Baeg v Wink Singh Pty Ltd (No 2)

This case raises the interesting issue of the extent to which a contract is under the “control of the court” after an order for specific performance is made in favour of one party, the other party fails to comply with that order and the first party then seeks vacation of the order and leave of the court to obtain damages for breach of contract. Specifically in question is whether, in the circumstances of this case, the first party’s attempted termination of the contract after the other party’s non-compliance with the order for specific performance has any impact on the first party’s entitlement to claim damages.

These proceedings concern a contract for the sale and purchase of land dated 4 September 2021 (Contract) entered in respect of a property bearing Land Title Reference XX/XXXXXXX and situated at XXX Pennant Hills Road, West Pennant Hills, New South Wales (Property).

The parties to the Contract are the parties to these proceedings, being:

For convenience, within this judgment I will refer to the first defendant and the second defendant collectively as the defendants.

In essence, the time for completion under the Contract was twice extended by formal addenda agreed between the parties. Wink Singh failed to complete the Contract on several occasions both before and after these extensions.

It was on this basis that Mr Baeg sought, and was granted, an order for specific performance of the Contract, with judgment delivered ex tempore by Parker J on 9 May 2024: Baeg v Wink Singh Pty Ltd [2024] NSWSC 589 (First Judgment). Amongst the orders made in the First Judgment was an order for specific performance of the Contract against both defendants and an order that Wink Singh complete the purchase of the Property by not later than 3:30pm on Thursday, 23 May 2024 in accordance with the Contract.

Wink Singh did not complete the purchase of the Property by that time or any time subsequently.

On 16 July 2024, the solicitors acting for Mr Baeg served a Notice of Termination on Wink Singh purporting to accept Wink Singh’s repudiation of the Contract and terminating it on that basis.

The Notice of Termination concluded by foreshadowing an “action for recovery of damages”. Before me for determination is Mr Baeg’s application pursuing that foreshadowed course of action, seeking orders including to:

At the hearing before me, the defendants’ principal complaint in opposition to Mr Baeg’s application is that having obtained an order for specific performance of the Contract, Mr Baeg could not terminate it without leave or further order of this court. The defendants say Mr Baeg’s purported termination on 16 July 2024 amounted to a repudiation, which they belatedly accepted on 27 March 2025. On that somewhat ironic basis, the defendants (as parties who have been in continual default of their obligations under the Contract and the orders made in accordance with the First Judgment) say that the Contract has been terminated by the defendants and so Mr Baeg is not entitled to damages.

For the reasons that follow, I have determined to vacate the order for specific performance of the Contract, grant leave to Mr Baeg to terminate the Contract and seek damages in lieu of specific performance and award those damages to Mr Baeg against the defendants, as assessed below, plus costs.

On 4 September 2021, the Contract was exchanged, having been signed by Mr Baeg as vendor and by Mr Chhabra in his capacity as director of the purchaser, Wink Singh, as well as on his own behalf as guarantor.

The Contract Date under the Contract is 4 September 2021.

The Purchase Price under the Contract is $3,500,000.

The Deposit payable under the Contract was $87,500. It was payable by way of instalments.

The Completion Date under the Contract was 4 September 2022, being the “365th day after the contract date”.

The Contract utilises the Law Society of New South Wales standard form (2019 edition) and consists of thirty-two standard clauses which relevantly include:

There are 24 special conditions in the Contract, which are additional to the standard clauses. The special conditions are numbered 1 to 23, with an error resulting in there being two special conditions numbered 21. Those special conditions relevantly include:

On 6 September 2021, Wink Singh paid the first instalment of the Deposit in the amount of $8,750, constituting 0.25% of the Purchase Price payable on exchange in accordance with Special Condition 21(a) of the Contract.

On 17 September 2021, Wink Singh paid the second instalment of the Deposit in the amount of $43,750. This amount is not the $52,500 (being 1.5% of the Purchase Price) as contemplated by Special Condition 21(b) of the Contract which, while a correct calculation of that percentage, appears to be the product of a miscalculation with regard to the total amount of the Deposit payable.

On 4 March 2022, Wink Singh failed to pay the third and final instalment of the Deposit in the amount of $35,000, constituting 1% of the Purchase Price which was then due and payable under Special Condition 21(c) of the Contract.

On 7 March 2022, Wink Singh paid the third and final instalment of the Deposit so that Mr Baeg received the Deposit in the total agreed amount of $87,500.

Settlement did not occur by the Completion Date of 4 September 2022.

On or about 7 September 2022, Mr Baeg and the defendants commenced negotiations regarding a possible extension to the Completion Date.

On 17 October 2022, in accordance with his right under Special Condition 1 of the Contract, Mr Baeg served a Notice to Complete on the defendants (First Notice to Complete).

Later on 17 October 2022, Mr Baeg and the defendants executed an Addendum to the Contract (First Addendum).

The First Addendum was executed as a Deed and is replete with grammatical errors. Ignoring those errors, in its essence the First Addendum extended the Completion Date for a period of nine months, until 4 June 2023 (Extended Completion Date) on the following terms (all errors left in place):

On 20 October 2022, Mr Baeg belatedly received payment of the first tranche of the Increased Deposit provided by cl 3 of the First Addendum, being $50,000, (it curiously being due “on and before” 15 October 2022).

On or about 31 October 2022, Mr Baeg granted Wink Singh an extension until 10 November 2022 to pay the second tranche of the Increased Deposit provided by cl 3 of the First Addendum, being $55,000 (it being due on or before 31 October 2022).

Wink Singh failed to pay Mr Baeg the second tranche of the Increased Deposit by 10 November 2022.

On 24 November 2022, Wink Singh paid the second tranche of the Increased Deposit to Mr Baeg, together with an additional $500 as agreed consideration for the further delay and extension.

Putting the additional $500 for delay aside, Mr Baeg received a total of $192,500 under the Contract in the form of both the Deposit and Increased Deposit.

Settlement did not occur by the Extended Completion Date of 4 June 2023.

On 6 June 2023, in accordance with his right under cl 5 of the First Addendum, Mr Baeg served a Notice to Complete on the defendants (Second Notice to Complete).

On 7 June 2023, the Second Notice to Complete was re-served on the defendants.

On 21 June 2023, Mr Baeg and the defendants commenced negotiations regarding a possible further extension to the Extended Completion Date.

On 7 July 2023, Mr Baeg and the defendants executed a further Addendum to the Contract (Second Addendum).

Like its predecessor, the Second Addendum was executed as a Deed and is also replete with grammatical errors. Putting those errors aside, the Second Addendum had the effect of extending the Completion Date until 15 September 2023 (Further Extended Completion Date). That further extension was granted on the following terms (leaving all errors in place):

Wink Singh did not pay either of the amounts contemplated by way of the Increased Deposit in cl 4 of the Second Addendum as and when they fell due, or any time subsequently.

Settlement did not occur on or before the Further Extended Completion Date of 15 September 2023.

On 15 September 2023, in accordance with his right under cl 7 of the Second Addendum, Mr Baeg served a Notice to Complete on the defendants which required settlement to occur within two weeks, on or before 4:00pm on 29 September 2023 (Third Notice to Complete).

Settlement did not occur on or before 4:00pm on 29 September 2023.

On 16 February 2024, Mr Baeg commenced these proceedings by way of summons, principally seeking a declaration that the Contract was valid and enforceable and an order for specific performance as against the defendants.

On 9 May 2024, Parker J delivered the First Judgment and made the following orders:

As is evident from the First Judgment and the orders made in it, an order for specific performance was granted against Mr Chhabra as guarantor, being the sole director and shareholder of Wink Singh: First Judgment, Parker J at [8], citing Ryan v UPG 322 Pty Ltd [2023] NSWSC 1293, Parker J at [30]–[85] generally and [77] specifically. Both the First Judgment and Ryan were later cited in Toma v Taylor TT Pty Ltd [2024] NSWCA 304 by Bell CJ at [122] as instances where a guarantor expressly assumed obligations as principal and therefore had co-ordinate liability with the purchaser under a contract for the sale and purchase of land such that specific performance may be granted, requiring the guarantor to pay the purchase price upon settlement.

On 9 May 2024, in accordance with the orders of Parker J in the First Judgment, Mr Baeg through his solicitors (Yazbeck Law) served the defendants with a copy of those orders, created the PEXA workspace with a settlement date of 23 May 2024, and invited the defendants (through their then solicitors, Destination Lawyers) to join that workspace.

That invitation was not accepted by the defendants personally, nor by Destination Lawyers, who subsequently ceased acting for the defendants. Except for the communication of Destination Lawyers’ cessation in acting for the defendants on 13 May 2024, neither Mr Baeg nor his solicitors received any communication by or on behalf of either of the defendants between 9 and 23 May 2024.

The defendants did not comply with any of the orders made by Parker J in the First Judgment so far as they applied to each of them. Pertinently, contrary to order 5, Wink Singh did not complete the purchase of the Property by 3:30pm on 23 May 2024 and so, contrary to order 2, the Contract was not specifically performed by the defendants.

On 16 July 2024, Mr Baeg through his solicitors issued the Notice of Termination to Wink Singh reciting the numerous failures by Wink Singh to complete the Contract in accordance with the First Notice to Complete, the Second Notice to Complete, the Third Notice to Complete and the orders made by Parker J in the First Judgment, giving notice that Mr Baeg accepted Wink Singh’s repudiation of the Contract and purported to terminate the Contract on that basis. Wink Singh and Mr Chhabra were served with the Notice of Termination by email and by post. A copy was also provided to Wink Singh’s former solicitors, Destination Lawyers.

Prior to the issuance of the Notice of Termination, Mr Baeg maintains that at all material times he was ready, willing and able to complete the Contract. The defendants made no submission to the contrary.

On 23 August 2024, Mr Baeg filed the notice of motion making the application that I must now determine, seeking orders including to vacate the order for specific performance made in the First Judgment and award Mr Baeg damages and costs in lieu of performance. As a consequence of Wink Singh’s latest failure to complete, contrary to its obligations under the Contract and orders of this court, Mr Baeg now wishes to bring the Contract to an end and claim damages for its breach.

Initially, the parties were not in agreement as to the relevant value of the Property for the purpose of any damages calculation.

On 10 March 2025, Mr Baeg filed an expert report dated 14 August 2024 (being the date of inspection) prepared by Joseph Jakovich of Valuations NSW (Valuations NSW Report). The Valuations NSW Report valued the Property as at 16 July 2024 (being the date of the Notice of Termination) at $2.2 million.

On 17 March 2025, Wink Singh filed an expert report dated 12 March 2025 prepared by Paul Waterhouse of Waterhouse Valuation (Waterhouse Valuation Report). The Waterhouse Valuation Report valued the Property as at 16 July 2024 and 12 March 2025 at $2,639,010, and as at 4 September 2021 (being the Contract Date) at $1,834,221.

The respective expert valuers who prepared the Valuations NSW Report and the Waterhouse Valuation Report then prepared a Joint Report dated 29 May 2025. The Joint Report concluded that as at all of the relevant dates posed to them (being 23 May 2024, 16 July 2024 and 29 May 2025), the Property had a value of $2.4 million.

At the hearing before me on 14 July 2025, the parties agreed to proceed on the basis that the Property had a value of $2.4 million (Agreed Value).

It was also agreed that at all relevant times Mr Baeg has had, and continues to have, the benefit of occupying the Property.

On 27 March 2025, the current solicitors for the defendants (Aquinas More) sent a letter by email to the solicitors for Mr Baeg (Yazbeck Law) that stated:

By this letter, the defendants purported to accept the Notice of Termination as a repudiation of the Contract by Mr Baeg, and as a result purported to terminate the Contract themselves.

The first issue for me to determine is the legal effect of the Notice of Termination. This issue has two aspects:

In relation to these two aspects, I will state the relevant legal principles, briefly outline the parties’ respective submissions and then set out my consideration of them.

The relevant legal principles as to the legal effect of the Notice of Termination are those which relate to orders of specific performance generally, the consequence of such an order and its application as alternative relief.

In light of the defendants’ submissions (which are outlined below), it will also be necessary to set out basic contract law principles regarding unlawful termination amounting to repudiation. I will do so briefly, in a manner that is reflective of the merits of that argument given the circumstances of this case.

A decree of specific performance is an order of the court directing a party to a contract to perform their obligations under it. What the order involves in any particular case depends on the terms of the contract, the circumstances that exist at the time of the order and what acts of performance required by the contract have not yet occurred: Despot v Registrar General of NSW [2014] NSWSC 1002, Ball J at [43], citing JAG Investment Pty Ltd v Strati [1981] 2 NSWLR 600, Mahoney JA at 607. The order takes as its starting point the existence of an enforceable contract and requires the parties to act in accordance with its terms: Despot, Ball J at [44] and the authorities cited there.

Specific performance in the primary or proper sense “presupposes an executory as distinct from an executed agreement”, where something definite is remaining in law to be done before the transaction is complete, such as the execution of a deed or a conveyance, to put the parties in the position contemplated by their contract: JC Williamson Ltd v Lukey (1931) 45 CLR 282, McTiernan J at 313 and Dixon J (with whom Gavan Duffy CJ agreed) at 297; [1931] HCA 15.

It is also helpful to understand that in issuing a decree of specific performance for a legally enforceable contract, equity is operating in its auxiliary jurisdiction to assist in the enforcement of the contract, not adjudicating its enforceability. In this way, equity acts as a supplement to common law rights and obligations, offering an equitable remedy where common law damages are or would be inadequate: Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, Hoffmann LJ at 11; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1; [1998] HCA 30, Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ at [78]–[79].

In seeking and obtaining an order for specific performance, a party elects for a continuance of the contract under the control of the court and that control involves the power, in certain events, to terminate it. Seeking an order for specific performance is a course of action that encourages performance, but which may or may not lead to implementation of the contract: Johnson v Agnew [1980] AC 367, Wilberforce LJ at 398; JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 604.

Once an order for specific performance has been made, the contractual rights and obligations of the parties are not superseded, but the future exercise of rights and performance of obligations fall under the control of the court. That is the very nature of the remedy. So much was observed by Campbell J in Zorbas v Titan Properties (Aust) Pty Ltd [2005] NSWSC 440 at [12]:

Importantly, contractual rights do not merge in an order for specific performance: Despot, Ball J at [44]. Rights and obligations under the subject contract subsist and run parallel to the order and the order is not final until the order is discharged by performance or, in the case of a contract for the sale and purchase of land, the contractual rights merge upon completion: Despot, Ball J at [45], citing Fu v Bucasia Pty Ltd [2014] NSWSC 325, Stevenson J at [52]. See also Johnson v Agnew, Wilberforce LJ at 393–4 and JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 603.

An order for specific performance is binding on the parties who will be in contempt if they do not comply with it: Despot, Ball J at [48]. Any relevant delay in compliance with an order for specific performance will be delay in performing the contract, which gives rise to contractual rights: Despot, Ball J at [48].

The court may vacate an order for specific performance but whether it should do so will depend on the terms of the contract, not on the exercise of a discretion to refuse to give effect to an order that the court has already made: Despot, Ball J at [48].

One circumstance in which it may be necessary for the court to reconsider an order for specific performance is where some act has occurred (or not occurred) which gives rise to new contractual rights, usually being a failure by one party to perform the contract, and the contractual right is a right to terminate the contract because of that failure: Despot, Ball J at [49].

This precise circumstance invites consideration of the issue of doctrine as to whether, once an order for specific performance has been made, a contractual right of termination can only be exercised with leave of the court or, more accurately, an order vacating the order for specific performance. That position has been heavily criticised, perhaps most notably by J D Heydon, M J Leeming and P G Turner in Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies, (5th ed, 2014, LexisNexis Butterworths) at, for example, [20-265]–[20-270]. Those criticisms and the uncertain origin of the “rule”, while fascinating and in some respects compelling, are not reflective of the state of Australian authority on the issue. The “accepted rule” – whatever may be its doctrinal origin or jurisdictional basis – requires some further order of the court before the subject contract can be determined: Despot, Ball J at [50]–[53]; JAG Investment, Hope JA (with whom Glass and Mahoney JJA agreed) at 603. The state of the law in this regard was succinctly summarised by the High Court in Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245, by Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 260; [1988] HCA 11, as follows (footnotes omitted):

It is equally clear – contrary to early English authority which has since been abandoned in that jurisdiction – that a party in whose favour an order for specific performance has been made retains their right to pursue other rights they may have had absent the order for specific performance, including the right to claim damages for breach of contract: Despot, Ball J at [54], citing McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457, Dixon J at 476–7; [1933] HCA 25, and Johnson v Agnew, Wilberforce LJ at 396.

While the requirement for leave of the court or vacation of the order for specific performance may be contentious when expressed as a pre-condition for the exercise of axiomatic common law rights, in circumstances where it is well-established that there is no merger of those rights into the order, it is hardly surprising that an otherwise innocent party cannot unilaterally determine the very contract which – at that party’s instigation – the other party is by order of this court required to complete. Whatever its basis as a matter of doctrine, that position reflects the longstanding principle of mutuality of obligation under contract and preserves the integrity of this court and of orders for specific performance, generally.

In Aarons v Advance Commercial Finance Ltd (1995) 6 BPR 13,911, the Court of Appeal considered, without deciding, the issue of whether a party who has obtained an uncompleted order for specific performance of a contract is disentitled thereafter from terminating the contract without leave the court or vacation of the order.

In Aarons, the plaintiff vendor had sought and obtained leave of the court to issue a notice of termination following an uncompleted order for specific performance. Instead, the vendor “misguidedly” served a notice to complete and the errant purchaser argued to the effect that by serving a notice to complete, the vendor had elected to affirm the contract “although in an illicit and impermissible way”, rather than terminate it pursuant to the leave granted. Both the trial judge and the Court of Appeal rejected this argument. Both courts held that as the purchaser had demonstrated an inability to complete the contract on several occasions, including after the order for specific performance, they had repudiated the contract so it was open to the vendor to terminate it. The trial judge vacated the order for specific performance and allowed the vendor a second chance to terminate the contract. On appeal, it was held that this was “clearly the correct resolution of the dispute between the parties according to its merits” and there could be no technical impediment because the orders for specific performance were eventually discharged: Aarons, Kirby P at 13,914 (with whom Priestley JA agreed on this point at 13,914). Meagher JA agreed at 13,915 that the purchaser had repudiated the contract entitling the vendor to terminate but expressed serious doubt as to the utility and necessity of what I have referred to above as the “accepted rule”.

The doctrinal and jurisdictional debates surrounding the “accepted rule” are not determinative of the issue before me and it is thankfully not necessary for me to unravel them. In this respect, I adopt the remarks of Hope JA in JAG Investment at 603–4:

In summary, the accepted position in Australia is now that:

Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Shevill v Builders Licensing Board (1982) 149 CLR 620, Wilson J at 633; [1982] HCA 47.

For the conduct of a party to constitute a renunciation of its contractual obligations it must be shown that the party is either unwilling or unable to perform its contractual obligations, that is, it has evinced by words or conduct an intention to no longer be bound by the contract or stated that it intends to fulfil the contract only in a manner substantially inconsistent with its obligations and in no other way: Galafassi v Kelly (2014) 87 NSWLR 119; [2014] NSWCA 190, Gleeson JA (with whom Bathurst CJ and Ward JA agreed) at [62]–[63].

To determine whether impugned conduct amounts to a repudiation of a contract, it is necessary to characterise such conduct in the context in which it occurred. This includes the prior conduct of the parties and any misapprehension of fact or law under which they were operating: see, for example, Hong v Gui [2022] NSWCA 245, Basten AJA (with whom Macfarlan JA and Simpson AJA agreed) at [25], [31] and [58] and the authorities cited there.

It is well established that an unwarranted termination of a contract, based on an erroneous assertion of repudiation, may itself constitute repudiation by the party purporting to terminate the contract. That is the situation if no right to terminate the contract had arisen in favour of the party issuing the notice prior to its issue: Carr v JA Berriman Pty Ltd (1953) 89 CLR 327, Fullagar J (with whom Dixon CJ, Williams, Webb and Kitto JJ agreed) at 343; [1953] HCA 31.

That position can be contrasted with the issue of a notice of termination of a contract by a vendor in the face of multiple failures to complete in circumstances that make the giving of the notice justified. In that situation, no question of a repudiation of the contract arises because the termination is lawful: Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444, Barwick CJ at 453–4, Gibbs, Mason and Jacobs JJ at 458–9; [1976] HCA 21.

Both parties agreed that Mr Baeg was not entitled or permitted to validly determine the Contract without leave of this court or, more accurately, the vacation of the order for specific performance made by Parker J on 9 May 2024. Where they differ is the purported legal effect of the Notice of Termination and the consequences which flow from it with particular regard to Mr Baeg’s entitlement to damages.

Mr Baeg submits that the issuance of the Notice of Termination in the face of an extant order for specific performance, absent a grant of leave or further order vacating the order for specific performance, renders the notice a “nullity”, “not competent” or in any case “invalid”. These characterisations adopt language used to describe both notices to complete and notices of termination in similar but not identical contexts in Hamdan v Widodo (No 2) [2010] WASC 6, Johnson J at [128]; Morrow v Tucker (No 2) [2006] NSWSC 1358, Biscoe AJ at [21], quoting Pratt v Hawkins (1991) 32 NSWLR 319, Young J at 325; and Despot, Ball J at [62], respectively.

Ultimately, Mr Baeg submitted that while the Notice of Termination was “a mistake”, it was not “unlawful” in the repudiatory sense, nor did it alter the parties’ rights and obligations under the Contract, including the “new contractual rights” which arose following the defendants’ latest failure to complete and non-compliance with the order for specific performance (T26–7).

The crux of the defendants’ argument is that the extant order for specific performance prevented Mr Baeg from unilaterally terminating the Contract without approaching the court. The defendants say that Mr Baeg’s attempt to do so was “unlawful” and “wrongful” in the repudiatory sense (T17). The defendants also say that they accepted this repudiation on 27 March 2025, causing the Contract to be terminated. The defendants submit that the Contract is now at an end and Mr Baeg is not entitled to claim any damages (T23).

The defendants submit that the Notice of Termination was unlawfully given at a time when an order for specific performance was extant and was therefore a repudiation of the Contract capable of their acceptance some eight months later. In support of this contention, the defendants principally rely on the line of authority stated above which holds that once a party has obtained an order for specific performance, the subject contract comes within the control of the court and that termination after an order for specific performance requires leave of the court or, more appropriately, vacation of the order, citing Sunbird Plaza, Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 260 (quoted above).

In my opinion, the relevant principles in respect of the first issue for my determination are sufficiently clear, even if the doctrinal basis of the accepted rule and precise nature of the jurisdiction being exercised by the court is less so.

As stated above, Mr Baeg refers principally to three cases to support his contention that the Notice of Termination should simply be treated as a “nullity”, “not competent” or in any case “invalid” for the purposes of terminating the contract. These cases are Hamdan, Johnson J at [128], Morrow, Biscoe AJ at [21] quoting Pratt, Young J at 325, and Despot, Ball J at [62].

I will briefly address each of these cases in turn.

Hamdan is a decision of the Supreme Court of Western Australia. The relevant facts are as follows. There was an extant order of specific performance in favour of the plaintiff purchaser in respect of a contract for the sale and purchase of land. The defendant vendor appealed that order. In light of the appeal, neither party took any action in furtherance of the order. The subject contract provided for settlement some 60 days following finance approval. Before the vendor’s appeal was determined, the vendor issued a notice to complete requiring completion within 25 business days. It was said to be issued based on the vendor’s view of the futility of their own appeal. The purchaser declined to complete unless the vendor either discontinued their appeal or secured the purchaser’s costs of the same. The vendor did not agree and issued a default notice requiring completion in 10 business days. The purchaser did not complete within that time and the vendor then served a notice of termination. The vendor’s appeal was subsequently dismissed with costs following which the purchaser enquired as to completion. The vendor insisted that the contract was at an end and filed a summons seeking a declaration to that effect. The purchaser brought a motion seeking implementation of (or further directions in respect to) the order for specific performance. Johnson J considered the authorities and determined at [126] and [128]:

In Morrow, Biscoe AJ was tasked with determining a question of procedure; no substantive issues were determined. The question before his Honour was whether a notice of motion in the same proceedings was the appropriate vehicle by which a party should seek directions in respect of the implementation of an extant and outstanding order for specific performance, or whether this required fresh proceedings. In determining that the notice of motion procedure was appropriate, Biscoe AJ at [21] referred to and quoted the decision of Young J in Pratt, at 325 (emphasis in original):

In Despot, among the five motions before Ball J was a motion filed by Mr Despot seeking a declaration that he had validly terminated a contract for the sale and purchase of land which was the subject of an extant order for specific performance in favour of the third defendant. That termination was said to be achieved by notice served against the third defendant in the face of the order. One of the many “insuperable difficulties” with Mr Despot’s claim as identified by Ball J was that Mr Despot could not terminate the contract “without first seeking an order that the order for specific performance be vacated”. Consequently, his Honour determined the notice of termination he gave was “invalid”: Despot, Ball J at [62]. His Honour went on to determine that Mr Despot was not entitled to terminate the contract in any event for several reasons which are of no moment in these proceedings.

In this case, Mr Baeg issued the Notice of Termination absent an order of this court vacating the order for specific performance.

In light of the applicable principles outlined above, to the extent it is necessary for me to do so, I have determined that the Notice of Termination was invalid for the purpose of terminating the contract: Despot, Ball J [62].

Perhaps more importantly, I have also determined that the defendants had clearly and repeatedly demonstrated an unwillingness or inability to complete the Contract, including after the order for specific performance was made and had thereby repudiated the contract. At the time the Notice of Termination was issued, Mr Baeg undoubtedly had a common law right to accept that repudiation and terminate the Contract: Aarons, Kirby P at 13,914.

Having determined the Notice of Termination was invalid for the purposes of terminating the Contract, I must now consider whether service of the Notice of Termination was repudiatory in the sense contended by the defendants.

The essence of the defendants’ argument is that Mr Baeg “wrongfully terminated” the Contract and by doing so, repudiated it. It is said by the defendants that Mr Baeg’s attempted termination was “unlawful because it was inconsistent with the decree of specific performance” and because it was not open to Mr Baeg to seek to terminate the Contract without first seeking leave of the court to do so (T18).

Upon my enquiry, counsel for the defendants properly accepted that, given that Wink Singh had failed to complete the Contract on several occasions in breach of the Contract and orders of this court, there was repudiatory conduct on their part or, at the very least, there was non-compliance with the order for specific performance. On this footing, it was accepted that prior to issuing the Notice of Termination, Mr Baeg undoubtedly had a “right to approach the court” to withdraw his election for specific performance and to seek damages in the alternative. The defendants say Mr Baeg’s failure to approach the court should not be forgiven but also seem to accept that, if their argument is correct, their own unilateral termination (in supposed acceptance of Mr Baeg’s purported repudiation) would be faced with the same issue (T25–26).

Once an order for specific performance has been made in respect of a contract, that contract comes under the control of the court and cannot be validly determined inter partes. However, Mr Baeg’s attempt to exercise his common law right to terminate the Contract without leave of the court – while invalid and of no legal effect – is not an “unlawful termination” in the repudiatory sense contended by the defendants in the circumstances of this case: see, for example, Hong, Basten AJA (with whom Macfarlan JA and Simpson AJA agreed) at [25], [31] and [58]; Carr, Fullagar J (with whom Dixon CJ, Williams, Webb and Kitto JJ agreed) at 343; Ogle, Barwick CJ at 453–4, Gibbs, Mason and Jacobs JJ at 458–9.

The defendants’ argument, if successful, would make a mockery of this court’s supervisory jurisdiction and, in its essence, seeks to do the very thing the authorities weigh heavily against, which is to merge the rights and obligations arising under a contract with those arising pursuant to an order for specific performance: Fu, Stevenson J at [52]; Johnson v Agnew, Wilberforce LJ at 393–4; JAG Investment [1981] 2 NSWLR 600, Hope JA (with whom Glass and Mahoney JJA agreed) at 603; Ogle, Gibbs, Mason and Jacobs JJ at 461, as quoted in Sunbird Plaza, by Mason CJ (with whom Deane, Dawson and Toohey JJ agreed) at 259–60; see also Gaudron J at 273.

Mr Baeg’s purported termination of the Contract by serving the Notice of Termination on 16 July 2024 was exactly that and nothing more – purported. It was not an unlawful termination amounting to a repudiation. However, it was invalid and ineffective because, having sought and obtained an order for specific performance of the Contract, Mr Baeg had no ability to determine the Contract without leave or further order of this court. That order still stands subject to Mr Baeg’s motion to have it vacated.

My determination that the defendants repudiated the Contract after the order for specific performance is largely sufficient to deal with this issue. As Meagher JA observed in Aarons at 13,915, in respect of the errant purchaser in that case, the defendants here too have “neither law nor merit” on their side.

The key principles regarding specific performance have been outlined above and I do not intend to repeat them here. I will outline the scope of the court’s jurisdiction to supervise and, where appropriate, vary or dissolve an order for specific performance in light of continued non-compliance.

In Riltang Pty Ltd v L Pty Ltd [2004] NSWSC 977, White J considered the width of this court’s jurisdiction to superintend the enforcement or working out of an order for specific performance at [51]:

In Georges v Wieland [2010] NSWSC 1378, Brereton J considered the principles which apply where an order for specific performance has not been complied with, including the right of the innocent party to seek alternate relief in the face of continued non-performance. Brereton J stated at [25]:

Having dealt with the issue in respect of the Notice of Termination, I note that neither Mr Baeg nor the defendants made any submissions as to whether I should proceed to vacate the order of specific performance. It appears that both parties proceeded on the basis that my determination of this issue would flow from – or collapse into – my determination of the first issue. This is perhaps unsurprising given the defendants’ acceptance that at the time the Notice of Termination was issued, Mr Baeg undoubtedly had a subsisting right to approach the court seeking, in essence, precisely the same relief (T25–26).

It is clear that this court may, upon application, vacate an unfulfilled order for specific performance, determine the subject contract and substitute alternative relief: Riltang, White J at [51]; Construction Technologies Australia Pty Ltd v Doueihi (No 5) [2018] NSWSC 294, Kunc J at [74]; Georges, Brereton J at [25]; McLeary v Swift [2014] NSWSC 1414, Hallen J at [50].

Their technical argument having failed, the defendants have not complied with the extant order for specific performance and have repeatedly demonstrated their unwillingness or inability to perform the Contract. Mr Baeg is entitled to bring the Contract to an end and seek alternate relief: Despot, Ball J at [48]–[49].

In the circumstances, I am satisfied that the Contract ought to be terminated. I have determined that the order for specific performance of the Contract as made by Parker J on 9 May 2024 is to be vacated and, to the extent it is necessary for me to do so, I will grant leave to Mr Baeg to terminate the Contract and seek damages in lieu of performance.

Having determined that Mr Baeg should be granted leave to accept Wink Singh’s repudiation of the Contract, terminate the Contract and recover damages, I must determine the appropriate measure of those damages.

It is trite law that the starting point for the assessment of damages in contract is stated in Robinson v Harman (1848) 154 ER 363, Parke B at 365:

The High Court has described this as the “ruling principle” with respect to damages at common law for breach of contract, as approved by that court on many occasions: see, for example, Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8, French CJ, Gummow, Heydon, Crennan and Kiefel JJ at [13]; Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64, Mason CJ and Dawson J at 80; [1991] HCA 54; Wenham v Ella (1972) 127 CLR 454, Gibbs J at 471; [1972] HCA 43.

Where a contract for the sale and purchase of land is terminated due to the purchaser’s breach, the vendor is entitled to seek damages for loss of bargain: Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltd [2021] NSWSC 504, Darke J at [118], citing Tabcorp Holdings, French CJ, Gummow, Heydon, Crennan and Kiefel JJ at [13].

The measure of damages for the loss of a contractual bargain in respect of an uncompleted contract for the sale and purchase of land calls for a comparison between the contract price that would have been received if the contract had been completed and the value of the assets retained by the vendor due to the fact that it was not completed: Dyco Hotels, Darke J at [119] and [129].

Damages for breach of contract are generally assessed as at the date of breach: Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56, Keane J (with whom Crennan and Bell JJ agreed, with Hayne J agreeing “generally”) at [109]. However, this rule will yield if the particular circumstances of the case require some later date to provide adequate compensation: Johnson v Perez (1988) 166 CLR 351, Wilson, Toohey and Gaudron JJ at 367; [1988] HCA 64; Vieira v O’Shea [2012] NSWCA 21, Basten and Meagher JJA (with whom Handley AJA agreed) at [45], as cited in Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146; [2014] NSWCA 389, Gleeson JA (with whom Tobias AJA agreed) at [51]–[53].

In the context of a claim for loss of bargain damages upon termination for breach, the date of breach should be understood as the date of termination for breach: Ng v Filmlock, Emmett JA (with whom Tobias AJA agreed) at [26] and Gleeson JA (with whom Tobias AJA also agreed) at [44].

The right to loss of bargain damages only arises at the time the bargain is lost: Sunbird Plaza, Mason CJ (with whom Deane, Dawson, and Toohey JJ agreed) at 260–1 and Gaudron J at 273.

Where a party has sought and obtained an order for specific performance in the face of earlier breaches of contract, damages should be assessed as at the date the remedy of specific performance is no longer available and the contract is lost: El Ali v Tritton [2019] NSWCA 111, Payne JA (with whom Macfarlan and Leeming JJA agreed) at [50]–[54].

Mr Baeg seeks damages for loss of bargain, including $1,100,000, which is said to constitute the difference between the Contract Price of $3,500,000 and the Agreed Value of the Property he retains, being $2,400,000.

Mr Baeg also seeks interest in the amount of $822,583.61 pursuant to the Contract as amended by the First Addendum, as well as certain holding costs incurred in respect of the Property in the amount of $14,049.58.

As dealt with above, the defendants’ primary position is that Mr Baeg’s misguided attempt to terminate the Contract was a repudiation which they accepted some eight months later, and so Mr Baeg is not entitled to damages at all.

Alternatively, the defendants submit that Mr Baeg should not be entitled to any of the holding costs, save for those incurred by way of legal fees in respect of the contemplated conveyance of the Property to Wink Singh, including the cost of drafting the Contract and the addenda.

The defendants made no submissions as to Mr Baeg’s calculations in respect of the value of the loss of bargain (at least those on the footing of the agreed value), nor the interest calculations provided at the hearing.

In the circumstances of this case, the relevant date for the assessment of damages is the date of my orders vacating the order for specific performance and granting leave to Mr Baeg to terminate the Contract and seek damages in lieu of performance, which is the date on which the remedy of specific performance is no longer available and the Contract is lost: El Ali, Payne JA (with whom Macfarlan and Leeming JJA agreed) at [50]–[54].

Mr Baeg has provided proof of loss up until various dates, with loss of bargain damages including interest calculated up until 14 July 2025 (the date of the hearing) and holding costs calculated up until 1 April 2025. The defendants made no submissions on this so I will proceed with my assessment on the evidence before me.

The Contract price is $3,500,000. The Agreed Value is $2,400,000. It is on this basis that Mr Baeg claims $1,100,000 for loss of the bargain.

Curiously, while Mr Baeg accounted for the $192,500 received by him by way of both the Deposit and Increased Deposit in his calculation of interest, it was not accounted for in his loss of bargain calculation. In his written submissions, there was suggestion that an allowance should be made for the Deposit (incorrectly stated to be $86,000), but not the Increased Deposit. No explanation was provided by counsel for Mr Baeg and the discrepancy was not raised by the defendants.

To make no allowance for either the Deposit or Increased Deposit would amount to the “double dipping” that the defendants colloquially complained about at the hearing, though that complaint was directed toward the holding costs in circumstances where it was agreed that Mr Baeg has continued to have the benefit of occupying the Property (T15).

Had the contract been performed, Mr Baeg would have received $3,500,000 including the Deposit and Increased Deposit in consideration for the Property. With the Contract not performed, Mr Baeg received $192,500 and retains the Property having an Agreed Value of $2,400,000.

I have determined that Mr Baeg is entitled to $907,500 for loss of bargain damages.

Mr Baeg claims interest pursuant to Special Condition 3 of the Contract as amended by the First Addendum.

The interest calculations provided at the hearing are as follows:

The defendants made no submissions on interest.

Both amounts are due under the Contract as amended and would have been received by Mr Baeg had the Contract been performed on 14 July 2025 or at the date of my orders.

I have determined that Mr Baeg is entitled to interest in the amount as claimed, being $822,583.61.

By affidavit sworn 18 March 2025, Mr Baeg set out other various expenses he has incurred in relation to the Property between 29 September 2023 (being the date upon which the Third Notice to Complete required completion) and 1 April 2025.

These expenses have been characterised by Mr Baeg as “holding costs” associated with the Property and form part of his claim for damages. Each of them will be addressed in turn.

Mr Baeg retained Sojong Lawyers & Attorneys to act for him in relation to the contemplated sale and conveyance of the Property.

In the period from 29 September 2023 to 1 April 2025, Mr Baeg incurred legal fees and disbursements associated with that envisaged transaction, including those charged by Sojong in relation to:

The three invoices rendered by Sojong in relation to those costs, dated 28 May 2021, 28 September 2022 and 17 October 2022 are in evidence before me and total $5,550.12.

Mr Baeg seeks to recover these costs from the defendants by way of damages.

The defendants concede that, should their argument in relation to the Notice of Termination prove unsuccessful (which it has), these legals costs are recoverable (T16).

I have determined that the legal costs incurred by Mr Baeg in the amount of $5,550.12 are recoverable.

The Property is situated in Hornsby Shire Council. The Council issues annual rates and charges.

Two notices issued to Mr Baeg by the Council are in evidence before me, being those relating to the periods 1 July 2023 to 30 June 2024 and 1 July 2024 to 30 June 2025. The full amount payable under each notice is $2,230.22 and $2,401.45, respectively.

In the period from 29 September 2023 to 1 April 2025, Mr Baeg incurred Council rates and charges in the amount $3,481.46.

Mr Baeg seeks to recover that amount from the defendants by way of damages.

The defendants do not accept that the Council rates and charges should be recoverable. The defendants argued that the Council rates and charges were payable “by reason of living at the property”, that Mr Baeg “is not paying council rates elsewhere” and that because he continues to reside at the Property, he obtains (or retains) the benefit of it (T16). I reject each of those arguments.

The Council rates and charges have been incurred by Mr Baeg in the period from 29 September 2023 to 1 April 2025 by virtue of him being the “owner for the time being of land” on which those rates and charges were levied: ss 560(1) and 561(a) of the Local Government Act 1993 (NSW).

The Council rates and charges are not attributable to Mr Baeg’s continued occupation of the Property; they are attributable to the fact that he has been forced to continue to hold title to the Property contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.

I have determined that the Council rates and charges claimed by Mr Baeg in the amount of $3,481.46 are recoverable.

In the period from 29 September 2023 to 1 April 2025, Mr Baeg has incurred fixed service charges and usage charges from Sydney Water on a quarterly basis.

As the labels suggest, fixed service charges are a fixed charge levied in relation to the Property’s connection to water and wastewater services and usage charges relate to the water actually supplied to the Property during the relevant period.

Six notices issued to Mr Baeg by Sydney Water are in evidence before me, being those relating to the periods:

All six notices fall within the period of time identified by Mr Baeg as relevant to his calculation of holding costs, being from 29 September 2023 to 1 April 2025.

The total amount of fixed service charges incurred within that period are $1,030.72. The total amount of usage charges incurred within that period are $1,035.96.

Mr Baeg only seeks to recover the amount of $1,030.22 from the defendants by way of damages in respect of the fixed service charges. No claim in respect of usage charges is pressed.

The defendants do not accept that the Sydney Water fixed service charges should be recoverable (T16).

The Sydney Water fixed service charges have been incurred by Mr Baeg in the period from 29 September 2023 to 1 April 2025 by virtue of him being the “owner of land that is connected to a water main or sewer main” owned by Sydney Water: see, for example, s 55(1) of the Sydney Water Act 1994 (NSW).

The Sydney Water fixed service charges are not attributable to Mr Baeg’s occupation of the Property; they are attributable to the fact that he has been forced to continue to hold title to the Property contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.

I have determined that the Sydney Water fixed service charges claimed by Mr Baeg in the amount of $1,030.22 are recoverable.

From 29 September 2023 to 1 April 2025, Mr Baeg has maintained insurance in respect of the Property with Auto & General Insurance Company Limited, trading as Budget Direct.

Two certificates of insurance are in evidence before me, being those which concern the periods 3 June 2023 to 2 June 2024 and 3 June 2024 to 2 June 2025. The insurance obtained covers the home, contents and legal liability.

Mr Baeg claims the amount of $1,360.80 in respect of property insurance and says he has “made the appropriate adjustments” to accurately reflect the insurance premiums incurred from 29 September 2023 to 1 April 2025. No evidence was provided as to his method of calculation.

The defendants do not accept that Mr Baeg’s cost of maintaining insurance in respect of the Property should be recoverable (T16).

The insurance premiums for the period of 3 June 2023 to 2 June 2024 total $946.30 (a period of 366 days). Of that amount, $801.67 is attributed to the premium in respect of the Property and $144.63 is attributable to the premium in respect of its contents. If 29 September 2023 (the date the Contract was required to complete in accordance with the Third Notice to Complete) is included, insurance premiums for 248 days were required to be incurred by Mr Baeg during that period.

The insurance premiums for the period of 3 June 2024 to 2 June 2025 total $864.60 (a period of 365 days). Of that amount, $678.07 is attributed to the premium in respect of the Property and $186.53 is attributable to the premium in respect of its contents. If 1 April 2025 is included, insurance premiums for 303 days were required to be incurred by Mr Baeg during that period.

I consider that it was necessary for Mr Baeg as the owner of the Property to maintain insurance on the building/s situated there and for any legal liability arising from his ownership of the Property. Mr Baeg has been required to insure the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.

The same cannot be said of the premiums incurred in respect of the contents of the Property. Those items are personal property, unconnected to the realty and in respect of which Mr Baeg has enjoyed the benefit of insurance during the relevant periods. For that reason, in my calculation below, I have not accounted for the costs of that insurance.

I will allow for 248 days of coverage with respect to the Property within the period of 3 June 2023 to 2 June 2024 ($801.67 ÷ 366 x 248 = $543.21) and 303 days of coverage within the period of 3 June 2024 to 1 April 2025 ($678.07 ÷ 365 x 303 = $562.89). This amounts to a total of $1,106.10.

I have determined that insurance premiums claimed by Mr Baeg in the amount of $1,106.10 are recoverable.

From 29 September 2023 to 1 April 2025, Mr Baeg has once arranged for pest control services to be completed at the Property.

The invoice dated 1 April 2024 in the amount of $165 is in evidence before me.

That invoice was rendered by BugZoff Termite & Pest Management for termite treatment of the multi-level house situated at the Property.

Mr Baeg claims the full amount of that invoice.

The defendants do not accept that the pest control service charge should be recoverable (T17).

Pest control for termites is protective of the building/s situated on the Property. Mr Baeg has been required to prevent termites damaging the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.

I have determined that the pest control charges claimed by Mr Baeg in the amount of $165 are recoverable.

From 29 September 2023 to 1 April 2025, Mr Baeg has arranged for gardening and maintenance works to take place at the Property on several occasions.

There are 15 invoices in evidence before me, four of which were rendered by The Grass Muncherz for basic lawn care with the balance rendered by Benji’s Gardens for both lawn mowing and leaf blowing. The dates and amounts of those invoices are as follows:

Mr Baeg claims the total of those 15 invoices, being $2,462.20.

The defendants do not accept that the gardening and maintenance works charges should be recoverable (T17).

Mr Baeg has been required to maintain the gardens on the Property because the defendants have failed to complete the Contract, contrary to both the terms of the Contract and orders of this court that required the Contract to be performed.

I have determined that the gardening and maintenance charges claimed by Mr Baeg in the amount of $2,462.20 are recoverable.

For the reasons set out above, I have concluded Mr Baeg should be awarded damages in the total amount of $1,743,878.71.

In light of Mr Baeg’s success in respect of his motion, costs should follow the event.

The orders I proposed to make are as follows: