Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd as Trustee for Golden Asset Pty Ltd - [2012] WASC 443

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: PRIMEWEST (MANDURAH) PTY LTD -v- RYOM PTY LTD as Trustee for GOLDEN ASSET PTY LTD [2012] WASC 443

CORAM: EDELMAN J

HEARD: 22-23 OCTOBER 2012

DELIVERED : 23 NOVEMBER 2012

FILE NO/S: CIV 3126 of 2011

BETWEEN: PRIMEWEST (MANDURAH) PTY LTD
Plaintiff
AND
RYOM PTY LTD as Trustee for GOLDEN ASSET PTY LTD
First Defendant
KEDO (AUST) PTY LTD
Second Defendant
(BY ORIGINAL ACTION)
RYOM PTY LTD as Trustee for GOLDEN ASSET PTY LTD
First Plaintiff
KEDO (AUST) PTY LTD
Second Plaintiff
AND
PRIMEWEST (MANDURAH) PTY LTD
Defendant
(BY COUNTERCLAIM)

Catchwords:

Contract - Contract interpretation - Meaning of 'deed of affirmation' - Meaning of 'other documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require' - Whether deeds from third party lessees are deeds of affirmation or other documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require - Whether document evidencing registration of transfer of land was a document relating to the Leases and their continuation after Settlement as the Buyer may reasonably require - Whether documents evidencing registration of lease transfer are deemed to be supplied by Transfer of Land Act 1893 (WA), s 53(1) and s 56 - Whether termination by purchaser valid - Whether purchaser ready and willing to perform despite not having obtained stamped transfer of land - Whether purchaser required to obtain stamped transfer of land despite conduct of vendor

Equity - Specific performance - Contract for the sale of land - Availability of specific performance by vendor - Requirement for specific performance or damages in lieu of specific performance that vendor is ready and willing to perform at the date of suit - Whether damages in lieu of specific performance are subject to principles of mitigation of loss - Whether defendant acted unreasonably in refusing offer of settlement

Legislation:

Property Law Act 1969 (WA), s 77, s 78
Transfer of Land Act 1893 (WA), s 53(1), s 56, s 68

Result:

Claim dismissed
Counterclaim allowed

Category: A

Representation:

Original Action

Counsel:

Plaintiff:     Mr M Zilko SC & Mr G J Douglas
First Defendant             :     Ms P E Cahill SC
Second Defendant         :     Ms P E Cahill SC

Solicitors:

Plaintiff:     Hotchkin Hanly Lawyers
First Defendant             :     Frichot & Frichot
Second Defendant         :     Frichot & Frichot

Counterclaim

Counsel:

First Plaintiff                :     Ms P E Cahill SC
Second Plaintiff            :     Ms P E Cahill SC
Defendant:     Mr M Zilko SC & Mr G J Douglas

Solicitors:

First Plaintiff                :     Frichot & Frichot
Second Plaintiff            :     Frichot & Frichot
Defendant:     Hotchkin Hanly Lawyers

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

A v B1 and B2 (No 2) [2012] WASC 383
ASA Construction Pty Ltd v Iwanov [1975] 1 NSWLR 512
Atco Controls Pty Ltd (in liq) v Newtronics Pty Ltd (recs and mgrs apptd)(in liq) [2009] VSCA 238
Beard v Wratislaw [1993] 2 Qd R 494
Burton v Arcus [2006] WASCA 71
Cohen & Co v Ockerby & Co Ltd [1917] HCA 58; (1917) 24 CLR 288
Coulls v Bagot's Executor and Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460
Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142
DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423
Eastern Counties Railway Co v Hawkes (1855) 5 HLC 331; 10 ER 928
Eastwood-Epping Ice & Fuel Co Ltd v Pittock (1938) 38 SR (NSW) 671
Foran v Wight [1989] HCA 51; (1989) 168 CLR 385
Harry Ignatius Lantry v Tomule Pty Ltd [2007] NSWSC 81
Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd [2003] NSWSC 851; (2003) 59 NSWLR 312
Idameneo Pty Ltd v Ticco Pty Ltd [2004] NSWCA 329
Ireland v Leigh [1982] Qd R 145
Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391
Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180
Leros Pty Ltd v Terara Pty Ltd [1992] HCA 22; (1992) 174 CLR 407
Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2007] WASC 88
Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23; (2008) 35 WAR 520
Mills v Ruthol Pty Ltd [2004] NSWSC 547; (2004) 61 NSWLR 1
Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235
Pourzand v Telstra Corporation Ltd [2012] WASC 210
R v Morton (1873) LR 2 CCR 22
Rosser v Maritime Services Board (No 2) (Unreported, NSWSC, Library No BC9604305, 17 September 1996)
SAS Global Forrestdale 2 Ltd v Claycorp Investments Pty Ltd as trustee for the Claycorp Investment Trust [2010] WASC 114
Stacks Managed Investments Limited,in the matter of Premium Mortgage Income Fund [2008] FCA 12
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272
TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57; (1963) 180 CLR 130
Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463
Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603
Wilson v Northampton and Banbury Junction Railway Co (1874) 9 Ch App 279
Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530

TABLE OF CONTENTS

Introduction

Background

Ryom and Kedo consider purchase of the Property from Primewest
Primewest enters the Sale Agreement with Ryom and Kedo on 1 June 2011
The six tenants of the Property at the time of the Sale Contract
A settlement date is set for 14 October 2011
The correspondence and events before and after the settlement date
The dispute concerning the failure to settle

Primewest's claim for specific performance or damages in lieu of specific performance

Primewest's obligations under the Sale Contract cl 4.2(c)
The first requested documents: The Rick Hart Lease Transfer Documents

Were the Rick Hart Lease Transfer Documents 'documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require'?
Were the Rick Hart Lease Transfer Documents provided on 10 October 2011?

The second and third requested documents: the Requested Avanti and Lesandu Deeds

What is a deed of affirmation?
The historical meaning of a deed of affirmation
The contemporary usage of the term 'deed of affirmation'
The literal meaning and context of the words 'deed of affirmation'
The restrictions suggested by Primewest upon the words 'any deed of affirmation or other documentation relating to the Leases and their continuation after Settlement'
The Requested Avanti deed was within cl 4.2(c)
The Requested Lesandu Deed was not reasonably required within cl 4.2(c)

Conclusion on the claims for specific performance and damages

The counterclaim: Did Ryom and Kedo validly terminate the Sale Contract on 2 November 2011?

The issue: were Ryom and Kedo ready, willing and able to perform?
The assumptions at trial
Ryom and Kedo were ready and willing to perform

Remedial issues: the availability of specific performance and the operation of mitigation

Specific performance
Mitigation of loss

Conclusion

EDELMAN J:

Introduction

This trial involved a number of related legal issues. The evidence covered months of correspondence between the parties and their solicitors. But at the heart of the issues and the evidence was a short question. The question was the meaning of a subclause in the contract of sale:
Upon Settlement the Seller must provide any deed of affirmation or other documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require.
A focus at trial, and a heavy focus in the correspondence prior to settlement which was relevant to issues of readiness and willingness to settle, was upon the meaning of the undefined words 'deed of affirmation' in the contract of sale. The variety of different submissions concerning the meaning of a 'deed of affirmation' was understandable. It appears that in the last century there are no reported or unreported Australian or English decisions, nor real property texts, which give any detailed consideration to the meaning of a deed of affirmation. However, these deeds were common for centuries after the Norman conquest. They are meticulously described in the writings of Dodderidge, Bacon and Coke. Their meaning has been historically constant. The context in which the term is used in the contract of sale is consistent with that meaning. And when the reference to a deed of affirmation is read with the extended reference to 'other documents relating to the Leases and their continuation after Settlement' it can be seen that the subclause includes the documents required by the buyers at settlement, some of which were reasonably required.
The plaintiff, Primewest (Mandurah) Pty Ltd (Primewest), agreed to sell a commercial property (the Property) to the defendants, RYOM Pty Ltd (Ryom) and Kedo (Aust) Pty Ltd (Kedo), for $12 million. The Property was subject to several leases. Settlement of the sale was due to occur on 14 October 2011. But settlement did not occur. The dispute centred upon the subclause of the contract of sale quoted above. Ryom and Kedo said that Primewest was required to provide various documents at settlement. The documents required by Ryom and Kedo at settlement, but which Primewest did not produce, were documents described by Ryom and Kedo as deeds of affirmation and a document evidencing the registration of a transfer of one of the leases.
Primewest sought specific performance of the contract of sale or alternatively damages in lieu of specific performance. Ryom and Kedo submitted that specific performance was unavailable because they had properly terminated the contract of sale due to Primewest's failure to provide the documents sought. Alternatively, Ryom and Kedo said that specific performance was not available for a contract of this nature and that Primewest had failed to mitigate its loss.
In the reasons below, I explain why documents showing registration of the transfer of a lease and one of the deeds were reasonably required by Ryom and Kedo at settlement within cl 4.2(c) and why the contract of sale was properly terminated by Ryom and Kedo for Primewest's inability to provide those documents.
Although I conclude that the Sale Contract was properly terminated, the remedial issues were fully canvassed at trial and my conclusions on those issues are set out in my reasons below. If the contract had remained on foot, and if Primewest had been ready and willing to perform at the date of commencement of the suit for specific performance then Primewest would have been entitled to insist on specific performance of the contract for the sale of land. As for Ryom and Kedo's submission about mitigation, Primewest's conduct did not involve a failure to mitigate any loss. But, in any event, where damages in lieu of specific performance are sought to reflect the promised price to which a vendor would have been entitled, it is doubtful whether that award of damages will be subject to the principles of mitigation.

Background

Ryom and Kedo consider purchase of the Property from Primewest

Primewest was, and remains, the registered proprietor of the Property which is the subject of this litigation. The Property is at 327 Mandurah Terrace, Western Australia.
In May 2011, Primewest provided Ryom and Kedo with an Information Memorandum for the sale of the Property.[1] The Information Memorandum provided important information about the Property. It contained disclaimers including a statement that it was 'intended only as a guide and an aid to further investigation by potential Buyers.'[2] It also provided that '[r]ecipients acknowledge that they will make their own enquiries and obtain their own independent advice in order to verify the accuracy of the information contained in this document.'[3] Nevertheless, key matters contained in the Information Memorandum were not in dispute at trial.
[1] Exhibit 1A.
[2] Exhibit 1A, page 17.
[3] Exhibit 1A, page 17.
The Property was described in the Information Memorandum as a 'modern retail bulky goods showroom complex situated in a prime lead corner location and boasting some of Australia's leading retailers.'[4]
[4] Exhibit 1A, page 4.
The leading retailers who had leases on the Property were described as follows:
(i)Officeworks - parent Wesfarmers (Coles/Target/Kmart/Bunnings)
(ii)Rick Hart - parent 'Lesandu' (Lesandu CP Mandurah Pty Ltd) (Harvey Norman)
(iii)Capt'n Snooze - parent Steinhoff Asia Pacific (Freedom Group)
(iv)The Outdoor Furniture Specialists - national franchise retailer
(v)Carpet Court Flooring Centre - national franchise retailer
(vi)Avanti Plus Fleet Cycles - national franchise retailer
The Information Memorandum explained that the three anchor tenants were Rick Hart, Officeworks, and Capt'n Snooze.[5] Of these, the Rick Hart tenancy comprised 40% of the area or floor space of the Property.[6] It accounted for more than a third of the rental income from the Property.[7]

Primewest enters the Sale Agreement with Ryom and Kedo on 1 June 2011

[5] Exhibit 1A, page 5.

[6] Exhibit 1A, page 11.

[7] Exhibit 1A, page 11.

On 1 June 2011, Primewest, as vendor, and Ryom and Kedo, as purchasers, entered into a written agreement which I will describe as the Sale Contract. In the Sale Contract, Ryom and Kedo agreed to purchase the Property from Primewest for $12 million subject to various terms and conditions.
The Sale Contract[8] was comprised of the following documents:
(i)Document entitled 'Contract for Sale of Land or Strata Title by Offer and Acceptance'.
(ii)Annexure A: Special Conditions - Hometown Mandurah.
(iii)Annexure B: Tenancy Details - Hometown Mandurah.
(iv)Annexure C: Record of Certificate of Title and Deposited Plan;
(v)Annexure D: 2009 General Conditions Joint Form of General Conditions for the Sale of Land with Addendum; and
(vi)Annexure E: Proposed Strata Plan 61288.

The six tenants of the Property at the time of the Sale Contract

[8] Exhibit 2.

At the date of the Sale Contract, the Property was subject to six separate leases. Two of these were as follows.
(i)The Avanti lease:[9] an unregistered lease of 385 square metres of the Property between Primewest as lessor and Luke and Joanne Boulton as lessee for a term of seven years expiring on 27 November 2013.
(ii)The Rick Hart lease transfer:[10] an unregistered transfer from Clive Peeters Ltd to Lesandu of a lease of 2,347 square metres of the Property between Primewest as lessor and Clive Peeters as lessee for a term of 10 years expiring on 21 December 2016 with two options to renew the lease term for a further term of five years each.

A settlement date is set for 14 October 2011

[9] Exhibit 20.

[10] Exhibit 1.

Clause 4.1(a) of the Special Conditions of the Sale Contract provided that the settlement date for the Sale Contract was the later of (i) 28 days following receipt by Ryom and Kedo of a Settlement Notice issued by Primewest under cl 1.4(f), or (ii) 25 July 2011.
On 16 September 2011, Primewest gave Ryom and Kedo a Settlement Notice under cl l.4(f) of the Special Conditions of the Sale Contract.[11] It is common ground that the effect of this was that the settlement date of the Sale Contract became 14 October 2011.
[11] Exhibit 11.
Settlement did not occur.

The correspondence and events before and after the settlement date

On 26 August 2011, Harvey Norman wrote to Primewest. Harvey Norman was the parent company of Lesandu which held the Rick Hart lease, the anchor lease for the Property, and which represented more than a third of the Property's rental income. Harvey Norman said that the Rick Hart business had been closed due to substantial losses and proposed to surrender the lease upon payment of three months' gross rent. Harvey Norman said that a direction as to future monthly rental payments for the store at the Property had not been made.[12]
[12] Annexures to Exhibit 5.
Primewest proposed to Ryom and Kedo that Primewest reply to Harvey Norman and explain that this proposal from Harvey Norman was not acceptable.[13]
[13] Annexures to Exhibit 5.
On 31 August 2011, Ryom and Kedo's solicitors, Frichot & Frichot, wrote to Primewest's solicitors, Pye & Quartermaine.[14] Frichot & Frichot enclosed the letter from Harvey Norman and the proposed letter from Primewest, saying that the developments discussed in those letters were of the utmost concern. Frichot & Frichot explained that they had reviewed all the leases in respect of the Property and had two concerns:
(i)the Rick Hart lease transfer: the transfer of Clive Peeters Ltd's leasehold interest in the Property to Lesandu had not been registered (although the original Clive Peeters Ltd lease was registered); and
(ii)the Avanti lease: the lease to Luke and Joanne Maree Boulton in relation to the Avanti lease had not been registered.
[14] Exhibit 5.
Frichot & Frichot referred to advice received from Senior Counsel that an unregistered lease for more than five years which is not protected by caveat will be extinguished upon registration of the transfer of title to the Property and will not be enforceable by Ryom and Kedo.
Frichot & Frichot also said that they relied on cl 4.2(c) of the Special Conditions of the Sale Contract and that
upon settlement of the Property Primewest must provide a deed of affirmation in respect of each current tenant whose lease is for a period of greater than five (5) years and that is not currently registered on the Certificate of Title of the Property. The deed is to be prepared by our office and will need to be executed by Primewest, Ryom and the respective tenants. We consider that it is reasonable in the circumstances for the deed concerning the Lesandu lease to contain a warranty that Lesandu is solvent and capable of entering into the deed at the date of its execution.
At the time of this letter, on 31 August 2011, the date of settlement had not yet been set by Primewest. A settlement notice was not issued for another two weeks by Primewest, setting the settlement date for 14 October 2011. If Primewest had concerns about the deeds of affirmation which were sought then it may be that one solution might have been to offer to register the leases for current tenants whose leases exceeded a period of five years (the Avanti lease and the Rick Hart lease transfer) and, if required, to obtain deeds of assignment of the rights relating to those leases. But no submissions were made at trial concerning whether there were any legal obstacles to such a course and it is not necessary to consider this point.
On 2 September 2011, Pye & Quartermaine, responded on behalf of Primewest.[15] In relation to the Avanti lease, Pye & Quartermaine acknowledged that this was unregistered and for a period in excess of five years. But they did not offer to register this lease and grant an assignment of rights. Instead, the solicitors asked for the proposed draft of the deed of affirmation so that they could approach the lessee (Luke and Joanne Boulton).
[15] Exhibit 6.
In relation to the Rick Hart lease transfer, Pye & Quartermaine said that they were currently arranging to complete the registration and that '[w]e trust that this satisfies your concerns in relation to that particular matter'.
On 9 September 2011, Primewest wrote to Harvey Norman about the Rick Hart lease, confirming the unacceptable nature of the proposal to surrender the Rick Hart lease with payment of only three months' rent.[16] Primewest asked for confirmation that Harvey Norman would honour its obligations under the lease and explained that the Property was under a contract of sale and that all tenants would be required to enter into a deed of affirmation.
[16] Exhibit 7.
On 14 September 2011, Harvey Norman replied saying that Lesandu's position had not changed and that any future correspondence should be directed to their solicitors.[17]
[17] Exhibit 9.
On 15 September 2011, Pye & Quartermaine (for Primewest) wrote to Ryom and Kedo's solicitors.[18] Attached to the letter was email correspondence from Harvey Norman's solicitors to Primewest's solicitors. That correspondence had been requested by Ryom and Kedo on 31 August 2011. In the email correspondence, Primewest's solicitors had asked Harvey Norman's solicitors on 28 July 2011 for the full name of 'P P Carter' so that it could be inserted on the Landgate form. Harvey Norman's solicitors had emailed back on 24 August 2011 apologising for the delay and requesting that Primewest's solicitors 'kindly cease working on this file as my client has elected not to proceed with this site and accordingly registration is no longer required'. As explained below, on the form subsequently lodged with Landgate (dated 7 July 2010 but lodged on 10 October 2011)[19] the full name of Philip Patrick Carter is inserted under Mr Carter's signature.[20]
[18] Exhibit 10.
[19] Exhibit H (statement of agreed facts and issues dated 18 October 2012) [26].
[20] Exhibit A (affidavit of Adam Peter O'Donoghue sworn 17 September 2012) page 80.

In their letter of 15 September 2011, the solicitors for Primewest, Pye & Quartermaine, explained to Ryom and Kedo that despite the opposition of Harvey Norman to registration, Primewest considered that it was entitled to register Primewest's copies of the documentation to complete the dealing.[21] Indeed, on 2 September 2011 the solicitors for Primewest had told the solicitors for Ryom and Kedo that they were currently arranging to complete the registration of the Rick Hart lease transfer. The transfer documents were dated 7 July 2011.
[21] Exhibit 10.
On 15 September 2011, different solicitors acting for Primewest (Hotchkin Hanly) issued a notice of default to Lesandu in relation to the Rick Hart lease, demanding payment of $60,367.98 of which it was claimed Lesandu was in default under the lease.[22]
[22] Exhibit 10A.
On 16 September 2011, a settlement notice was issued to Ryom and Kedo by Primewest.[23] As I have explained, the effect of this notice was that the settlement date became 14 October 2011.
[23] Exhibit 11.
On 22 September 2011, Hotchkin Hanly, acting for Primewest, emailed the solicitors for Ryom and Kedo.[24] Hotchkin Hanly said that they considered that the 'proper order of things' was (i) for Primewest to obtain the consent of Ryom and Kedo to register the lease, (ii) to notify Lesandu's solicitors, then (iii) register the assignment of lease. A reference was made in the email to a concern allegedly expressed by Ryom and Kedo's solicitors on 9 September 2011 that registering the assignment of the lease may be in breach of the Sale Contract.
[24] Exhibit 12.
On 23 September 2011, the solicitors for Ryom and Kedo replied.[25] They enclosed a pro forma deed of affirmation for all the tenants and a particular deed of affirmation in relation to Lesandu for the Rick Hart lease. The solicitors for Ryom and Kedo referred to correspondence with Primewest on 10 September 2011 and explained that they had taken advice from counsel in relation to the issue of Ryom and Kedo's consent to the registration. They said that the advice was that Ryom and Kedo's consent was not required.
[25] Exhibit 13.
The deed of affirmation attached to the 23 September 2011 letter from the solicitors for Ryom and Kedo in relation to Lesandu was a deed between Ryom and Kedo, Primewest, Lesandu and Harvey Norman. It contained a number of specific provisions. It required numerous undertakings which can be broadly summarised as follows:
(i)An undertaking from Lesandu affirming the provisions of the lease without exception.
(ii)An undertaking from Lesandu affirming the enforceability of the lease without exception.
(iii)An undertaking from Lesandu agreeing to be bound by the provisions of the lease from the settlement date for the benefit of Ryom and Kedo.
(iv)Undertakings from Lesandu agreeing to pay rent and other money due under the lease to Ryom and Kedo, and perform all of its obligations under the lease, from the settlement date.
(v)An undertaking from Lesandu agreeing to perform all the required provisions of the lease in favour of Ryom and Kedo prior to settlement date and all its obligations for the remainder of the term.
(vi)An assignment of Primewest's rights as lessor and consent to that assignment by Lesandu.
(vii)Warranties by Lesandu that the lease is the entire understanding between Lesandu and Primewest in relation to the demised premises and that there are no statements, documents, understandings or representations in existence that would or may: (a) invalidate the lease or any of the provisions of the lease; (b) cause the lease or any of the provisions of the lease to be unenforceable against the Lesandu; or (c) vary the lease or any of the provisions of the lease.
(viii) Warranties by Lesandu that it is solvent as at the date of execution of the deed and that it will be solvent as at the settlement date; that it has due authority and capacity to enter into the deed; that it is not in breach, or default, of the lease as at the date of execution of the deed; that it will not be in breach or default of the lease as at the Settlement Date.
(ix)Warranties by Lesandu that Primewest is not in breach, or default, of the lease and has no outstanding, unsatisfied or unperformed obligations pursuant to the provisions of the lease, as at the date of execution of the deed.
(x)Agreement by Lesandu that s breach any of the provisions of the deed by Lesandu shall be deemed to be a breach of the lease.
(xi)Agreement between Lesandu and Ryom and Kedo as to numerous matters including that except as otherwise modified by the deed, the provisions of the lease shall apply as between Ryom and Kedo and Lesandu after the settlement date; the rent payable as and from the settlement date shall be subject to the provisions for review of rent specified in the lease; and the right of re-entry reserved by the lease is exercisable by Ryom and Kedo (a) in the events specified in the lease, (b) in the event of non-payment of any rent reserved under the deed, (c) in the event of the non-observance or non-performance of any of the provisions of the deed.
(xii)A separate covenant from a guarantor to guarantee payment by Lesandu of the rent and all other monies due, owing or payable by Lesandu to Ryom and Kedo as and from the settlement date under the deed or the lease.
(xiii)A separate covenant from a guarantor to guarantee the observance and performance by Lesandu of any terms and conditions in the deed and the lease.
(xiii)A separate covenant from a guarantor to indemnify Ryom and Kedo in respect of any breach of the lease or the deed by Lesandu; and
(xiv)Agreement by the guarantor that the indemnity given shall be a principal obligation and may be enforced against the guarantor without any responsibility on the part of Ryom and Kedo to proceed against the Lesandu or any other person.
A generic deed of affirmation was also provided for each of the other tenants of the Property to enter a deed with Ryom and Kedo, Primewest and a guarantor.
After saying that these provisions in the Lesandu deed of affirmation were required by Ryom and Kedo due to their concerns about the Rick Hart lease, the 23 September 2011 letter from the solicitors for Ryom and Kedo also explained and recited many of the events described above. In addition to the events described above, Ryom and Kedo's solicitors also observed that:
(i)The only response from Harvey Norman to Primewest's letter on 9 September 2011 - which had sought confirmation that Harvey Norman would honour its obligations under the lease - was the reply from Harvey Norman on 14 September 2011 saying that Lesandu's position had not changed and that any future correspondence should be directed to their solicitors.
(ii)Correspondence requested by Ryom on 31 August 2011 had only been supplied by Primewest on 15 September 2011. That correspondence was the email by the solicitors for Harvey Norman on 24 August 2011 (responding to the short request on 28 July 2011 for Mr Carter's full name) where Harvey Norman had said that they 'elected not to proceed with this site' and had said that registration of the transfer of the lease was no longer required.
In their 23 September 2011 letter, the solicitors for Ryom and Kedo concluded by observing that it:
appears therefore that Lesandu is proceeding on the basis that it is not legally obliged to perform the lease and/or it is unwilling or unable to do so. Therefore the deed of affirmation to be executed by Lesandu has been cast in terms which takes [sic] account of the circumstances.
On 26 September 2011, Hotchkin Hanly responded on behalf of Primewest.[26] No issue was taken with any of the concerns raised by Ryom and Kedo's solicitors. Instead, Hotchkin Hanly said that Primewest was prepared to send the deeds of affirmation to the tenants of the Property, including Lesandu. However, Hotchkin Hanly asserted that cl 4.2(c) of the Special Conditions of the Sale Contract did not oblige Primewest to procure a signed deed of affirmation in order for settlement to proceed. They argued that their obligation was to deliver up any deed of affirmation in existence or, at most, to make reasonable efforts to procure such a deed if Ryom and Kedo requested it.
[26] Exhibit 14.
Correspondence was then exchanged between the solicitors which argued about the meaning of a deed of affirmation and the extent of Primewest's obligation at settlement under cl 4.2(c) of the Special Conditions of the Sale Contract.[27] Ryom and Kedo's solicitors did not subsequently include the requirement for guarantees and indemnities in the Avanti deed of affirmation.[28]
[27] Exhibit 16; Exhibit 17.
[28] Exhibit 16; Exhibit 18.
In the course of the correspondence, on 28 September 2011 Hotchkin Hanly also asserted that an appropriate deed of affirmation ought to be limited to affirmation of the terms of the lease if the lease instrument is not otherwise adequate.[29] For the reasons below, and as senior counsel for Ryom and Kedo, Ms Cahill, properly conceded this assertion was correct save that a deed of affirmation is appropriate if the lease instrument might not be enforceable.[30]
[29] Exhibit 17.
[30] ts 108.
In their 28 September 2011 letter, Hotchkin Hanly asserted that the lease instrument was adequate because the lease is registered and the 'transfer of lease is executed and in registrable form'.[31] The inference which might have been drawn from that letter is that the forms for registration of lease had not yet been lodged.
[31] Exhibit 17.
On 29 September 2011, the solicitors for Ryom and Kedo responded to the 28 September 2011 letter of Hotchkin Hanly observing that (i) the transfer of the Rick Hart lease had not been registered, so Lesandu did not have a registered interest in the Property; and (ii) Lesandu's (and Harvey Norman's) conduct and all the circumstances suggested that Lesandu may take the position that their lease is not legally enforceable.[32]
[32] Exhibit 19.
On 30 September 2011, the solicitors for Ryom and Kedo also replied to query whether the transfer of the Rick Hart lease was in registrable form.[33] They alleged that:
(i)the full name of Mr Carter had not been inserted under the signature PP Carter when Mr Carter signed the form on 7 July 2011;
(ii)Primewest (who was not a party to the transfer of the Rick Hart lease) inserted Mr Carter's full name without the consent of the parties to the transfer;
(iii)the only response received from any party to the transfer of lease to Primewest's request for Mr Carter's full name was Lesandu's solicitor's letter which said that registration was no longer required and which requested return of the documents.
[33] Exhibit 19A.
The solicitors for Ryom and Kedo said that they had sought clarification from Landgate about the requirements for registration of documents which are altered after registration and those requirements included authorization and countersigning of any amendment to the document after execution.
In their 28 September 2011 letter, Hotchkin Hanly had also referred to the suggestion by the solicitors for Ryom and Kedo that the next draft of the deed of affirmation would include Primewest as a party. They said that they were 'not aware of any obligation on our client [Primewest] to execute any further agreements'.[34] As I explain below, Primewest, as lessor, is an essential party to any deed of affirmation.
[34] Exhibit 17.
On 28 September 2011, the solicitors for Ryom and Kedo sent the revised deeds of affirmation to be executed by the tenants.[35] The deed of affirmation for Lesandu did not contain any guarantee provisions. However, many of the undertakings and warranties from the original draft were repeated.
[35] Exhibit 18.
In both the deed for the Boultons and the deed for Lesandu there were undertakings required by the lessee affirming the provisions of the lease; undertakings to pay the rent and observe the provisions of the lease; undertakings to comply with their obligations for the lease term; and the provision deeming a breach of the deed to be a breach of the lease. Primewest was a proposed party to the deed and there was also a provision assigning Primewest's rights under the leases to Ryom and Kedo and for consent from the lessee to the assignment.
On 4 October 2011, Primewest issued a General Procedure Claim against Lesandu in the Magistrates Court to recover $60,367.98 in outstanding rent. Ryom and Kedo were informed of the claim.[36]
[36] Exhibit 21.
A further exchange of letters between the solicitors for Primewest and those for Ryom and Kedo then followed. The parties remained in dispute about the meaning of cl 4.2(c) of the Special Conditions of the Sale Contract. The position taken by Hotchkin Hanly, acting for Primewest, was that 'it is a substantial extension of the plain meaning of cl 4.2(c) … that the Seller must procure the agreement of non-parties in order to comply with this term'.[37]
[37] Exhibit 22.
In reply on 6 October 2011, Frichot & Frichot, acting for Ryom and Kedo, made a number of comments.[38]
[38] Exhibit 23.
First, the solicitors for Ryom and Kedo observed that Primewest's position concerning what was required by cl 4.2(c) had been constantly shifting. They asserted the following.
(i)When Ryom had asked for a deed of affirmation on 31 August 2011 for those tenants whose leases were not registered, the response from Primewest's solicitors on 2 September 2011 had been to say that the Rick Hart lease transfer was in the process of being registered and to ask for the proposed draft of the deed of affirmation so that they could approach the lessee of the Avanti lease. On 9 September 2011, Primewest had written to Harvey Norman saying that they were requiring all tenants to enter into a deed of affirmation.
(ii)On 26 September 2011, different solicitors for Primewest (Hotchkin Hanly) had asserted that cl 4.2(c) only required Primewest to deliver a deed of affirmation which was already in existence or to make reasonable efforts to procure a deed of affirmation.
(iii)On 28 September 2011, Hotchkin Hanly had said that they were 'not aware of any obligation on our client [Primewest] to execute any further agreements'. They also said that a deed of affirmation in relation to the Rick Hart lease was not required because the Rick Hart lease transfer was in registrable form.
(iv)The 4 October 2011 stance of Hotchkin Hanly was that Primewest was not obliged to procure the agreement of non-parties to a deed of affirmation.
The solicitors for Ryom and Kedo observed in their 6 October 2011 letter that in light of these changing arguments, it was reasonable to assume that Primewest was unable to obtain a deed of affirmation from Lesandu, or perhaps any other tenant, on any terms. They also observed that the 28 September 2011 letter from Hotchkin Hanly invited the inference that Primewest was now unwilling to execute a deed of affirmation in relation to the Rick Hart lease on any terms. They also observed that the delay in bringing legal proceedings for the recovery of outstanding rent from Lesandu meant that any defence by Lesandu arguing that the lease was unenforceable would not be received prior to settlement.
Against that background, the solicitors for Ryom and Kedo explained that they required under cl 4.2(c):
(i)a deed of affirmation executed by Primewest and Lesandu that in its terms affirms, at least, the validity and enforceability of the Rick Hart lease by and for the benefit of Ryom and Kedo against Lesandu from settlement of the Sale Contract and continuing thereafter; and
(ii)deeds of affirmation in respect of all other unregistered leases exceeding a term of five years or any leases for a lesser term that carry an option of renewal (unless a subject to claim caveat has been lodged) executed by the relevant tenant and Primewest respectively that in its terms affirm, at least, the validity and enforceability of the relevant lease by and for the benefit of Ryom and Kedo against the relevant tenant from settlement of the Sale Contract and continuing thereafter. It was common ground at trial that the only lease which fell within this point was the Avanti lease.[39]
[39] ts 97.
The 6 October 2011 letter from the solicitors for Ryom and Kedo also described the history of their request for the registration of the transfer of the Rick Hart lease. That history can be summarised as follows.
(i)On 31 August 2011, the solicitors for Ryom and Kedo had first expressed concern about the lack of registration of the Rick Hart lease transfer.
(ii)On 2 September 2011, the solicitors for Primewest, Pye & Quartermaine, had responded by saying that they were 'currently arranging to complete the registration' of the Rick Hart lease transfer. They said 'we trust that this satisfies your concerns in relation to that particular matter'. I interpolate that the lease transfer forms were dated 7 July 2011.
(iii)On 22 September 2011, Hotchkin Hanly, also solicitors for Primewest, had said that they intended to register the Rick Hart lease transfer, although they suggested that they needed to notify Lesandu's solicitors first and to obtain consent from Ryom and Kedo.
(iv)On 28 September 2011, Hotchkin Hanly had said that the Rick Hart lease transfer was in registrable form.
(v)On 30 September 2011, the solicitors for Ryom and Kedo explained their concerns that the transfer of the Rick Hart lease might not be in registrable form, setting out their inquiries of Landgate and their concerns about the subsequent insertion of Mr Carter's full name after the forms had been signed.
(vi)As at 6 October 2011, the forms for registration of the Rick Hart lease transfer had not been lodged with Landgate and Primewest had not responded to the concerns expressed by the solicitors for Ryom and Kedo on 30 September 2011, nor had Primewest explained why the forms for the registration of transfer had not yet been lodged.
In those circumstances, the solicitors for Ryom and Kedo reiterated that Ryom and Kedo required Primewest to provide at settlement a registered transfer of lease under cl 4.2(c) of the Special Conditions of the Sale Contract.
As to the two deeds of affirmation and the registered lease transfer, the 6 October 2011 letter from the solicitors for Ryom and Kedo said that they 'request that you confirm in writing by 12 pm Monday 10 October 2011 that your client [Primewest] will provide the required documents on settlement. If we do not have a response from you within that timeframe, our clients [Ryom and Kedo] will proceed on the basis that your client does not intend to comply with our clients' requirements'.
Primewest did not provide Ryom and Kedo any documents requested by the Defendants pursuant to cl 4.2(c) of the Special Conditions of the Sale Contract on or before the Settlement Date, nor was there any indication that it would do so.
On 10 October 2011, Hotchkin Hanly lodged the Rick Hart lease transfer and supporting documents at Landgate for registration. The copy of the lodged transfer was provided the same day to the solicitors for Ryom and Kedo. No explanation was provided for the delay in lodging the transfer for registration. There was no assurance that the forms would be registered by Landgate.[40]
[40] Exhibit 25.
On 11 October 2011, Hotchkin Hanly replied to the 6 October 2011 letter from the solicitors for Ryom and Kedo.[41] Hotchkin Hanly reiterated their stance about cl 4.2(c) that (i) it did not create an obligation for Primewest to procure a signed deed of affirmation but required Primewest only to deliver up a deed which was in existence or, at its highest, to use reasonable efforts to procure such a deed if Ryom and Kedo requested it; (ii) to the extent that Ryom and Kedo requested Primewest to sign the deed, which confirmed that Primewest transferred and assigned the benefit of each lease to take effect at settlement, Primewest had already agreed to that obligation in cl 3.1(a) of the Special Conditions of the Sale Contract.
[41] Exhibit 27.

The 11 October 2011 letter from Hotchkin Hanly also disputed Ryom and Kedo's claimed entitlement to the deeds of affirmation in the terms requested on 6 October 2011. Nothing was said about Ryom and Kedo's claim to be entitled to be provided with evidence of a registered transfer of the Rick Hart lease.
On 12 October 2011, the solicitors for Ryom and Kedo asked for confirmation from Hotchkin Hanly that Lesandu's solicitors had been notified that the transfer of lease had been lodged for registration.[42]
[42] Exhibit 28.
Again on 12 October 2011, the solicitors for Ryom and Kedo wrote to Hotchkin Hanly, referring to the pending settlement on 14 October 2011.[43] The solicitors for Ryom and Kedo again reiterated the relative positions of the parties concerning cl 4.2(c) and also said (in summary):
(i)Hotchkin Hanly had not contacted them concerning whether any of the tenants of the Property was willing to execute the deeds of affirmation which were sent.
(ii)Hotchkin Hanly had not confirmed whether Primewest would execute a deed of affirmation in at least the minimum terms sought by Ryom and Kedo.
(iii)Hotchkin Hanly had not confirmed whether the relevant tenants would execute a deed of affirmation in at least the minimum terms sought by Ryom and Kedo.
(iv)Hotchkin Hanly had not advised that the transfer of the Rick Hart lease would be registered by 14 October 2011 and provided to Ryom and Kedo at settlement.
[43] Exhibit 29.
On 12 October 2011, the solicitors for Ryom and Kedo received a letter from Pye & Quartermaine, acting for Primewest.[44] The letter attached a settlement statement and notices of attornment for settlement and also noted that a stamped transfer, executed by Ryom and Kedo, had not yet been received.
[44] Exhibit 30.
The same day, the solicitors for Ryom and Kedo responded to Pye & Quartermaine, referring them to the correspondence with Hotchkin Hanly of which they had been provided with copies, and explaining that since Primewest was unwilling or unable to perform its obligations under cl 4.2(c) of the Special Conditions of the Sale Contract, Ryom and Kedo were not obliged to tender performance although Ryom and Kedo remained ready, willing and able to perform.[45]
[45] Exhibit 31.
On 13 October 2011, the solicitors for Ryom and Kedo sent two further letters, one to Pye & Quartermaine and the other to Hotchkin Hanly, raising other matters relating to settlement. The letter sent to Hotchkin Hanly included an allegation that a statutory declaration was defective.[46] The statutory declaration was provided with the forms lodged with Landgate to register the transfer of the Rick Hart lease. Hotchkin Hanly responded with an email asking what was wrong with the statutory declaration.[47] No reply was received. There was no suggestion at trial that the statutory declaration was defective.
[46] Exhibits 32; Exhibit 33.
[47] Exhibit 34.
On 13 October 2011, Hotchkin Hanly also emailed and attempted to contact the solicitors for Lesandu to ascertain:
(i)Why 'Lesandu is not paying its rent, and whether it considers that it has any defence to the claim, and whether it considers that the lease is binding'.
(ii)Whether Lesandu was 'willing to sign the Deed of Affirmation or a simpler deed which simply states that Lesandu confirms the terms of the lease are binding, and will be binding on Lesandu following the purchase and enforceable by [Ryom and Kedo]'.[48]
[48] Exhibit 35; Exhibit 38.
It appears that on 14 October 2011 Hotchkin Hanly were told by Lesandu's solicitors that Lesandu did not have a position at this time on (i) or (ii) but that even if the lease is binding the solicitors did not believe that Lesandu was under an obligation to sign the deed of affirmation.[49]
[49] Exhibit 38.
On 13 October 2011, Pye & Quartermaine, acting for Primewest, wrote to the solicitors for Ryom and Kedo disputing that Ryom and Kedo were ready, willing and able to perform. Pye & Quartermaine observed that Ryom and Kedo had not complied with a number of matters including a failure to provide 'a fully signed Transfer of Land with duty endorsed within a reasonable time prior to Settlement' and requesting a copy of that document to evidence Ryom and Kedo's ability to settle.[50]
[50] Exhibit 36.
On 13 October 2011, in an email between Hotchkin Hanly and Pye & Quartermaine (but not sent to Ryom and Kedo or their solicitors) it was said that, with two exceptions, all the tenants including Avanti were prepared to sign the deeds of affirmation. The exceptions were the Snooze and Lesandu (Rick Hart) leases. Messages had been left with those tenants.[51]
[51] Exhibit 39.
On 14 October 2011, the solicitors for Ryom and Kedo responded to Pye & Quartermaine, explaining that Ryom and Kedo were ready, willing and able to perform each of their obligations and that they would attend to all outstanding matters to enable settlement to proceed as soon as they received confirmation from Pye & Quartermaine or Hotchkin Hanly that the three categories of requested documents would be provided ie the deeds of affirmation and a copy of the registered transfer of the Rick Hart lease.[52]
[52] Exhibit 40.
On 14 October 2011 at 4:48 pm Hotchkin Hanly wrote to the solicitors for Ryom and Kedo. Hotchkin Hanly explained that although they did not believe that the deeds of affirmation were reasonably required, they had followed this up with Lesandu. They said that they had been told by Lesandu's solicitors that Lesandu did not have a position at this time on whether the lease was binding, but that, even if the lease is binding, Lesandu's solicitors did not believe that Lesandu was under an obligation to sign the deed.[53]
[53] Exhibit 41.
The settlement of the sale of the Property did not occur on the Settlement Date, namely 14 October 2011.
On 17 October 2011, Ryom and Kedo gave a Default Notice to Primewest.[54] The Default Notice said that Primewest 'is in breach of Special Condition 4.2(c) of the Contract in failing to provide [Ryom and Kedo], upon Settlement… with deeds of affirmation and other documentation relating to the Leases …and their continuation after Settlement … as have been reasonably required by [Ryom and Kedo] …'.
[54] Exhibit 45.
On 18 October 2011, Primewest gave a Default Notice to Ryom and Kedo[55] which said that Ryom and Kedo were not ready willing and able to settle because they had failed to provide a signed transfer with duty endorsed under cl 3.3(a) of the General Conditions of the Sale Contract within a reasonable time before the scheduled settlement date under cl 3.2 of the General Conditions of the Sale Contract. Primewest demanded that Ryom and Kedo deliver a duly signed transfer pursuant to cl 3.2 of the General Conditions of the Sale Contract.
[55] Exhibit 46.
On 21 October 2011, Hotchkin Hanly emailed the solicitors for Lesandu asking for a response to the query whether they denied that they had a binding lease.[56]
[56] Exhibit 48.
Default judgment was entered against Lesandu in respect of the General Procedure Claim on 31 October 2011.[57]
[57] Exhibit 49.
Primewest did not at any time within 10 business days of Ryom and Kedo's Default Notice provide to Ryom and Kedo any of the documents requested by Ryom and Kedo.
On 2 November 2011, Ryom and Kedo gave a Termination Notice to the Primewest.[58]
[58] Exhibit 51.
On an unknown date between 3 November 2011 and 14 November 2011, the Rick Hart lease transfer became registered on the Certificate of Title of the Property, with such registration being retrospectively recorded on the Certificate of Title for the Property as being registered with effect from the date of lodgment, namely 10 October 2011. A copy of the Certificate of Title for the Property was obtained by Primewest on 14 November 2011.[59]
[59] Exhibit 55.
Primewest commenced the current proceedings for specific performance of the Sale Contract, alternatively damages in lieu of specific performance, on 4 November 2011.
On 4 November 2011, an administrator was appointed to Lesandu.[60] Lesandu never delivered a deed of affirmation to Primewest.[61]

The dispute concerning the failure to settle

[60] Exhibit A (affidavit of Adam Peter O'Donoghue sworn 17 September 2012) [13].

[61] Exhibit A (affidavit of Adam Peter O'Donoghue sworn 17 September 2012') [13].

Each party claims that the other was in default. Ryom and Kedo plead that Primewest was not ready, willing and able to perform at settlement. Ryom and Kedo also say that they validly terminated the Sale Contract on 2 November 2011 because of Primewest's failure to provide documents requested by Ryom and Kedo which they say were requested under cl 4.2(c) of the Special Conditions of the Sale Contract. The Requested Documents, as defined in the pleading, were:[62]
(i)a deed of affirmation executed by Primewest and Lesandu that in its terms affirmed, at least, the validity and enforceability of the Rick Hart Lease by and for the benefit of Ryom and Kedo against Lesandu from settlement of the Sale Contract and continuing thereafter (the Requested Lesandu Deed);
(ii)a deed of affirmation executed by Primewest and Luke and Joanne Boulton that in its terms affirmed, at least, the validity and enforceability of the Avanti Lease by and for the benefit of Ryom and Kedo against Luke and Joanne Boulton from settlement of the Contract and continuing thereafter (the Requested Avanti Deed);
(iii)a document or documents evidencing the registration of the Rick Hart Lease Transfer (the Rick Hart Lease Transfer Documents).
[62] Further amended defence and counterclaim [12].
It is common ground that none of these documents was provided to Ryom or Kedo prior to 2 November 2011 when, after having earlier issued a notice of default, Ryom and Kedo issued a termination notice to Primewest.[63]
[63] Exhibit H (statement of agreed facts and issues dated 18 October 2012) [27].

Primewest's claim for specific performance or damages in lieu of specific performance

Primewest's obligations under the Sale Contract cl 4.2(c)

At the heart of this trial is the meaning of cl 4.2(c) of the Special Conditions of the Sale Contract. Clause 4.2, in full, is as follows:
4.2 Seller to Supply
Upon Settlement the Seller must provide:
(a)clear and unencumbered title to the Property subject to the Specified Encumbrances; and
(b)must provide all withdrawals, discharges, surrenders and/or notices of satisfaction (in registrable form, if reasonably required by the Buyer) of all mortgages and charges affecting and/or being encumbrances on the Land;
(c)any deed of affirmation or other documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require;
(d)Attornment Notices for each Tenant holding a Lease in relation to premises within the Property directing the Tenants to pay to the Buyer all rent and moneys payable by such Tenant pursuant to the terms of the relevant Lease as and from the Settlement Date;
(e)originals of each of the relevant Lease Documents in the event that the same are in the possession or control of the Seller or otherwise duplicate copies of each of the relevant Lease Documents;
(f)the duplicate keys and security keycards of the Property that, are in the possession or control of the Seller;
(g)subject to apportionment as provided for in this Contract, all moneys, if any, held by or on behalf of the Seller in respect of bonds, deposits, rental and moneys collected from the Tenants pursuant to the Leases;
(h)all sinking funds and similar moneys to be used for the purpose of maintaining and repairing improvements on the Land and all outgoings of the Land or the Building paid or contributed to by the tenants and which have not been discharged on the date that Settlement actually occurs ('the Actual Settlement Date');
(i)all copies of any drawings or plans of the Land in the possession or control of the Seller;
(j)all original Bank Guarantees in the possession or control of either the Seller or the then current managing Agent of the Seller; and
(k)a written authority to the then current managing agent of the Seller to promptly provide to the Buyer copies of all records of the Property held by it for the Seller.
The central question for Primewest's claim was whether each of the Requested Documents fell within cl 4.2(c).

The first requested documents: The Rick Hart Lease Transfer Documents

The first, and primary, category of document requested by Ryom and Kedo as early as 31 August 2011 was a document or documents evidencing registration of the Rick Hart lease transfer.
The first two issues are:
(i)whether the Rick Hart Lease Transfer Documents were documentation relating to the Leases and their continuation after Settlement as Ryom and Kedo may reasonably require, and
(ii)whether Primewest was ready and willing to provide those documents, or whether they should be deemed to have been provided by Primewest.

Were the Rick Hart Lease Transfer Documents 'documentation relating to the Leases and their continuation after Settlement as the Buyer may reasonably require'?

The request by Ryom and Kedo for a document or documents evidencing the registration of the Rick Hart lease transfer fell within cl 4.2(c) for the following three reasons.
First, the plain meaning of the words 'documentation relating to the Leases and their continuation after Settlement' encompasses documentation which provides evidence of registration of the Rick Hart lease transfer. In a system of title by registration, documentary evidence of registration of the lease transfer 'relates to' the lease and its 'continuation after settlement'.
As I explain below in relation to the Requested Avanti Deed there is no warrant for implying further words into the subclause to limit the documentation relating to the Leases and their continuation after Settlement to exclude documentation which must be obtained from a third party such as Landgate.
Secondly, cl 3.1(a) of the Special Conditions of the Sale Contract provided that Primewest, 'to the extent possible at law', transfer and assign the benefit of each lease to Ryom and Kedo with effect from the date that settlement actually occurs. The provision of a document under cl 4.2(c), evidencing the registration of a transfer of one of the leases, is consistent with this obligation by ensuring that, consistently with a request, Ryom and Kedo have documents supporting the preservation of the benefit of each lease as assigned from settlement.
The same approach is evident in the relationship between cl 3.1(b) and cl 4.2(d). Clause 3.1(b) provides that Primewest agrees at settlement to provide 'such Notices of Attornment or other advice to tenants as may reasonably be required' by Ryom and Kedo to note the change in ownership of the Property and the assumption of the position of landlord under the various leases by Ryom and Kedo. Consistent with this obligation, cl 4.2(d) requires documentation concerning notices of attornment to be provided at settlement.
Thirdly, the request by Ryom and Kedo for documents evidencing the registration of the Rick Hart lease transfer was reasonably made.
As explained above, as early as 31 August 2011 Ryom's and Kedo's solicitors had told Primewest of their concerns arising from the lack of registration of the transfer of Clive Peeters Ltd's leasehold interest in the Property to Lesandu, including advice received from Senior Counsel that an unregistered lease for more than five years which is not protected by caveat will be extinguished upon registration of the transfer of title to the Property and will not be enforceable by Ryom.
Some of the forms for the registration of the Rick Hart lease transfer were dated 7 July 2011. And weeks before they issued a settlement notice, the solicitors for Primewest had told Ryom and Kedo, on 2 September 2011, that they were 'currently arranging to complete the registration' of the Rick Hart lease transfer and that '[w]e trust that this satisfies your concerns in relation to that particular matter'. As senior counsel for Primewest, Mr Zilko, accurately submitted, 'the full copy of the executed transfer of lease was provided to [Ryom and Kedo] so they knew as long ago as 2 September 2011 that [Primewest] had it and it was simply a matter of registering it.'[64]
[64] ts 61.
In light of this background it was entirely reasonable for Ryom and Kedo to request documents relating to registration of the Rick Hart lease transfer to be provided at settlement. The documents had been requested before a settlement notice had even been issued and Primewest had told Ryom and Kedo that they were arranging registration.
Indeed, subsequent events made the request for registration more important to Ryom and Kedo, not less so. Those subsequent events included:
(i)At all times prior to the date of settlement, the conduct of Lesandu, Harvey Norman, and their solicitors raised reasonable concerns that Lesandu might argue that it was not bound by the lease. Even as late as 21 October 2011, Hotchkin Hanly was writing to Lesandu's solicitors to inquire whether they denied that the lease was binding.
(ii)On 22 September 2011, Hotchkin Hanly, for Primewest, had said that they intended to register the Rick Hart lease transfer, although they suggested that they needed to notify Lesandu first and to obtain consent from Ryom and Kedo.
(iii)On 30 September 2011, Ryom and Kedo had expressed concerns (including based on enquiries made of Landgate) that the transfer of lease was not in registrable form because of the subsequent insertion by some person of Mr Carter's full name under his signature. Even when Hotchkin Hanly sent the forms to Landgate on 10 October 2011 they (understandably) did not provide any assurance that the transfer of lease would be registered by Landgate.
(iv)At 6 October 2011 the forms for registration of the Rick Hart lease transfer had not been lodged with Landgate and Hotchkin Hanly had not responded to the concerns expressed by the solicitors for Ryom and Kedo on 30 September 2011, nor had they explained why the forms for the registration of transfer had not yet been lodged.
Mr Zilko submitted, which I understand to be part of a submission that the registration of the transfer of the Rick Hart lease was not reasonably required, that under s 77 of the Property Law Act 1969 (WA) the lease ran with the title so 'there was no more to be done'.[65]
[65] ts 60.
Section 77(1) of the Property Law Act provides as follows:
77.Rent and benefit of lessee's covenants to run with reversion
(1)Rent reserved by a lease, and the benefit of every covenant or provision contained in the lease, having reference to the subject-matter thereof, and on the lessee's part to be observed or performed, and every condition of re-entry and other condition contained, shall be annexed and incident to and shall go with the reversionary estate in the land, or in any part thereof, immediately expectant on the term granted by the lease, notwithstanding severance of that reversionary estate, and without prejudice to any liability affecting a covenantor or his estate.
A similar submission was made by the holder of the reversionary interest in Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd.[66] In that case, Lighting by Design leased property from Parkworld Holdings Pty Ltd for a term of seven years with an option for a further five‑year term. Parkworld sold the property to Cannington Nominees Pty Ltd. Cannington Nominees had received legal advice that it was not bound by the terms of the Parkworld lease. Lighting by Design was aware of the sale of the property but it did not register the Parkworld lease or lodge a caveat to protect its interest. Soon after settlement, Cannington Nominees advised Lighting by Design that Cannington Nominees considered it was not bound by the Parkworld lease and proposed to re‑let the premises. Lighting by Design sought an order that the lease was still on foot.
[66] Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2007] WASC 88.

Master Sanderson described the argument of Lighting by Design as a submission that the combined effect of s 77 and s 78 of the Property Law Act was that all of the covenants under the lease go with the reversion upon the sale of the Cannington property. In contrast, the argument for Cannington Nominees was that s 68 of the Transfer of Land Act1893 (WA) prevailed and Lighting by Design's interest was destroyed at the time the property was transferred to the defendant.
Section 68(1) provides for the paramountcy of the estate of the registered proprietor. The exception in s 68(1A) as to leases includes only 'any prior unregistered lease or agreement for lease or for letting for a term not exceeding 5 years to a tenant in actual possession'. Both the Avanti lease and the Rick Hart lease exceeded five years.
Master Sanderson accepted the submission of Cannington Nominees:[67]
In my view, s 68 prevails in this case and the lease, being a lease for more than five years, was destroyed upon the defendant becoming the registered proprietor of the land. That conclusion is based upon my understanding of the decision of the High Court in the Leros case;[68] I accept the argument put by the defendant. I have also followed the decision of Austin J in Heggies.[69] In doing so, I am mindful that although the provisions of the Transfer of Land Act and the Property Law Act are not statutes of national application, there is sufficient identity between the regimes they embody to warrant a consistent national approach: see Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15; (1993) 177 CLR 485.
[67] Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2007] WASC 88 [32].
[68] Leros Pty Ltd v Terara Pty Ltd[1992] HCA 22; (1992) 174 CLR 407.
[69] Heggies Bulkhaul Ltd v Global Minerals Australia Pty Ltd [2003] NSWSC 851; (2003) 59 NSWLR 312.
A majority of the Court of Appeal upheld the appeal on a different ground concerning acts of part performance and the existence of an unregistered agreement between Cannington Nominees and Lighting by Design.[70] That point is not relevant to this case. It was not suggested in this case that there had been any conduct by the Avanti lessees or Lesandu which amounted to an agreement to lease between them and Ryom and Kedo, or an assignment of their leases by them, Primewest and Ryom and Kedo.[71]
[70] Lighting by Design (Aust) Pty Ltd v Cannington Nominees Pty Ltd [2008] WASCA 23; (2008) 35 WAR 520.
[71] ts 100.
Mr Zilko submitted that the decision of Master Sanderson was not binding upon me. However, apart from a reference to difficulty in confining s 77 of the Property Law Act to old system land, no other submission was made in any detail concerning why the decision of the learned Master on this point should not be followed. Nor was any other reason given to explain why doubt should be cast upon the learned Master's reasoning about the operation of s 77 of the Property Law Act and its relationship with s 68 of the Transfer of Land Act.
Although submitting that I should not follow the decision in Lighting by Design, no reference was made to any of the parliamentary history analysed in detail by the learned Master. No reference was made to the cases relied upon by the Master, including the decision of Austin J in Heggies. No mention was made of the interpretation considerations relied upon by the Master and referred to in the earlier decision of Buss JA (Steytler P agreeing) in Burton v Arcus.[72]
[72] Burton v Arcus [2006] WASCA 71 [139].
Nor was there any attempt to distinguish the decision in Lighting by Design from the circumstances of this case. No submission was made that any equitable assignment could arise, or had arisen. In any event, senior counsel for Ryom and Kedo submitted that there had been no assignment.[73] Nor was there any argument that Ryom and Kedo's interests were sufficiently protected by unregistered attornment notices concerning only payment of the rent under each lease without an assignment of the lease.
[73] ts 100.
It was not surprising that no substantial challenge was made to the decision in Lighting by Design nor that any attempt was made to distinguish it. The reason why the absence of any such detailed submission was not surprising is that the correctness of the decision in Lighting by Design is not critical to the outcome of this case. This is for two reasons.
First, not only does the decision in Lighting by Design represent the state of the law, but it was not suggested that the detailed reasoning of Master Sanderson could reasonably be disregarded by a person in the position of Ryom and Kedo.
Secondly, and as a matter of fact, both Ryom and Kedo on the one hand, and Primewest on the other, properly proceeded on the basis that there was uncertainty surrounding the enforceability of the Rick Hart lease transfer. Ryom and Kedo had taken senior counsel's advice and had told Primewest so. They had also told Primewest of their uncertainty about the Rick Hart lease transfer and the enforceability of the lease against Lesandu. Primewest had undertaken to register the transfer of lease. Nothing had subsequently ameliorated the uncertainty which Ryom and Kedo had about enforceability; if anything, uncertainty subsequently increased including uncertainty concerning whether the transfer of lease was in registrable form. Primewest did not, and could not, assure Ryom and Kedo that their legal position would be entirely unaffected by the absence of registration. Only the provision of documents which evidenced registration would fully alleviate these concerns.
It was reasonable for Ryom and Kedo to require that Primewest supply documents evidencing the registration of the transfer of lease at settlement.

Were the Rick Hart Lease Transfer Documents provided on 10 October 2011?

On 10 October 2011, the solicitors for Ryom and Kedo received from Hotchkin Hanly a copy of the documents which had been lodged by Primewest with Landgate for registration of the Rick Hart lease transfer.[74]
[74] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [9].
Between 10 October 2011 and 2 November 2011, the solicitors for Ryom and Kedo made regular and frequent inquiries at Landgate in relation to the registration of the Rick Hart lease transfer.[75] On each occasion Landgate responded that the Rick Hart lease transfer was still being processed and that the certificate of title to the Property was subject to dealing.[76] The same was true of a search of the certificate of title.[77]
[75] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [10].
[76] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [11].
[77] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [12].
However, Mr Zilko submitted that the effect of s 53(1) and s 56 of the Transfer of Land Act was that Ryom and Kedo knew on 10 October 2011 that the transfer had been registered.[78]
[78] ts 147.
Section 53 of the Transfer of Land Act provides as follows:
53.Priority of registration of instruments
(1)The Registrar shall register an instrument presented for registration in the order, and from the time, of its presentation.
(2)Instruments purporting to affect the same estate or interest have priority as between each other according to the time of registration and not according to the date of the instrument, notwithstanding any actual or constructive notice.
Section 56 provides:
56.Memorandum to state certain particulars
Every memorandum (other than a memorandum under Part IVA) entered in the Register shall state the date of lodgment for registration of the instrument to which the memorandum relates and such other particulars as the Registrar directs.
It was then submitted that s 58 of the Transfer of Land Act had the effect to transfer the interest in the Rick Hart lease to Lesandu as at 10 October 2011 which was the date that the forms were lodged with Landgate. Section 58 provides as follows:
58. Instruments not effectual until registered
No instrument until registered in manner herein provided shall be effectual to pass any estate or interest in any land under the operation of this Act or to render such land liable to any mortgage or charge or to make any dealing in respect of Crown land effective, as the case requires; but upon such registration the estate or interest comprised in the instrument shall pass or as the case may be the land shall become liable in manner and subject to the covenants and conditions set forth and specified in the instrument or by this Act declared to be implied in instruments of a like nature, or the dealing in respect of Crown land is made effective, as the case required.
There was no dispute that the proper construction of the request by Ryom and Kedo on 6 October 2011 that Primewest provide at settlement a registered transfer of lease under cl 4.2(c) of the Special Conditions of the Sale Contract ('other documentation relating to the Leases…') was a request (as pleaded) for 'a document or documents evidencing the registration of the Rick Hart lease transfer'. It was not submitted, nor could it be submitted, that the request should be construed as a request for forms evidencing merely the lodgment of a transfer of lease. Neither the literal meaning of the words on 6 October 2011 nor the purpose of the request could support such a construction.
It was an agreed by the parties that, as a matter of fact, the requested documentary evidence was not provided. The question is whether the provisions of the Transfer of Land Act quoted above has the fictitious effect of deeming the documents evidencing the registration of the Rick Hart lease transfer to have been provided on 10 October 2011. For three reasons those provisions did not have that effect.
First, the language of the sections of the Transfer of Land Act is concerned with the timing of registration, not the timing of provision of documentation which evidences registration. The 6 October 2011 request by Ryom and Kedo was a request for documents evidencing registration as cl 4.2(c) permitted. It was not a request that the forms for a transfer of lease be submitted to Landgate before registration so that (assuming that registration occurred) the transfer would be deemed to be registered by the time of settlement.
Secondly, the purpose of s 53(1), and its deeming effect, is concerned with creating priorities between competing registered interests. It deemed, as was recorded on the certificate of title,[79] registration as having occurred on 10 October 2011. But s 53(1) does not create any deeming effect for the purpose of separate contractual provisions between private parties, such as cl 4.2(c), which require provision of documentation.
[79] Exhibit 55.
Thirdly, the purpose of the request by Ryom and Kedo was for documents evidencing registration under cl 4.2(c) at the time of settlement. This was because, as Ryom and Kedo said in their 6 October 2011 letter, since 30 September 2011, they had identified concerns 'as to whether the transfer was in fact in registrable form, what might be required to make it so, and the fact that Lesandu might argue at a later point in time that the transfer is not capable of being registered or, if registered, that registration was not valid'. The purpose of Ryom and Kedo's request under cl 4.2(c) was for documentation to alleviate these concerns.
For these reasons I conclude that although registration was deemed to occur on 10 October 2011, at no time before the issue of a termination notice by Ryom and Kedo on 2 November 2011 was a document or documents evidencing the registration of the Rick Hart lease transfer provided to Ryom and Kedo.
Even when the action for specific performance was commenced by Primewest on 4 November 2011,[80] Primewest was not able to provide the documentation evidencing registration of the transfer of the Rick Hart lease. On 3 November 2011, a Landgate search still showed the Property as subject to dealing.[81] The registration of the Rick Hart lease transfer by Landgate, although backdated to 10 October 2011, did not occur until some time between then and 14 November 2011.[82] I consider that on the balance of probabilities Primewest did not obtain the documentation evidencing registration of title until some time after 4 November 2011. In any event, as I explain below, Primewest cannot satisfy its onus of showing that at the time it commenced its action it was ready, willing and able to perform this obligation.

The second and third requested documents: the Requested Avanti and Lesandu Deeds

[80] Exhibit H (statement of agreed facts and issues dated 18 October 2012) [37].

[81] Exhibit 52.

[82] Exhibit H (statement of agreed facts and issues dated 18 October 2012) [36].

As I explain below, it is sufficient to dispose of Primewest's claim to observe that at no time prior to the issue of its claim on 4 November 2011 was it ready or able to produce to Ryom and Kedo evidence of the registered transfer of title as had been reasonably requested under cl 4.2(c). However, as I explain below, I conclude also that Primewest was required to, but did not prove, that it was ready, willing and able to provide the Requested Avanti Deed.

What is a deed of affirmation?

The rarity of reference to such deeds in the modern law has caused some confusion. In the letters exchanged between the solicitors prior to settlement, as well as in the competing written and oral submissions at trial, there was much uncertainty about the meaning of the term 'deed of affirmation' in the Sale Contract. This was probably due to the absence of any substantial discussion of deeds of affirmation in any reported or unreported case in the last century. Nevertheless, the term 'deed of affirmation' (or 'deed of confirmation') has a long history which is consistent with the context in which that undefined term is used in the Sale Contract.
I do not accept that 'deed of affirmation' has the meaning suggested by either party. The submission by Primewest that it describes only a deed which corrects another deed should not be accepted. Nor should the submission by Ryom and Kedo that the deed of affirmation required an affirmation of the leases by the tenants in the terms in which the deeds of affirmation were drafted.
A strong guide to the meaning of the undefined term 'deed of affirmation' is its historical meaning. This meaning has not altered in contemporary usage. It is consistent with the literal meaning of the term. And it is consistent with the context in which the term is used in the Sale Contract.

The historical meaning of a deed of affirmation

As Sir John Dodderidge[83] explained in Sheppard's Touchstone, 'in ancient time [after the conquest] when feoffees were frequently disseised of their land upon some suggestion or other, charters of confirmation seem to have been in great request'.[84]
[83] To whom the authorship of Sheppard's Touchstone was widely attributed.
[84] Sheppard W, & Hilliard E, Touchstone of Common Assurances (7^th ed, 1820) 313.
A deed of affirmation, sometimes also called a deed of confirmation, was (and is) in form, a deed which confirms a grant. Bacon's Abridgement described a Deed of Confirmation as a 'mere Assent by Deed to the Grant'.[85] Sir Edward Coke explained the form of words often used in a deed of confirmation as follows:[86]
Know all men … that I … have ratified approved and confirmed to C … the estate and possession which I have of …
[85] Cunningham T (ed), & Bacon M, A New Abridgement of the Law (6^th ed, 1793) 389.
[86] Coke on Littleton, Chapter IX, s 515 'Of Confirmation'.
In substance, however, the deed could alter the grant in some situations. The standard definition of a deed of affirmation derives from the definitive Sheppard's Touchstone of Common Assurances:[87] 'A confirmation is the conveyance of an estate or the communication of a right that one hath in or unto land or tenements, to another that hath the possession thereof, or some estate therein, whereby a voidable estate is made sure and unavoidable, or whereby a particular estate is increased and enlarged.'
[87] Sheppard W, & Hilliard E, Touchstone of Common Assurances (7^th ed, 1820) 311.
In 1821, in the second edition of Barton's leading text on Elements of Conveyancing,[88] it was explained that a deed of confirmation was used in three distinct situations: (i) to confirm and make good a wrongful and defeasible estate or to make a conditional estate absolute (confirmatio perficiens); (ii) to increase and enlarge a rightful estate (confirmatio crescens); and (iii) to 'diminish and abridge the services whereby the tenant holds'; in other words to convert a conditional estate to an absolute estate (confirmatio diminuens).
[88] Barton C, Elements of Conveyancing: in theory and practice with cursory remarks upon the study of that science (2^nd ed, 1821) vol IV, 231 ‑ 232.
The primary category (confirmatio perficiens) is that which is relevant to this case. This category involved confirming a right to possession of a defeasible seisin or the making absolute of a conditional estate, although not an estate which is void because a void estate cannot be confirmed.[89] An example of the primary category of confirmation given by Blackstone, was of a deed of affirmation obtained by a lessee for a period of years:[90]
An instance of the first branch of the definition is, if tenant for life leaseth for forty years, and dieth during that term; here the lease for years is voidable by him in reversion: yet, if he [the reversioner] confirmed the estate of the lessee for years, before the death of tenant for life, it is no longer voidable but sure.
[89] Sheppard W, & Hilliard E, Touchstone of Common Assurances (7^th ed, 1820) 312.
[90] Blackstone, Book 2, s 446.
The requirements for a valid deed of affirmation were repeated in the leading conveyancing texts of the 18^th and 19^th centuries.[91] They are summarised below.
(i)The parties must have capacity; there must be a grant to be confirmed; and the deed must be sealed.
(ii)The person to whom the confirmation or affirmation is made must have a 'precedent' estate 'rightful or wrongful' or possession of the estate which is being confirmed. Otherwise there is nothing for the confirmation to work upon. Hence, 'a confirmation to him that hath nothing [viz: hath not any estate] in the land is void'.[92] Further, the precedent estate must not be void (such as a lease which has been surrendered).
(iii)The confirmor must have the interest to be entitled to affirm the estate.
(iv)The 'precedent estate' of the person to whom the confirmation is made must continue until the date of the confirmation.
(v)The confirmation must be lawful.
(vi)The proper words of confirmation must be used. The most common words used were 'I have confirmed ratified and approved' but it was also sufficient to use words such as 'I have given, granted or demised'.[93] Hence, the example was given of a valid deed of confirmation was a lessor who makes a deed confirming that he 'has given or granted' the land to the lessee, and delivers the deed to the lessee.
[91] Wood E, Complete Body of Conveyancing in Theory and Practice (3^rd ed, 1770) vol I, page 718; Sheppard W, & Hilliard E, Touchstone of Common Assurances (7^th ed, 1820) 312; Barton C, Elements of Conveyancing: in theory and practice with cursory remarks upon the study of that science (2^nd ed, 1821) vol IV, 232 ‑ 233.
[92] Sheppard W, & Hilliard E, Touchstone of Common Assurances (7^th ed, 1820) 314.
[93] Wood E, Complete Body of Conveyancing in Theory and Practice (3^rd ed, 1770) vol I, page 720.
As Wood explained, a deed of confirmation would recite the estate of the tenant which is to be confirmed and also the estate of the confirmor. The deed of confirmation could be made by indenture or by deed poll.[94] Unlike an indented deed between several parties, the deed poll was 'polled' or cut evenly consistent with its nature as a charta de una parte (unilateral promise).
[94] Wood E, Complete Body of Conveyancing in Theory and Practice (3^rd ed, 1770) vol I, page 721.

This issue - the absence of provision of a signed and stamped Transfer by Ryom and Kedo - was raised by an allegation of default by Ryom and Kedo's breach of cl 3.2, introduced on 3 September 2012.[124] The particular allegation of a lack of readiness, willingness and ability to perform due to failure to deliver the transfer was subsequently introduced on 27 September 2012.[125]
[124] Amended reply and defence to counterclaim [19].
[125] Re‑amended reply and defence to counterclaim [19].
The response of Ryom and Kedo to the allegation of a lack of readiness and willingness to perform was to admit that they did not deliver a signed and stamped Transfer of Land prior to the nominated settlement date, but to deny that they were in default of cl 3.2 of the General Conditions and to plead that they remained, at all material times, ready, willing and able to proceed to settlement. Ryom and Kedo also said that they were not required to deliver a signed and stamped Transfer of Land to Primewest because Primewest 'had intimated its unwillingness and/or inability to perform the obligations it had under Special Condition 4.2(c) of the [Sale Contract].'[126]

The assumptions at trial

[126] Amended reply to reply and defence to counterclaim [3].

One assumption upon which this trial of the counterclaim proceeded was that unless Primewest intimated its unwillingness or inability to perform its own obligations, the validity of the termination notice from Ryom and Kedo required them to be ready and willing to deliver a signed and stamped Transfer of Land to Primewest at the date for settlement, 14 October 2011.
This assumption may be questionable. There may be room for argument concerning whether the general law requiring a purchaser to be ready, willing and able to perform before terminating the contract is implied into the specific contractual scheme of termination under the General Conditions.[127] But this point was not raised at trial and it is not necessary to consider it.
[127] See SAS Global Forrestdale 2 Ltd v Claycorp Investments Pty Ltd as trustee for the Claycorp Investment Trust [2010] WASC 114 [111] (Beech J).
Nor was any submission made concerning the established law that a party in breach of a non-essential term is not prevented from terminating a contract for breach by the other party if the terminating party has not renounced the contract and if there is no causal relationship between the breach by the terminating party and that of the other party.[128] The alleged breach by Ryom and Kedo's failure to prepare a signed transfer was not a renunciation of the Sale Contract and did not cause Primewest's breach.
[128] Idameneo Pty Ltd v Ticco Pty Ltd [2004] NSWCA 329 [97] (Santow JA); Harry Ignatius Lantry v Tomule Pty Ltd [2007] NSWSC 81 [81](White J citing several other cases).
A second assumption upon which the pleaded case and submissions at trial proceeded was that if the proper construction of the Sale Contract was that the Requested Documents, or any of them, were reasonably required by Ryom and Kedo, within cl 4.2(c), to be produced then the notice of default issued by Ryom and Kedo was otherwise valid.
Primewest did not plead or submit that it could only be in breach of cl 4.2(c) by failing to provide the Requested Documents at the time of a conveyance which actually occurred. Nor was there any matter pleaded concerning the obligation by Ryom and Kedo, under cl 3.4 of the General Conditions, to notify Primewest of a time and place for settlement on 14 October 2011.
This assumption was correct. It is not necessary to consider whether a default notice could encompass an anticipatory breach of cl 4.2(c), because Primewest was in actual breach on 14 October 2011. In the context of the Special Conditions, the meaning of the words in cl 4.2(c) that '[u]pon Settlement the Seller must provide…' encompass both the actual provision of the documents at the times of completion of the conveyance as well as a readiness, willingness and ability to provide the documents on the date for settlement (ie 14 October 2011). As Mr Zilko correctly submitted, the obligation was 'to attend the settlement with [the documents]'.[129] That carries with it the readiness and willingness to do so.
[129] ts 49.
This construction is also supported by cl 4.2(a) which requires that Primewest provide 'upon settlement' clear and unencumbered title to the Property (subject to the specified encumbrances). That obligation must exist prior to, and independently of, the actual conveyance of that title.
Further, this construction of the obligation in cl 4.2(c), ie to attend with documents at the time of settlement irrespective of whether a conveyance actually occurs, contrasts with other obligations in the Special Conditions which were concerned with obligations at 'the date that Settlement actually occurs' or 'the Actual Settlement Date' (see, eg, cl 3.1(a), 4.2(h), 5.1, 5.2).
Finally, although the Special Conditions prevail over the General Conditions in the Sale Contract in the event of inconsistency (Special Condition 9.2(a)), the General Conditions are consistent with this construction. The General Conditions define Settlement as 'the completion of the Sale and Purchase of the Property in accordance with clause 3'. Clause 3 of the General Conditions imposes an obligation upon Primewest to complete Settlement on 14 October 2011 (cl 3.5(a)) and requires Primewest to deliver to Ryom and Kedo at settlement all documentation required to be delivered (cl 3.10(a)(4)).

Ryom and Kedo were ready and willing to perform

In their 6 October 2011 letter, the solicitors for Ryom and Kedo requested the solicitors for Primewest 'to confirm in writing by 12 pm Monday 10 October 2011 that [Primewest] will provide the required documents upon settlement'. The solicitors for Ryom and Kedo said that if 'we do not have a response from you within that timeframe, our clients will proceed on the basis that your client does not intend to comply with our clients' requirements'.
The solicitors for Ryom and Kedo did not at any time prior to issue of their termination notice on 2 November 2011 receive any of the Requested Documents or any correspondence, nor did they receive any indication that Primewest could or would provide any of the Requested Documents at settlement or any time after settlement.[130] Nor were the solicitors for Ryom and Kedo provided with the signed Avanti deed, or told that it had been signed, or told anything which would have suggested that it would be signed, prior to 2 November 2011.[131]
[130] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [6].
[131] Exhibit C (affidavit of Nicholas Emil Gvozdin sworn 17 May 2012) [8].
By 12 October 2011, the solicitors for Ryom and Kedo were correct in their response to Pye & Quartermaine's request for a signed transfer, saying that since Primewest was unwilling or unable to perform its obligations under cl 4.2(c) of the Sale Contract, Ryom and Kedo were not obliged to tender performance although Ryom and Kedo remained ready, willing and able to perform. The circumstances at that date, and the conduct of Primewest, amounted to an implied indication that Primewest would not, or could not, provide the Requested Avanti Deed (whether or not as a signed copy of the draft provided by Ryom and Kedo) or the Rick Hart Lease Transfer Documents at settlement.
In Killarney Investments Pty Ltd v Macedonian Community of WA (Inc)[132] a purchaser of land brought a claim for interest as compensation for late settlement. One issue raised by the vendor in a notice of contention was that the purchaser's claim should fail because the purchaser failed to tender a duly stamped and signed transfer as required by the contract for sale and was not therefore ready, willing and able to settle. Steytler P and McLure JA explained that[133]
[t]here is no doubt that the purchaser's inability to comply with its obligation in this respect prior to 1 May 2003 was a product of the vendor's breach. As EM Heenan AJA points out, it is settled that the refusal or inability of one contracting party to comply with its contractual obligations, rendering it impossible or pointless for the other party to perform, will absolve the innocent party from the obligation to perform: Cohen & Co v Ockerby & Co Ltd [1917] HCA 58; (1917) 24 CLR 288, 297; Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235, 246 - 247 (Dixon CJ). Moreover, there was no suggestion by the vendor, at any time after 7 July 2003, that it required the appellant to tender the transfer before performing its own obligations under the contract or that the performance of its obligations was in any way delayed as a consequence of delay by the purchaser in providing the transfer. Nor is there any suggestion that, if it had been asked to do so on or after 7 July 2003, the appellant would not immediately have been able to comply with its obligation in that respect (as it presumably did, when called upon to do so).
[132] Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180.
[133] Killarney Investments Pty Ltd v Macedonian Community of WA (Inc) [2007] WASCA 180.
With one difference, the same general factual pattern is present in this case. Mr Maddestra's affidavit evidence was that:[134]
If [Primewest] had at any time prior to the issue of the Termination Notice stated that it accepted that it was obliged to, or that it would, provide the Requested Documents at settlement I would have immediately thereafter:
a.instructed the solicitors for the Defendants to prepare a transfer of land in respect to the Property (Transfer of Land);
b.made arrangement for my wife … and I, both of us being directors of [Ryom and Kedo] to sign the Transfer of Land;
c.provided the solicitors for [Ryom and Kedo] with funds to pay the transfer duty assessed on the Contract so that the Transfer of Land could be 'stamped' with duty;
d.instructed the solicitors for [Ryom and Kedo] to pay the transfer duty assessed on the Contract with the funds provided and have the Transfer of Land stamped with duty; and
e.instructed the solicitors for [Ryom and Kedo] to provide the signed and stamped Transfer of Land to [Primewest's] nominated settlement representative; and
f.instructed the solicitors for [Ryom and Kedo] to do all such things necessary to proceed to settlement of the purchase of the Property.
[134] Exhibit E (affidavit of Dominic Maddestra sworn 17 October 2012) [5].
A difference from the general factual pattern in Killarney Investments Pty Ltd was that Primewest was not obliged to provide the Requested Lesandu Deed at settlement. But there was no plea, or submission, by Primewest that Ryom and Kedo would have been unwilling to provide the signed transfer if Primewest had agreed to provide the Rick Hart Lease Transfer and the Requested Avanti Deed (or the Avanti deed which was signed). Further, as Stephen, Mason and Jacobs JJ said in DTR Nominees Pty Ltd v Mona Homes Pty Ltd:[135]
No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.
[135] DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423, 432.
Although there may be real doubt whether it would make any difference to their power to terminate even if it were established that Ryom and Kedo were in breach but did not renounce the Sale Contract, I find that Ryom and Kedo were willing to perform by arranging for a stamped transfer of land document even though they expressed the wrong view about whether the Requested Lesandu Deed was required.
Mr Zilko also relied upon the decision in Jeppesons Road Pty Ltd v Di Domenico.[136] In that case the appellant agreed to sell two parcels of land to the respondents by two interdependent contracts. At the time for performance of one of the contracts, described as the caravan park contract, the appellant failed to tender the purchase price due to an inability to obtain funds. The respondents purported to terminate the contracts. The appellant argued at the time fixed for performance the respondents were not themselves able to perform their obligations by delivering to the appellant notices of attornment required under the contract to be delivered at settlement. Hence, the appellant submitted that the respondents were not entitled to terminate the contracts and the appellant sought specific performance.
[136] Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391.
The Queensland Court of Appeal allowed the appeal. In the leading judgment, Keane JA (as his Honour was then) explained that the provisions of the contract in relation to what is required to be provided at settlement are of critical importance because these obligations of a purchaser and a vendor were 'dependent, concurrent and reciprocal'.[137] Absent compliance by the vendor with those provisions, or proof of the vendor's readiness, willingness and ability to comply, the purchaser cannot be charged with breach of contract by reason of its failure to perform its dependent, concurrent and reciprocal obligation to tender the purchase price.[138]
[137] Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391 [21], referring to Beard v Wratislaw [1993] 2 Qd R 494, 503 (McPherson SPJ, Moynihan J agreeing).
[138] Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391 [21], referring to Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 396-398 (Mason CJ) 422 ‑ 423 (Brennan J).
However, nothing in that decision casts doubt upon the proposition that a person may be dispensed from performing a condition by the other party expressly or impliedly intimating that it is useless for him to perform it or requesting him not to do so. Indeed, Keane JA distinguished that scenario as 'radically different' explaining that 'the appellant's conduct was not such as to dispense with the need for the respondents to be ready, willing and able to perform their part of the bargain.'[139]
[139] Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391 [44].
The same is true of another decision relied upon by Mr Zilko and cited by Keane JA in Jeppesons Road Pty Ltd: this was the decision in Ireland v Leigh.[140] In that case, a vendor sought to terminate a contract based upon the purchaser's failure to tender the purchase price at settlement. The purchaser pointed to the vendor's failure to execute a transfer which the contract of sale required to be delivered at settlement. The majority of the Queensland Court of Appeal held that the vendor could not terminate because she was in breach of contract herself. If 'the purchaser had tendered performance at the office of the vendor's solicitor at the last moment of the working day the memorandum of transfer would still have been unexecuted and unstamped'.[141] But, once again, this was not a case in which the purchaser had expressly or impliedly intimated to the vendor that performance would be pointless.
[140] Ireland v Leigh [1982] Qd R 145.
[141] Ireland v Leigh [1982] Qd R 145, 151 ‑ 152 (Connolly J, Lucas SPJ agreeing); see also Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391 [34].
The counterclaim should be allowed and a declaration made that the Sale Contract was validly terminated by Ryom and Kedo on and from 2 November 2011.

Remedial issues: the availability of specific performance and the operation of mitigation

I have concluded that the action for specific performance, or for damages in lieu of specific performance, must be dismissed, and the counterclaim allowed for a declaration that the Sale Contract has been terminated. However, for the sake of completeness, I mention two other issues raised by Ryom and Kedo in the alternative.

Specific performance

Specific performance is available whenever damages are inadequate. In Coulls v Bagot's Executor and Trustee Co Ltd,[142] Windeyer J explained that the inadequacy concerned whether damages could 'satisfy the demands of justice'. His Honour explained, quoting Lord Selborne LC, that specific performance is awarded 'instead of damages only when it can by that means do more perfect and complete justice'.[143]
[142] Coulls v Bagot's Executor and Trustee Co Ltd [1967] HCA 3; (1967) 119 CLR 460, 503; see also Zhu v Treasurer of NSW [2004] HCA 56; 218 CLR 530, 574 ‑ 575 [128] (the Court).
[143] Wilson v Northampton and Banbury Junction Railway Co (1874) 9 Ch App 279, 284.
In Turner v Bladin,[144] the High Court said in a joint judgment, after citing numerous authorities for the proposition:
[W]here the contract is of such a kind that the purchaser can sue for specific performance, the vendor can also sue for specific performance, although the claim is merely to recover a sum of money and that he can do so although at the date of the writ the contract has been fully performed except for the payment of the purchase money or some part thereof.
[144] Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463, 473 (the Court).
One justification is the concept of reciprocity of specifically enforceable duties of vendor and purchaser.[145] Another is that damages are not adequate for the purchaser: he is entitled to divest himself of an interest in the property.[146]
[145] Turner v Bladin [1951] HCA 13; (1951) 82 CLR 463, 473 (the Court) citing Eastwood-Epping Ice & Fuel Co Ltd v Pittock (1938) 38 SR (NSW) 671, 677 (Nicholas J).
[146] Dougan v Ley [1946] HCA 3; (1946) 71 CLR 142, 150 (Dixon J, McTiernan J agreeing), referring to Eastern Counties Railway Co v Hawkes (1855) 5 HLC 331, 376; 10 ER 928, 945 (Lord St Leonards).
Ryom and Kedo submitted that if the counterclaim were dismissed, so that the Sale Contract remained on foot after 2 November 2011, but Primewest was not ready or willing to perform its obligations from the commencement of its suit on 4 November 2011, then the claim for specific performance should be refused and Ryom and Kedo should be confined to a claim for damages.
This submission is misconceived. Even if the Sale Contract were still on foot on 4 November 2011 then, as I have explained above, the inability of Primewest to perform its obligations under the Sale Contract on 4 November 2011 precludes either a claim for specific performance or a claim for damages.

Mitigation of loss

With a considerable degree of cooperation, and in a short period of time following directions prior to trial, the parties reached agreement on the external quantification of any damages award. The agreement was subject to one issue.[147] That issue was whether Primewest had failed to mitigate its loss by refusing an offer from Ryom and Kedo for purchase of the Property for $10.45 million rather than the initial purchase price of $12 million.
[147] Exhibit I (Agreed statement of facts in relation to damages dated 18 October 2012).
If it had been necessary to reach a conclusion on this issue I would have rejected the submission by Ryom and Kedo that Primewest failed to mitigate its loss by refusing this offer. There was no basis in the evidence upon which Ryom and Kedo could have satisfied their onus[148] of showing that Primewest's conduct in refusing an offer, on commercial grounds, was unreasonable. As McHugh J explained in Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd,[149] quoting the primary judge, Steytler J, who was in turn quoting Harvey McGregor QC:
The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken.
[148] TC Industrial Plant Pty Ltd v Robert's Queensland Pty Ltd [1963] HCA 57; (1963) 180 CLR 130, 138 (the Court).
[149] Unity Insurance Brokers Pty Ltd v Rocco Pezzano Pty Ltd [1998] HCA 38; (1998) 192 CLR 603, 617 [36].

This conclusion is further reinforced by the affidavit of Mr Bond who deposes to the commercial reasons for the decision to refuse the offer.[150]
[150] Exhibit F (affidavit of John Bryan Bond sworn 19 October 2012).
The expression of this conclusion is not to recognise or to endorse the general applicability of principles of mitigation to a claim for damages in lieu of specific performance.[151] Although there have been statements in some Australian courts that principles concerning mitigation of loss can apply to these claims for damages,[152] much may depend upon the nature of the claim for damages in lieu of specific performance. A decree of specific performance is an order which is made to 'ensure or encourage the performance of contracts rather than the payment of damages for breach'.[153] Where the award of damages in lieu of specific performance is sought to provide a money substitute for the performance, rather than compensation for consequential loss, it may be that restrictions upon availability of the money award will require exceptional circumstances which are more limited than those concerned with mitigation.[154] But it is unnecessary to consider this point or reach any conclusion upon it.
[151] Supreme Court Act 1935 (WA), s 25(10).
[152] ASA Construction Pty Ltd v Iwanov [1975] 1 NSWLR 512, 519 (Needham J); Mills v Ruthol Pty Ltd [2004] NSWSC 547; (2004) 61 NSWLR 1, 13 ‑ 14 [67] (Palmer J); Rosser v Maritime Services Board (No 2) (Unreported, NSWSC, Library No BC9604305, 17 September 1996) (Young J).
[153] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272, 286 [13] (the Court).
[154] Pourzand v Telstra Corporation Ltd [2012] WASC 210 [202] ‑ [207].

Conclusion

The claim by Primewest should be dismissed and the counterclaim by Ryom and Kedo should be allowed. The parties should confer upon the appropriate orders to give effect to these reasons and they should send by email to my associate an agreed minute, or competing minutes, within three working days.