latest Date (30 April 2008) not being met in respect of a separate certificate of title issuing in respect of part lot 213 (lot 222). 

7. On my assessment, the Purchaser's notice of termination of 6 May 2008 relieved the Purchaser, from that time, of its obligation to settle on part lot 213 (lot 222), which otherwise would have fallen due (item 8(b) of the schedule) on 15 May 2008 and, as well on lot 212, with its settlement only due on 15 September 2008. 

8. Valid termination of the Purchaser's obligation to settle on part lot 213, carried with it the allied release of the correlative obligation to pay over the deposit in respect of that component.  The deposit which was to have been paid in respect of part lot 213 on 17 March 2008, by the variation, was then to be paid to the Vendor to be held beneficially, rather than to the stakeholder.  But deposit moneys paid over would still retain their deposit character (as an earnest of performance), notwithstanding that those deposit moneys were, under the varied arrangements, no longer to be held by the stakeholder.  If they been paid over as deposit moneys on 17 March 2008 to the Vendor, as was required under the variation, the effective notice of termination by the Purchaser on 6 May 2008 would, at that time, have resulted in an obligation arising in the Vendor to refund those deposit moneys - under the work of special condition 3(d)(2).  That of course is all hypothetical, as the deposit on part lot 213 was never paid, by reason of the Purchaser's continuing default in settling on lot 214. 

9. Effective termination by the Purchaser on 6 May 2008 also relieved the Purchaser of all obligation to pay to the stakeholder deposit moneys otherwise due in respect of lot 212.  The future obligation to settle on that component of property, fell due for performance at 15 September 2008.  That obligation of future performance also ended under the Purchaser's notice of 6 May 2008.

10. In all the circumstances, however, the Purchaser's 6 May 2008 notice of termination could not end its outstanding, unmet obligation to settle on lot 214, which had fallen due on the contract as varied, as at 17 March 2008, and in respect of which the Purchaser had been in default for over 30 days as at 6 May 2008.  The Purchaser had received notice of default in respect of its failure to settle on lot 214, on 17 March 2008 - under notice of default given by the Vendor's solicitors, dated 19 March 2008 (see exhibit F, pages 282 ‑ 283).  That notice gave the Purchaser, in effect, 28 days to remedy the default, after which, in effect, the Vendor reserved all its rights.  The 28 day period had run by mid‑April 2008. But the Vendor had not given any further notice terminating the contractual arrangements, at that time.  In fact, such notice by the Vendor was not given until 3 December 2008, after a notice to complete, issued by the Vendor's solicitors on 29 October 2008.

11. In all these circumstances, my conclusion is that the Purchaser must fail in respect of its claim to recover the $2 million deposit it paid in respect of lot 214.  Correlatively, the Vendor must succeed on its counterclaim in seeking to have forfeit to it, the $2 million deposit in respect of lot 214.  That consequence stands, notwithstanding that the deposit paid in respect of lot 214 exceeded 10% of the purchase price, because cl 6(f) of the contract of sale varied general condition 24.4, to sanction that outcome, ie forfeiture of the full deposit.  No argument as to penalty, by reason of that outcome was submitted to me at trial, on behalf of the Purchaser. 

12. Furthermore, the Vendor, by its counterclaim, is entitled, on my analysis, to loss of bargain damages, arising out of the Purchaser's serious and non‑excused continuing breach of its contractual obligation to settle in respect of lot 214, at 17 March 2008 and continuing thereafter until the Vendor terminated on 3 December 2008. 

13. Very sensibly, the parties have agreed the quantum of any loss of bargain damages, as between themselves, on various scenarios.  They were agreed that, in the event that the Vendor is held to be entitled to damages for breach, in respect of a failure by the Purchaser to settle on lot 214, that the loss of bargain damages are to be assessed in the amount of $5 million (that is, over and above forfeiture of the $2 million deposit).  The Vendor is entitled to that relief as well, on its counterclaim. 

14. I will hear the parties as to precise orders in implementation of the conclusions carried under these reasons.

15. As to the issue of costs, I am of the prima facie view that the Vendor having been substantially successful on its alternative argument, but failing on its earlier alternative case concerning it meeting the Latest Date  deadline (an issue that in an evidentiary sense occupied most of the hearing time during trial), should only receive one half of its taxed costs of the trial (but otherwise, all its taxed costs of the action in defence of the claim and upon its counterclaim), to be taxed, with all the upper limits for all scale allowances removed, for the purposes of any taxation. 

16. However, I will hear the parties, if necessary, in respect of all orders, including as to costs.