Le v Qureshi[2003] QDC 442

DISTRICT COURT OF QUEENSLAND

1. [1]
   This is the plaintiff-purchasers’ application for summary judgment for specific performance against the defendant-vendors. The claim was filed as 3178 of 2003 on 24 September 2003. For some reason which has not been made clear, when the “application” was brought in for filing it was re-entitled “originating application” and given a separate file number, with the consequence that the plaintiffs became obliged to pay additional fees of $428.60. The Contract Date of the parties’ agreement, in the Law Society-REIQ Form (5^th ed.) is 7 July 2003, the Settlement Date “6 weeks from the date of contract”, which was 18 August 2003 The contract price is $220,000 including a deposit of $11,000, for the subject property, land and residence constructed on it; material before the court indicates that the Valuer General’s valuation of the land, unimproved, relevant for purposes of the court’s jurisdiction is $74,000, well within the jurisdictional limit

2. [2]
   In a rising market (of which there is evidence before the court), the defendants say they have terminated the agreement for failure of the plaintiffs to deliver transfer documents in time. The Terms of Contract provide:

“6.1Time is of the essence of this contract, except regarding any agreement between the parties on a time of day for settlement.

5 Settlement provides, in part:

“5.1 Time and Date

3. (1)
   Settlement must occur between 9am and 5pm on the Settlement Date.

3. (2)
   If the parties do not agree on where settlement is to occur, it must take place in the Place for Settlement at the office of a solicitor or Financial Institution nominated by the Seller, or, if the Seller does not make a nomination, at the land registry office in or nearest to the Place for Settlement.

5.2Transfer Documents

3. (1)
   The Transfer Documents must be prepared by the Buyer’s Solicitor and delivered to the Seller a reasonable time before the Settlement Date.

3. (2)
   If the Buyer pays the Seller’s reasonable expenses, it may require the Seller to produce the Transfer Documents at the Office of State Revenue nearest the Place for Settlement for stamping before settlement.

5.3Documents and Keys at Settlement

3. (1)
   In exchange for payment of the Balance Purchase price, the Seller must deliver to the Buyer at settlement:

1. (a)
   any instrument of title for the Land required to register the transfer to the Buyer.

2. (b)
   unstamped Transfer Documents capable of immediate registration after stamping:

3. (c)
   keys …”

9. Buyer’s Default commences:

“9.1Seller May Affirm or Terminate

If the Buyer fails to comply with any provision of this contract, the Seller may affirm or terminate this contract.

  9.2If Seller Affirms

If the Seller affirms this contract under clause 9.1, it may sue the Buyer for:

(1)damages;

(2)specific performance; or

(3)damages and specific performance.

9.3If Seller Terminates

If the Seller terminates this contract under clause 9.1, it may do all or any of the following:

(1)resume possession of the Property:

(2)forfeit the Deposit and interest earned on its investment;

(3)sue the Buyer for damages;

(4)resell the Property.

9.4Resale

3. (1)
   The Seller may recover from the Buyer as liquidated damages:

(a)any deficiency in price on a resale; and

(b)its expenses connected with this contract, any repossession, any failed attempt to resell, and the resale;

provided the resale settles within 2 years of termination of this contract.

3. (2)
   Any profit on a resale belongs to the Seller.

9.5Seller’s Damages

The Seller may claim damages for any loss it suffers as a result of the Buyer’s default, including its legal costs on a solicitor and own client basis and the cost of any Work or Expenditure under clause 7.6(2).”

There should be noticed some of the provisions of 10 General:

“10.3 Duty

The Buyer must pay all duty on this contract

10.4Notices

3. (1)
   Notices under this contract must be in writing and may be given by a party’s solicitor.

3. (2)
   Notices are effectively given if:

1. (a)
   delivered or posted to the other party or its solicitor; or

2. (b)
   sent to the facsimile number of the other party or its solicitor.

3. (3)
   Posted notices will be treated as given 2 Business Days after posting.

3. (4)
   Notices sent by facsimile will be treated as given when the sender obtains a clear transmission report.

…

10.5Business Days

3. (1)
   If anything is required to be done on a day that is not a Business Day, it must be done instead on the next Business Day.

3. (2)
   If the Finance Date or Inspection Date fall on a day that is not a Business Day, then it falls on the next Business Day.

…

10.7Further Acts

If requested by the other party, each party must, at its own expense, do everything reasonably necessary to give effect to this contract.”

3. [3]
   10.7 relates to the general obligation of contracting parties described by Mason J (with the concurrence of other judges) in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, 607-08:

“But it is common ground that the contract imposed an implied obligation on each party to do all that was reasonably necessary to secure performance of the contract As Lord Blackburn said in Mackay v Dick (1881) 6 App. Cas. 251, at p 263.

‘as a general rule … where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.’

It is not to be thought that this rule of construction is confined to the imposition of an obligation on one contracting party to co-operate in doing all that is necessary to be done for the performance by the other party of his obligations under the contract As Griffith CJ said in Butt v M’Donald (1896) 7 QLJ 68, at pp 70-71.

‘It is a general rule applicable to every contract that each party agrees, by implication to do all such things as are necessary on his part to enable the other party to have the benefit of the contract.’

It is easy to imply a duty to co-operate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract It is not quite so easy to make the implication when the acts in question are necessary to entitle the other contracting party to a benefit under the contract but are not essential to the performance of that party’s obligations and are not fundamental to the contract Then the question arises when the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit In such a case, the correct interpretation of the contract depends, as it seems to me, not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.”

4. [4]
   My impression is that contract preparation is the responsibility of the vendor. In the subject agreement, the vendors’ solicitors are named, with telephone and facsimile numbers given, but no address. The first communication from that firm to the plaintiffs’ solicitors came in the form of a letter of 17 July 2003, the letterhead containing in bold type the direction “ALL CORRESPONDENCE TO PO BOX 4165”. After introducing the firm, the letter advised that it “looked forward to receipt of Transfer documentation in due course.”

5. [5]
   On 21 July 2003, by facsimile transmission, the plaintiffs’ solicitors advised that their clients’ application for finance had been approved. On 14 August 2003, the plaintiffs’ solicitors sent out two communications, a facsimile transmission seeking an extension of time for settlement until 22 August and a letter addressed to the post office box enclosing transfer documents for execution, accompanied by a request for their return prior to settlement to permit stamping. The first communication (which may have set the vendors wondering whether the plaintiffs were able to complete) was the subject of a negative response dated 15 August 2003. The posted letter attracted no response, but a facsimile was sent at 10.29 am on 18 August 2003 as follows:

“We refer to the above matter which is due to settle today, Monday 18^th August 2003 and note that we do not appear to have received Transfer documents from your office.

We note that the buyer has breached clause 5.2(1) of the Terms and Conditions of the Contract of Sale and pursuant to clause 9.1 of the Terms and Conditions of the Contract of Sale, the seller elects to terminate the Contract of Sale.

If there are any queries, please contract Garry of this office.”

6. [6]
   The plaintiffs’ assertion that the transfer documents were posted off before 6 pm on Thursday, 14 August 2003 (which would lead to the prediction of delivery next day) is confirmed by an Australia Post stamp “Underwood Mail Centre 6 pm 14 AU 03”. Although the letter was required to be taken only from one suburb to the next, quite near to Underwood, the Australia Post system diverted it to the Northgate Mail Centre whose stamp apparently fixed on 15 August 2003 at 21.23 hrs also appears on the authenticated copy of the envelope (it shows that the appropriate one dollar in stamps was affixed). The filed defence asserts correctly that the envelope is dated 15 August 2003 by Australia Post – but ignores that, incontrovertibly, it had already been dated 14 August 2003 by Australia Post.

7. [7]
   Garry Douglas Wooler’s was the only affidavit relied on by the defendants. He deposes:

“I was in the said Forest Lake Office on Monday the 18^th August 2003 when the following event occurred.

a.On or about 9.00 am on that day Jodi Henderson, Receptionist went to Lake Lawyers Post Office Box 4165 at Forest Lake Post Office to collect the mail as is the usual practice for her each day On her return the office she informed Robyn Fleming, Conveyancing Supervisor, that there was no mail from TDT lawyers, particularly any transfer forms to convey the Defendant’s property to the Plaintiffs.

b.Robyn Fleming then immediately contacted Mohammad Qureshi and informed him that no transfer documents had been received for the said (sic) of the said property being the subject of the said contract.

c.After Robyn Fleming had finished speaking with Mohammad Qureshi she informed me that Mohammad Qureshi had instructed her to terminate the contract as it was agreed between them that there was no reasonable time left to complete the transfer of the property to the plaintiffs.

d.To be consistent with acting in good faith Robyn Fleming instructed Jodi Henderson to check the said Post office box on or about 11 am which was done On Jodi Henderson’s return from the post office box she informed Robyn Fleming that there was a large envelope from TDT lawyers I witnessed Robyn Fleming opening the envelope which contained Transfer documents being the subject of the contract of the said parties A copy of the front of the envelope is marked as exhibit A and marked hereto.

e.Robyn Fleming then immediately attempted to telephone Mohammad Qureshi but to no avail Robyn Fleming continued to attempt to contact Mohammad Qureshi by telephone on several occasions but again to no avail. Robyn Fleming then asked me for my opinion on the matter and I advised her that it was not practically possible to fulfil the obligations of the contract within a reasonable time.”

That use of hearsay on hearsay is highly unsatisfactory Even if the plaintiffs had sought to cross-examine, there would have been no assurance available that evidence of events was coming from a source with actual knowledge of them I observe that one could not be confident about the time of Ms Henderson’s supposed first visit to the Forest Lake Post Office It may have been considerably before 9am It is clear that, with settlement scheduled for 2pm, transfer documents were available three hours ahead of time, and that Mr Qureshi, at the least, was (or had been) accessible The conclusion that “there was no reasonable time left to complete the transfer” has not been justified in any way It is a matter of speculation whether Mr Qureshi had rendered himself inaccessible If the “general rule” referred to in [3] were respected, one would expect Mr Wooler’s event d to have been instigated before event b or c.

8. [8]
   Mr Tony Tran, the plaintiffs’ solicitor, deposes that on 18 August at about 9.30am he received a telephone call advising non-receipt of transfer documents, whereupon he expressed surprise on the basis of the time when they had been posted. “This conversation was the first indication I had been given that they did not have the transfer documents.” After receipt of the fax advising termination, Mr Tran “…called Garry and told him this was not reasonable. I said I could deliver the transfer documents straight away.” I would regard this as an implied request by Mr Tran for co-operation under clause 10.7. Within minutes he heard back from Mr Wooler that the transfer documents had been received, but that the vendors wished to terminate “notwithstanding”. His offer of extending the time for settlement was rejected. Mr Wooler’s failure to take issue with any of Mr Tran’s assertions indicates that they are accepted.

9. [9]
   On Friday, 15 August 2003, the plaintiffs accepted that settlement would be required on the following Monday. They obtained from the Commonwealth Bank’s solicitor confirmation of the availability of finance and the bank’s requirements:

“Outstanding requirements are as follows:

• Copy Transfer required
• The Bank does not require a Settlement Notice, however, should you lodge one it should note ‘Commonwealth Bank of Australia’ was incoming mortgagee
• If settling Monday 18-8-03, cheque details required by 2.30pm this afternoon, otherwise, cheque details required by midday the day prior to settlement
• Final Search required dated day of settlement
• Available funds $218,511.80 (5 bank cheques free of charge, then $5.40 per cheque to be deducted from the above amount)
• Evidence that clients have REPAID & CLOSED their Westpac Credit Card 5163 2300 0137 1835 prior to settlement.”

A fax was sent to the vendors’ solicitors advising settlement “at 2.15pm on Monday, 18 August 2003, at St George, Level 2, 10 Felix Street, Brisbane”, with a request made for the “cheque details” wanted by the bank A letter went the other way, contemplating a time of 2pm, advising under “bank cheque details” that “other bank cheques will be supplied as soon as pay-out figure has been received from our client’s bank.”  The foregoing communication was faxed by Lake Lawyers to Mr Tran’s firm at 12.33pm on Saturday, 16 August 2003 It is impressive to see the activity going on at the weekend Mr Tran deposes that he received the letter on 16 August 2003 (which does not necessarily mean he was at work as well); by reason of that letter, he says that (justifiably), “I was led to believe that the settlement would proceed and I passed this on to my clients who also believed the settlement would proceed.”

10. [10]
    Mr Tran sent the following letter on 18 August 2003 prior to the indicated time of settlement:

“We refer to your instant fax but advise that we have forwarded the transfer documents to your office on 14^th August 2003 and by taking into the account that the distance between our offices thus would be reasonable and thus our client is not in breach of Cl 5.2(1) of the contract.

We further advise that up to now we still don’t receive your cheque details to effect the settlement this afternoon notwithstanding that we had numerous requests to your office that our clients bank solicitor required the cheque details by midday prior to the settlement date.

Therefore we hereby notice that our client is ready and willing to settle today and if your client fails to do so then our client will be in breach of contract and our client will proceed a legal proceeding against your client for specific performance and damages.”

In my opinion, the letter correctly identified failure by the vendors to comply with the contractual and general law requirements of co-operation by the vendors so that the purchasers could obtain the benefit of the contract, by way of providing the cheque details that had been requested No doubt the practice of conveyancers required identification of the payees and appropriate amounts, to facilitate the provision of “particular” bank cheques to satisfy their just demands I think it is arguable that the requirement of co-operation extended to require the vendors or their solicitors to advise that transfer documents had not been received There is no hint anywhere that it was suggested to the purchasers that it was necessary to provide them well ahead of time because of some difficulty in obtaining signature by the vendors.

11. [11]
    Clause 5.2 of the contract contemplates delivery of transfer documents on a day before the Settlement Date (“a reasonable time before”). That is subject to the effect of clause 10.5(1) which, arguably, would extend until the date of settlement the time for providing transfer documents, if the stipulation “a reasonable time before” allowed delivery on the weekend. (By clause 1 Definition, “business day” means a week day.”)  There exists authority that “before” may mean “not after” in appropriate contexts:  see Thornton’s Executrix v Angus & Sons’ Trustee (1934) SC 279, not applied in Tomlinson v Fugro Holdings (Aust) Pty Ltd [2003] QSC 325 Mr Smith, for the applicant plaintiffs, did not rely on such authority No submissions were made about the meaning of “delivered” in cl 5.2 Clause 10.4(2)(a) suggests it is something different from “posted” It is hard to see why successful posting would not suffice “Deliver” is also used in 5.3(1)(b) and 7.3 (“Buyer may not deliver any requisitions”) 

12. [12]
    Mr Smith relied on Re Ronim Pty Ltd (1999) 2 Qd R 172, in which, as the headnote reveals:

“A contract for the sale of a building relevantly provided:

‘Completion shall be effected at such time and place as may be agreed upon the parties.

The time for completion shall be between the hours of 9.00am and 5.00pm on the Date for Completion’

and deemed time to be of the essence.

On the date fixed for completion it was impossible to search the relevant title because the Land Titles Office computer was inoperative It was uniform conveyancing practice to ascertain the state of the title before settling and not to settle without a search of the title on the day of settlement.

Held:

…

3. (3)
   That it was an implied term of the contract that where on the day for completion the parties through no fault of their own could not carry out the necessary computer checks through the Land Titles office to verify title, because the relevant departmental computer was inoperative, the obligation to complete was suspended until that could be done.

…

3. (4)
   That according the contract remained on foot despite the purchaser’s failure to settle by 5pm on the completion date.”

He contended that a similar term ought to be implied in the present contract, to cover the surprising delay which occurred in the course of the post The Court of Appeal, however, expressed reservations about the “flexible” approach of decisions such as Smilie Pty Ltd v Booth (1998) NSW Conv R 55-841, in circumstances where time limits are not complied with (see 177 ff) I would be loath to endorse any general rule about implication of terms to cover delay in the post It appears to me relevant, however, that, for the vendors, communications through the post office box was asked for This necessitated use of the services of Australia Post It seems somewhat harsh, in the circumstances, to place the whole risk of things going wrong in the course of post on the purchasers One would expect, when the vendors’ solicitors sent a communication on the Saturday afternoon, in the terms about to be reproduced, that if any difficulty was felt regarding the unavailability of transfer documents, it would have been revealed, that some advice that they had not been received and were “awaited” along with the advices referred to in the letter of 16 August 2003 would be forthcoming What occurred has something of an appearance of ambush The letter was:

“We refer to the above matter and confirm that settlement is to be effected on Monday the 18^th August 2003 at a time of 2.00pm.

We provide our Settlement Statement as attached and await your advices in the confirmation of settlement figures We will revert to you with bank cheque details as soon as we are provided with a pay-out figure from our clients bank.

If there are any queries, please contact Robyn of this office.”

The vendors’ solicitors would have known they were not in possession of transfer documents at the time of sending of that letter, which was indicative of non-assertion of any requirement that the documents be received prior to the weekend in which event, clause 10.5 may come into effect In the absence of some clear submissions as to when the breach relied on happened, I disagree with Mr Brennans’ submission that the vendors’ right to terminate did not become manifest until Monday 18 August 2003.

13. [13]
    The evidence before the court establishes that the plaintiffs were ready, willing and able to settle at the time fixed; whether that was 2.15pm or 2pm appears to me irrelevant for the present purposes. Mr Brennan, for the defendants, queried readiness, willingness and ability of the plaintiff, instancing in particular the bank’s condition of provision of finance that the plaintiffs cancel (after paying it out) some credit facility with Westpac. I regard the possibilities along those lines as too speculative to require the court to stay its hand under UCPR 292 Further, it is not shown in an acceptable way that there was any impediment in the way of obtaining the defendants’ signature of the transfer documents, which were available by 11pm on Monday the 18^th (no difficulty was suggested flowing from the unavailability of them at the beginning of the afternoon of the previous Saturday or if they had been available at 9am) Following the proper approach to r 292, the court is not willing to speculate that some undisclosed kind of difficulty lay in the way of execution of the transfer documents on the day fixed for settlement in the few hours available for that purpose  I am prepared to find that, had the parties attended for purposes of settlement, the defendants would have achieved everything they bargained for, their only complaint being late arrival of transfer documents for their execution (something not shown to have made the slightest difference) It does not appear what arrangements there were for the vendors to sign transfer documents, had they been available earlier

14. [14]
    Mr Brennan’s helpful written submissions urge certain “Policy Considerations in Favour of the Vendors’ Determination”:

“36 Clause 5.2(1) is clothed in mandatory language The delivery of the transfer documents by the purchaser in the manner stipulated by the clause is a condition precedent to the fulfilment of the parties’ obligations under the contract This is a contract freely entered into between legally represented parties conducting their agreement at arm’s length The contract states that time is of the essence.

37 The contract is in a form published by respected associations and is used throughout Queensland on a daily basis as the foundation for the rights and obligations of vendors and purchasers in contacts for the sale of houses and land.

38 If the Court was to superimpose an interpretation on the disputed clause proposed by the purchasers, an interpretation which is in contradistinction to the ordinary language of the provision, the Court would be effectively varying the rights and obligations under the parties’ original agreement.

39 One can readily imagine that, given the notoriety of the standard contract’s use throughout Queensland, a favourable ruling for the purchasers runs a very real probability that a purchaser in breach of clause 5.2(1) would readily seek the equitable assistance of the Court for relief against forfeiture leading to increased purchaser-driven litigation, prohibitive costs and the effective sterilisation of the property, the subject of the litigation.

40 In my submission, this situation should be avoided but for the most extreme case The present case does not fall within that category.”

The standard form of contract obviously works well in the vast majority of occasions when it is adopted But it is not without problems when critically examined Termination is presented as a useful step that may be taken, useful in the sense that the parties will know exactly where they stand, if it is taken The consequences of termination may be harsh for the purchaser Mr Brennan skirted this issue, saying that “other rights flow from the vendors exercising their rights to terminate which are not presently relevant.”   The purchasers here stand to lose their $11,000 deposit, the benefit of the enjoyment of property and any appreciation in its value, and may become liable to pay damages – although ready, willing and able to complete on time;  the punitive “solicitor and own client” costs stipulation in clause 9.5 will be noted The defence contains a counter-claim for damages  

15. [15]
    The seller’s right to terminate in clause 9 (which I suppose could be exercised by sellers who expected to improve their own situation thereby) could arise if a buyer, for example, failed to pay the deposit (2.2(1)), failed to pay the balance of the purchase price by bank cheque as the seller directs (2.5 – here the defendants have failed to give the necessary details, although the purchasers sought them), failed to take all reasonable steps to obtain approval of finance (3.1) or building and pest inspection reports (4.1), failed to give the seller a copy of any relevant inspection report without delay (4.4), or failed to pay duty (10.3) consequences of which in some of those respects may be of minimal (or no) significance. Exercise of the seller’s right to terminate may be draconian, if clause 9 be subject to no limitations calculated to require the seller to act reasonably, as the buyer is required to do in certain instances by the standard terms. Against that background, it is of interest to note that clause 5.1 does not in terms impose any obligation on the buyer, but rather on the buyer’s solicitor. There may be room for argument as to whether the buyer’s solicitor’s default constitutes default by the buyer for the purposes of clause 9. Notwithstanding Mr Brennan’s paragraph 39, it seems to me one can envisage a flood of applications by purchasers seeking “the equitable assistance of the Court for relief against forfeiture” if vendors are to apply clause 9 in all its rigour.

16. [16]
    The purchasers seek relief against forfeiture, which they are driven to do if the vendors’ termination is good, in the sense that it has brought the agreement to an end. Reliance was placed on Legione v Hateley (1983)  152 CLR 406 There, as here, the purchaser relied on things said and or not said by the vendors’ solicitor Reliance was also placed on Waltons Stores (Interstate) Limited v Maher (1987) 164 CLR 387 There is an important very recent decision of the High Court of Australia Tanwar Enterprises Pty Ltd v Cauchi (2003) HCA 57 (7 October 2003) which tends to limit the circumstances in which equity will relieve a purchaser against forfeiture of its interest in a contract to purchase a property The leading judgment (of five judges) contains the following at paras 21-25:

“21. The term ‘unconscionable conduct’ is used in authorities such as Legione and Stern [Stern v McArthur (1988) 165 CLR 489]  … ‘unconscientious’ is the more accurate term.

22.  … that more accurate term directs attention to the question why the vendors ought not to be heard to assert the exercise of their legal right to terminate in answer to the claim by Tanwar for specific performance The conscience of the vendors which equity seeks to relieve is, …… a ‘properly formed and instructed conscience’.

…

25. … legal rights may be acquired by conduct which pricks no conscience at the time A misrepresentation may be wholly innocent However, at the time of attempted enforcement, it then may be unconscientious to rely upon the legal right so acquired …”          

Apropos Legione, their Honours said at paras 27-31:

“Legione

27. …  The division of opinion … turned upon the question whether a particular telephone conversation was sufficient to found the necessary estoppel; …

30.… the Court in Ciavarella v Balmer (1983) 153 CLR 438, 449-50) … described … the circumstances which … led to the order of remittal in Legione:

‘[T]he material in evidence strongly indicated unconscionable conduct on the part of the vendor in seeking to insist on the rescission of the contract in circumstances where the statement of the vendor’s solicitors had helped lull the purchaser into a belief that the vendor would accept completion provided it took place without a few days and where the consequence of rescission was that the vendor would reap the benefit of the very valuable improvements which the purchaser had effected to the property.’

31. In the present appeal, there is nothing to suggest that the vendors lulled Tanwar into any relevant false sense of security … .”

At paras 35-36 their Honours rejected the view of Gaudron J in Stern identified as deciding the case:

“… on a wider footing. This was that a decree of specific performance would secure all that the vendors had bargained for, whereas to deny that remedy would prejudice the purchasers A house had been built on the land, the land had increased in value and the balance unpaid was a relatively insignificant amount These circumstances, to which the vendors had not contributed, made it unconscionable for the vendors to insist on their contractual rights.”

Preference was expressed for the (dissenting) view of Mason CJ, distinguishing Legione, where it had been shown that some “conduct of the vendors had led to, caused, or contributed to” the purchaser’s breach of contract

17. [17]
    At para 40 in Tanwar, approval was given to the following statement from Legione:

“… the result in a given case will depend upon the resolution of subsidiary questions which inevitably arise. The more important of these are: (1) Did the conduct of the vendor contribute to the purchaser’s breach? (2) Was the purchaser’s breach (a) trivial or slight, and (b) inadvertent and not wilful? (3) What damage or other adverse consequences did the vendor suffer by reason of the purchaser’s breach? (4) What is the magnitude of the purchaser’s loss and the vendor’s gain if the forfeiture is to stand? (5) Is specific performance with or without compensation an adequate safeguard for the vendor?’

explaining at 44:

“… That to which the questions are said to be ‘subsidiary’ is the basic issue:  … relief against forfeiture.”

Their Honours said at 53:

“… the ‘interest’ of the purchaser is commensurate with the availability of specific performance That availability is the very question in issue where there has been a termination by the vendor for failure to complete as required by the essential stipulation Reliance upon the ‘interest’ therefore does not assist; it is bedevilled by circularity.”

and  at 57:

“… where the issue …. concerns alleged unconscientious reliance by vendors upon their contractual right to terminate, it does not assist to found the equity of the purchaser upon the protection of rights to injunctive relief acquired under a contract the termination of which has taken place Whilst the contracts here were on foot, breach thereof by the vendors would have been restrained But there was no relevant breach of contract by the vendors, and the contracts were terminated in exercise of a contractual right to do so.”

Turning to the appeal before them, their Honours said at 58-60:

“58 …heads of fraud, accident, mistake or surprise identify in a broad sense the circumstances making it inequitable for the vendors to rely upon their termination … as an answer to its claim for specific performance  … where accident and mistake are not involved, it will be necessary to point to the conduct of the vendor as having in some significant respect caused or contributed to the breach of the essential time stipulation. …

59. …

‘ …a court will be reluctant to interfere with the contractual rights of parties who have chosen to make time of the essence of the contract The  circumstances must be such as to make it plain that it is necessary to intervene to avoid injustice or, what is the same thing, to relieve against unconscionable – or, more accurately, unconscientious – conduct.’”

60 … it remains for Tanwar to show that it is against conscience for the vendors to set up the termination of the contracts. …”

Tanwar was left to plead “accident”, which was held inapt to cover the circumstances of “a failure by a third party to provide the finance” that was necessary to settle on time: [67]  It did not help Tanwar that there had been a dreadful record of default, leading to re-negotiation; but it might also be noted that, while a standard deposit may have been forfeited, Tanwar was to have returned large sums of money that had been paid in extensions of time that had been granted to it along the way.

18. [18]
    Mr Brennan urged “caution” in respect of summary judgment applications, citing, in particular, Caxton Agencies Pty Ltd v Korkidas [2002] QSC 210. He acknowledged the changed philosophy in summary judgment applications brought about by rr 292 and 293 of the UCPR, recognised by the Court of Appeal in Bernstrom v National Australia Bank Limited [2003] 1 Qd R 469 While, at first blush, it may seem strange for an application for relief against forfeiture to be dealt with on a summary basis, I think that it comes comfortably within the new Rules. There are circumstances in which such relief would be available almost as of course, for example against forfeiture of something in excess of a conventional 10 per cent deposit by a purchaser, whose contract did not proceed to conclusion. This is a claim for relief rendered necessary by the way in which clauses 5.2 and 9.1 appear to have worked; the jurisdiction to entertain the claim (as outlined in Tanwar) is established, and there appears to be no consideration pointing towards refusing relief As to the “subsidiary questions”, the matter seems to me almost self-evident All of them must be answered favourably for the plaintiffs. As to the so-called “basic issue”, it should be noted that the vendors wanted use of Australia Post, which (alone) had access to the post office box indicated – it was Australia Post’s unexpectedly dilatory performance that led to the problem On the assumption that the purchasers’ breach lay in failure to secure the placing of transfer documents in the post office box by the last business day before the settlement date (I do not think that any conveyancing activity on the weekend would have been contemplated) the breach was complete before the vendors’ solicitors’ faxed letter of Saturday, 16 August 2003. That letter at once called for settlement and recorded the vendors’ own inability to supply details of the bank cheques needed, as properly required by the purchaser; it neither called for transfer documents, nor noted their apparent non-receipt, nor advised termination for the breach of cl 5.2(1), which had already occurred, on the strict approach the vendors take; it asks the purchasers to confirm settlement figures; it has all the hallmarks of an affirmation of the contract.

19. [19]
    In the circumstances, I think there has been conduct by the vendors (or their solicitors) which “in some significant respect caused or contributed to the breach of the essential time stipulation.” In any event, there was “accident or surprise” here in the unexpectedly slow post. (I do not think the Notices provision clause 10.4 applies: we are not dealing with a Notice.)

20. [20]
    It has not been necessary, to get to this point, to mention the affidavit of Mr Fisher, on which Mr Smith placed reliance. There was no challenge made to the assertions contained therein regarding local conveyancing practice, in accordance with which, in the apparently common circumstances of transfer documents coming late, vendors and their solicitors go to considerable lengths to get the transfer documents executed, so that settlement may go ahead, if necessary billing errant purchasers for additional costs, such as those of couriers. The affidavit confirms what counsel said, that stamping of transfer documents can now be effected in solicitors’ offices, obviating the need for attendance at the Office of State Revenue for “urgent stamping”. What Mr Fisher says of the practice is no less than one would expect, in a context where contracting parties would ordinarily push to see completion occur. The sole instance of cl 5.2 being relied upon in Mr Fisher’s considerable experience was one in which it was genuinely impossible to locate the vendors at the last minute. I am not prepared to accept the indirect assertions which might be put up as pointing to the present as that kind of case. Mr Smith referred to TLI Management Pty Ltd v Nufate Pty Ltd (1988) 1 QLR 717, 723 as a judicial acknowledgement of the appropriateness of a co-operative approach.

21. [21]
    Within the meaning of the Rule, the defendants have no real prospect of succeeding in their defence, which seeks to maintain their termination under clause 9.1. The defence contends that requiring settlement on 18 August 2003, even as late as 5pm was “not reasonable”, but there is no evidence to support that assertion. I can see no need for a trial, given the evidence before the court; there is insufficient to suggest that the evidence at a trial would be relevantly different.

22. [22]
    In relation to “accident”, Mr Brennan relied on Kirby J at [122] and Callinan J at [143] in Tanwar for the proposition that only something exceptional can relevantly be an accident While, as a matter of logic, and experience, too, I suppose, the possibility of delays in the mail has to be allowed for, it is difficult to know what allowances would be appropriate Mail may go missing entirely  If this mattered, I would think that the vendors might have assented, if asked whether the posting of transfer documents, as established here, would be sufficient. I think that the ordinary person would assume delays in the mail would be less likely were mail sent to a post office box than to a street address.

23. [23]
    Mr Brennan scored a pleading point, in his complaint that the implied term Mr Smith sought to rely on was ventilated in a reply, rather than in the statement of claim. There is nothing to be gained in the circumstances from requiring the statement of claim to be amended. I have attempted to eschew definitive interpretations of provisions in the standard form contract which may be capable of different interpretations; I do not say that Mr Smith’s contentions as to an implied term are wrong. I prefer to reach my decision on the basis of the conduct of the parties and their legal representatives. This leads me to a firm view that, assuming the vendors were legally entitled to terminate, in all the circumstances, it was “unconscientious” for them to rely on that termination if the purchasers wished to see the contract carried into execution, and demonstrated their ability to complete on time.

24. [24]
    The parties will have the opportunity to make submissions about the orders that may be appropriate in light of the foregoing reasons. It may be sensible to formulate a specific performance decree incorporating detailed arrangements for completion.