Carter v Mehmet

1. [1]

   THE COURT: This appeal involves a dispute between parties to a contract for the sale of land in Byron Bay made in 2015. On 3 December 2015, the purchasers commenced proceedings seeking the return of their deposit and damages for breach of contract. The vendors cross‑claimed for damages for loss of the contract for sale. In a judgment delivered on 17 April 2020, the primary judge, Ward CJ in Eq, granted the relief sought by the purchasers and dismissed the vendors’ cross‑claim: Mehmet v Carter [2020] NSWSC 413. The vendors appeal against the whole of the decision below.

Background to these proceedings

1. [2]

   The appellants in this appeal were the owners of certain land located on Broken Head Road, Byron Bay. The second appellant, The Wheel Resort Pty Ltd, and the third appellant, Cathscompany Pty Ltd, are controlled by the first appellant, Mr Murray Carter. The second appellant operated an ecological tourist resort known as the Rainforest Resort (formerly The Wheel Resort) on the land. Except where it is necessary to distinguish between them, the appellants will be referred to in this judgment as the vendors.

2. [3]

   The first to third respondents in this appeal (the first to third plaintiffs and cross‑defendants in the primary proceedings), Messrs Ian, Cameron and Errol Mehmet, are brothers acting in their respective capacities as trustee for a named testamentary trust or partnership. The fourth respondent (fourth plaintiff and cross-defendant), Cheers Aviation Pty Ltd, is a corporate trustee of another investment trust. It is controlled by the fifth respondent (fifth cross‑defendant), Mr Matthew Cheers, who is a friend of the first respondent’s son, Mr Adam Mehmet. Except where it is necessary to distinguish between them, the first to fourth respondents will be referred to in this judgment as the purchasers.

3. [4]

   The land which formed the subject matter of the contract for sale comprises two lots. Lot 1 covers an area of approximately seven acres and is partly zoned for commercial tourism use. It is the land on which the Rainforest Resort was operated. When the contract was entered into, this parcel was held jointly by the third appellant, Cathscompany Pty Ltd, and by the first appellant’s late wife, Mrs Catherine Carter. Lot 10 covers an area of approximately 23 acres and is zoned for environmental protection. When the contract was entered into, this parcel was held by the second appellant, The Wheel Resort Pty Ltd.

4. [5]

   The land has been held under Torrens title since 14 September 1953. Before then, the land was held under a Crown Lease until 1925, and then under a Crown Tenure Conditional Purchase. Prior to 30 December 1916, part of Lot 1 also formed part of Crown Reserve No. R 43074 “for use of the land by Aborigines”. Any potential commercial development of the land was largely, if not wholly, limited to Lot 1.

5. [6]

   On 6 July 2015, the parties exchanged a contract for the sale of the land for $3 million (including a deposit of $300,000), and a contract for the sale of the Rainforest Resort business (the purchase price for which was included in the price for the sale of land). The contract did not disclose the existence of any Aboriginal objects in or on the land and made no reference to any Aboriginal cultural significance attaching to the site. The terms of the contract made clear that it was an unconditional contract, and that the purchasers were acquiring the property in its present state and condition.

6. [7]

   On 9 July 2015, the first respondent received a copy of a report prepared by an environmental consultant, Mr Peter Parker, which referred to the land as the burial site of “two prominent Bundjalung elders”, Harry and Clara Bray, and noted the site’s “particular significance to the Arakwal”, the local Aboriginal community group. This report is the genesis of the dispute between the parties which has led them to this Court on two occasions.

7. [8]

   On 17 July 2015, a transmission application was lodged in respect of the half‑interest of the first applicant’s late wife, Mrs Catherine Carter, in Lot 1. Special condition 21(a) of the contract for sale of land provided that completion was conditional on Mr Carter, as executor of the estate of his late wife, becoming the registered proprietor of Lot 1. Special condition 21(c) provided that completion should take place within fourteen days “after the Vendor’s solicitors have notified the Purchaser or the Purchaser’s solicitor in writing of registration of the Transmission Application”. No formal and separate “written notice” of registration was sent to the purchasers. However, in this Court it was contended for the vendors that the provision of a copy of the executed transfer in respect of Lot 1 on 4 August 2015, which bore Mr Carter’s name and signature as “transferor”, was sufficient notice for the purpose of special condition 21(c). The primary judge considered that the provision of the executed transfer was not sufficient to satisfy the notice requirement in the special condition. As will become apparent, in their communications in August and September 2015 leading to the termination of the contract, the parties overlooked the operation of this clause.

8. [9]

   Situated on Lot 1 are a memorial stone and plaque which were placed there in 1988 with the consent of the then proprietors of the land by the New South Wales Government as part of projects to commemorate Australia’s Bicentenary. As can be seen in the photograph below, which also includes a piece of A4 paper for scale, the stone (as distinct from the plaque) is approximately 1 metre in height and 1 metre in width at its base. The plaque affixed to the stone states:

9. [10]

   However, while the vendors admitted the presence of the memorial stone and plaque on Lot 1, they disputed the accuracy of the words inscribed on the plaque. They also disputed the claim that there were the remains of any Aboriginal persons (whether of Harry and Clara Bray, or others) on or within the land.

10. [11]

    The possible presence of Aboriginal objects on the land and the assertion of a possible defect in title arising from their presence was first raised in correspondence over three weeks after the contracts were exchanged. On 28 July 2015, the purchasers’ solicitor wrote to the vendors’ solicitor asserting that there were “Aboriginal objects” on the land within the meaning of the National Parks and Wildlife Act 1974 (NSW) which constituted a defect in title, and requiring the vendors to remove them before completion. The letter relevantly stated:

11. [12]

    The vendors’ solicitor replied on 5 August 2015 (by letter dated 3 August 2015) noting the purchasers’ allegation that the property is subject to a defect in title and asking for “the detail of that alleged defect and your claim”. The purchasers’ solicitor responded to that request on 17 August 2015 in the following terms:

12. [13]

    There was further correspondence between the parties’ solicitors over August and September, in which the purchasers repeated their requests for information about the Aboriginal objects, and the vendors denied knowledge of Aboriginal objects on the land and contested the alleged defect in title. On 20 August 2015, the vendors’ solicitor requested further information about the remains alleged to be Aboriginal objects and “how the remains, if any, affect the title as distinct to the quality of the land the subject of the contract.”

13. [14]

    By letter dated 27 August 2015, the purchasers’ solicitor responded with reference to a number of reports and enquiries made in relation to the land, and invited the vendors to concede the presence of Aboriginal remains as Aboriginal objects on the land and that those remains constituted a defect in title:

14. [15]

    On the same day, 27 August 2015, the vendors’ solicitor noted that the purchasers were “unable to identify what remains you allege are present nor where they are located” and that the vendors “remain to be persuaded that there are any remains at all after approximately 100 years.” This was followed by a letter on 28 August 2015 in which the vendors’ solicitor again doubted the existence of Aboriginal remains on the land. The letter referred to a report entitled “Protection and Enhancement of Biodiversity in Connected Endangered Ecological Communities Adjacent to Tallow Creek, Byron Bay” dated 7 May 2012 prepared by Mr Peter Parker for the Northern Rivers Catchment Management Authority. The letter relevantly provided:

15. [16]

    The purchasers’ reply, dated 2 September 2015, repeated the purchasers’ contention that there were Aboriginal remains on the land, and called on the vendors to disprove the presence of Aboriginal remains by conducting an archaeological survey:

16. [17]

    Later in the same letter, the purchasers again required the vendors to provide “material evidence” as to the absence of Aboriginal objects on the land, and also to procure from the Crown an assignment of its interest in any Aboriginal objects which might be on the land:

17. [18]

    On 9 September 2015, the vendors’ solicitor replied acknowledging the presence of the memorial stone and plaque, but again contesting the existence of any remains on the land. The vendors also disputed the requirement that they conduct an archaeological survey of their land:

18. [19]

    The purchasers’ solicitor responded the same day, rejecting the vendors’ explanation and claiming:

19. [20]

    On 10 September 2015, the vendors’ solicitor repeated their denial that the vendors had knowledge as to the presence of any remains as Aboriginal objects on the land:

20. [21]

    The completion date for the sale nominated on the cover page of the contract for sale was the “30th day after the contract date”, i.e. 5 August 2015. Special condition 21, however, provided for completion within 14 days after notice of registration of the Transmission Application. On 3 August 2015, the vendors’ solicitor confirmed an appointment for settlement on 5 August 2015 at 11am. On 4 August, a copy of the executed transfer was provided together with a settlement adjustment sheet. Directions to pay were also provided. Settlement did not proceed on 5 August.

21. [22]

    On 27 August 2015, the vendors’ solicitor issued a notice to complete, appointing 10 September 2015 as the settlement date. The settlement figures provided with the notice to complete required payment of default interest from 5 August 2015. We will return to the significance of the date from which default interest was sought later in these reasons.

22. [23]

    On 2 September 2015, the purchasers’ solicitor responded to the notice to complete, asserting that the notice was invalid as the vendors had not shown good title at the time of its issue. The letter relevantly provided:

23. [24]

    On 11 September 2015, the vendors withdrew their first notice to complete, and issued a further notice to complete, appointing 28 September 2015 as the date for completion. Updated settlement figures were provided on 17 September, including a claim for default interest for the period from 5 August 2015.

24. [25]

    In his letter of 23 September 2015, the purchasers’ solicitor also gave the vendors a notice disputing the validity of the second notice to complete, demanding that the vendors withdraw that notice and the demand for default interest, and requiring the vendors to submit corrected settlement figures by the following day, making time of the essence. The purchasers’ notices provided:

25. [26]

    The vendors responded on 24 September 2015 insisting on completion and refusing to comply with the notice to perform:

26. [27]

    By notice on 25 September 2015 the purchasers purported to terminate the contract:

27. [28]

    The vendors responded on 6 October 2015 alleging that the purchasers’ notice of termination was repudiatory and themselves purporting to terminate the contract:

28. [29]

    On 29 November 2015, the property was re-sold at auction for $2.525 million.

29. [30]

    On 3 December 2015, the purchasers commenced proceedings in the Equity Division of the Supreme Court of New South Wales. The purchasers sought recovery of the deposit and damages or, alternatively, relief under ss 55(1) and 55(2A) of the Conveyancing Act 1919 (NSW). The vendors filed a cross‑claim against the purchasers and Mr Cheers (who is alleged to be a guarantor) for damages for the loss of the sale.

30. [31]

    In answer to the cross‑claim, the purchasers denied that the vendors were ready and willing to perform, relied on s 55 Conveyancing Act and raised a claim for misleading or deceptive conduct under s 18 of the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law (Australian Consumer Law) in relation to representations allegedly made during the advertising and marketing of the property. Mr Cheers also denied that he was a guarantor under the contracts.

Issues in the primary proceedings

1. [32]

   The issues raised in the proceedings below were as follows:

   1. (1)

      Repudiation by failure to address defect in title in answer to requisitions – this raised the issue whether the vendors repudiated the contract by refusing to attempt (or being unable) to show and prove a title free of Aboriginal objects, such that they were not ready, willing and able to perform the contract at the time of the two notices to complete and at the time the purchasers purported to terminate the contract?

   2. (2)

      Termination for material or substantial defect in title in accordance with the rule in Flight v Booth – this raised the issue whether any Aboriginal objects in fact on the land constituted a defect in title in the sense of being a material or substantial matter impacting on the use of the land, thereby entitling the purchasers to terminate in accordance with the rule in Flight v Booth [1834] Eng R 1087; (1834) 131 ER 1160?

   3. (3)

      Repudiation by insistence upon payment of default interest – this raised the issue whether the vendors repudiated the contract by insisting on payment of interest from a date when there was no obligation to make a payment of interest?

   4. (4)

      Recovery of the deposit pursuant to the Conveyancing Act – this raised the issue whether the purchasers were entitled to recover their deposit pursuant to s 55 of the Conveyancing Act?

   5. (5)

      Defence to the cross-claim – although other issues were raised in the cross‑claim, the only issue remaining on appeal was whether Mr Matthew Cheers was liable to the vendors as guarantor under the contract of sale?

2. [33]

   Success on any of the alternative claims (1) to (3) above would have entitled the purchasers to their relief sought, viz recovery of the deposit and damages for breach of contract. Claim (4) under the Conveyancing Act was an alternative means by which the purchasers could recover the deposit (but not damages).

Decision of the primary judge

1. [34]

   The primary judge found, after “considerable hesitation” on the issue, that the memorial stone with the affixed plaque is an “Aboriginal object” within the meaning of the National Parks and Wildlife Act 1974 (NSW). Her Honour rejected the claim that any other “Aboriginal objects” as defined were present on the land.

2. [35]

   The primary judge concluded that the presence of an Aboriginal object on the property was capable of constituting a defect in title if, in the particular circumstances of the case, its existence was a material and substantial matter impacting on the use of the land; or alternatively, on the basis that an Aboriginal object was “property that had vested in the Crown, such that the vendors could not convey a title free of third parties’ property interests”. In reaching the former conclusion, her Honour drew an analogy with the circumstances in Micos v Diamond [1970] 3 NSWR 407; (1970) SR (NSW) 392, where a defect in title existed by reason of the statutory powers which the Water Board could exercise in respect of the land. Her Honour highlighted the “onerous statutory requirements” and the “risk of criminal liability” that Aboriginal objects attract under the National Parks and Wildlife Act. She observed that these requirements under the Act could present “real and significant interference” for use and development of land, depending on the “precise facts of the case”, in particular the location of the Aboriginal object on the land.

3. [36]

   Although her Honour rejected the purchasers’ claim that it had been established as a matter of fact that Harry or Clara Bray (or any other Aboriginal person) was buried on Lot 1, the primary judge was satisfied that the evidence established a “plausible contention” that Harry and Clara Bray were buried on Lot 1. Her Honour was also satisfied that it was a plausible contention that the burial site on Lot 1 was in the vicinity of a swimming pool, and that the presence of their remains, being Aboriginal objects, in that location was capable of constituting a defect in title.

4. [37]

   Having found that the presence of an Aboriginal object on the property was capable of constituting a defect in title, and that there was a plausible contention that there were in fact Aboriginal objects on the property, the primary judge concluded that it was incumbent on the vendors to address the purchasers’ requisitions about the Aboriginal objects and establish a good title. The vendors’ failure properly to do so amounted to repudiation of the contract, which gave the purchasers the right to rescind.

5. [38]

   Her Honour found that the position at common law was that a vendor has an obligation to respond to any requisition concerning a possible latent defect in title; that is, a defect in title which cannot be discovered through reasonable inquiries. Failure by a vendor to respond, or to provide an adequate response, may amount to default on the part of the vendor. While the precise rights of the parties will depend on the terms of the contract and the circumstances of the case, the primary judge observed that this contract for sale did not contain any non‑annulment clause for error or misdescription of the subject matter. Furthermore, although cl 6 of the contract gave the purchasers an election to claim compensation for error or misdescription, the purchasers were not confined to that remedy.

6. [39]

   The primary judge concluded that the vendors’ conduct, which she characterised as a failure properly to address requisitions made by the purchasers concerning the presence of the Aboriginal objects on the land, amounted to a repudiatory breach of contract by the vendors, giving the purchasers the right to rescind. The primary judge was much influenced in this conclusion by the decision of Windeyer J in Crowe v Rindock [2005] NSWSC 375; (2005) 12 BPR 22,823.

7. [40]

   Accordingly, issue 1 was resolved in favour of the purchasers.

8. [41]

   The purchasers asserted there were six items on the land which were “Aboriginal objects” within the meaning of the National Parks and Wildlife Act, being:

   1. (1)

      a memorial stone and plaque bearing the inscription “Harry and Clara Bray, Tribal Elders of the Bundjalung Tribe buried near this site circa late 1890”;

   2. (2)

      the remains of Harry and Clara Bray (and possibly one or more of their children);

   3. (3)

      the remains/burial sites of other Aboriginal persons;

   4. (4)

      the remains of a gunyah (described as a traditional native Aboriginal home or shelter);

   5. (5)

      a ceremonial “mound”; and

   6. (6)

      a bunya pine tree.

9. [42]

   The primary judge found that the memorial stone and plaque fall within the definition of “Aboriginal objects” under the legislation, in that it is an object that provides material evidence of the fact that Harry and Clara Bray lived in New South Wales. Her Honour concluded that the memorial stone and plaque had been “abandoned” for the purposes of s 83 of the National Parks and Wildlife Act, applying the test of abandonment set out in Gupta v Fordham Laboratories Pty Ltd [2018] NSWSC 551, with the result that the memorial stone and plaque were property of the Crown.

10. [43]

    The primary judge concluded that the purchasers’ contention that items (2) to (5) were present on the land was not made out, and her Honour was not satisfied that item (6) was “material evidence” relating to human habitation and accordingly was not an “Aboriginal object” as defined. No notice of contention or cross-appeal was filed in relation to those findings.

11. [44]

    The primary judge concluded that the presence of the memorial stone and plaque was a defect in title that was so material or substantial as to entitle the purchasers to rescind. The presence of that Aboriginal object on Lot 1 imposed a constraint on the purchasers’ ability to develop that land, which the purchasers might reasonably have regarded as substantial considerations in a decision whether to purchase the property. The purchasers were therefore entitled to rescind the contract pursuant to the rule in Flight v Booth.

12. [45]

    Issue 2 was therefore resolved in favour of the purchasers.

13. [46]

    The primary judge concluded that the vendors’ notices to complete amounted to a repudiation by insisting on an invalid demand for interest. The primary judge relied upon Carydis v Merrag Pty Ltd [2007] NSWSC 1220 which her Honour found was a case “not unlike the claims and pleadings in the present proceeding”. In that case, the vendors purported to terminate a contract for the sale of land on the basis that the purchasers had repudiated the contract by refusing to pay interest on settlement. The judge in that case found that the purchasers’ interpretation of the contract was correct and no interest was payable; since the purchasers were insisting on a correct view of the contractual position they could not possibly have been in repudiatory breach of the contract. Instead, it was the vendors who repudiated the contract by insisting on payment of interest where no obligation existed under the contract properly construed.

14. [47]

    Her Honour considered that the vendors’ insistence in early August that settlement should proceed on 5 August 2015 was not reasonable, having regard to the various matters “still to be arranged”, with the result that there was no “failure to complete on a date properly appointed for settlement” (cf special condition 8). Furthermore, although special condition 21(c) provided for completion within 14 days after notification of registration of the transmission application, her Honour found that when the notices to complete were issued “there still had been no notice in writing of registration of the transmission application” so that the 14 day period had not commenced.

15. [48]

    As for the insistence on payment of default interest, the primary judge found that the vendors were not only wrong to require payment of default interest in the absence of any default by the purchasers, but they had refused to withdraw their claim for interest upon being requested to do so by the purchasers, who had also made time of the essence for the vendors to do so. The primary judge found that this conduct amounted to repudiation of the contract by the vendors, giving the purchasers the right to rescind.

16. [49]

    Accordingly, issue 3 was resolved in favour of the purchasers.

17. [50]

    As the purchasers were successful on their principal claim that they were entitled to rescind the contract and to require the vendors to repay their deposit, this issue did not strictly arise. Even so, the primary judge provided brief reasons on a contingent basis resolving this issue.

18. [51]

    Section 55 of the Conveyancing Act gives a purchaser the right to recover his or her deposit in certain circumstances. The sub‑sections relied on by the purchasers before the primary judge provide:

19. [52]

    Although the purchasers sought relief pursuant to s 55(1), this sub-section was not considered by the primary judge, who dealt solely with s 55(2A).

20. [53]

    It was accepted that, on an application under s 55(2A), the purchaser must show some injustice or something that was inequitable about the conduct of the vendor: Greek Orthodox Parish Community of St Marys and District Ltd v Denis Stanley Merrick [2014] NSWSC 1196 at [17] per Young AJA. The primary judge concluded that there was injustice in the present case, arising from the defect in title. If the deposit was not refunded, the purchasers would essentially have been forced to accept something which was less than that for which they bargained, or risk losing their deposit.

21. [54]

    The primary judge also accepted the alternative submission that injustice arose from the vendors’ conduct before and after contracting. Prior to exchanging contracts, the vendors failed to disclose the Aboriginal significance of the land, which was within their knowledge, notwithstanding that the property was marketed as a development proposition. After exchanging contracts, upon the purchasers communicating doubts as to the vendors’ title, the vendors did not take up the opportunity to rescind and promptly resell (at a substantially lower price by reason of the disclosure of the Aboriginal significance of the land) in an “attempt to hold on to an unjust gain”.

22. [55]

    Accordingly, the primary judge concluded that, if not for the purchasers’ success on their principal claim, the power under s 55(2A) should be exercised to require the vendors to return the deposit to the purchasers.

23. [56]

    As part of its defence to the vendors’ cross‑claim for damages for loss of the sale, the purchasers contended that the vendors had engaged in misleading or deceptive conduct in trade and commerce within the meaning of s 18 of the Australian Consumer Law. Her Honour rejected that claim and no notice of contention or cross-appeal has been filed in relation to that finding.

24. [57]

    In response to the vendors’ cross‑claim against him, Mr Matthew Cheers denied that he had guaranteed performance of the purchasers’ obligations. Special condition 22 of the contract provided for such a guarantee by the director of the corporate purchaser, Cheers Aviation Pty Ltd, and an indemnity in favour of the vendors. While the execution clause made provision for Mr Cheers to sign as “Sole Director/Secretary”, the primary judge recorded that he denied doing so. In the absence of that signature, her Honour found that Mr Cheers was not bound as guarantor under the contract.

Issues on appeal

1. [58]

   The issues on appeal are as follows:

   1. (1)

      did the vendors repudiate the contract by failing properly to address objections or requisitions founded on the “plausible contention” that there were Aboriginal objects on the land constituting a defect in title, thereby permitting the purchasers to terminate the contract;

   2. (2)

      were the purchasers entitled to terminate the contract in accordance with the rule in Flight v Booth by reason of a material or substantial defect in title arising from the presence on the land of the memorial stone and affixed plaque;

   3. (3)

      did the vendors repudiate the contract by insisting on payment of default interest when there was no obligation to make that payment;

   4. (4)

      were the purchasers entitled to recover the deposit pursuant to s 55 of the Conveyancing Act;

   5. (5)

      was Mr Matthew Cheers liable to the vendors as guarantor under the contract of sale.

2. [59]

   Because the conclusion in relation to one matter has a critical impact on the conclusion of each of these issues on appeal, we will address it first. That issue is whether the memorial stone and affixed plaque is an “Aboriginal object” within the meaning of the National Parks and Wildlife Act.

3. [60]

   The National Parks and Wildlife Act 1974 (NSW) provides that “Aboriginal objects”, as defined, are deemed in certain circumstances to be property of the Crown. The relevant definitions are as follows:

4. [61]

   To fall within the definition, the memorial stone and affixed plaque must first be an object “relating to the Aboriginal habitation of the area that comprises New South Wales”. The definition includes Aboriginal remains.

5. [62]

   The provision vesting property in certain Aboriginal objects in the Crown has a number of important features. Critically, for present purposes, s 83(2) provides that “nothing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land”. As far as the memorial stone and affixed plaque are concerned, to fall within the section the object must be “abandoned” on or after the day of commencement of the National Parks and Wildlife Act on 27 November 1974. The section provides:

6. [63]

   The context is important. The following provisions from the Act of 1967 (as amended by the National Parks and Wildlife (Amendment) Act 1969 (NSW)), referred to in s 83(1)(a) have the effect of deeming certain property, namely relics (as defined) which have been abandoned, as property of the Crown:

7. [64]

   Part 6 of the National Parks and Wildlife Act regulates dealings with Aboriginal objects. Aside from the deemed vesting of abandoned Aboriginal objects as property of the Crown under s 83, there are further provisions inter alia imposing responsibilities on the Chief Executive to protect Aboriginal objects (s 85), providing for the transfer of Aboriginal objects (s 85A), and penalising persons for harming or desecrating Aboriginal objects (s 86).

8. [65]

   The purpose of Pt 6 of the Act was explained by the Minister for Lands and Minister for Tourism in the New South Wales Legislative Assembly, Parliamentary Debates (Hansard), 29 August 1974 at 783 as follows:

9. [66]

   The Minister also made comments at 784, relevant to the question of the effect that the presence of Aboriginal objects on land has on a landowner’s ability to use and dispose of land:

10. [67]

    The unchallenged evidence is that in about 1988 the memorial stone with its affixed plaque was placed on Lot 1 during that year with the consent of the then registered proprietor of the land by the New South Wales Government as a Bicentennial project. The evidence was that the matters recorded in the plaque were grossly inaccurate. Harry and Clara Bray did not die until some time in the 1920s, more than three decades after the “late 1890” date identified by the plaque. Although there was some evidence that some remains were discovered in the construction of a swimming pool on Lot 1 in 1988, the primary judge was not satisfied that any Aboriginal remains existed on the land as at July 2015 when the contract for sale was made.

11. [68]

    There was no controversy on the appeal about the principles of statutory interpretation to be applied. The task remains the construction of the words the legislature has enacted. The beginning and end of the task of statutory interpretation is the statute or, in this case, statutes, that fall to be construed: Federal Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503; [2012] HCA 55 at [39]. The meaning of words and phrases is influenced by the immediate context in which they are used. The correct approach to statutory interpretation uses “context” in its widest sense “to include such things as the existing state of the law and the mischief which, by legitimate means … one may discern the statute was intended to remedy”: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 (Brennan CJ, Dawson, Toohey and Gummow JJ); [1997] HCA 2.

12. [69]

    A construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object: Interpretation Act 1987 (NSW), s 33.

13. [70]

    The objects of the National Parks and Wildlife Act tend against the purchasers’ contention that the memorial stone with its affixed plaque amounts to an “Aboriginal object”. The objects are relevantly identified in s 2A:

14. [71]

    Accepting as we do the evidence that the land here in question has a particular significance to the local Aboriginal population, it is nonetheless unlikely that a memorial stone and affixed plaque supplied, apparently as a gift, by the Bicentennial Authority to the former registered proprietor of the land could correctly be described as an “object … of significance to Aboriginal people”. It is unlikely that the protective measures and responsibilities imposed by the Act apply to an object created by non-Aboriginal people to record the fact of Aboriginal habitation in a given area.

15. [72]

    The text of the National Parks and Wildlife Act tends strongly to suggest that the memorial stone and affixed plaque is not an “Aboriginal object” as defined. The first matter to notice is that the definition in s 5 requires the existence of a “deposit, object or material evidence (not being a handicraft made for sale)” relating to the Aboriginal habitation of the area. Whilst the definition is a deliberately broad one, each of the items “deposit”, “object” or “material evidence” relating to the Aboriginal habitation of the area connotes something that is a physical manifestation, sign or remnant of Aboriginal occupation or use of the land. As Basten JA explained in Country Energy v Williams (2005) 63 NSWLR 699; [2005] NSWCA 318 at [29]:

16. [73]

    A memorial stone with an affixed plaque provided to a landowner by the New South Wales Government as a Bicentennial project in 1988 does not bear witness in the sense of provide evidence about Aboriginal occupation of the land. There is an important distinction between evidence of human habitation that “bears witness” in some sense to Aboriginal habitation on the one hand and, on the other hand, a plaque prepared by a Government Authority recording the, as it happens incorrect, opinion of that Government Authority about Aboriginal habitation of the land.

17. [74]

    There are a number of other features of the National Parks and Wildlife Act tending against the purchasers’ contention that the memorial stone and affixed plaque is an “Aboriginal object”. Section 83 of the National Parks and Wildlife Act provides for the vesting in the Crown of an Aboriginal object in two circumstances: first, where the object was, prior to the commencement day of 27 November 1974, deemed to be the property of the Crown by virtue of s 33D of the Act of 1967 and, secondly, where an Aboriginal object is “abandoned” on or after that day.

18. [75]

    As to the first, the Act of 1967 is the National Parks and Wildlife Act 1967 (NSW), the statutory predecessor to the legislation currently under consideration: National Parks and Wildlife Act, s 5(1) definition of “Act of 1967”. Section 33D of the Act of 1967 is in similar terms to s 83 but provides for the vesting of title to abandoned “relics” (defined in the Act of 1967 in similar terms to “Aboriginal objects” under the present Act) in the Crown. This is an important contextual matter. If the memorial stone and affixed plaque had been placed on the land prior to the commencement date, the language of s 83 of the current Act suggests that title in the memorial stone and affixed plaque would not have vested in the Crown by reason of the first limb, viz. that the memorial stone and plaque do not comprise a “relic” caught by s 33D of the Act of 1967. That conclusion provides support for the vendor’s submission that the memorial stone and plaque is not an Aboriginal object to which s 83 of the current Act applies.

19. [76]

    As to the second way title to an “Aboriginal object” may vest in the Crown, the concept of “abandonment” in both s 83 of the current Act and s 33D of its statutory predecessor strongly suggests that the Aboriginal object said to have been abandoned must, in and of itself, constitute tangible evidence of Aboriginal habitation. It would strain the concept of “abandonment” to include within the definition of “Aboriginal object” a record of the fact or opinion about Aboriginal habitation which was placed on the property as a Bicentennial project. The notion of “abandonment” provides support for the vendors’ construction that an “Aboriginal object” is confined to tangible evidence of Aboriginal habitation. Such an object can meaningfully be described as having been “abandoned”, in a way that the memorial stone and affixed plaque cannot. In this regard we respectfully doubt that Gupta v Fordham Laboratories Pty Ltd and the authorities referred to at [166]-[168] in that case, which all deal with circumstances in which it may be inferred that a contract has been abandoned by the parties to that contract, throws any light on this question of statutory interpretation.

20. [77]

    Further support for the vendors’ construction is provided by s 85A of the Act, which deals with the transfer of Aboriginal objects:

21. [78]

    The language of this provision, which provides for the “return” of Aboriginal objects to their “Aboriginal owners”, is drafted on the apparent statutory assumption that an Aboriginal object is one which, although currently the property of the Crown, is secret or sacred according to Aboriginal tradition. It would not be consistent with the concept of “returning” an object to its Aboriginal “owner” if according to Aboriginal tradition the relevant object never had any such significance.

22. [79]

    The relevant context is also consistent with the vendors’ construction. As set out by the Minister for Lands and Minister for Tourism in his second reading speech at Hansard 783, the object of the statute is “to preserve and protect remaining traces of the Aboriginal way of life”. The memorial stone and plaque do not constitute remaining traces of the Aboriginal way of life.

23. [80]

    In the present case the memorial stone and plaque do not bear witness in any physical sense to Aboriginal habitation of the land. We have thus concluded that the memorial stone and plaque is not an “Aboriginal object” within the meaning of the National Parks and Wildlife Act. This conclusion differs from that of the primary judge and has a significant impact on each of the issues in the appeal to which we now turn.

Issue 1 – The purchasers’ principal repudiation case

1. [81]

   The appellants challenge the primary judge’s determination that the purchasers had made out their principal repudiation case against the vendors, namely that by failing properly to address the purchasers’ “plausible contention” that there were Aboriginal objects on the land that were capable of constituting a defect in title, the vendors evinced an intention no longer to be bound by the contract. Before turning to that case, three related preliminary issues should be addressed:

   1. (1)

      this Court’s decision in the first Mehmet v Carter appeal;

   2. (2)

      the proposition that the Crown’s property in an abandoned Aboriginal object pursuant to s 83 of the National Parks and Wildlife Act is an interest affecting the vendors’ title to the land; and

   3. (3)

      whether the memorial stone and plaque constitute a constraint on the development of the land.

2. [82]

   This Court in Mehmet v Carter (2018) 98 NSWLR 977; [2018] NSWCA 305 at [100] (Beazley P, McColl JA agreeing), set aside certain answers to separate questions which had been given by Darke J (Mehmet v Carter [2017] NSWSC 1067) and concluded, obiter, that the presence of “Aboriginal objects” as defined by the National Parks and Wildlife Act may be capable of constituting a defect in title as a question of statutory construction of that Act, notwithstanding that sub-s 83(2) of the National Parks and Wildlife Act makes explicit provision that “[n]othing in this section shall be construed as restricting the lawful use of land or as authorising the disturbance or excavation of any land.” Bathurst CJ did not in terms agree with the then President and restricted himself (at [10]) to the observation that “a defect in title is not limited to a failure to convey something which was contracted to be conveyed”.

3. [83]

   In coming to the conclusion that the presence of Aboriginal objects on the land was capable of constituting a defect in title, Beazley P drew an analogy with the facts in Micos v Diamond [1970] 3 NSWR 407. In that case, the purchasers of a parcel of land sued their solicitor for negligence in failing to inform them before completion of the existence of a sewer drain on the property and the rights of the relevant statutory body, the Metropolitan Water, Sewerage and Drainage Board (the Water Board) in relation to that drain. The Water Board had a statutory right to enter upon any private land and to lay or place therein a sewerage main. The statute then made it an offence to erect, construct or place any building or other structure in, upon, over or under that sewerage main so as to interfere with or to obstruct the sewer, and empowered the Water Board to obtain an injunction to prevent any damage to, interference with or obstruction of the sewer in case of a threatened breach.

4. [84]

   However, we respectfully doubt whether the analogy to Micos v Diamond is apposite in the present case. Unlike the statutory rights and powers conferred upon the Water Board in that case, here the National Parks and Wildlife Act provides no authority to enter onto the land and specifically provides that the fact that an Aboriginal object is deemed to be the property of the Crown is not to be construed as “restricting the lawful use of land or as authorising the disturbance or excavation of any land”: s 83(2). Whilst it is correct that the Act proscribes certain conduct in relation to Aboriginal objects, the express statutory provision that the lawful use of the land shall not be restricted by reason of the presence of any Aboriginal object which is “property” of the Crown provides a very significant difference from Micos v Diamond. Resolution of this issue, however, should await a case where it directly arises.

5. [85]

   The vendors do not cavil with the proposition that they have an obligation to show good title to the land free of any interest of a third party therein. The vendors do challenge the primary judge’s implicit conclusion that the property that the Crown has in an abandoned Aboriginal object pursuant to s 83 of the National Parks and Wildlife Act is an interest affecting the vendor’s title to the land.

6. [86]

   The terms of s 83 have already been set out at [62] above. Whilst sub‑s 83(1) deems an Aboriginal object that is abandoned as “the property of the Crown”, the use of the word “property” in sub‑s 83(1) does not amount to the creation of a proprietary interest in the Aboriginal object which is vested in the Crown and which would prevent the vendors from passing an unencumbered estate in fee simple in the land. Writing in relation to s 7(1) of the Fauna Conservation Act 1974 (Qld) which, like the National Parks and Wildlife Act, also deems certain items as “the property of the Crown”, the plurality in Yanner v Eaton (1999) 201 CLR 351; [1999] HCA 53 (Gleeson CJ, Gaudron, Kirby and Hayne JJ) said:

7. [87]

   That analysis is apposite to the construction of the National Parks and Wildlife Act, notwithstanding that the Act regulates a different subject matter than the statute construed in Yanner v Eaton. The statutory vesting of abandoned Aboriginal objects as property of the Crown under s 83(1) is a “fiction expressive in legal shorthand” of the importance to the people, in particular the Aboriginal people, of New South Wales that the State has the power to preserve and regulate Aboriginal objects. The “property” which the National Parks and Wildlife Act vests in the Crown is the aggregate of the various rights of control by the Executive created by that Act. Those rights are not the rights of full beneficial, or absolute, ownership. They do not affect the legal estate of the land where the Aboriginal object is located. Assuming it is an Aboriginal object, the property of the Crown in the memorial stone and plaque did not constitute an interest in the subject land.

8. [88]

   This view is fortified by the terms of sub‑s 83(2) which affirms that “[n]othing in this section shall be construed as restricting the lawful use of the land”. The denial under sub‑s 83(3) of any compensation payable in respect of the vesting of an Aboriginal object in the Crown is also consistent with the conclusion that the “property” of the Crown is not an encumbrance on the legal title of the owner of the land.

9. [89]

   Consequently, even if the memorial stone and plaque is an Aboriginal object, the property that the Crown has in that object does not constitute an interest in the land.

10. [90]

    The alternative basis on which the existence of the memorial stone and plaque was said by the purchasers to constitute a defect in title is the development constraint it poses, which meant that the purchasers were not getting substantially the same land for which they had bargained. Reserving to a case where it arises the question whether an Aboriginal object is capable of providing a relevant development constraint, the difficulty with this conclusion in the present case is that it is clear that the presence of the memorial stone and affixed plaque would not in fact pose any additional constraint on the development potential of the land.

11. [91]

    The primary judge did not find that the memorial stone and plaque resulted in any additional restriction on the purchasers’ ability to develop the land. Instead, her Honour’s only finding was that they might pose “potential additional development constraints” (italics added).

12. [92]

    However, the evidence does not support a finding that the presence of the memorial stone and plaque on the land would, or even might, have resulted in additional constraints on its development. The land on which the memorial stone and plaque is located was already subject to development restrictions forbidding development of that part of the land. The joint expert opinion of Messrs Darryl Anderson, Tim Robins and Stephen Connelly identified various constraints affecting the development potential of the property, including endangered flora and fauna, bushfire hazards and traffic generation considerations. Relevantly, the report contained the following summary of the zoning constraints affecting the land:

13. [93]

    The evidence before the primary judge was to the effect that the land on which the memorial stone and plaque rests is located in part of the 50 metre buffer zone required by the State Environmental Planning Policy No 14—Coastal Wetlands (Coastal Wetlands SEPP). The technique of identifying a buffer around areas identified as “coastal wetlands” is a rational and proportionate legislative device which serves the objects of the Environmental Planning and Assessment Act 1979 (NSW) and the Coastal Protection Act 1979 (NSW) by engaging certain development controls: Reysson Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 [2020] NSWCA 281 at [104]-[105]. Since the land on which the memorial stone and plaque is located is within the 50 metre buffer zone specified by the Coastal Wetlands SEPP, there is a prohibition against development on that portion of land imposed by the Coastal Wetlands SEPP. Even assuming that the memorial stone and plaque might theoretically have posed development constraints on the land, the land on which it is located was already incapable of being further developed by reason of the Coastal Wetlands SEPP.

14. [94]

    The purchasers’ reliance on existing use rights would not have assisted them in this regard. This is because the unchallenged evidence was that the land on which the memorial stone and plaque is situated (near the swimming pool fence and close to a walkway to some cabins) was not relevantly in “use” such that redevelopment might be permitted.

15. [95]

    In light of the development constraints already affecting the land on which the memorial stone and plaque is located, it cannot be said that its presence posed any further constraint limiting the development potential of the land. The presence of the memorial stone and plaque was not a material or substantial matter affecting the use or enjoyment of the subject land so as to constitute a defect in title.

16. [96]

    The purchasers’ principal case was predicated on the “plausible contention” advanced by requisition or objection about the existence of Aboriginal objects on the land constituting a defect in title, and the alleged failure by the vendors adequately to establish their good title in response to that requisition or objection.

17. [97]

    The primary judge found that the evidence was capable of supporting a “plausible contention” that there were Aboriginal objects present on the land aside from the memorial stone and plaque (whose presence was uncontested), being Aboriginal remains belonging to Harry and Clara Bray. The vendors’ failure “squarely” and adequately to address the purchasers’ objection that there was a plausible contention as to a defect in title due to the presence of the Aboriginal objects on the land amounted to repudiation, entitling the purchasers to rescind the contract.

18. [98]

    A vendor of land bears an obligation at common law to “show” and “make” a good title. For land under Old System title, where a history of the dealings and interests affecting the land is recorded in an “abstract of title”, a vendor “shows a good title when all matters essential to the title are stated in the abstract”, and “makes a good title when those matters are proved, by sufficient evidence, to be true”: Roy Milner Stonham, The Law of Vendor and Purchaser (1964, Law Book Co) (Stonham) at [665].

19. [99]

    This obligation is also understood to apply in relation to the sale of land registered under the Real Property Act 1900 (NSW), though the means by which it may be discharged have necessarily changed: Patricia Lane, Sale of Land in New South Wales (6th ed, 2018, Law Book Co) (Lane) at [10.10]; see also FE Moss, Sale of Land in New South Wales (5th ed, 1973, Butterworths) at 264 (referring to the “the vendor’s duty to show a good title” without making any distinction between Old System and Torrens title). By reason of the conclusiveness of the Torrens title register, a vendor of Torrens title land “does not face the uncertainties of title which might obtain in the case of land held under common law title” and “should have no difficulty in showing title or of making it”: Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529 at 535 (Barwick CJ); [1972] HCA 36 (Godfrey Constructions).

20. [100]

    In Travinto Nominees Pty Ltd v Vlattas (1973) 129 CLR 1 at 12; [1973] HCA 14, Barwick CJ explained, albeit using different terminology (i.e. using “prove” in place of “make”), how a vendor discharges its obligation to prove good title in relation to both Old System and Torrens title land:

21. [101]

    The purchaser’s right to make “requisitions” or “objections” on title exists as a means of holding a vendor to its common law obligation to show and make a good title. According to L Voumard, The Sale of Land (5th ed, 1995, Law Book Co) at [10.490]:

22. [102]

    That passage was quoted with approval in Votraint No 1088 Pty Ltd v Commonwealth [2004] NSWSC 1003 at [14] by Young CJ in Eq.

23. [103]

    The role of requisitions in giving effect to the vendor’s obligation to show and make a good title is also explained in T Williams, A Treatise on the Law of Vendor and Purchaser of Real Estate and Chattels Real (3rd ed, 1922, Sweet and Maxwell), Bk 1 at 34:

24. [104]

    Accordingly, a purchaser may make either a “requisition” or an “objection” on title. A “requisition” on title, strictly called, is a demand that the vendor provide some information or take some action in order to prove good title. For instance, in the Torrens title context it might require the vendor to advise the purchaser of the exact position of a drainage pipe known to be running below the land, in respect of which no easement has been registered: Liberty Grove (Concord) Pty Ltd v Yeo [2006] NSWSC 1373 at [13]. An “objection” on title is an assertion by the purchaser that there is a defect in the vendor’s title to the land subject of the sale: Godfrey Constructions at 536 (Barwick CJ). The distinction between the two terms is often blurred in practice; Stonham recognises that an objection (strictly so called) “ought to be accompanied by a demand, or requisition, for the remedying of the defect where it is remediable”. In some cases, an objection may perform the same function as a requisition in “point[ing] out what is required to complete the abstract or perfect the title": Stonham at [1007].

25. [105]

    A requisition or objection in the strict sense can be made either as to title (as explained above) or to conveyance (i.e. in relation to the manner in which title is to be conveyed): Adolfson v Jengedor Pty Ltd (1995) 6 BPR 14,147 (Adolfson) at 14,154 (Young J), citing Voumard Sale of Land, 4th ed at 284.

26. [106]

    It is, however, recognised that the purchaser might also ask another type of question, also described as a “requisition”, though it goes to neither title nor conveyance, but is in the nature of a general inquiry: see Godfrey Constructions at 536; Stonham at [1005]. Barwick CJ in Godfrey Constructions distinguished these “requisitions in the nature of general inquiries” from true requisitions on title in the following terms (at 536):

27. [107]

    Stonham at [1010] sets out the following subject matters which might form the basis of general inquiries (though the list was considered to be too broadly formulated by Windeyer J in Crowe v Rindock [2005] NSWSC 375 at [22]):

28. [108]

    For instance, requisitions in the nature of general inquiries were made in the following terms in Gogard Pty Ltd v Satnaq Pty Ltd [1999] NSWSC 1283; (1999) 9 BPR 17,171 (Gogard) (and found by Santow J to have been properly made at [181]):

29. [109]

    Similarly, in Adolfson at 14,154, Young J found that the following requisitions were validly made:

30. [110]

    Once made, a vendor is obliged to “answer requisitions properly issued to the extent of the vendor’s knowledge”: Gogard at [181] (Santow J); see also P Butt, The Standard Contract for Sale of Land in New South Wales (2nd ed, 1998, Law Book Co) (Butt) at [5.44]. The standard form contract does not prescribe any consequences for failing to answer (or satisfactorily answer) a properly made requisition per se. Rather, in the first instance, it will justify service by the purchaser of a notice to perform the obligation to answer within a reasonable time and making time essential: Re Stone and Saville’s Contract [1962] 1 WLR 460. If the answer is not given after that time, the purchaser may be entitled to terminate the contract for repudiation.

31. [111]

    Failure to answer satisfactorily will also preclude the vendor from issuing a notice to complete, as the vendor cannot be regarded as ready, willing and able to complete: Winchcombe Carson Trustee Co Ltd v Ball-Rand Pty Ltd [1974] 1 NSWLR 477 at 477-478; Adolfson at 14,154.

32. [112]

    Otherwise, a purchaser’s remedies depend on the type of requisition made. Where the requisition relates to an irreparable defect in title with no prospect that the vendor will be able to cure it, then the purchaser will have a right to rescind brevi manu, as noted by the primary judge at [425] (citing Walton v Stocks & Parkes Investments Pty Ltd (1975) 1 BPR 9660 at 9663 (in turn citing Bell v Scott (1922) 30 CLR 387 at 392 (Knox CJ), 395 (Isaacs J), 398 (Higgins J); [1922] HCA 13)).

33. [113]

    Conversely, Lane explains the consequence of a purchaser persisting with an improperly made requisition at [10.220]:

34. [114]

    There are thus two questions to be determined in addressing the purchasers’ principal repudiation case: first, whether the purchasers’ requisition was properly made; and secondly, whether the vendors failed to respond to the requisition as required in a manner amounting to repudiation of the contract.

35. [115]

    In relation to the first issue, what constitutes a valid requisition is left to the common law: Festa Holdings Pty Ltd v Adderton [2004] NSWCA 228 at [7] (Mason P). As summarised above, there are different categories of requisition (as identified by Barwick CJ in Godfrey Constructions at 536), distinguished by their subject matter. A requisition must fall within one of those categories to qualify. There are various requirements (substantive and procedural) which condition the making of a valid requisition. The requirements were summarised by Santow J in Gogard:

36. [116]

    Special attention should be paid to the requirement of particularity: a requisition is not properly made if it is a “wide and searching interrogatory”: Re Ford & Hill (1879) 10 Ch D 365. In Gogard the following purported requisition was found not to be sufficiently clear so as to be valid:

37. [117]

    That survey report, which purported to evidence “matters of non-compliance” in the form of otherwise undisclosed encroachments by a party wall, contained a sketch that referred to a “party wall” and “easement”, but did not reveal the alleged encroachment or make clear that this was the defect complained of (at [252]-[253]).

38. [118]

    Santow J, in reaching the conclusion that the requisition was not “clear enough in its terms so as to be valid”, found:

39. [119]

    The requirement that a requisition or objection be framed in sufficiently specific terms in order to be valid was also a key issue in Crowe v Rindock. In that case, Windeyer J found at [23] that a requisition about “permissible use” was a question which required an answer, but that a “wide and searching interrogatory” in the form of a “searching unlimited question requiring the vendor to search his or her mind as to what other risk there might be and to decide whether the specified and unspecified risks give rise to restrictions on use not necessarily imposed by competent authority” was impermissible.

40. [120]

    As to the second issue in the present case, relating to the sufficiency of the vendors’ response, the general position is that a vendor is obliged to “answer requisitions properly issued to the extent of the vendor’s knowledge”: Gogard at [181] (Santow J). Similarly, in Crowe v Rindock at [11], Windeyer J stated:

41. [121]

    According to the cited passage in Butt at [5.45]:

42. [122]

    Stonham relevantly states at [1011]:

43. [123]

    Where the vendor has no knowledge of a matter which is the subject of a requisition, and responds to that effect, the vendor’s response carries with it an implied representation that the vendor has undertaken reasonable inquiries to verify that the asserted matter does not exist. As observed by Hoffman LJ (with whom Russell and Evans LLJ agreed) in William Sindall PLC v Cambridgeshire County Council [1994] 1 WLR 1016 at 1025:

44. [124]

    To similar effect was the decision of this Court in Bebonis v Angelis (2003) 56 NSWLR 127; [2003] NSWCA 13. In that case, the purchasers raised the requisition: “Is the vendor aware of (a) Any easement, right or licence affecting the land and not shown upon the Certificate of Title and not discoverable by search”. The response given by the vendors’ solicitor was: “We are instructed No”. That instruction was incorrect, as the land was subject to a right of way reserved when the vendors acquired the property but which the Registrar-General had failed to record on the vendors’ title. In considering whether the vendors and their solicitors were liable in negligence to the purchasers for the incorrect answer, Handley JA (with whom Beazley and Heydon JJA agreed) contemplated that in answering requisitions the vendors implicitly warrant that they have taken reasonable care in preparing the answer:

45. [125]

    On this approach, only where the vendor has knowledge or reasonable means of knowledge of the asserted defect or its underlying facts must it give a substantive answer: Butt at [5.45]; Stonham at [1011]. What the outer limits of a “reasonable” means of knowledge comprise has not typically been at issue in the cases about requisitions on title, which have tended to involve asserted defects whose existence is either known (see eg Liberty Grove v Yeo; Gogard) or is readily ascertainable by the vendor (see eg Crowe v Rindock; Adderton v Festa Holdings Pty Ltd [2003] NSWSC 1065).

46. [126]

    In Crowe v Rindock, one of the requisitions made by the purchaser was whether “the subject land has been proclaimed to be a mine subsidence district within the meaning of the Mine Subsidence Compensation Act, 1961”. That fact was ascertainable by reference to a certificate annexed to the contract for sale (and which the vendors’ solicitor, in making the requisition, was taken to have overlooked: at [24]). The requisition was found at [23] to be a “genuine requisition on title” on the basis that s 15 of the Act provided that if the land had been proclaimed a mine subsidence district, and improvements had been made on it without the prior approval of a statutory board, then the purchaser could rescind the contract for sale. Windeyer J opined that while the vendors’ response, that the purchaser “must rely on his own inquiries”, was insufficient, a reply in the terms of “not to the vendors’ knowledge” or “not so far as the vendor is aware, but the purchaser should make his own inquiries” would be proper: at [11].

47. [127]

    In Adderton v Festa Holdings, the solicitors for the purchaser made a requisition asking whether any residential building work had been done on the property under a contract entered into or commenced after 21 March 1990 and, if so, requested details of insurance applicable to the work under the Building Services Corporation Act 1989 (NSW) (now retitled the Home Building Act 1989 (NSW)). By requisition 29 the solicitors also requested a copy of the vendors’ warranty insurance for the dwelling. The vendors replied that there had been building work undertaken by a previous owner, and attached correspondence revealing that no insurance had been issued. The purchasers alleged that this was an insufficient response and that the vendors were obliged to obtain alternative insurance in accordance with the Home Building Act prior to conveying the property. Gzell J construed the Home Building Act as not requiring the vendors to obtain alternative insurance cover and concluded that the answers given to the requisitions were appropriate: at [20]. The vendors were thus entitled to give the purchasers a notice to complete and to terminate on the purchasers’ failure to complete in accordance with that notice. Gzell J also noted in obiter that even if insurance were required, its absence would not be a defect in title: at [23]. The finding that absence of insurance was not a defect in title was expressly affirmed by this Court: Festa Holdings Pty Ltd v Adderton [2004] NSWCA 228 at [60] (Mason P, Sheller JA and Stein AJA agreeing).

48. [128]

    A vendor is not required to take more than “reasonable” steps to ascertain the asserted defect on which a requisition or objection to title is based. The degree of certainty with which the existence of the asserted defect is put by the purchaser must necessarily inform what means of obtaining the necessary knowledge are “reasonable” to the vendor.

49. [129]

    As made, the purchasers’ principal repudiation case did not turn on whether it was established that there were Aboriginal objects in or on the land. Their case was that there was a “plausible contention” as to the existence of such objects on the land, and as to their presence being capable of constituting a defect in title. The basis for that contention with respect to the existence of Aboriginal objects on the land was the “reputation” evidence establishing the knowledge and belief of the Arakwal community that Harry and Clara Bray were buried on the land and that there were other Aboriginal remains on the land. In our view, and notwithstanding that evidence and the purchasers’ contention as to the capacity of the existence of any such remains to constitute a defect in title, the objections and requisitions raised were not properly made and did not require an answer from the vendors. Furthermore, even if properly made, the answers given by the vendors to those requisitions were sufficient to discharge their obligation to provide a reasonable response and did not constitute or involve any repudiation of the contract.

50. [130]

    The factor which is particularly relevant to our reaching this conclusion is that the purchasers’ requisitions and objections were based not on a defect in title which was actually proved to exist, but merely on the contention that there might be in existence certain matters which, if they existed, could constitute a defect in title. The degree of specificity with which the purchasers were required to formulate their requisitions or objections to title, and the form of answer required of the vendors in order to squarely address such a requisition or objection, must necessarily take account of the fact that the requisitions and objections were based on a reputed, rather than proved, defect.

51. [131]

    Another key factor arises from the correspondence set out at [11]-[26] above. The only Aboriginal objects alleged by the purchasers to be on the land in that correspondence were “Aboriginal remains”, being those of Harry and Clara Bray and possibly other Aboriginal persons. The purchasers did not assert that the memorial stone and plaque were Aboriginal objects. While both parties referred to the presence of the memorial stone and plaque on the land, this was only in relation to whether they constituted evidence of the (contested) existence of Aboriginal remains on the land. The memorial stone and plaque in and of themselves were not asserted to be Aboriginal objects.

52. [132]

    The correspondence discloses four central assertions or requests made and repeated on several occasions by the purchasers:

    1. (1)

       the assertion that there are Aboriginal remains on the land subject to sale, based on the report prepared by Mr Peter Parker, the statements made by Mr Carter on 13 July 2015, and information recorded on the Aboriginal Heritage Information Management System database (AHIMS);

    2. (2)

       the assertion that the presence of these remains (being “Aboriginal objects” within the meaning of the National Parks and Wildlife Act) constitutes a defect in title, since title to the land was encumbered by the Crown’s interest in the remains, and use of the land was materially affected by associated development constraints;

    3. (3)

       the demand that the vendors should obtain further information, including by conducting an archaeological survey to ascertain the existence and location of the remains;

    4. (4)

       the demand that the vendors should take action to remove the defect, initially by unspecified means and subsequently by specified means, such as by obtaining an assignment of title to the remains from the Crown.

53. [133]

    The first question is whether these objections and requisitions were properly made. Proceeding on the basis that the presence of Aboriginal remains – depending on their location – could constitute a defect in title, the purchasers’ objection (in asserting a defect in title) and accompanying requisition (in requesting the vendors to obtain and provide further information) fell within the type of inquiry that can be made properly by way of requisition identified by Barwick CJ in Godfrey Constructions.

54. [134]

    However, we are unable to conclude that the purchasers’ objection and accompanying requisition met the conditions of a proper requisition. Specifically, the requisition was not “clear enough to have enabled the [vendor] to identify the matter complained of to an extent that the vendor could take steps to rectify the contended defect”: per Santow J in Gogard at [254]. The requisition asserted the presence of the remains of Harry and Clara Bray (along with the possible presence of the remains of several other unidentified persons), but did not specify their location, nor even reliably identify a sub-area of the 30-acre property in which they might be found. Identification of the specific location of the remains would have informed the next steps, if any, which might reasonably have been taken by the vendors. In the absence of more specific information, it was not reasonable for the purchasers to require the vendors to conduct an “archaeological survey” and dig through all 30 acres of their property to search for remains whose existence was only the subject of mere contention.

55. [135]

    Although the purchasers’ solicitors referred in correspondence to the AHIMS database, which purported to record a burial site on Lot 1 (being 7 acres), this did not clarify the location of any such remains to a sufficient extent. The relevant search recorded that it was for the area of Lot 1 “with a buffer of 50 metres”, and was subject to various qualifications, including that “the map does not accurately display the exact boundaries of the search … [and] is to be used for general reference purposes only”, and that “information recorded on AHIMS may vary in its accuracy and not be up to date”. The report of Mr Peter Parker, to which the purchasers’ solicitor also referred, was similarly imprecise, recording that Harry and Clara Bray were “buried at the Rainforest Resort” and that their remains were discovered during excavation of the pool in 1988, but providing no account of what happened to the remains after that point.

56. [136]

    We consider that the generality of the requisitions in this case yields the conclusion that they were “wide and searching interrogatories” in the sense proscribed in Re Ford and Hill. For that reason, we hold that the requisitions were not validly made. That being so, there was no requirement that the vendors respond to them. Accordingly, the purchasers’ claim that the vendors repudiated the contract by refusing to give an adequate reply fails.

57. [137]

    However, assuming that the purchasers’ objections and requisitions were properly made so as to require a response, then the second question arises: was the vendors’ response a sufficient one or was the response repudiatory? We hold that the vendors did properly respond to the purchasers’ interrogatories. The vendors’ responses sought to contest the underlying fact (the existence of Aboriginal remains on the land) and the characterisation of that fact as a defect in title. The position taken by the vendors was that the purchasers had not provided sufficient evidence as to the existence or location on the land of the remains of Harry and Clara Bray, or of any other Aboriginal persons. The vendors ultimately responded that they had no knowledge of the existence of any such remains, and no ready means of obtaining such knowledge.

58. [138]

    In our view, no more could have been reasonably required of the vendors in circumstances where it was common ground that they had no knowledge of the existence of the remains of Harry and Clara Bray, or of other persons, on the land. It would not have been reasonable to expect the vendors to carry out an archaeological survey over all 30 acres of their property in an attempt to discover if there were any Aboriginal remains. For the purposes of assessing whether the vendors’ response was reasonable in the circumstances, it is the vendors’ own knowledge and abilities that matter. Relevantly, there is no evidence to suggest that the vendors possessed any more specific information as to the existence or location of remains which they declined to share with the purchasers. The vendors repeatedly denied knowledge of the existence of any remains on the land. Nor, in order to provide a reasonable response to the purchasers’ objection and accompanying requisition, was it necessary for the vendors to procure from the Crown an assignment of any property in an Aboriginal object vested in it pursuant to s 83 of the National Parks and Wildlife Act. The Aboriginal objects in question were never shown to be present on the land. How unidentified objects could be transferred was not adequately explained by the purchasers.

59. [139]

    Given the focus in the purchasers’ case upon Crowe v Rindock we will explain why the conclusion we have reached is not inconsistent with that case. Crucially in Crowe v Rindock, although the fact said to constitute a defect (the proclamation of land in Cremorne as a mine subsidence district) was observed to be implausible, it was easily ascertainable by the vendors as it was recorded on a certificate attached to the contract. This meant that it was insufficient for the vendors (as they did) to advise the purchaser to rely on their own inquiries, rather than directly answer the requisition. Crowe v Rindock is thus distinguishable from the present case, where the underlying fact (the presence of Aboriginal remains) was no more than “plausibly” contended for and was neither within the vendors’ knowledge nor easily ascertainable by the vendors. In those circumstances, what constitutes a reasonable response by the vendors in this case is different from the response that ought to have been given in Crowe v Rindock.

60. [140]

    We have concluded that the purchasers’ objection and accompanying requisition were not properly made and that, even if properly made, the vendors’ response was reasonable. The vendors by their response did not thereby repudiate the contract. The purchasers’ principal repudiation claim accordingly fails.

Issue 2 – The purchasers’ alternative case concerning defect in title

1. [141]

   In the primary proceedings, the purchasers ran an alternative case that they were entitled to terminate the contract as the vendors did not have good title to the land. That case relied on the common law rule as expressed by Tindal CJ in Flight v Booth [1834] Eng R 1087; (1834) 131 ER 1160 at 1162-1163 that:

2. [142]

   The purchasers contended that the presence of Aboriginal objects on the land meant that they were not getting substantially the property which they had contracted to buy. The purchasers’ alternative contention depends on a finding that there are in fact Aboriginal objects in or on the land.

3. [143]

   We have already concluded that there are not any Aboriginal objects on the land. The memorial stone and plaque is not an “Aboriginal object” within the meaning of the National Parks and Wildlife Act.

4. [144]

   However, even if the memorial plaque and stone is an Aboriginal object within the meaning of the Act, we are not satisfied that its presence on the land would be a material or substantial matter giving the purchasers the right to terminate.

5. [145]

   The test is whether, objectively, a reasonable person in the position of the purchasers would have taken the view that he or she was not getting substantially the property which he or she contracted to obtain: Frankel v Paterson [2015] NSWSC 1307 at [34].

6. [146]

   As we have explained at [90]-[95] above, development in the location of the memorial stone and plaque was already prohibited, and any reliance on existing use rights would not have assisted the purchasers in realising the development potential of that land. The presence of the memorial stone and plaque, given their location, did not give rise to any further restriction on development of the land.

7. [147]

   It cannot be said that the presence of the memorial stone and plaque, even assuming they are an Aboriginal object, affected the contract in a material or substantial way. The purchasers’ alternative case that they were entitled to terminate the contract by reason of the rule in Flight v Booth also fails.

Issue 3 – The purchasers’ alternative repudiation case

1. [148]

   In the primary proceedings, the purchasers also relied on an alternative case that the vendors had repudiated the contract by purporting to terminate the contract in reliance on an invalid notice to complete which claimed payment of default interest. Having accepted the purchasers’ principal repudiation case, it was not strictly necessary for the primary judge to decide the alternative repudiation case. Nevertheless, her Honour determined that the alternative repudiation case would have been made out.

2. [149]

   The repudiatory conduct alleged by the purchasers before the primary judge was the vendors’ insistence that the purchasers comply with a notice to complete which was invalid as it was given in circumstances where the purchasers had not been in default of any valid appointment to complete, coupled with the vendors’ insistence on an invalid demand for default interest in the face of a notice from the purchasers requiring the vendors to withdraw the demand for interest (making time of the essence for the vendors to do so).

3. [150]

   On appeal, the parties’ submissions were confined to whether the vendors repudiated the contract by failing to withdraw their claim for default interest. There was no further contention raised in relation to the validity of the notices to complete, or any allegation that the vendors’ insistence that the purchasers comply with such notice was repudiatory.

4. [151]

   The vendors’ right to default interest is governed by special condition 8 to the contract. It provides:

5. [152]

   The cover page of the contract nominated as the completion date the “30th day after the contract date”. That date is 5 August 2015, being 30 days after execution on 6 July 2015. However, special condition 21 made completion conditional on transmission of the late Mrs Carter’s interest in the property to her husband and imposed a completion period within 14 days of the written notification of that event. It provides:

6. [153]

   The parties engaged in the following correspondence in relation to the notices to complete and the payment of default interest:

   1. (1)

      By a letter dated 3 August 2015, the vendors’ solicitor purported to “confirm” an appointment for settlement on 5 August at 11.00am. It is apparent from that letter that the vendors did not have regard to special condition 21(c)when fixing an appointment for settlement on 5 August. There is also a suggestion that this letter of 3 August was not forwarded to the purchasers (through their solicitor) until the early morning of 5 August.

   2. (2)

      By two letters each dated 4 August 2015, the vendors’ solicitor provided copies of duly executed transfers, a settlement adjustment sheet, copies of land tax and rates notices and directions for the drawing of bank cheques. She also confirmed settlement was to occur on 5 August 2015.

   3. (3)

      Settlement did not proceed on 5 August 2015. In his later letter of 23 September 2015, the purchasers’ solicitor said:

   4. (4)

      The vendors’ solicitor issued a notice to complete under a letter dated 27 August 2015, appointing 10 September 2015 as the settlement date and providing settlement figures (that the vendors emphasised were draft settlement figures). The settlement figures supplied under this notice required payment of default interest of $25,890.20 calculated from 5 August 2015.

   5. (5)

      On 2 September 2015, the purchasers’ solicitor responded to that notice to complete. The letter required the vendors to state whether they were in a position to provide a good title to the land on 10 September 2015 and asserted that if the vendors were not able to show this then the notice to complete must be invalid. It was further contended that the notice to complete was bad in any event because the vendors had failed to show a good title at the time of its issue.

   6. (6)

      On 8 September 2015 (at a time, the purchasers note, when no response to the 2 September 2015 letter had been received), the purchasers’ solicitor submitted to the vendors’ solicitor a transfer (expressly tendered subject to the above notice to perform and subject to contract) and requested cheque directions.

   7. (7)

      On 9 September 2015, the vendors’ solicitors provided revised settlement figures (which still included the claim for default interest calculated from 5 August 2015) and cheque directions, and confirmed settlement on 10 September 2015.

   8. (8)

      On 10 September 2015, the purchasers attended at the appointment for settlement (with bank cheques drawn in accordance with the cheque directions that had been provided), represented by their solicitor Mr Lynch in the company of one of his staff. The vendors were represented by an agent, Mark Hazlett of Hazlett & Co. Settlement did not occur on that day.

   9. (9)

      On 11 September 2015, the vendors withdrew their first notice to complete. Under cover of the same letter, the vendors gave a further notice to complete (without settlement figures) appointing 28 September 2015 for completion.

   10. (10)

       The vendors then provided further updated settlement figures by facsimile on 17 September 2015, including a claim for default interest of $39,945.21 calculated from 5 August 2015.

   11. (11)

       On 23 September 2015, the purchasers gave to the vendors a notice to withdraw their demand for default interest, and submit corrected figures by the following day (the second last business day before the settlement appointment). The notice made time of the essence in this regard. In the paragraphs preceding that notice, the purchasers identified the reason that the item for default interest was “not correct” as being that they were “not in default of the contract”:

   12. (12)

       The vendors responded on 24 September 2015 insisting on the claim for interest, explaining the basis for their calculation of default interest:

   13. (13)

       The purchasers then purported to terminate the contract by notice on 25 September 2015. The notice of termination did not identify the grounds for termination, stating only:

   14. (14)

       On 6 October 2015, the vendors responded alleging that the purchasers’ notice of termination was repudiatory and themselves purporting to terminate the contract.

7. [154]

   These communications show that both parties had overlooked the effect of special condition 21, and neither of them at any relevant time maintained that the time by which completion was to take place as stipulated in special condition 21(c) had not commenced. As is apparent from their exchanges on 23 and 24 September 2015, each was proceeding on the basis that the contract had provided for completion on 5 August 2015. The vendors’ position, completion not having occurred on that date, was that the parties were obliged to complete within a reasonable time. As there was no attention to special condition 21(c), there was no attention to whether the provision on 4 August 2015 of a copy of the transfer executed by Mr Carter as registered proprietor and “Certified correct for the purposes of the Real Property Act” satisfied, or was to be treated as satisfying, the requirement in that paragraph for notice of registration of the transmission application.

8. [155]

   Although the purchasers now contend that the vendors’ insistence on the payment of default interest constituted repudiatory conduct, at no point in the communications set out above did the purchasers dispute the correctness of the vendors’ interpretation of special condition 8 of the contract, which provided for the payment of default interest, or the vendors’ calculation of that interest.

9. [156]

   In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 432; [1978] HCA 12, Stephen, Mason and Jacobs JJ said:

10. [157]

    In an oft-cited caution against too readily finding that a party has evinced an intention no longer to be bound by a contract, Wilson J said in Shevill v Builders Licensing Board (1982) 149 CLR 620 at 633; [1982] HCA 47:

11. [158]

    This is a case in which it should not be concluded that the vendors repudiated the contract. Both parties proceeded on the basis that the date fixed for settlement was 5 August 2015, and the only point of contention was whether the purchasers did “not complete [the] purchase by the completion date, without default by the vendor[s]” (special condition 8).

12. [159]

    The view that 5 August 2015 was the settlement date nominated by the contract was an erroneous one. Special condition 21(c) prevailed and required that completion take place within 14 days after notification of the registration of the Transmission Application.

13. [160]

    In argument before this Court, the vendors contended that the provision of the duly executed transfer identifying Mr Carter as transferor (and therefore registered proprietor) was sufficient to satisfy special condition 21(c). The purchasers contended that it was not. It is unnecessary for us to decide that question.

14. [161]

    In acting in the way they did, and insisting on payment of default interest calculated from 5 August 2015, the vendors proceeded on a mistaken view as to the date for completion. That view was shared by the purchasers, who never identified or confronted the vendors with that error. Nor did the purchasers suggest that the completion date had not arrived, merely asserting that they were not in default.

15. [162]

    While the vendors did decline the purchasers’ invitation in their letter of 27 August 2015 “to approach the Court for declaratory relief”, that invitation was made in relation to the dispute between the parties as to the presence of Aboriginal objects on the land and whether they constituted a defect in title. The purchasers did not suggest that the parties seek an authoritative ruling about the correct interpretation of the contract in relation to the payment of default interest.

16. [163]

    In these circumstances, the vendors’ insistence on the payment of default interest calculated from 5 August 2015 did not amount to repudiation of the contract. They did not insist on settlement with an incorrect view of the contract in the face of a clear explanation of the true position. At the same time, they had a reasonable basis for maintaining that completion had not proceeded on 5 August without their default.

17. [164]

    The purchasers’ further alternative case that the vendors had repudiated the contract by insisting on the payment of interest from 5 August 2015 also fails.

Issue 4 – return of the deposit pursuant to s 55 Conveyancing Act

1. [165]

   As the primary judge found that the purchasers had demonstrated an entitlement to the return of their deposit through their principal repudiation claim, it was not strictly necessary to consider whether the purchasers also had a right to recover their deposit pursuant to s 55 of the Conveyancing Act. Even so, her Honour stated that, had it been necessary to do so, she would have considered that the power under s 55(2A) should be exercised to require the vendors to repay the deposit to the purchasers.

2. [166]

   Section 55(2A) of the Conveyancing Act states:

3. [167]

   The parties accepted at trial that a purchaser who makes an application for the return of a deposit under s 55(2A) must show some injustice, or something that was inequitable about the conduct of the vendor: Greek Orthodox Parish Community of St Marys and District Ltd v Denis Stanley Merrick [2014] NSWSC 1196 at [17] per Young AJA. The “principal injustice” relied upon by the purchasers was the defect in title. In the alternative, the purchasers alleged that injustice arose from the vendors’ concealment of the Aboriginal significance of the land notwithstanding that the land was marketed as a development proposition.

4. [168]

   We have found above that there were no Aboriginal objects on the land and that, even if there were, they do not constitute a defect in title. This being so, the “principal injustice” alleged by the purchasers is not established.

5. [169]

   As for the purchasers’ alternative contention, the primary judge did not accept that the evidence established any concealment of Aboriginal heritage on the part of the vendors’ agent (or anyone on behalf of the vendors for that matter). Further, in the context of the purchasers’ unsuccessful misleading or deceptive conduct claim, her Honour considered that it was “abundantly clear” that the purchasers were acting in reliance on their own enquiries and inspection, rather than any representation by the vendors as to the development potential of the property. The purchasers have not challenged those findings. No notice of contention was relied upon in relation to these issues. Their alternative contention as to injustice therefore also fails.

6. [170]

   Since the purchasers have not demonstrated any injustice or inequity, they are not entitled to an order for the repayment of their deposit.

Issue 5 – The guarantee by Mr Cheers

1. [171]

   It is no longer in dispute that the fifth respondent, Mr Cheers, signed the personal guarantee provision under special condition 23 of the contract: Exhibit 6. The purchasers accept that Mr Cheers conceded in cross-examination that he had guaranteed the purchasers’ performance under the contract. As recorded in the trial transcript:

2. [172]

   Since it is no longer in dispute that Mr Cheers guaranteed the purchasers’ performance of the contract, his liability follows that of the purchasers.

Costs

1. [173]

   As the successful party, the vendors are entitled to an order in their favour in relation to the costs of the proceedings before the primary judge and in this Court.

2. [174]

   As to the costs of the hearing of the separate question, on appeal this Court made no order as to the costs of the appeal and ordered that the costs of the hearing of the separate questions before Darke J be costs in the cause: Mehmet v Carter (2018) 98 NSWLR 977; [2018] NSWCA 305. The vendors are therefore also entitled to their costs of the separate questions hearing before Darke J.

Conclusion and proposed orders

1. [175]

   The purchasers have failed to demonstrate that they were entitled to terminate the contract on any of the three alternative bases they relied on, being the principal repudiation claim, the rule in Flight v Booth, and their alternative repudiation claim based on a claim for default interest. Consequently, by purporting to terminate the contract on 25 September 2015 when they had no right to do so, the purchasers themselves repudiated the contract. The vendors were entitled themselves to terminate and to an award of loss of bargain damages.

2. [176]

   On the hypothesis that the appeal was successful, there was no dispute between the parties as to the quantum of damage suffered by the vendors by reason of the purchasers’ repudiatory breach. That loss is as follows:

   1. (1)

      Loss of bargain damages of $475,000. This is the difference between the contract price and the price achieved by the vendors on re-sale; and

   2. (2)

      Costs and expenses of $5,832.20 associated with the re-sale of the land.

3. [177]

   For the reasons above, we make the following orders:

   1. (1)

      Appeal allowed.

   2. (2)

      Set aside the orders of Ward CJ in Eq made on 17 April 2020 and in lieu thereof order:

   3. (3)

      Respondents pay the appellants’ costs of the appeal.