Cruise v Cornish

Each of the two plaintiffs, Nicola Eagle and Patricia Cruise, in these proceedings seek orders for specific performance of obligations under two contracts for the sale of land located in Berry, New South Wales, which they respectively entered into as purchasers during 2020 with the same vendors, being the defendants, Mark Cornish and Elvi Wood.

The first plaintiff, Ms Cruise, entered into a contract for the sale of land dated 14 May 2020 with the defendants (Cruise Contract) pursuant to which she agreed to purchase and the defendants agreed to sell the land identified as 63A Parker Crescent, Berry, New South Wales, described as proposed Lot 1 in the unregistered plan of the subdivision of Lot 705 in Deposited Plan 1247531 (Lot 1). The Cruise Contract provided that Lot 1 is vacant land and was sold with vacant possession. The purchase price under the Cruise Contract was $750,000, 10% of which ($75,000) was the deposit to be paid by Ms Cruise to the defendants in two instalments, $37,500 on exchange and $37,500 on completion, leaving the balance of $712,500 presently remaining unpaid.

The second plaintiff, Ms Eagle, entered into a contract for the sale of land dated 2 October 2020 with the defendants (Eagle Contract) pursuant to which she agreed to purchase and the defendants agreed to sell the land identified as 2/63 Parker Crescent, Berry, New South Wales, described as proposed Lot 2 in the unregistered plan of the subdivision of Lot 705 in Deposited Plan 1247531 (Lot 2). The Eagle Contract provided that Lot 2 is vacant land and was sold with vacant possession. The purchase price under the Eagle Contract was $740,000, 10% of which ($74,000) was to be paid by Ms Eagle to the defendants as the deposit, leaving the balance of $666,000 remaining unpaid. It is not clear on the evidence precisely how much of the deposit was paid or when.

The proceedings were commenced by the plaintiffs filing a Statement of Claim on 23 January 2023 in which the plaintiffs sought declarations and orders for specific performance of obligations contained in the Cruise Contract and the Eagle Contract.

On 2 March 2023, the defendants were each separately personally served with a sealed copy of the Statement of Claim.

On 23 March 2023, each of the defendants filed a document entitled “submitting appearance” in the proceedings.

The “submitting appearance” filed by Ms Wood was in accordance with r 6.11(1) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and approved Form 6B to the UCPR because it contained a statement that she appears and submitted to the making of all orders and the giving or entry of judgment in respect of the proceedings.

The “submitting appearance” filed by Mr Cornish stated that he appears but did not contain a statement that he submitted to the making of all orders and the giving or entry of judgment in respect of the proceedings. Instead, it contained a set of submissions denying that there had been a breach of either the Cruise Contract or the Eagle Contract, stating that he had no objections to the court making the declarations sought “if it finds fit to do so”, and contesting the making of any orders for specific performance and costs. In addition, Mr Cornish stated that he would “complete and file a Defence in the approved form no later than 31 March 2023 as required by UCPR 14.4”.

Throughout the proceedings, Mr Cornish has not been legally represented and has corresponded in person with the plaintiffs’ solicitors, Giles Payne & Co.

On 24 March 2023, in the absence of Mr Cornish, Peden J made orders requiring Mr Cornish to file and serve a defence by 31 March 2023, the plaintiffs to file and serve their evidence by 28 April 2023, Mr Cornish to file and serve his evidence by 2 June 2023 and listing the matter for further directions on 30 June 2023. There was no compliance with these orders by any of the parties.

On 30 June 2023, in the absence of Mr Cornish, Hammerschlag CJ in Eq directed the plaintiffs to notify Mr Cornish of their intention on 14 July 2023 to move the court for final judgment and stood the matter over for directions on that date.

On 11 July 2023, the plaintiffs’ solicitors sent an email to Mr Cornish to which they attached 5 affidavits on which they intended to rely in the proceedings.

On 14 July 2023, in the absence of Mr Cornish, Peden J listed the proceedings for hearing on 18 August 2023 and made the usual order for hearing.

On 31 July 2023, the plaintiffs’ solicitors sent an email to Mr Cornish to which they attached a letter in which they made reference to the appearance before Peden J on 31 July 2023, the listing of the matter for final hearing on 18 August 2023 and the order for the parties to comply with the usual order for hearing. The letter also attached a draft Amended Statement of Claim and further affidavits to those which were sent to Mr Cornish on 11 July 2023, stating:

On 2 August 2023, Mr Cornish sent a letter to the plaintiffs’ solicitors which referenced their correspondence of 11 and 31 July 2023, the Amended Statement of Claim and affidavits which had been attached to those letters. In his letter, Mr Cornish stated:

At the conclusion of his letter, Mr Cornish asserted that it would be necessary for the plaintiffs to seek leave from the court to admit into evidence any of the affidavits served on 31 July 2023, to admit into evidence any material not filed in accordance with the orders made by the court on 24 March 2023 (that the plaintiffs file and serve their evidence by 28 April 2023) and to permit the filing of the Amended Statement of Claim. There was no response to this letter by the plaintiffs.

On 9 August 2023, Mr Cornish sent a letter to the plaintiffs’ solicitors in which he referred to the various orders relating to the preparation and production of the Court Book for the hearing. He asked the plaintiffs’ solicitors to clarify:

On 15 August 2023, Mr Cornish sent an email to the plaintiffs’ solicitors in which he stated that shortly after receiving an email from the plaintiffs’ solicitors on 14 August 2023 he received from them a copy of the index to the Court Book, which he attached to his email. In his email, Mr Cornish said:

At the hearing before me on 18 August 2023, Mr LT Fermanis appeared as counsel for the plaintiffs and Mr Cornish appeared in person. There was no appearance by or on behalf of Ms Wood.

The plaintiffs sought leave to file the Amended Statement of Claim. In summary, the effect of the amendments in the Amended Statement of Claim sought (in addition to declarations and orders for specific performance which had been sought in the Statement of Claim) detailed orders under s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act) for the appointment of trustees for the partition of the land at 63 Parker Crescent, Berry, New South Wales to obtain a grant of subdivision, the conveyance of Lot 1 and Lot 2 by the appointed trustees to each of the respective plaintiffs and payment of the proceeds of sale to the defendants after the deduction of the remuneration and expenses of the trustees and various other expenses, taxes and rates.

Mr Cornish opposed the grant of leave to file the Amended Statement of Claim on the basis that there was no appropriate notice of motion accompanying it and that he had not had a proper opportunity to consider and respond to it.

In exercise of my power under s 14 of the Civil Procedure Act 2005 (NSW) (CPA), I dispensed with the requirement for the plaintiffs to file a notice of motion seeking leave to file the Amended Statement of Claim because I was satisfied that it was appropriate to do so and granted leave under s 64 of the CPA for the plaintiffs to make the amendments contained in it and to file it. I did so because it was clear that the Amended Statement of Claim had been received by Mr Cornish on 31 July 2023 in circumstances where he had been explicitly informed that the plaintiffs intended to move on it at the hearing on 18 August 2023, thus giving him a period of nearly 3 weeks to consider the proposed amendments. At the hearing, Mr Cornish was also unable to point to any particular prejudice caused to him by the lack of a notice of motion or by the filing of the Amended Statement of Claim.

My decision in this regard is fortified by my determination that none of the amendments in the Amended Statement of Claim have been decided in favour of the plaintiffs, for the reasons set out below. As a result, there was no injustice to Mr Cornish occasioned by the amendments.

Accordingly, the hearing then proceeded on the issues raised in the Amended Statement of Claim.

At the hearing, the plaintiffs relied on the following evidence:

Mr Cornish did not have any particular objections to any of the affidavits relied on by the plaintiffs and did not seek to cross-examine any of the deponents of them. Mr Cornish did have a general objection to these affidavits on the basis that he had been provided with them late in relation to the timetable and there had been no attempt by the plaintiffs to extend that time.

Mr Cornish relied on material that was part of the evidence referred to in the affidavits, as well as a bundle of further documents which are referred to in the chronology below.

Towards the conclusion of the hearing, Mr Cornish made an application to adjourn the hearing to enable him to provide expert evidence and make additional submissions dealing with a range of matters which were raised at the hearing, being the expert evidence, the application of s 4.55 of the Environmental Planning and Assessment Act 1979 (NSW) (EPAA) and the appointment of trustees. At the hearing, I declined to grant the adjournment sought and stated that I would provide my reasons in this judgment, which I have set out below.

Section 66(1) of the CPA provides that, subject to rules of court, the court may at any time and from time to time by order, adjourn to a specific day any proceedings before it or any aspect of any such proceedings. I therefore had a discretion whether to grant the adjournment sought in this case.

The overriding purpose of the CPA and the UCPR in their application to proceedings in this court is to facilitate the just, quick and cheap resolution of the real issues in the proceedings: s 56(1) of the CPA. I must seek to give effect to that overriding purpose when I exercise any power in the CPA or the UCPR: s 56(2) of the CPA.

In seeking to give effect to the overriding purpose, I must have regard to the objects of the just determination of the proceedings, the efficient disposal of the business of the court, the efficient use of available judicial and administrative resources, and the timely disposal of the proceedings at a cost affordable by the respective parties: s 57 of the CPA.

In deciding whether to make any order granting an adjournment and the terms on which any such order is to be made, I must seek to act in accordance with the dictates of justice: s 58(1) of the CPA.

For the purpose of determining what are the “dictates of justice” in this particular case, I must have regard to the provisions of ss 56 and 57 of the CPA (s 58(1) of the CPA) and may have regard to the following matters to the extent to which I consider them to be relevant (s 58(2) of the CPA):

In my view, the just, quick and cheap resolution of the real issues in the proceedings acting in accordance with the dictates of justice necessitated the refusal of Mr Cornish’s adjournment application. The Statement of Claim was served on Mr Cornish on 2 March 2023 and since that time he has decided to take no active part in the proceedings up until his appearance at the hearing on 18 August 2023.

Mr Cornish did not comply with any of the interlocutory directions of the court in preparation for the hearing. He did not file any defence at all (despite being directed to do so by 31 March 2023 at the directions hearing held before Peden J on 24 March 2023), he did not file any affidavit evidence at all (despite being directed to do so by 2 June 2023 at the directions hearing held before Peden J on 24 March 2023) and he did not file any written submissions at all (despite being directed to do so in accordance with the usual order as to hearing at the directions hearing held before Peden J on 14 July 2023).

Mr Cornish was provided with the draft Amended Statement of Claim and all of the lay and expert affidavit and documentary evidence on which the plaintiffs intended to rely at the hearing on 18 August 2023 as attachments to two letters on 11 and 31 July 2023 from the plaintiffs’ solicitors. Mr Cornish was provided with the index to the Court Book by the plaintiffs’ solicitors on 14 August 2023 which listed all of the lay and expert affidavit and documentary evidence on which the plaintiffs intended to rely at the hearing on 18 August 2023.

The only responses provided by Mr Cornish in his letters dated 2, 9 and 15 August 2023 to all of these communications from the plaintiffs was to raise procedural matters relating to the need for the plaintiffs to obtain leave to file the Amended Statement of Claim and leave to rely on the evidence. Mr Cornish has determined not to engage in a substantive way with the issues raised in the proceedings, including the evidence on which the plaintiffs rely. In my view, he had sufficient time to address the issues that are raised and the evidence on which the plaintiffs rely.

In addition, insofar as the plaintiffs rely on the expert evidence provided by Mr Carmichael, in my view, that material is of very little weight to the determination of the issues. I do not think I would be assisted by any expert evidence in response on behalf of Mr Cornish. Further, as I have already stated above, for the reasons set out below, I have decided against the plaintiffs’ argument that I should appoint trustees to the property. This means that none of the evidence relied on by the plaintiffs which are said to support the contentions on that issue required any response by Mr Cornish. There was no injustice occasioned to Mr Cornish by him not being able to respond to that evidence.

For these reasons, approaching the matter in accordance with the dictates of justice, I decided that the just, quick and cheap resolution of the real issues in the proceedings means that Mr Cornish’s application for an adjournment of the hearing should be refused.

Except for the identification of the property, the purchase price, the date, the purchaser particulars and two of the special conditions, each of the Cruise Contract and the Eagle Contract are identical. Each contract is the 2019 edition of the standard New South Wales Law Society sale of land contract (standard form contract), containing the standard disclosure statement for off the plan contracts under s 66ZM of the Conveyancing Act and containing 29 special conditions in the same form, with an additional 2 special conditions in the Cruise Contract (concerning assignment or novation by the defendants and their agreement to receive the 10% deposit by two instalments).

It is asserted by the plaintiffs that the Eagle Contract also contained a clause pursuant to which the obligation to pay a deposit of 10% was reduced, but that is not evident in any of the provisions in the Eagle Contract which only contains 29 special conditions and no other provision amending the requirement to pay a deposit of 10%.

The special conditions to the Cruise Contract and the Eagle Contract contain their own additional definitions to those contained in the standard form contract, including the following:

The Plan of Subdivision, Administration Sheet and Section 88B instrument were attached to each of the Cruise Contract and the Eagle Contract.

Clauses 23 and 24 of the special conditions in the Cruise Contract and the Eagle Contract provide:

The “date for completion” is defined on the front page of each of the Cruise Contract and the Eagle Contract in the following form:

Clause 27 of the special conditions in the Cruise Contract and the Eagle Contract provides:

None of the parties to either the Cruise Contract or the Eagle Contract have terminated or rescinded it and the defendants as vendors have not made any application under s 66ZL of the Conveyancing Act permitting them to rescind the Cruise Contract or the Eagle Contract.

It is plain that completion of the Cruise Contract and the Eagle Contract requires registration of the Subdivision Documents (being the Plan of Subdivision, Administration Sheet and the Section 88B instrument).

A further provision of each of the Cruise Contract and the Eagle Contract which is relevant for the determination of the issues in these proceedings is cl 17.1 of the standard form contract which provides:

Absent agreement between the defendants and the plaintiffs which would allow the plaintiffs to obtain possession of their respective properties in advance of completion (in which case the provisions of cl 18 of the standard form contract would be applicable), there is otherwise no provision in either of the Cruise Contract or the Eagle Contract which allows for Ms Cruise or Ms Eagle to obtain possession before that time respectively.

On 1 October 2019, Ms Cruise paid the amount of $7,500 as a holding deposit in respect of Lot 1 to the defendants, being 1% of the purchase price of Lot 1 ($750,000).

On 6 March 2020, the New South Wales Rural Fire Service (RFS) issued General Terms of Approval and a Bushfire Safety Authority to Shoalhaven City Council as part of the development approval process for 63 Parker Crescent, Berry (RFS GTAs). The RFS GTAs included the following:

On 27 March 2020, Shoalhaven City Council granted development consent, subject to particular conditions, to Mr Cornish in respect of Lot 1 and Lot 2 with a lapse date of 27 March 2025. Condition 5 of the “integrated development conditions” in Part B of the development consent stated that the conditions of the RFS GTAs were included as conditions of the development consent. Condition 35 of the “conditions that must be complied with before a subdivision certificate issued” in Part F of the development consent stated that “[e]vidence of compliance with NSW Rural Fire Service General Terms of Approval, which are included as conditions of this consent, must be submitted to Council from a suitably qualified professional”.

On 28 April 2020, Ms Cruise paid the amount of $30,000 which, together with the amount of $7,500 paid earlier as the holding deposit on 1 October 2019, was equal to 5% of the purchase price of Lot 1. This was in advance of the Cruise Contract being exchanged and in accordance with special condition 31 of the Cruise Contract which provided that the remaining 5% of the deposit is payable on completion.

On 14 May 2020, the Cruise Contract was exchanged.

On 2 October 2020, the Eagle Contract was exchanged.

1 April 2021 was the Sunset Date under each of the Cruise Contract and the Eagle Contract.

On 9 March 2021, Catherine Bern (Manager, Development Services of Shoalhaven City Council) sent an email to Adrian Riepsamen (consultant acting for the defendants) and Vicki Dale (Land Registration Officer of Shoalhaven City Council) in which she stated that she had spoken to Mr Cornish about the issue with the RFS GTAs. She stated:

On 21 April 2021, Mr Cornish sent an email to Ms Cruise informing her that the Sunset Date had now passed, noting that neither of them wished to rescind the Cruise Contract and that the Cruise Contract was still valid and that they could “settle as soon as we have registration” (which I infer to be a reference to completion after the registration of the Subdivision Documents in cl 27).

On 21 April 2021, Bliss Conveyancing (acting for the defendants) sent an email to Southland Conveyancing (acting for Ms Eagle) stating that:

On 22 June 2021, Shoalhaven City Council sent a letter to SET Consultants (acting for the defendants) in respect of the application for the subdivision certificate for 63 Parker Crescent, Berry, stating the following:

There is no evidence that the defendants ever sought to address the outstanding conditions of the development consent as outlined in this letter from Shoalhaven City Council.

On 16 July 2021, Shoalhaven City Council refused to issue the subdivision certificate in respect of Lot 1 and Lot 2 for the following reasons:

It is clear on the evidence that it was the failure of the defendants to provide the information requested by Shoalhaven City Council which has led to the refusal of their consent to the subdivision.

On 6 August 2021, Mr Cornish sent an email to Ms Dale in which he referred to having had a conversation with Matthew Smith of the RFS who in turn said he had spoken to Ms Dale who was requesting a “s 4.55 application to be lodged”. In the email, Mr Cornish expressed the view that a s 4.55 application is not the correct way to proceed and instead proposed amending the RFS GTAs under ss 4.50 or 4.57 of the EPAA. Mr Cornish said that he is “not comfortable” with either himself or Shoalhaven City Council bearing the responsibility to request an amendment when the problem is with the GTAs issued by the RFS.

On 8 August 2021, Ms Bern sent an email to Mr Cornish and Ms Dale in which she stated:

On 6 September 2021, the RFS sent a letter to Shoalhaven City Council in which they referred to their letter of 6 March 2020, said that they had considered additional information submitted to them and set out amended General Terms of Approval (amended RFS GTAs), which included the following:

The effect of the amended RFS GTAs is to increase the building envelope on each of the lots comprising the subdivision for 63 Parker Crescent, Berry, including each of Lot 1 and Lot 2.

On 30 September 2021, Ms Bern of Shoalhaven City Council sent an email to other staff within the Council in which she referred to having had a conversation with Mr Cornish. In the email, Ms Bern stated as follows:

Regular communications between Ms Cruise and Mr Cornish in the period from September 2020 to July 2021 and between Ms Eagle and Mr Cornish in the period from February 2021 and September 2022 have involved numerous assurances by Mr Cornish that he is attending to the steps required to obtain the consent of Shoalhaven City Council to a plan of subdivision of Lot 1 and Lot 2, including addressing the issue of the requirements of the RFS. There is no evidence of what steps Mr Cornish has actually taken.

On 18 November 2021, the husband of Ms Eagle (Rodney Eagle) spoke to Ms Bern during which Ms Bern stated that the original development consent referred to the old documentation (being the original RFS GTAs), that the vendors should lodge an application to modify the consent to include the amended RFS GTAs pursuant to s 4.55 of the EPAA and that this “should be pretty straightforward”. During the conversation, Ms Bern said that a “s 4.55 application is achievable and totally resolvable to clean up the DA [development application] consent to current GTAs”. She further stated that the vendors would prefer to use s 4.57 of the EPAA, a process which is very rare, usually only used to revoke a consent, it would be a slow process for the Council and would leave the Council open to damages. Ms Bern concluded by saying that the Council had receivedno communication from Mr Cornish since early October 2021.

In January 2022, a representative of Shoalhaven City Council told Ms Eagle and Mr Eagle that the defendants needed to apply to amend the development consent to incorporate the amended RFS GTAs by making an application under s 4.55 of the EPAA.

On 12 January 2022, Mr Eagle received written advice from Lee Carmichael (a qualified and experienced town planner and development consultant) that the appropriate way for the defendants to proceed would be to make an application under s 4.55 of the EPAA to request that Shoalhaven City Council modify the development consent to take into account the amended RFS GTAs, which would involve:

On 8 March 2022, Ms Dale of Shoalhaven City Council sent an email to Ms Cruise stating that the subdivision certificate application for the property at 63 Parker Crescent, Berry was refused on 16 July 2021 and “Council has not received a further application for Subdivision Certificate since that date”.

On 23 March 2022, Mr Cornish sent an email to Ms Dale of Shoalhaven City Council which referred to a discussion the previous day and attached the RFS GTAs (6 March 2020), the Shoalhaven City Council development consent (27 March 2020), the amended RFS GTAs (6 September 2021), along with a set of notes described as “a shorthand summary for review regarding the same as requested”. In the email, Mr Cornish stated:

There is no evidence of any discussion between Mr Cornish and Ms Dale on 22 March 2022 or at any time after the email. There is no evidence of there being any response to the email.

On 2 April 2022, Mr Cornish met with Ms Eagle and Mr Eagle at their home. During the course of that meeting, Mr Cornish said that he could lodge a new development application to resolve the issues but that Ms Eagle would have to rescind her contract and buy the property on the basis of the new development application for the site, which she could purchase for the same price. He asserted that Ms Cruise had said that she was going to rescind the Cruise Contract. Mr Cornish said that the best thing for him would be that Ms Eagle sued him so that he could then sue Shoalhaven City Council and the RFS. In response, Mr Eagle said that the best thing for them would be to complete and that they did not want to rescind. This was the last substantive communication between Mr Cornish, Ms Eagle and Mr Eagle.

In submissions at the hearing on 18 August 2023, Mr Cornish said that at the end of the meeting on 2 April 2022, he ceased to take any further action to meet the obligations in cl 23.1 of the Cruise Contract and the Eagle Contract.

Shortly after the meeting with Mr Cornish, Ms Eagle and Mr Eagle had a telephone conversation with Ms Cruise in which Ms Cruise said that she had never said that she might rescind and that she did not intend to rescind.

On 28 March 2023, Mr Eagle had a conversation with Ms Dale of Shoalhaven City Council in which he asked her whether the Council had agreed to proceeding in a way that suited everyone but not under s 4.55 of the EPAA. Ms Dale replied “no” and that she had just come from an internal meeting about how to reply to Mr Cornish and she could not tell Mr Eagle anything more.

There is no evidence that the defendants have taken any steps to apply to Shoalhaven City Council to modify the development consent of 27 March 2020 to incorporate the amended RFS GTAs.

There is no evidence that the defendants have taken any steps to obtain Shoalhaven City Council’s consent to a plan of subdivision of Lot 1 and Lot 2 and lodge the plan of subdivision at NSW Land Registry Services for registration as a deposited plan.

There are a number of legal principles which are relevant to the determination of the plaintiffs’ claims to be entitled to an order for specific performance of the Cruise Contract and the Eagle Contract or, in the alternative, an order for the appointment of trustees under s 66G of the Conveyancing Act.

First, the plaintiffs must establish that the defendants have breached each of the Cruise Contract and the Eagle Contract.

Second, the plaintiffs must establish that they are entitled to an order for specific performance, which involves consideration of the extent to which the court would be involved in the ongoing supervision of the contracts, whether it is necessary for the plaintiffs to demonstrate that they are ready, willing and able to perform their respective contracts, and the likelihood of a modification of the development consent granted to the defendants on 27 March 2020.

Finally, in the alternative to specific performance, the plaintiffs seek an order for the appointment of trustees pursuant to s 66G of the Conveyancing Act.

Each of these relevant legal principles is dealt with in turn below.

The question of whether there has been a breach of contract for failure to perform an obligation in the time provided under it is essentially one which arises from the proper construction of the contract and the facts of what was done or not done, the onus of proof for which lies on the promisee (here, the purchasers) seeking to enforce it: see Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 at 230.

In the present case, the relevant cl 23.1 of the Cruise Contract and the Eagle Contract alleged to have been breached is the obligation of the vendors in the following terms:

A very similar obligation was the subject of consideration in Pelley v Tebran Pty Ltd [2006] NSWSC 1072 in relation to a claim by a purchaser for specific performance of a contract for sale of land. The key issue was whether the vendor proceeded with all due dispatch as required by a special condition of the contract to obtain council consent to a proposed plan of subdivision and thereafter lodge the plan for registration as a deposited plan. At [155]-[165], Hall J said:

The principles from Pelley and the cases cited in it emphasise that a party under an obligation to act with “all due dispatch” must act in a timely way with due care, which is determined objectively, the onus being on the plaintiff to prove those matters, although an evidentiary onus falls on the defendant for matters peculiarly within its own knowledge.

Specific performance is an equitable remedy requiring a contracting party to carry out one or more contractual obligations resting on that party: see Rossi Recycling Pty Ltd v Buckland Valley Pty Ltd [2022] VSC 467 at [564].

The principles that govern the question of whether or not specific performance of a contract should be granted are long standing and well established, particularly in relation to contracts for the sale of land where damages are not regarded as an adequate remedy available to a purchaser for failure by a vendor to complete: see Adderley v Dixon (1824) 1 Sim & St 607 at 610; 57 ER 239 at 240; Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 at 151.

An order for specific performance in relation to a contract for the sale of land pending subdivision is a discretionary exercise, and may be granted in circumstances where:

In order to obtain an order for specific performance of a contract for the sale of land, it is often said that the moving party must be ready, willing and able to perform their essential obligations under the contract and complete the purchase. This is a discretionary matter because even a failure to plead it is not fatal to a plaintiff’s case (although both plaintiffs did plead it in these proceedings): see Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 640.

It has even been held that if a defendant to an action for specific performance does not put the plaintiff to proof on the issue of whether a plaintiff is ready, willing and able, then the plaintiff need not adduce evidence to show that he or she is ready and willing: see Nobleza v Lampl (1986) 85 FLR 147 at 152.

The modern approach of equity is that if a party seeking specific performance is demonstrably ready, willing and able to complete a contract, then relief will be given: see Mulkearns v Chandos Developments Pty Ltd [2003] NSWSC 1132 at [67].

In Klein, at [43], Darke J noted that he was “comfortably satisfied” of this requirement in circumstances where the plaintiff had arrangements in place to borrow a substantial proportion of the purchase price under the contract, with the balance to be provided by way of his personal funds, and there was “some documentary evidence that suggested that the plaintiff was at times able to renew his finance approval for the purchase”.

In Parkes, at [52]-[54], Darke J noted that he was satisfied of this requirement in circumstances where the plaintiffs are “particularly attracted to the property” and have been successful in obtaining approval for finance which would be sufficient to enable them to complete the contract for the purchase of the property.

The extent to which any ongoing supervision on behalf of the court in regard to overseeing the performance of the contract is needed is a factor for the court to take into account and does not present as a disqualifying factor: Rossi at [589].

Parkes involved an application for specific performance of a contract for the sale of land pending subdivision which contained a special condition requiring the vendor to proceed with all due dispatch to obtain the consent of the local council to the proposed plan of subdivision, and thereafter lodge the subdivision plan for registration as a deposited plan. Darke J (at [59]) ordered the vendor to do such acts and take such steps as are required to discharge his obligations under the contract concerning the registration of the plan of subdivision and ordered that, if registration is obtained, the contract be further performed and carried into effect by the parties.

Klein involved a similar application for specific performance of a contract for the sale of land containing a special condition requiring the vendor to proceed with all due dispatch to obtain consent of the council to a plan of subdivision. Darke J, in circumstances where his Honour noted (at [44]) that “there is good reason to think that the defendants will now make every effort to complete the sale”, made an order for specific performance of the contract for sale.

In both cases, whilst it was not suggested in either circumstance that it was not possible for subdivision to occur, Darke J granted the parties liberty to apply in the event that difficulties arise in the course of performance of the contract.

As outlined by Slattery J in Santangelo v Yates Holdings Victoria Pty Ltd [2022] NSWSC 397, in considering what relief should be granted in circumstances where the court should maintain supervision over the performance of a contract, at [79]-[80]:

Similarly, in Mordue v Kroone [2009] NSWSC 255, involving the enforcement of a decree of specific performance made by Hammerschlag J (as his Honour then was), Brereton J (as his Honour then was) referred to a set of directions made by Rein J, apparently by consent, for the further implementation of the decree, as follows:

If an order for specific performance of each of the Cruise Contract and the Eagle Contract is to be made, it will be necessary for the defendants to apply to Shoalhaven City Council pursuant to s 4.55 of the EPAA for a modification of the development consent granted to them on 27 March 2020 to incorporate the amended RFS GTAs as the existing consent refers to the superseded RFS GTAs.

Section 4.55 of the EPAA is in the following terms:

The relevant principles which would be applied by Shoalhaven City Council in the consideration of such an application under s 4.55 of the EPAA are those set out by Pepper J in Agricultural Equity Investments Pty Ltd v Westlime Pty Ltd (No 3) [2015] NSWLEC 75 (approved in Dungog Shire Council v Hunter Industrial Rental Equipment Pty Ltd (No 2) [2018] NSWLEC 153; Progress East Pty Ltd v Randwick City Council [2019] NSWLEC 1029; Garling v Northern Beaches Council [2022] NSWLEC 1512).

In Agricultural Equity at [173], Pepper J said (in respect of the predecessor s 96(2) of the EPAA) (authorities omitted):

As an alternative to an order for specific performance, the plaintiffs sought orders from the court appointing trustees for the partition of 63 Parker Crescent, Berry under s 66G of the Conveyancing Act.

Section 66G of the Conveyancing Act is in the following terms:

The term “co-ownership” is defined in s 66F of the Conveyancing Act in the following terms:

It is recognised that a purchaser who enters into a contract for the sale of land has an equitable interest in the property before completion, and therefore has ownership in equity: see Golden Mile Property Investments Pty Ltd (in liq) v Cudgegong Australia Pty Ltd [2015] NSWCA 100 at [98]-[102].

The key determinant for an order under s 66G is whether there is ownership in law or equity “in possession” by two or more persons as joint tenants or tenants in common. In Lewin v Lewin [2019] NSWSC 380, Darke J had to consider whether co-owners of shares could obtain an order under s 66G of the Conveyancing Act. In finding that they could, Darke J made reference to the decision of Young J (as his Honour then was) in Commonwealth Bank of Australia v MacDonald [2000] NSWSC 553 concerning ownership “in possession”:

A right in possession must therefore exist for a person to obtain an order under s 66G of the Conveyancing Act.

I am satisfied that the defendants have breached cl 23.1 of the Cruise Contract and the Eagle Contract by failing to proceed with all due dispatch to obtain the consent of Shoalhaven City Council to the plan of subdivision and then lodge that subdivision plan at NSW Registry Services for registration as a deposited plan. Relying on the observations in Pelley at [159], the obligation in cl 23.1 is expressed in an unqualified and objective way, not conditioned by the subjective knowledge or ability of the defendants. Further, the reference to “all due dispatch” is one which emphasises the promptness with which the defendants were required to act: Pelley at [162].

The evidence demonstrates that these steps of consent and lodgement have not been taken by the defendants. I am more readily able to draw the inference that they have not attempted to do so in a timely fashion because of the lack of evidence from Mr Cornish on all of the steps he has taken with due care (if any), when those facts are peculiarly within his knowledge: applying the principles from Pelley at [156]-[165].

I am not satisfied with Mr Cornish’s explanation that it is not appropriate for him to apply under s 4.55 of the EPAA to seek a modification of the existing development consent from Shoalhaven City Council to remove the existing RFS GTAs and replace them with the amended RFS GTAs (which themselves apply much of the original RFS GTAs). His views in that regard are misconceived because such an application would appear to be relatively straightforward to make and for Shoalhaven City Council to consider. It is an application that Shoalhaven City Council have repeatedly invited Mr Cornish to make, but he has refused to do so for his own particular reasons.

Even taking the gloss that Mr Cornish seeks to put on the obligation in cl 23.1 that it only required him to “do all things reasonably necessary” (a submission I reject), I think the defendants are still in breach of cl 23.1 because it was reasonably necessary for them to apply under s 4.55 of the EPAA to seek a modification of the existing development consent from Shoalhaven City Council and they have not done so.

Mr Cornish also submitted that the change between the RFS GTAs and the amended RFS GTAs is so substantial that s 4.55 of the EPAA has no application to it because it would not be the same subdivision plan. I do not agree. In my mind, the change is relatively minor, which is the same view which is held by officers of Shoalhaven City Council. In any event, there is an express provision in cll 24.1 and 24.2 of the Cruise Contract and the Eagle Contract which concerns alterations, that Mr Cornish submitted had no application in the current circumstances.

Now that the Sunset Date of 1 April 2021 has passed without the registration of the deposited plan, then under cl 23.2, either party may rescind the Cruise Contract and the Eagle Contract respectively. But they have chosen not to do so. This means the obligation of the defendants to perform the matters stated in cl 23.1 remains in place.

Once the Subdivision Documents are registered after the Sunset Date but without any party rescinding, cl 23.3 provides that neither party is entitled to rescind the Cruise Contract and the Eagle Contract.

In my view, the defendants are required to make an application under s 4.55 of the EPAA to seek a modification of the existing development consent as a first step to meet their obligation to act with “all due dispatch” to obtain the consent of Shoalhaven City Council to the plan of subdivision and their failure to do so constitutes a breach of cl 23.1 of the Cruise Contract and the Eagle Contract.

The finding that each of the Cruise Contract and the Eagle Contract has been breached by the defendants enlivens my discretion to order specific performance of the obligations contained in them. Whilst I have a concern about the role of the court in undertaking ongoing supervision of the obligations required to be performed by the defendants, such a matter is a discretionary consideration and not a bar to obtaining an order for specific performance: Rossi at [589].

In my view, the defendants did not place any material before the court to support a submission that the plaintiffs are not ready, willing and able to complete the Cruise Contract and the Eagle Contract respectively. There is no suggestion that either of the plaintiffs are in breach of their contractual obligations. In any event, the plaintiffs pleaded that they are ready, willing and able to complete the Cruise Contract and the Eagle Contract respectively and are demonstrably ready, willing and able to perform as indicated by them continuing to pursue Mr Cornish for updates on the status of the approval of the subdivision plan by Shoalhaven City Council during 2020, 2021 and 2022, having Ms Eagle take the step of seeking expert advice from Mr Carmichael in January 2022 on the best way to obtain that approval, and declining invitations from Mr Cornish to rescind the contracts.

This court has demonstrated a preparedness to make orders for specific performance of the obligations in contracts for the sale of land even in circumstances where it has been necessary to set out a very detailed series of steps required to be taken by the vendor under them: see Mordue at [8]; Santangelo at [79]-[80]; Parkes at [59]; Klein at [44].

I am satisfied that an order for specific performance which required the defendants to apply to Shoalhaven City Council under s 4.55 of the EPAA to modify the existing development consent would not involve undue ongoing supervision by the court. This is because such an application appears to be relatively straightforward as Shoalhaven City Council would have to be guided by the principles expressed in Agricultural Equity – approaching the application in a facultative and beneficial way to compare what is sought in the amended RFS GTAs compared to the RFS GTAs to determine if the modified development is substantially the same as the existing approved development.

If the defendants are ordered to specifically perform their obligations in cl 23.1 of each of the Cruise Contract and the Eagle Contract, it will be appropriate for the parties to come back before the court to report if the consent of Shoalhaven City Council to the subdivision plan has not been forthcoming and, if so, what further steps need to be taken for the specific performance of the contracts. If the consent of Shoalhaven City Council is not given, then any further orders of the court would have to await the reasons provided by them for that refusal.

If the consent of Shoalhaven City Council has been obtained and the lodgement of the subdivision plan at NSW Registry Services for registration as a deposited plan has occurred, then completion of the Cruise Contract and Eagle Contract can occur without further intervention by the court.

Although Ms Cruise under the Cruise Contract and Ms Eagle under the Eagle Contract each have an equitable interest in their respective properties, cl 17.1 of each of the Cruise Contract and the Eagle Contract only gives the plaintiffs a right to vacant possession of their respective properties on completion. Until such time, they do not have a property right of co-ownership “in possession”. As a result, they do not fall within the definition of “co-ownership” in s 66F of the Conveyancing Act.

Accordingly, in my view they cannot obtain an order for the appointment of trustees under s 66G of the Conveyancing Act.

I consider that in all the circumstances, it is appropriate for the court to take a similar supervisory role in regard to the performance of the Cruise Contract and the Eagle Contract as was contemplated in Parkes, Klein and Mordue.

Accordingly, the orders I propose to make are as follows: