Akrawe v Culjak

1. [1]

   THE COURT: The issues in this appeal are twofold: whether the primary judge erred in declining to order specific performance of a contract for the sale of land, and in declining to order a return of a deposit of $155,000.

2. [2]

   The parties, Mr Behnam Said Akrawe as purchaser, and Mrs Margaret Marita Culjak and Mr Ante Culjak as vendors, entered into a contract for the sale of land in Cobbett Street, Wetherill Park in Western Sydney. The purchase price was $1,550,000, with a 10% deposit being paid to a stakeholder. The date for completion was 25 January 2021, but this was extended consensually to 22 February 2021. By the time of the trial, the deposit had been paid into Court, and the stakeholder played no active part in the proceedings.

3. [3]

   On 3 March 2021, the Culjaks served a Notice to Complete calling for completion to take place on the PEXA platform at 12.00pm on 18 March 2021, with time to be of the essence. Settlement did not take place on 18 March 2021. Late in the afternoon of 18 March 2021, Mr Akrawe’s solicitor informed the Culjaks’ conveyancer that Mr Akrawe needed until 23 March 2021 to settle the purchase, and took steps to change the appointed time for settlement on PEXA to 23 March 2021.

4. [4]

   On 22 March 2021, the Culjaks’ conveyancer served a Notice of Termination of the contract upon Mr Akrawe, referring to Mr Akrawe’s default in completing the purchase in accordance with the Notice to Complete, and stating that the contract was thereby terminated and the deposit forfeited.

5. [5]

   The parties each commenced proceedings in the Equity Division. The Culjaks sought, relevantly, a declaration that the contract was duly terminated and an order that they be paid the deposit. Mr Akrawe by cross-claim sought a declaration that the termination of the contract was invalid (on the basis that the Culjaks were not ready, willing and able to perform) and an order for specific performance. However, in closing submissions Mr Akrawe accepted that the Notice to Complete was valid, and the primary judge recorded that Mr Akrawe also appeared to accept that the Culjaks were entitled at law to terminate, with the consequence that the primary issue was whether Mr Akrawe was entitled to specific performance on the basis that equity would intervene to prevent the forfeiture of Mr Akrawe’s interest under the contract. Alternatively, Mr Akrawe sought, relevantly, the recovery of the deposit pursuant to s 55(2A) of the Conveyancing Act 1919 (NSW).

6. [6]

   The trial took place before the primary judge on 27 and 28 June and 7 July 2022, with judgment being delivered promptly thereafter on 19 July 2022: Culjak v Akrawe [2022] NSWSC 949. The Court dismissed Mr Akrawe’s cross-claim, declared the contract was validly terminated and ordered that the deposit be paid out of Court to the Culjaks. The Court also directed Mr Akrawe to remove the caveat within seven days. In November 2021, after the Culjaks had commenced a further campaign to sell their home at auction, Mr Akrawe had lodged a caveat over the land, based on his interest under the contract for sale of land. The auction did not proceed.

7. [7]

   Mr Akrawe appeals as of right. There are seven grounds of appeal. In oral submissions, his counsel, who had also appeared at trial, proceeded on the basis that there were two issues: whether equity would relieve against forfeiture, and whether there was appellable error in the discretionary decision by the primary judge not to order the return of the deposit. The first six grounds of appeal relate to the findings of fact concerning the events of March 2021 following the issuing of the Notice to Complete, and it will be necessary to address the evidence bearing upon that period in some detail. By way of summary:

   1. (1)

      The principal complaint was that the primary judge erred in failing to find that by 11 March 2021 the Culjaks had made up their minds not to proceed but failed to tell Mr Akrawe as much. The primary judge said that the proposition was not put to the Culjaks in cross-examination, and that the correspondence made it clear to Mr Akrawe that they reserved the right to terminate the contract if the Notice to Complete was not complied with. The attack upon this reasoning turned upon parallel negotiations which were taking place concerning the possibility that the Culjaks might sell the property to Mr Akrawe’s son.

   2. (2)

      The primary judge also concluded that Mr Akrawe had not persuaded him that he had sufficient funds to enable completion on 18 March 2021. This was challenged, including by an application to adduce fresh evidence on appeal.

   3. (3)

      Mr Akrawe also contended there was House v The King error in any decision under s 55(2A) not to order the return of the deposit of the Conveyancing Act 1919 (NSW).

8. [8]

   Shortly before the hearing, Mr Akrawe swore a further affidavit concerning money (in the form of banknotes) available to him and his son stored in a vault. The affidavit was read on the limited basis that it would be necessary, in the event this Court re-exercised the discretion to order specific performance, to be satisfied that Mr Akrawe was ready, willing and able to complete. That was an appropriate course. The cross-claim had adopted the pre-Judicature approach of expressly alleging readiness, willingness and ability to perform (see the discussion in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 620; [1988] HCA 16). This was not admitted and there had been a real issue at trial as to the purchaser’s ability to complete. The further evidence would permit this Court to re-exercise the discretion in the event that the appeal was allowed on the principal grounds. It may readily be seen how difficult it would have been to have the evidence adduced on any broader basis, for it was plainly available at trial: see Akins v National Australia Bank (1994) 34 NSWLR 155 at 160 and Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 at [169]-[175]. No such application was made. There was brief cross-examination. It will not be necessary to summarise the affidavit or the cross-examination.

Factual background

1. [9]

   The dealings between the parties following exchange of contract were carefully summarised by the primary judge at [9]-[60], to which no challenge was made. The following is very substantially taken from those paragraphs.

2. [10]

   The contract for sale was entered into on 12 December 2020 following an auction at which Mr Akrawe was the successful bidder. The Culjaks engaged Mrs Frances Belluccini of Kingfisher Conveyancing Services Pty Ltd to act for them, while Mr Akrawe engaged Mr Kugathas Pathmathas of Path Legal to act for him.

3. [11]

   On 17 December 2020, Mr Pathmathas sent an email to Mrs Belluccini stating that Mr Akrawe wanted to change the name of Mr Akrawe to that of his son, Mr Saad Saeed. The following day, Mrs Belluccini replied that the Culjaks did not agree to the request. She also sought confirmation that the balance of the 10% deposit had been paid, for it seems that only $100,000 had been paid at that stage.

4. [12]

   Later on 18 December 2020, Mr Akrawe (then aged 81) and his son, Mr Saeed, went to the Culjaks’ home. The primary judge recorded that there was competing evidence about a discussion concerning extending the completion date of the contract by 4 weeks, to 22 February 2021, which was unnecessary to resolve. His Honour recorded that the evidence was clear that whatever discussion occurred on 18 December 2020, an agreement was reached to extend the completion date to 22 February 2021. An exchange of emails between Mr Pathmathas and Mrs Belluccini on 19 and 23 December 2020 confirmed this, by which time the full $155,000 deposit had been paid. The primary judge stated that it seemed that Mr Saeed provided the funds for the deposit in two instalments.

5. [13]

   Favourably to Mr Akrawe, and relevant to some of the submissions in the appeal, is the following passage of his Honour’s reasons at [13]:

6. [14]

   On 8 February 2021, Mr Saeed and his three children went to the Culjaks’ home. There was discussion on that occasion between Mrs Culjak and Mr Saeed about the Culjaks renting the property for a period following settlement of the contract. Mr Saeed went to the Culjaks’ home again on 11 February 2021. The primary judge found that “[o]n at least one of those occasions (most likely on 11 February 2021)”, Mr Saeed requested that the contract be changed so that he would become the purchaser instead of his father. His Honour said that he thought it likely that Mr Saeed also said that he would want six weeks to complete the purchase, but was satisfied that both Mr and Mrs Culjak responded by saying words to the effect that they would like to help, but they would first need to speak to Mrs Belluccini about it. His Honour recorded that Mrs Culjak said in cross-examination that she went to see Mrs Belluccini shortly after 11 February 2021, and discussed with her the fact that Mr Saeed wanted a new contract in his name, but that the content of this discussion was not explored in any detail in the evidence.

7. [15]

   On 12 February 2021, Mr Pathmathas sent a settlement sheet to Mrs Belluccini. On 15 February 2021, Mrs Belluccini sent an email to Mr Pathmathas in the following terms:

8. [16]

   At 10:35am on 16 February 2021, Mrs Belluccini sent a further email to Mr Pathmathas that included the following:

9. [17]

   Mrs Belluccini sent another email to Mr Pathmathas at 4:27pm on 16 February 2021, in which she sought confirmation that Mr Akrawe had given instructions to proceed to settlement.

10. [18]

    In the evening of 16 February 2021, Mrs Culjak sent a text message to Mr Saeed which included the following:

11. [19]

    Mrs Belluccini deposed that she had a telephone conversation with Mr Akrawe’s solicitor (presumably Mr Pathmathas) on 17 February 2021 in which she was told that Mr Akrawe would not be able to settle on 22 February 2021 as he did not have the funds to complete. Mrs Belluccini sent an email to Mr Pathmathas later on 17 February 2021 in the following terms:

12. [20]

    On 18 February 2021, Mr Pathmathas sent an email to Mrs Belluccini in the following terms:

13. [21]

    Later on 18 February 2021, Mrs Belluccini sent an email in response that included the following:

14. [22]

    Mrs Belluccini sent a further email on 19 February 2021 in the following terms:

15. [23]

    Mr Pathmathas responded later on 19 February 2021 in the following terms:

16. [24]

    Mrs Belluccini replied later on 19 February 2021, stating that she would seek instructions from her clients and advise accordingly. That was the Friday before the settlement which was due to take place on Monday 22 February 2021.

17. [25]

    Mr Akrawe and Mr Saeed went to the Culjaks’ home, uninvited, on the evening of 21 February 2021, the night before the (re)scheduled settlement. There was disputed evidence about the conversation which ensued. The primary judge was of the view that nothing turned on this, and that it was likely there was debate about whether the settlement would proceed and the possibility of cancelling the existing contract and entering into a new contract with Mr Saeed as the purchaser. The primary judge accepted the Culjaks’ denials that Mr Saeed had asked why a new contract had not been forwarded to his solicitor as had been agreed.

18. [26]

    Five emails passed between Mrs Belluccini and Mr Pathmathas on 22 February 2021.

19. [27]

    At 12:00pm, Mrs Belluccini sent an email in the following terms:

20. [28]

    Mr Pathmathas replied by email at 1:43pm in the following terms:

21. [29]

    At 2:52pm, Mrs Belluccini sent an email to Mr Pathmathas that included the following:

22. [30]

    Mr Pathmathas replied by email at 3:43pm in the following terms:

23. [31]

    Finally, at 4:32pm, Mrs Belluccini sent an email to Mr Pathmathas in the following terms:

24. [32]

    It appears that Mr Akrawe later gave instructions to Mr Pathmathas to the effect that he was agreeable to proceeding in accordance with the terms of the above email. The primary judge stated that he inferred that Mr Pathmathas communicated that to Mrs Belluccini, because she proceeded to prepare documents including a Deed of Mutual Rescission of Contract and a new contract for sale which named Mr Saeed as the purchaser.

25. [33]

    On 25 February 2021, Mrs Belluccini sent an email to Mr Pathmathas which included the following:

26. [34]

    On 1 March 2021, Mrs Belluccini sent an email to Mr Pathmathas in which she enquired as to when she would receive the documents executed by his clients in readiness for exchange. Mrs Belluccini sent a further email to Mr Pathmathas on 2 March 2021 seeking his advice as to his client’s instructions as a matter of urgency, and reserving her clients’ rights pursuant to the contract.

27. [35]

    On 3 March 2021, Mrs Belluccini served a Notice to Complete. Service was not disputed. It was in the following terms:

28. [36]

    On 5 March 2021, Mr Pathmathas sent an email to Mrs Belluccini in the following terms:

29. [37]

    Mrs Belluccini replied later on 5 March 2021 stating that she would seek her clients’ instructions.

30. [38]

    On 8 March 2021, Mrs Belluccini sent an email to Mr Pathmathas that included the following:

31. [39]

    At 1:34pm on 10 March 2021, Mr Pathmathas sent an email to Mrs Belluccini in the following terms:

32. [40]

    Mrs Belluccini responded by email at 2:44pm that included the following:

33. [41]

    No documents were received by 12:00pm on 11 March 2021. At 12:43pm, Mr Pathmathas sent an email to Mrs Belluccini which included the following:

34. [42]

    At 1:05pm, Mrs Belluccini sent an email in which she stated that she would seek her clients’ instructions, and enquired whether Mr Pathmathas’ clients had signed the required documents.

35. [43]

    At 1:14pm, Mrs Belluccini sent an email to Mr Pathmathas in which she stated that she had not received the required documents and that, as such, his client had not complied with the timeframe required by her clients.

36. [44]

    At 1:18pm, Mr Pathmathas sent an email in response in the following terms:

37. [45]

    At 4:28pm, Mrs Belluccini sent an email to Mr Pathmathas in the following terms:

38. [46]

    The Notice to Complete called for completion to occur on 18 March 2021.

39. [47]

    On 16 March 2021, Mrs Belluccini sent an email to Mr Pathmathas in the following terms:

40. [48]

    On 17 March 2021, Mrs Belluccini received a letter from Path Legal, dated 16 March 2021, that enclosed a number of documents including a “Deed of Mutual Rescission of Contract” executed by Mr Akrawe, a Contract for Sale executed by Mr Saeed as purchaser, and cheques for the deposit and legal fees. The bank cheque for the deposit was dated 16 March 2021. The letter included a statement that there would be no legally binding relationship between the parties until “exchange of Contract” had taken place.

41. [49]

    At 6:25pm on 17 March 2021, Mrs Belluccini sent an email to Mr Pathmathas in the following terms:

42. [50]

    The following day, 18 March, was the further rescheduled day for completion in accordance with the Notice to Complete. Some seven emails were exchanged on that date between the parties.

43. [51]

    Mr Pathmathas responded by email at 11:14am to Mrs Belluccini’s last email, in the following terms:

44. [52]

    At 11:31am, Mrs Belluccini sent an email in response in the following terms:

45. [53]

    At 12:12pm, Mr Pathmathas sent an email to Mrs Belluccini in the following terms:

46. [54]

    Mr Pathmathas sent a further email at 2:59pm in the following terms:

47. [55]

    At 3:18pm, Mrs Belluccini sent an email in the following terms: “I confirm my telephonic advice that I am awaiting my client’s instructions”.

48. [56]

    Mr Pathmathas responded by email at 3:26pm in the following terms:

49. [57]

    At 4:35pm, Mr Pathmathas sent another email, in the following terms:

50. [58]

    Settlement did not occur on 18 March 2021 as called for by the Notice to Complete. As deposed by Mrs Belluccini, Mr Akrawe did not attend to the PEXA settlement on that day. It appears that Path Legal at no stage accepted the PEXA settlement date of 18 March 2021. Moreover, shortly before 5:00pm, Path Legal changed the time and date of settlement in PEXA to 1:00pm on 23 March 2021. It further appears that stamp duty had not been paid by 18 March 2021.

51. [59]

    At 11:13am on 22 March 2021, Mrs Belluccini served a Notice of Termination upon Path Legal. The notice included the following:

52. [60]

    Mrs Belluccini returned the new contract for sale and second deposit cheque to Mr Saeed.

Reasons of the primary judge

1. [61]

   After dealing with the factual background, the primary judge confirmed the concession that the Notice to Complete was valid and properly made, with the consequence that there was a contractual entitlement to terminate following Mr Akrawe’s failure to complete by 18 March 2021. His Honour observed at [63], by reference to Tanwar Enterprises Pty Ltd v Cauchi (2003) 217 CLR 315; [2003] HCA 57 at [5] and [22], that “the true question in this context is whether equity should intervene on the basis that it would be unconscientious for the plaintiffs to insist upon their legal right to terminate the contract”. For if, as his Honour put it, it would be unconscientious for the Culjaks to insist upon that right, then they could not rely upon their termination of the contract as an answer to Mr Akrawe’s claim for specific performance.

2. [62]

   That turned upon whether, as Mr Akrawe contended, the Culjaks had determined by 11 March 2021 not to proceed with a new contract with Mr Akrawe’s son. The position as at that time was described, uncontroversially, by the primary judge at [73]:

3. [63]

   It was in those circumstances that Mrs Belluccini said in her email on 11 March 2021 at 4.28pm that the Notice to Complete “still stands”. The primary judge said of that email at [75]:

4. [64]

   Mr Akrawe’s submission at trial, and maintained on appeal, was that although the Culjaks had made up their mind not to proceed with the new contract with Mr Akrawe’s son Mr Saeed, that position was not communicated. The primary judge said at [77], in a paragraph which was at the forefront of the submissions on appeal, that:

5. [65]

   The primary judge then observed that there was ample time between 11 and 18 March 2022 for Mr Akrawe to make funds available on the PEXA system, and that there was no explanation in Mr Akrawe’s evidence for why that did not occur. His Honour then made the further finding that “the evidence given by Mr Akrawe about his financial position at that time leaves me unpersuaded that he in fact had sufficient funds to enable him to complete by 18 March 2021”: at [79]. His Honour said that the evidence was imprecise, contradictory in some respects and confusing. He accepted that a considerable sum, “perhaps sufficient in [itself] to complete the purchase” was transferred by Mr Akrawe from Iraq to Australia in 2020, but there was no “cogent” evidence to establish the actual amounts of cash held at the relevant time: at [79]. Finally, his Honour noted that on 18 and 19 February 2021 Mr Pathmathas told Mrs Belluccini that Mr Akrawe did not have the funds and needed to organise funds from overseas. His Honour inferred that those statements were made on instructions from Mr Akrawe, and was unable to accept Mr Akrawe’s evidence to the effect that he was unaware of them. His Honour said that the statements undermined Mr Akrawe’s evidence that at all times he had sufficient money available to purchase the house: at [79].

6. [66]

   The primary judge noted that both Mr Akrawe and Mr Saeed sought to distance themselves from the email communications involving Mr Pathmathas. His Honour did not accept that Mr Pathmathas was not keeping them informed, and in any event noted that Mr Pathmathas was Mr Akrawe’s agent with authority to act on the purchase: at [80].

7. [67]

   That was sufficient to reject the submission that Mr Akrawe’s failure to complete by 18 March 2021 was somehow caused by or contributed to conduct by the Culjaks, including their silence, such that there was nothing unconscientious about their exercise of the right to terminate. It followed that the termination was a defence to the claim for specific performance: at [81].

8. [68]

   The primary judge addressed the return of the deposit at [82]-[88], and noted that relief under s 55(2A) was available to relieve against the forfeiture of a reasonable deposit, and it was not necessary to demonstrate special or exceptional circumstances. However, his Honour observed, by reference to Havyn Pty Ltd v Webster [2005] NSWCA 182; (2005) 12 BPR 22,837 at [150]-[157], that the proper approach to the discretion must appreciate the legal context of the established nature of a deposit as an earnest of performance in conveyancing transactions. His Honour concluded at [88]:

Appeal grounds 1 and 2

1. [69]

   The first ground of appeal challenged the primary judge’s conclusion at [77] that the evidence did not establish that the Culjaks had, as at 11 March 2021, come to a final decision that they would not under any circumstance agree to proceed with a new contract in the name of Mr Saeed. Ground 2 was that the primary judge was wrong to say that the proposition was not put to either of the Culjaks in cross-examination. The appellant did not point to any passage where this was squarely put to either of the Culjaks, but said it was not necessary to do so having regard to their evidence, and that what had been put was sufficient. These grounds are best addressed together, as they were in Mr Akrawe’s oral and written submissions.

2. [70]

   The starting point for these grounds was Mrs Culjak’s affidavit, which included paragraph 28:

3. [71]

   The appellant submitted that this paragraph, which was held out as representing the position on the afternoon of 11 March 2021, “could not be treated as anything other than [that] the Culjaks, as at 11 March 2021, would not under any relevant circumstances agree to proceed with the New Contract in the name of Mr Saeed as the purchaser”. He further submitted that “the requested documents had been signed” and the “only thing outstanding was provision of the signed documents by way of exchange together with a bank cheque for the additional $155,000”.

4. [72]

   Mrs Culjak’s affidavit was in terms inconsistent with the finding contended for. In the immediately following paragraph, Mrs Culjak referred to being informed on 17 March 2021 that a signed contract and a bank cheque had been received from Mr Saeed and stated:

5. [73]

   If the final decision for which Mr Akrawe contends had been reached on 11 March, there would be no occasion for any decision making six days later when Mr Saeed’s deposit and contract were provided. But the affidavit had the Culjaks making a decision after receiving that information (“we decided not to change our position”).

6. [74]

   What seems to have happened is that the cross-examination of Mrs Culjak (who was the principal point of contact with Mrs Belluccini and who was cross-examined first) proceeded on the basis that a decision was made on 17 March 2021, after being told by Mrs Belluccini that Mr Saeed’s documents and deposit had been received:

7. [75]

   Mr Akrawe relied on the final question and answer in this passage as sufficing to put the proposition to Mrs Culjak. That exchange, even read with the preceding questions and answers, falls well short of putting to her the holding of an irrevocable state of mind not to treat with Mr Saeed as at 11 March 2021.

8. [76]

   Mr Culjak’s evidence did not alter the position. His affidavit referred to him and his wife deciding “to just go with the original contract” after yet another failure by Mr Akrawe and his son to adhere to a timetable. His affidavit was much more generally expressed, and it is not clear at precisely what time he was speaking of.

9. [77]

   Mr Culjak gave this evidence in cross-examination on the point:

10. [78]

    Once again, that evidence falls well short of the final, irrevocable decision on 11 March for which Mr Akrawe contends.

11. [79]

    The contemporaneous documents also tell against the finding sought on appeal. After being told at 1.18pm on Thursday 11 March by Mr Pathmathas that his client had not come with bank cheques and the contract, and that the client had said “he was awaiting funds to be cleared”, Mrs Belluccini wrote at 4.28pm “I am still awaiting my client’s instructions. Pending my client’s instructions the Notice to Complete still stands”. There is no reason to doubt the accuracy of what Mrs Belluccini said about her instructions. That is inconsistent with a final decision having been made at that point. Indeed, it was put to Mrs Belluccini in cross-examination that she had been given express instructions that the Culjaks were not prepared to consider any further extensions, a proposition with which Mrs Belluccini disagreed. The next communication between the Culjaks and Mr Akrawe was the following Tuesday 16 March at 11.15am, when Mrs Belluccini confirmed that the Notice to Complete was being relied upon. She did not receive the signed contract and bank cheque from Mr Saeed until 17 March. There is nothing to suggest there was any update from Mr Pathmathas as to his clients’ position in the meantime. In those circumstances, it was not necessary for the Culjaks to reach a final decision on 11 March. Not until 17 March did Mr Pathmathas provide anything which called for a further response.

12. [80]

    Separately, shortly after receipt of the second deposit and executed contract in the name of Mr Saeed, Mrs Belluccini asked for confirmation of Mr Saeed’s ability to complete, in the event that the new contract was exchanged. So far as the evidence discloses, there was no response to that email. It may readily be inferred that the email was sent on instructions. The email is once again inconsistent with the Culjaks having made a final decision not to enter into a contract with Mr Saeed on 11 March 2021.

13. [81]

    There is an underlying difficulty with the finding for which Mr Akrawe seeks. The finding urged upon the primary judge and upon this Court was that “Mr and Mrs Culjak as Vendor had come to a final decision that they would not under any relevant circumstances agree to proceed with the new contract in the name of Mr Saeed as Purchaser”. What precisely that meant was not fully explored by the parties. It was not possible for the Culjaks unilaterally to bind themselves so as to prevent themselves considering a new contract offered to them in the future by Mr Akrawe or his son. Insofar as they had given instructions to Mrs Belluccini, it was always open to them to countermand those instructions. And indeed, it does not appear even that Mr Akrawe contended for a literal meaning of the finding. What might occur if Mr Saeed had made an offer to acquire the property for an additional $100,000, conditional upon the existing contract being rescinded, was unexplored. The best way, which is also the way most favourable to Mr Akrawe, to understand the finding for which he contended was that it amounted to a finding that the Culjaks would not contemplate any alternative offer by the father or son at the same price if it meant giving up their existing entitlements under the extant contract for sale, such that the efforts taken to negotiate the deed and to obtain a bank cheque for the second deposit were entirely wasted. The questions are whether that was the Culjaks’ state of mind, and if so whether not communicating that stance affected the Culjaks’ entitlement to rely on the Notice to Complete.

14. [82]

    The finding by the primary judge is appropriately nuanced and reflects the reality of the position. The reasoning at [76] and [77] was to the effect that the Culjaks were “keeping open the possibility that they might agree to a course other than their present insistence upon completion of the contract in accordance with the Notice to Complete”. That is inherently plausible. Many vendors, faced with the circumstances presented by a purchaser who seemed unable to complete on time and was uncertain of the identity of the transferee, would give some accommodation, even after service of a Notice to Complete, in order to avoid the cost and delay and risk of the dispute which would likely follow terminating the contract.

15. [83]

    The finding by the primary judge was self-evidently one which was likely affected by an assessment of Mrs and Mr Culjak giving evidence; cf Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55]. Far from being glaringly improbable, it is inherently plausible. The finding for which Mr Akrawe contends is itself implausible and was not squarely put to either vendor. These grounds are not made out.

Grounds 3 and 4.

1. [84]

   Grounds 3 and 4 built upon the finding sought in ground 1, and maintained that in circumstances where the Culjaks had reached a final decision on 11 March not to proceed with negotiations with the son, which was not communicated to Mr Akrawe, that caused or contributed to his not bringing in funds to complete by 18 March. These grounds do not arise.

2. [85]

   But in any event, they are not made out. Let it be assumed that the Culjaks had more or less irrevocably determined by 11 March not to treat with Mr Saeed, but to enforce the existing contract with Mr Akrawe. There was no testimonial evidence that if Mr Akrawe or Mr Saeed had been told as much on 11 March, to the effect that any efforts to make a separate offer involving rescission of the extant contract were simply wasted time, it would have made any difference. In particular there was no direct testimonial evidence that Mr Akrawe would have complied with the Notice to Complete.

3. [86]

   Counsel for the appellant acknowledged the absence of direct testimonial evidence on this point, but sought to rely on the fact that Mr Pathmathas scheduled an appointment on the PEXA platform for 23 March. The inference which was invited to be drawn was that completion as rescheduled by Mr Pathmathas would have occurred on 23 March, being only a few days later, when it was clear that the Culjaks would not sell to Mr Saeed. Thus, so it was put, if the Culjaks had communicated an implacable unpreparedness to treat with Mr Saeed on 11 March, it is to be inferred that funds would have been available on 18 March.

4. [87]

   The difficulty with Mr Akrawe’s submission is its premise. Mr Akrawe had a demonstrated history of being unable to provide funds in accordance with promises binding him. There is nothing to suggest that the mere rescheduling of a PEXA appointment is anything like a secure foundation for the inference that Mr Akrawe would have funds enabling completion to occur on 18 March had he been told firmly on 11 March that no transaction with his son was possible. The point may be tested this way. The contract had already been extended, and settlement had not proceeded. The clearest possible communication that the Culjaks were insisting upon performance of the extant contract was the service of a Notice to Complete and the statements reiterated by Mrs Belluccini that the notice stood. It is known that Mr Akrawe nonetheless did not complete in accordance with the notice. Why ever would it be inferred that had he also been told on 11 March something less formal, namely, that the Culjaks would not sell to his son, that would cause him to comply with his contractual obligations?

5. [88]

   These grounds are not made out.

Grounds 5 and 6

1. [89]

   Ground 5 was that where Mr Akrawe had requested an additional three business days to bring his money into PEXA in order to complete, it was unconscientious conduct on the part of the Culjaks to terminate. It was not separately developed in submissions, but was combined with ground 6. To the extent it is a separate point, it falls for the reasons given in relation to ground 4. Ground 6 challenged the finding made in the alternative that Mr Akrawe did not have sufficient funds at the date of the hearing to complete, and this was developed at some length. It is necessary to attend to the evidence bearing upon it.

2. [90]

   Mr Akrawe’s principal affidavit annexed documents recording international transfers of some $1.9 million into Australia in the second half of 2020. But there was, as the primary judge observed, a lack of clarity as to what had occurred to the money. For example, although Mr Akrawe was identified as the beneficiary, his bank account details and the SWIFT transaction numbers were left blank on five receipts from “Crystal Money Transfer”. Mr Saeed gave evidence in his principal affidavit that “Some of the amount transferred from Iraq to Australia were paid to me into my personal accounts, and some to company accounts”, while “Hundreds of thousands of USD dollars representing some of proceeds of sale of my father’s properties in Iraq were deposited in cash in a security box in a vault licensed from Kuber Vault”. Mr Akrawe’s affidavit was to the same effect, and likewise lacked specificity. Neither affidavit established any specific amount of money that was available to fund a purchase at any time, let alone as at the date of trial. The closest the affidavit evidence came was paragraph 95 of Mr Saeed’s affidavit of 12 November 2021, to which no objection was made, which stated:

3. [91]

   Mr Akrawe made an updating affidavit on 22 June 2022, in which he said he had sufficient funds of his own to complete the purchase, and added:

4. [92]

   That statement was admitted without objection, and was the subject of cross-examination. The cross-examination established that Mr Akrawe had A$470,000 in an ANZ bank account (Mr Akrawe said he had a bank statement, but “Nobody asked me to provide it”) and US$50,000 in a Commonwealth bank account. He also confirmed that he had taken all of his money out of the safety deposit box, as follows (Tcpt, 28 June 2022, p 92):

5. [93]

   Mr Akrawe added that he also had “around 350,000 as cash money, American dollar with me, here in Australia”.

6. [94]

   The position changed following a re-examination which was permitted to proceed without objection, despite the seeming (so far as appears from the transcript) absence of ambiguity in those answers. The re-examiner asked these questions about the money in the safety deposit box (Tcpt, 28 June 2022, p 94):

7. [95]

   The re-examiner confirmed that he had US$325,000 cash elsewhere than the vault, and then elicited the following summary:

8. [96]

   There is no reason to doubt the concession made by Mr Akrawe that although there had been $470,000 in the ANZ bank account, after paying the deposit (and, presumably, other expenses including his lawyers) the ANZ account contained some A$215,000. Assuming the correctness of those amounts, it would have been necessary to draw upon the bank notes in the vault at Castle Hill in order to complete. According to his (seemingly) unequivocal evidence in cross-examination, he had no access to the bank notes in the bank vault, which was in his son’s name, and he had taken all of his money from the vault. According to the re-examination, his son’s money was treated as his own (“it’s my money, he’s my son”). It is difficult to determine how to reconcile those statements. Even if they were to be resolved favourably to Mr Akrawe, upon the not implausible basis that an 82 year old father regarded money provided by him but in a vault in his son’s name as nonetheless money available to complete the purchase of a family home, there is merely the statement that there was US$850,000 in the vault, and assuming that were the fact, it would be necessary to obtain those banknotes, convert them into Australian dollars, and lodge the proceeds into the PEXA platform in short order. How precisely that was to occur was unexplained in the evidence.

9. [97]

   His Honour was entirely correct to state that the evidence was contradictory and confusing. His Honour was also correct to state that “no cogent evidence was adduced to establish the actual amounts of cash so held at the relevant time”. Finally, there is the difficulty that at a time when Mr Akrawe was contractually obliged to complete at risk of losing the deposit, Mr Pathmathas was saying, repeatedly, that he needed to organise money from overseas (“he has instructed us that he needs to organise for the money from overseas and facing some unexpected delays in getting the money at present”). It was open to Mr Akrawe and Mr Saeed to explain why that statement was made if they wished to resist the inference that it reflected the instructions given to Mr Pathmathas at the time. That did not occur.

10. [98]

    It is not unlawful to possess large amounts of banknotes, rather than to use the financial system. However, doing so comes at a price if it is necessary to establish funds presently available. The conclusion by the primary judge that he was unpersuaded that Mr Akrawe had sufficient funds was plainly one which was influenced by the testimonial evidence summarised above. The way that evidence emerged was contradictory and lacking in specificity. It also sat uneasily with the contemporaneous emails which had been served as part of the Culjaks’ case in chief. Mr Akrawe repeatedly failed to complete, and gave as his reason for his failure that he did not have the available funds. No error has been established in the primary judge not being satisfied that Mr Akrawe had the funds to complete the purchase.

Ground 7

1. [99]

   Section 55(2A) provides:

2. [100]

   This power, and its relationship with contractual damages, was considered by this Court in Stokes v Toyne [2023] NSWCA 59 at [99]-[106]. It is well settled that this provision creates a power to relieve against the forfeiture of a deposit which is broader than that available in equity: Havyn Pty Ltd v Webster [2005] NSWCA 182; (2005) 12 BPR 22,837 at [137]; Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40; (2006) 12 BPR 23,629. But the discretion is not unconfined. In Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268, Street CJ in Eq said at 272 that the provision does not give to a court an “overall discretionary supervision of monetary adjustments between parties to a contract under which a deposit was paid but which has been terminated”. Instead, “[A] vendor who forfeits a deposit in strict enforcement of his legal rights is not to be deprived of it under s 55(2A) unless it is unjust and inequitable to permit him to retain it”. That has been confirmed by what was said in Romanos v Pentagold Investments Pty Ltd (2003) 217 CLR 367; [2003] HCA 58 at [27], although what is “unjust and inequitable” may be a contestable conclusion in any particular case.

3. [101]

   However, it is well-settled that in the exercise of that discretion, the court should not weaken the proper function of a deposit as an earnest of performance: Havyn at [150]-[151], [155]; Nassif v Caminer (2009) 74 NSWLR 276; [2009] NSWCA 45 at [67], [91]. As Arden LJ said in Omar v El-Wakil [2001] EWCA Civ 1090; [2002] P & CR 36 at [35], in a passage approved in Havyn at [151], “the court must bear in mind that the payment in question was a ‘deposit’, that is an earnest for performance and that accordingly there should not be relief simply because the …contract never took place”.

4. [102]

   Mr Akrawe accepted that this Court would not intervene in respect of the primary judge’s failure to order the return of the deposit unless House v The King error was made out. The primary submission was that if any of the factual errors in the earlier grounds were made out, the discretion would be re-exercised. The submission is sound. Success on any of the other grounds would have amounted to a material error of fact bearing upon the discretion. However, no such errors have been made out.

5. [103]

   By way of fallback, it was said that even if relief against forfeiture were not justified, the facts could still justify a return of the deposit. That submission accords with the settled approach to the provision. However, it remains necessary to establish appellable error in the exercise of a discretionary power.

6. [104]

   This ground was advanced, primarily in oral submissions, on the basis that the reasons of the primary judge in effect foreclosed relief under the statute by the finding that there was nothing unconscientious in exercising the legal right to terminate. It was put thus:

7. [105]

   The reasoning of the primary judge was that reliance on the entitlement to terminate did not amount to the unconscientious exercise of a legal right, coupled with the fact that Mr Akrawe had not shown that forfeiture of the deposit would lead to a windfall or profit which in “justice or equity” they ought not to be permitted to enjoy. His Honour pointed in particular to the time which had elapsed and the attempt to sell the property later in 2021 which came to naught because of the caveat he lodged, and the important role played by deposits in contract for the sale of land.

8. [106]

   All of those matters were relevant to the exercise of the discretion. It has not been shown that his Honour “set the bar too high” or that the discretion otherwise miscarried.

9. [107]

   For those reasons, the appeal should be dismissed. There is no reason why costs should not follow the event.