Wesco Ventures Pty Ltd v Cecil Developments Pty Limited

[2020] NSWSC 98

Supreme Court

New South Wales

Medium Neutral Citation:

Wesco Ventures Pty Ltd v Cecil Developments Pty Limited [2020] NSWSC 98

Hearing dates:

12 February 2020

Decision date:

20 February 2020

Before:

Ball J

Decision:

(1)   An order that the defendants specifically perform clause 2.1(e) of the Deed of Release between the parties dated 1 August 2019 by the defendants, within 28 days, by providing to the plaintiffs' solicitors the agreement of each person who has an estate or interest in the Land to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry for the purposes of section 7.6 of the Environmental Planning & Assessment Act 1979 (NSW). This requires:

 

(a)   In respect of the first defendant's consent as registered proprietor of the Land, the provision of the first defendant's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; and

 

(b)   In respect of any other estate or interest holders in the Land, either:

 

(i)   The provision of those interest holder's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; or

 

(ii)   The discharge of any sum owed to the other estate or interest holders in the Land and the taking of all further steps necessary to remove their interest from the Land.

 

(2)   “Land” in these orders means the land with the following NSW Land Registry references:

 

(a)   Lot 6 DP 705913;
(b)   Lot 27 DP 15399;
(c)   Lot 1 DP 531559;
(d)   Lot 4 DP 531559;
(e)   Lot 5 DP 705913;
(f)   Lot 1 DP 581293;
(g)   Lot 3 DP 581293;
(h)   Lot 2 DP 581293;
(i)   Lot 4 DP 581293;
(j)   Lot 1 DP 547897;
(k)   Lot 2 DP 547897;
(l)   Lot 1 DP 591676;
(m)   Lot 2 DP 591676;
(n)   Lot 20 DP 15399;
(o)   Lot 6 DP 29141;
(p)   Lot 5 DP 29141;
(q)   Lot 21 DP 778585; and
(r)   Lot 22 DP 77855.

 

(3)   Liberty to the defendants to apply in relation to the time by which they have to comply with order (1).

 

(4)   Subject to order (5), the defendants pay the plaintiffs’ costs.

 (5)   Liberty to any party to apply to vary order (4) within 14 days of the date of this judgment.

Catchwords:

CONTRACTS – parties – whether all parties to contract must be joined
CONTRACTS – breach of contract – whether breach of an obligation to “procure” a result where no time specified for compliance with the obligation
CONTRACTS – remedies – specific performance – whether damages provide an adequate remedy

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW)
Hills Local Environmental Plan 2012

Cases Cited:

Boyarsky v Taylor [2008] NSWSC 1415; 14 BPR 26,553
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410
Pasedina (Holdings) Pty Ltd v Khouri (1977) 1 BPR 9460
Wilson v Northampton and Banbury Junction Railway Co (1874) LR 9 Ch App 279
Wong v Van Vlymen [2016] NSWSC 161

Texts Cited:

J D Heydon, Heydon on Contract (2019, Lawbook Co)
J D Heydon, M J Leeming, P G Turner, Meagher, Gummow & Lehane’s Equity Doctrines & Remedies, (5th ed, 2015, LexisNexis Butterworths)

Category:

Principal judgment

Parties:

Wesco Ventures Pty Ltd (First Plaintiff)
Tony Merhi (Second Plaintiff)
Globe Capital Administration Pty Ltd (Third Plaintiff)
Merck Property Pty Ltd (Fourth Plaintiff)
Cecil Developments Pty Limited (First Defendant)
Marlas Zhu (Second Defendant)
Parkroyal Investments Pty Ltd (Third Defendant)

Representation:

Counsel:

 

P Reynolds (Plaintiffs)
B Hancock (Defendants)

  Solicitors:
Madison Marcus (Plaintiffs)
Paul Bard Lawyers (Defendants)

File Number(s):

2019/346617

Judgment

Introduction

1. In these proceedings, the plaintiffs seek an order for specific performance requiring the defendants to take certain steps to implement an agreement by which the defendants obtained from the plaintiffs an interest in a proposed development in Cecil Avenue in Castle Hill, New South Wales (the Development). As part of that agreement, the third defendant, Parkroyal Investments Pty Ltd (Parkroyal), agreed to pay to the third plaintiff, Globe Capital Administration Pty Ltd (Globe), the sum of $29,000,000 (originally, $38,000,000) on the gazettal of an amendment to the Hills Local Environmental Plan 2012 which approved a change in the zoning applicable to the land the subject of the Development (the Gazettal) by 5.00pm on 26 August 2020 (originally, 26 May 2020). The Gazettal is necessary in order to for the land to be rezoned in the way sought. The steps the plaintiffs say the defendants should take are said to be necessary or desirable in order to achieve Gazettal and trigger the obligation to pay the $29,000,000.

Background

2. The second plaintiff, Mr Merhi, is a well-known property developer. The first plaintiff, Wesco Ventures Pty Ltd (Wesco), Globe and the fourth plaintiff, Merck Property Pty Ltd (Merck), are companies associated with him.

3. By 2017, Merck and another company associated with Mr Merhi, Nordea Capital Pty Ltd (Nordea), had acquired a parcel of land, and options over a further 17 parcels of land, on Cecil Avenue, Castle Hill for the purpose of development and resale.

4. On 26 May 2017, the parties entered into an agreement for subscription and redemption of units (the Subscription Agreement) by which:

1. Wesco, which held the shares in the first defendant, Cecil Developments Pty Ltd (Cecil), the trustee of a unit trust, redeemed those shares and the units it held in the trust;

2. Parkroyal, a company controlled by the second defendant, Mr Zhu, subscribed for an equivalent number of shares and units in Cecil and the trust for a subscription price of $12,000,000;

3. Cecil agreed to pay a redemption price of $12,000,000 to Wesco;

4. Wesco agreed to cause 97A Cecil Street (the property in Cecil Street already owned by an entity associated with Mr Merhi) to be transferred to the trust on or before Completion for a price of $3,650,000;

5. Globe took responsibility for lodging a planning proposal (as that term is defined in the Environmental Planning and Assessment Act 1979 (NSW) (the EPA Act)) with the Hills Shire Council on behalf of the trust for the purpose of seeking Gazettal;

6. if Gazettal was obtained, Parkroyal would pay Globe $38,000,000 on completion (which had to occur no later than three years after the date of the agreement – that is, by 26 May 2020).

5. It is plain that the Subscription Agreement contemplated that Merck and Nordea would nominate Cecil as the trustee of the trust as the entity entitled to exercise each option granted to them, although the mechanism by which that happened is not apparent from the evidence. In any event, at some stage before the events giving rise to these proceedings occurred, Cecil acquired all 18 properties and borrowed money from a number of financiers to enable it to do so. The borrowings from individual financiers were secured by mortgages over the individual parcels of land.

6. On 10 October 2017, the parties executed a variation to the subscription agreement. The variation agreement is not material to the current dispute.

7. On 22 December 2017, Cecil, Mr Zhu, Wesco, Parkroyal and Mr Merhi entered into a director deed by which Mr Merhi resigned as a director of Cecil and Mr Zhu was appointed in his place (the First Deed). Under the terms of that deed, Mr Zhu relevantly agreed that all decisions taken for and on behalf of Cecil had to be approved by Wesco and that he otherwise would act on the instructions of Wesco in all respects.

8. On or about 30 January 2018, Cecil, Mr Zhu, Wesco, Parkroyal and Mr Merhi entered into a second director deed (the Second Deed) and at the same time Parkroyal became the sole shareholder in Cecil. Under the terms of the Second Deed, Mr Zhu agreed that all decisions made for and on behalf of Cecil must in the first instance be approved by Mr Merhi in writing and that he must not execute any document on behalf of Cecil without first obtaining the prior written approval of Mr Merhi and that he otherwise agreed to act on the instructions of Mr Merhi in all respects with respect to any business of Cecil.

9. A dispute arose between the parties concerning the transfer of 97A Cecil Avenue to Cecil and the payment of the purchase price in respect of that transfer.

10. On 1 August 2019, the parties settled the dispute and a related dispute concerning whether Cecil or Mr Zhu was obliged to execute a voluntary planning agreement that had been negotiated with the Hills Shire Council (the VPA).

11. The deed of release relevantly contained the following term:

2.1   The parties have agreed to resolve the Dispute on the following terms:

(a)   (variation to Subscription Agreement): on the Deed Date, the parties (other than Merhi and Merck) will execute and exchange the Deed of Variation;

(b)   …

(e)   (exchange and registration of VPA): from the Deed Date, Merck and the Plaintiffs are authorised to do all things necessary to facilitate the exchange of the VPA with the Hills Shire Council and the Defendants must do all things necessary to procure and permit registration of the VPA against the title of each parcel of Land;

…

12. “Deed Date” is defined in cl 1.1 as “the date of this Deed”, which is 1 August 2019.

13. Under the terms of the Deed of Variation referred to in cl 2.1(a) of the Deed of Release, the amount payable on Gazettal was reduced to $29,000,000 and a new cl 5.4 was inserted which provided:

In the event that Gazettal is not procured by 5.00pm on 26 August 2020, the Service Payment shall not be payable and Completion will occur on 29 August 2020, notwithstanding the definition of Completion or Completion Date.

14. “Plaintiffs” is defined in the Deed of Release to mean Wesco, Globe and Mr Merhi. “Defendants” is defined to mean Cecil, Mr Zhu and Parkroyal.

15. On 21 August 2019, the Hills Shire Council, Merck as developer and Cecil and Merck as landowners executed the VPA.

16. Clause 27 of the VPA relevantly provides:

Registration of document on Title

27.1   Acknowledgement

The Developer and the Land Owners acknowledge that Council intends to register this document under section 7.6 of the Act on the Land and on registration by the Registrar-General the document will be binding on and enforceable against the owners of the Land from time to time as if each owner for the time being had entered into this document.

27.2   Consents to Registration

This document must be registered on the title of the Land by the Land Owners within sixty (60) days after it is entered into between the parties. Each Party must promptly execute any document and perform any action necessary to effect the registration of this document on the title of the Land.

17. Clause 22 of the VPA provides:

This Agreement will terminate in the event that the Instrument Change does not occur.

18. “Instrument Change” is a reference to the Gazettal.

19. It is relevant to observe that the VPA does not contain an express provision permitting the Council to terminate the VPA if the VPA is not registered in accordance with cls 27.1 and 27.2. However, it appears to be common ground that the Council may elect not to proceed with the Gazettal at any time.

20. Under s 7.6 of the EPA, a planning agreement can be registered if relevantly each person who has an estate or interest in the land agrees.

21. As I have said, different parcels of land are the subject of registered mortgages held by different lenders. In all, five lenders hold mortgages over one or more of the parcels of land. It is not clear when those mortgages were granted, but it seems clear that they were in place by the time the Deed of Release was executed.

22. Commencing on 16 September 2019, Madison Marcus, the solicitors for the plaintiffs, sent a number of emails to Paul Bard, the solicitors for the defendants, asking what was happening in relation to the production of the certificates of title to enable registration of the VPA.

23. In fact, it appears that Cecil took no immediate steps to obtain the consent of the mortgagees to registration of the VPA. Ms Fay Baker, a financial adviser to Cecil, deposes to a conversation she had in or about late October 2019 with a (unnamed) representative of one of the lenders who said that that lender would not produce the relevant certificates of title to enable registration of the VPA. She deposes to other conversations with representatives of other (again unnamed) representatives of other lenders in October and November 2019. One is said to have refused to agree to registration. Another was prepared to consider it if the loans and securities were consolidated, subject to legal advice. A third is alleged to have said that it wanted to be repaid immediately.

24. Finally, in response to an email from Madison Marcus sent on 18 October 2019, Paul Bard replied on 21 October 2019 saying:

We are instructed that our client is in the process of consolidating the finance arrangements so as to effect a single mortgagee for all the lots. It is intended to effect registration of the VPA as part of that process. In the circumstances, it has been impossible to effect separate registrations before such consolidation takes place.

25. Madison Marcus responded in detail to that email on 22 October 2019 alleging that the defendants were in breach of the Deed of Release and threatening to relist the earlier proceedings or commence new proceedings if the certificates of title were not produced by 28 October 2019.

26. On 29 October 2019, Marsdens, the solicitors acting for the Council, wrote to Madison Marcus seeking details of the third parties whose consent would be required for registration of the VPA. By an email dated 29 October 2019, Madison Marcus sought that information from Paul Bard.

27. On 4 November 2019, the plaintiffs commenced these proceedings and sought expedition of the application for specific performance, which was granted. The plaintiffs make a separate claim for damages. However, that claim is not currently before the Court.

28. On 15 November 2019, Marsdens wrote to Madison Marcus saying relevantly:

2.1   In relation to the registration of the Agreement on the title of the Land, please advise what steps have been taken by the Land Owner with respect to the registration of the Agreement, and when the consents to that registration from third parties will be available.

2.2   In that regard, we note that clause 27.2 of the Agreement requires the Land Owners to register the Agreement on the title of the Land within sixty (60) days of the Agreement being entered into by the parties. The Land Owners are presently in breach of this obligation.

2.3   Accordingly Council has instructed that unless the Agreement is registered on the title of the Land within seven (7) days, Council will take steps to contact the relevant third parties to ensure that their consent to the registration is obtained and the Agreement registered.

2.4   Any costs incurred by Council in that regard will be payable by the Land Owner.

2.5   Council also continues to reserve its rights with respect to the breach of the Agreement by the Land Owners.

29. On 15 November 2019, Madison Marcus sent a copy of that letter to Paul Bard. That letter put the defendants on notice of a claim for damages if there were any further delays in the registration of the VPA or the VPA was terminated for a breach of cl 27.2. The letter also requested that Cecil cease contacting the Council in relation to the Gazettal.

30. On 21 November 2019, Paul Bard responded to that letter stating that “Our clients are well advanced in the process of obtaining … consolidated finance, however, negotiations are confidential and specific details cannot be disclosed either to your client or the Council until finalised.” The letter also stated that Cecil did not intend to cease contacting the Council on the basis that “Our client is a party to the VPA and are entitled to correspond directly with the Council”.

31. On the same day, Paul Bard wrote to the Council giving contact details for the lenders and again asserting that “Our clients are advanced in obtaining consolidated finance, however, negotiations are confidential and specific details cannot be disclosed until finalised. Our clients expect registration of the VPA will occur at the same time as registration of the consolidated financier’s securities”.

32. On 28 November 2019, Madison Marcus responded to that letter and, relying on the Second Deed instructed “that your client cease contacting Council … in relation to the Gazettal unless the communication is in writing and you have obtained Mr Merhi’s prior consent in writing to the communication”.

The orders sought

33. Originally, the plaintiffs sought orders which broadly reflected the contractual obligations they were seeking to enforce.

34. However, during the course of the hearing they indicated that the order they sought was in the following terms:

An order that the Defendants specifically perform clause 2.1(e) of the Deed of Release between the parties dated 1 August 2019 (Release Deed) and the First Defendant perform clause 27.2 of the Voluntary Planning Agreement between the Hills Shire Council, the Fourth Plaintiff and the First Defendant dated 21 August 2019 (VPA) by the Defendants, within 7 days, providing to the Plaintiffs' solicitors the agreement of each person who has an estate or interest in the Land to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry for the purposes of section 7.6 of the Environmental Protection & Assessment Act 1979 (NSW). This requires:

(a)   In respect of the First Defendant's consent as registered proprietor of the Land, the provision of the First Defendant's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; and

(b)   In respect of any other estate or interest holders in the Land, either:

(i)   The provision of those interest holder's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; or

(ii)   The discharge of any sum owed to the other estate or interest holders in the Land and the taking of all further steps necessary to remove their interest from the Land.

35. “Land” is defined in the order to be the 18 parcels of land in Cecil Street that are the subject of the Development.

Consideration

36. The Court will grant an order for specific performance of a contract but only when “it can by that means do more perfect and complete justice” than it could by an award of common law damages: see J D Heydon, M J Leeming, P G Turner, Meagher, Gummow & Lehane’s Equity Doctrines & Remedies, (5th ed, 2015, LexisNexis Butterworths) at [20-030], quoting Lord Selbourne in Wilson v Northampton and Banbury Junction Railway Co (1874) LR 9 Ch App 279 at 284. J D Heydon in Heydon on Contracts, (2019, Thompson Reuters) at [27.180] summarised the position in these terms:

In outline, damages are seen as inadequate where there is a contract for the sale of land; or where there is a contract for the sale of property which is difficult to buy on a market (for example, a beautiful or rare chattel or shares in a company not available or readily available); or where there is a contract for the sale of a ship because of difficulties, for example, in acquiring another ship quickly; or where there are successive breaches of a continuing obligation necessitating repeated actions for damages at law; or where there is a contract in favour of a third party; or where damages are hard to calculate; or perhaps where the defendant is unlikely to pay damages.

37. In the present case, the defendants seek to resist an order for specific performance on four grounds. First, they say that the plaintiffs have not established that the defendants are in breach of contract. Second, they say that the plaintiffs have not established a link between registration of the VPA and Gazettal. Third, they say that the plaintiffs have not established a loss and not all parties to the VPA have been joined. Fourth, they take objection to the form of the order. It is convenient to deal with each of these issues in turn.

No breach

38. The plaintiffs sue on two agreements. The first is the Deed of Release and, in particular, the obligation in cl 2.1(e) that “the Defendants must do all things necessary to procure and permit registration of the VPA against the title of each parcel of Land”. The second is the obligation in cl 27.2 of the VPA that the document must be registered within 60 days and “Each Party must promptly execute any document and perform any action necessary to effect the registration of this document on the title of the Land”.

39. The defendants admit that the VPA was not registered within 60 days and to that extent there has been a breach of the first sentence of cl 27.2 of the VPA. However, the only parties to the VPA are the Council, Merck and Cecil. The Council is not a party to the proceedings. Any breach of that sentence is by Cecil (and Merck) alone. It has already occurred. On the other hand, there is no breach of the second sentence of cl 27.2. Consequently, there is no basis on which an order for specific performance would be justified, since Cecil is promptly doing everything necessary to effect registration of the VPA. In particular, it is seeking to refinance Cecil’s existing borrowings so that it will be in a position to obtain the consent of the lender to registration, which is necessary under s 7.6 of the EPA.

40. Similar points can be made in relation to cl 2.1(e) of the Deed of Release. That clause does not state by when the Defendants must “do all things necessary to procure and permit registration of the VPA”. In any event, for the reasons already given the defendants are doing everything necessary to achieve that result.

41. I do not accept those submissions.

42. Clause 2.1(e) of the Deed of Release relevantly provides that “from the Deed Date … the Defendants must do all things necessary to procure and permit” registration of the VPA. It is plain that the Defendants did not comply with this obligation. So far as the evidence goes, it appears that the defendants did nothing at all to procure registration of the VPA before Ms Baker made her half-hearted attempts to obtain the consent of existing lenders to registration in or about October 2019. It seems that at about the same time the defendants started negotiations to consolidate the borrowings (presumably of Cecil), with the intention of obtaining the consent of the replacement lender at the same time. There is no evidence concerning the precise steps they have taken. It is, of course, for the plaintiffs to prove that the defendants are in breach of the Deed of Release. However, the steps taken by them are peculiarly within their knowledge and, in the absence of any real evidence of what they have done, it can be inferred that at least until recently they have done very little, given that that was undoubtedly the position before October 2019.

43. It is true that cl 2.1(e) does not set out a specific timeframe by when the defendants were to have procured registration. However, that does not alter the fact that under the clause they were required to commence taking steps from the Deed Date, and they did not. Moreover, the evidence is inadequate to conclude that despite the breaches that have occurred, the defendants are now taking all the steps they could to procure registration as soon as possible. For those reasons it could not be said that an order for specific performance is unnecessary.

44. The position in relation to cl 27.2 of the VPA is similar. Mr Hancock submitted that the two sentences of that clause were to be understood as imposing independent obligations. The first sentence imposed an obligation to register the VPA within 60 days. He accepted that there had been a breach of that obligation. The second sentence imposed an obligation on Cecil (not the other defendants) to execute documents and perform other actions that were necessary to effect registration, but was not limited as to time.

45. I accept that cl 27.2 of the VPA only imposed obligations on Cecil (and Merck), but not the other defendants. But I do not accept that the second sentence should be read independently of the first. The first sentence required registration by a specific date. The second sentence imposed obligations directed at achieving that result. For the reasons already given, Cecil is in breach of those obligations.

The link between the VPA and Gazettal

46. To phrase the issue in terms of whether there is a link between the VPA and Gazettal is to misstate the issue. The question is whether damages would provide an adequate remedy for the breaches that have occurred or whether an order for specific performance would do more perfect and complete justice between the parties.

47. It seems plain that Gazettal will not proceed without the VPA. The VPA is obviously the price that Cecil and Merck are paying to obtain the Gazettal. Clause 22 of the VPA makes that clear.

48. It is unclear how significant registration of the VPA is to the Council, but it cannot be dismissed as irrelevant, given that it is a requirement of the VPA that clearly operates for the Council’s benefit. Conversely, it is unclear whether Gazettal will proceed without registration of the VPA. It may fail or not be achieved by the date set out in the amended Subscription Agreement for other reasons. If it is achieved within time, then it is difficult to see how the plaintiffs have suffered any loss as a consequence of the breaches to date. But if it is not and if the VPA is not registered, difficult questions may arise about the reasons that Gazettal was not achieved. One reason could be the absence of registration. But there could be others. In those circumstances, any damages claimable by Globe in respect of the loss of the $29,000,000 may have to be assessed as the loss of a chance. That will be both difficult and imperfect. Imperfect because any loss of a chance case will depend on an assessment of the prospect that Gazettal would have been achieved if the VPA had been registered, or registered earlier, which necessarily involves a large degree of guesswork. An order for specific performance will not eliminate these difficulties altogether. If the VPA is registered late and if Gazettal is not achieved within time, it may still be argued that it was the delay in registration that caused Gazettal not to be achieved within time. But an order for specific performance will greatly reduce the room for argument, particularly if it is made and complied with well before the date by which Gazettal must be achieved. For that reason, in my opinion it provides a more complete and satisfactory remedy than simply leaving the plaintiffs to a claim for damages.

No loss and the absence of the Council

49. These issues only arise to the extent that Merck seeks specific performance of the VPA. Having regard to the conclusions I have reached in relation to the claim under the Deed of Release, they are not significant in the context of the current dispute.

50. Had the only breach been a breach of the VPA, I would not have been inclined to grant specific performance of cl 27.2. That clause has been inserted in the agreement for the benefit of the Council. That is made plain when it is read with cl 27.1. Clause 27.1 contains an acknowledgment by Cecil and Merck that the Council intends to register the VPA. Clause 27.2 has been included because the conditions that need to be satisfied to permit registration are not within the Council’s control. Although cl 27.2 is directed at all the parties, it is included for the Council’s benefit so that the Council can bring to fruition the intention recorded in cl 27.1. The clause was not included for the benefit of Merck, let alone Globe, which is not a party to the VPA. In those circumstances, it is difficult to see why Merck should be entitled to obtain specific performance of the clause.

51. On the other hand, if Merck is entitled to an order for specific performance, the absence of the Council as a party is not a reason for refusing the order. Normally, it would be appropriate for all parties to an agreement to be joined as parties to the proceedings in which an order for specific performance of the agreement is sought. It may be necessary to join other parties affected by the order as well: see News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 525. However, in the present case, no order is sought against the Council; and the order only operates to the Council’s benefit. Given that, joinder is not necessary.

The form of the order

52. The defendants raised various objections to the form of the order for specific performance. However, most of those objections related to the form of the order as originally sought.

53. The effect of the order now sought by the plaintiffs is to require Cecil to give its consent to registration within seven days. It is not suggested that there is any difficulty in complying with that order. The order also requires the defendants within seven days either to procure the agreement of the mortgagees of the land the subject of the Development to give their consent to registration of the VPA or to pay out those mortgagees. Obviously, that order could be complied with by the defendants arranging to substitute for mortgagees unwilling to give their consent one or more mortgagees who were willing to give their consent.

54. The defendants took objection to the second limb of the orders that were sought. However, their objection was not to the order as such. It was not suggested that they could not substitute for the existing mortgagees mortgagees who were willing to give their consent. Rather, their objection was to the requirement that that happen within seven days. They did not seriously object to a suggestion from the Court that the relevant timeframe be 28 days with liberty to apply for additional time if, despite every effort, they had been unable to achieve a refinancing within the 28 days. It was for the defendants to prove that it was impossible to comply with the order for specific performance or that compliance would cause such hardship that the Court in the exercise of its discretion ought to refuse the order: Pasedina (Holdings) Pty Ltd v Khouri (1977) 1 BPR 9460 at 9460-1, quoted with approval by Brereton J in Boyarsky v Taylor [2008] NSWSC 1415; 14 BPR 26,553 at [33]f. See also Wong v Van Vlymen [2016] NSWSC 161 at [43]ff per Stevenson J. The defendants have not done that.

55. It follows that, subject to the variations referred to in the previous paragraph, the form of the order now sought does not provide a ground for refusing specific performance.

Conclusion, costs and orders

56. The plaintiffs should be entitled to an order for specific performance of cl 2.1(e) of the Deed of Release in the terms they seek, except that the defendants should be given 28 days to comply with the order and be given liberty to apply.

57. The plaintiffs have been substantially successful in the case. There is no apparent reason why they should not be entitled to an order for costs. However, I will give the parties an opportunity to make submissions on costs if they seek a different order from the one that I have indicated should be made.

58. The orders of the Court, therefore, are:

1. An order that the Defendants specifically perform clause 2.1(e) of the Deed of Release between the parties dated 1 August 2019 by the Defendants, within 28 days, by providing to the Plaintiffs' solicitors the agreement of each person who has an estate or interest in the Land to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry for the purposes of section 7.6 of the Environmental Planning & Assessment Act 1979 (NSW). This requires:

1. In respect of the First Defendant's consent as registered proprietor of the Land, the provision of the First Defendant's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; and

2. In respect of any other estate or interest holders in the Land, either:

1. The provision of those interest holder's agreement to the registration of the VPA on the title of the Land in a form acceptable to the NSW Land Registry; or

2. The discharge of any sum owed to the other estate or interest holders in the Land and the taking of all further steps necessary to remove their interest from the Land.

2. “Land” in these orders means the land with the following NSW Land Registry references:

1. Lot 6 DP 705913;

2. Lot 27 DP 15399;

3. Lot 1 DP 531559;

4. Lot 4 DP 531559;

5. Lot 5 DP 705913;

6. Lot 1 DP 581293;

7. Lot 3 DP 581293;

8. Lot 2 DP 581293;

9. Lot 4 DP 581293;

10. Lot 1 DP 547897;

11. Lot 2 DP 547897;

12. Lot 1 DP 591676;

13. Lot 2 DP 591676;

14. Lot 20 DP 15399;

15. Lot 6 DP 29141;

16. Lot 5 DP 29141;

17. Lot 21 DP 778595; and

18. Lot 22 DP 778595.

3. Liberty to the defendants to apply in relation to the time by which they have to comply with order (1).

4. Subject to order (5), the defendants pay the plaintiffs costs.

5. Liberty to any party to apply to vary order (4) within 14 days of the date of this judgment.

**********

Decision last updated: 20 February 2020