Supreme Court New South Wales Medium Neutral Citation: TC (Tallwoods) Pty Ltd v Mustapha [2013] NSWSC 1551 Hearing dates: 30 August 2013 Decision date: 28 October 2013 Jurisdiction: Equity Division Before: Robb J Decision: (1)Order that the defendant execute and provide to the plaintiff's solicitors the transfer granting easement attached to the letter from Simpson & Partners Solicitors Pty Ltd to Mr Michael Birch dated 15 February 2013 (a copy of which is included at Tab 7 of Exhibit A) within 7 business days of the making of this order. (2)Order that the defendant arrange for the production of the title for Lot 895 in Deposited Plan 1079140 to the Land and Property Information and take all other steps necessary to enable registration of the transfer granting easement referred to in order (1). (3)Order the defendant to pay the plaintiff's costs of the proceedings. Catchwords: SPECIFIC PERFORMANCE - construction of contractual term - where obligation in contractual term susceptible of more than one meaning - intended meaning of contractual term in context of contract - whether defendants required to execute transfer granting easement. Legislation Cited: Conveyancing Act 1919 Cases Cited: Bank of Queensland Ltd v Chartis Australia Insurance Ltd [2013] QCA 183 CE Health Underwriting & Insurance (Australia) Pty Ltd v Edwards Dunlop & Co Ltd (1993) 176 CLR 535 Phillips v NZI Insurance [1999] NSWSC 845 Schwartz v Hadid [2013] NSWCA 89 Category: Principal judgment Parties: T C (Tallwoods) Pty Ltd (plaintiff) Iman Mustapha (defendant) Representation: Counsel: J H Stephenson (plaintiff) R Notley (defendant) Solicitors: Simpson & Partners Solicitors Pty Ltd (plaintiff) Hancock Alldis & Roskov (defendant) File Number(s): 2013/147651 Judgment 1In these proceedings the plaintiff, TC (Tallwoods) Pty Ltd ("Tallwoods") seeks specific performance of a special condition in a contract for the sale of land between Tallwoods as vendor and the defendant, Ms Mustapha, as purchaser. Background 2The primary relief claimed in Tallwoods' summons is: "1. An order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement attached to the letter from Simpson & Partners Solicitors Pty Ltd to Mr Michael Birch dated 15 February 2013 within 3 business days of the making of this order. 2. An order that the defendant arrange for the production of the title for Lot 895 in Deposited Plan 1079140 to the Land and Property Information and take all other steps necessary to enable registration of the Transfer Granting Easement referred to in the preceding paragraph". 3By the contract of sale dated 2 October 2012 Tallwoods agreed to sell Lot 895 Grangewood Avenue, Tallwoods Village, NSW, being the whole of the land in Certificate of Title Folio Identifier 895/1079140, and being Lot 895 in DP 1079140 for a price of $450,000. 4Special Condition 19 of the contract of sale provided: "The Vendor proposes to create a Right of Carriageway over Lot 895 in DP1079140 in substantial accordance with the Draft Transfer Granting Easement and plan annexed hereto. The Purchaser shall make no objection, claim or demand of whatsoever nature in relation to the Right of Way and if required by the Vendor, shall do all things reasonable and necessary to assist the Vendor (sic) create such Right of Carriageway. This special condition shall not merge on completion." 5The draft transfer granting easement referred to in special condition 19 which is annexed to the contract of sale identifies Lot 895 in DP 1079140 as the servient tenement and Lot 896 in the same deposited plan as the dominant tenement. 6The draft transfer nominates Tallwoods as the transferor and Tallwoods International Golf Resort Pty Limited ("Tallwoods International") as the transferee. At the date of the contract Tallwoods and Tallwoods International had a common shareholding and directorship. At that time Tallwoods International was the registered proprietor of the proposed dominant tenement, Lot 896. 7The description of the easement stated in the draft transfer granting easement was: "Right of Access 10 m wide as shown on Annexure A provided there shall be no standing or parking on the Access at any time and the registered proprietor of Lot 896 shall bear the cost of maintaining the Access". 8Special condition 19 referred to Tallwoods' intention to create a right of carriageway, while the description of the easement in the draft transfer described it as a right of access. Section 181A (1) and (2) and Schedule 8 Parts 1 and 14 of the Conveyancing Act 1919 (NSW) have the effect that the rights attached to a right of carriageway differ in various respects from the rights attached to a right of access. Counsel for Ms Mustapha made it clear at the hearing that Ms Mustapha did not take any point based upon the reference to different types of easements in special condition 19 and the draft transfer, and Ms Mustapha accepted that if Tallwoods was entitled to the relief claimed, then it was entitled to the creation of a right of access. 9The plan which is annexed to the draft transfer granting easement in Annexure A to the contract of sale shows that Lot 895 is adjacent to Grangewood Avenue and that part of Lot 896 lies to the south of Lot 895. The eastern boundaries of Lots 896 and 895 form a straight line which is almost perpendicular to Grangewood Avenue. Lot 896 has no street frontage and is separated from Grangewood Avenue by the width of Lot 895. 10The proposed right of access is depicted on the plan as being 10 m wide and shown as two parallel broken lines which are each parallel to the western boundary of Lot 896 and the eastern boundaries of Lots 896 and 895. The western boundary of the proposed right of access forms a straight line with the western boundary of Lot 896. The location of the proposed right of access is such that it divides the bulk of Lot 895 from the remainder of that lot to the east of the right of access. 11The plan also depicts an existing right of carriageway of variable width (marked A on the plan). The line of the eastern boundary of the right of carriageway is the same as the eastern boundary of Lot 895. The right of carriageway runs from Grangewood Avenue with variable width southwards along the boundary of Lot 895 and then swings west across Lot 895 at its boundary with Lot 896, crosses the southern end of the proposed right of access, and then terminates on Lot 895 to the west of the proposed right of access. 12Mr Nolan, who is a director of Tallwoods, gave evidence, which was not challenged, that there is a clearly defined and sealed roadway constructed on the area of the proposed right of access, which provides direct and all weather access from Grangewood Avenue to Lot 896 and one of the machinery sheds located on that lot. The roadway has been in existence for approximately 12 or more years. The machinery shed located on Lot 896 houses, among other things, the plant and equipment necessary to maintain the adjacent 18 hole golf course. On the other hand the existing right of carriageway over Lot 895 has no defined road and is, in the main, heavily timbered. Mr Nolan expressed the view that the density of the timber prohibits vehicular access to Lot 896 along the existing right of carriageway. 13On 7 December 2012 Tallwoods International entered into a contract for the sale of Lot 896 to Timothy James Ford for a price of $75,000. This contract of sale contained a special condition 23 (vi) which was in the following terms: "The Vendor hereby warrants to and covenants with the Purchaser as follows:... (vi) To hereby undertake, warrant and guarantee to the Purchaser that the Vendor shall in its own right and in addition cause the registered proprietor of Lot 895 in Deposited Plan 1079140 (as Servient Tenement) to in a timely manner furnish to the Purchaser (as Dominant Tenement) of Lot 896 in Deposited Plan 1079140 a duly executed Transfer Granting Easement in registrable form for the benefit of the Purchaser and the aforesaid Lot 896 in Deposited Plan 1079140 in the form attached to this Contract granting the easement for right of carriageway of variable width as delineated in the Plan marked Annexure 'A' or such other appropriate instrument or dealing. This obligation shall not merge upon completion and the Vendor indemnifies the Purchaser against any losses, expenses or costs arising out of non-compliance with this obligation". 14The evidence establishes that there was no Annexure A actually annexed to the contract of sale. The reference in special condition 23(vi) to the right of carriageway being of "variable width" was unexplained. Ms Mustapha did not seek to make any issue of the absence of Annexure A or its terms. 15The contract for the sale of Lot 895 was completed on 26 November 2012. 16Completion of the contract for the sale of Lot 896 occurred on 7 December 2012, which was the date of the contract. 17On 15 February 2013 Tallwoods' solicitor sent a letter to Ms Mustapha's solicitor requesting that she sign as transferor a draft transfer granting easement which was enclosed with the letter. 18The draft transfer granting easement was in identical terms to that which was annexed to the contract for sale of Lot 895 except that Ms Mustapha was expressed to be the transferor and Mr Ford was expressed to be the transferee. 19Clearly the reason why Tallwoods' solicitor made these changes to the draft transfer was that in the intervening period Ms Mustapha had become the registered proprietor of Lot 895 following completion of the contract of sale of that lot, and Mr Ford had become registered proprietor of Lot 896 following the completion of the contract for the sale of that lot. 20Ms Mustapha's solicitor replied to the 15 February 2013 letter on 15 March 2013. He noted that the transferee in the draft transfer that had been submitted for execution was Timothy James Ford and not Tallwoods. The reference to Tallwoods was misconceived as the transferee stated in the draft transfer which was annexed to the contract of sale was Tallwoods International, which seems to be recognised by the writer of the letter who later notes that the transferee in the draft transfer attached to the contract was Tallwoods International. The letter states: "Our client does not understand how the vendor is now in a position to ...create such Right of Carriageway. Our client did not enter into any contractual relationship with Mr Ford nor Tallwoods International Golf Resort Pty Ltd and our client did not agree to execute the Transfer in favour of any successor in title. Our client can see no basis upon which she should be required to execute the Transfer in favour of any person or entity other than the vendor..." 21Ms Mustapha's objection to executing the transfer was founded on the change in the identity of the transferee. Ms Mustapha did not object to executing the transfer as transferor. The reasoning upon which this response was based is unclear. The contract for sale did not contemplate that any transfer granting easement would be executed in favour of Tallwoods, as Tallwoods was not the registered proprietor of the dominant tenement, Lot 896. 22Ms Mustapha's response, as elaborated in subsequent correspondence from her solicitor to the solicitor for Tallwoods and Mr Ford, eventually prompted Tallwoods to file a notice of motion seeking leave to amend the summons. That leave was granted at the trial. Tallwoods added the following additional alternative claims for relief to those which were contained in the original summons: "1A. In the alternative, an order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement contained in the contract between the plaintiff and the defendant dated 2 October 2012, amended to refer to the defendant as transferor, within 3 business days of the date of making this order. 1B. In the further alternative, an order that the defendant execute and provide to the plaintiff's solicitors the Transfer Granting Easement contained in the contract between the plaintiff and the defendant dated 2 October 2012, amended to refer to the defendant as transferor and the plaintiff as transferee, within three business days of the date of making this order". 23Thus, in par 1 of the summons Tallwoods seeks an order that Ms Mustapha execute a transfer where she, the present registered proprietor of the servient tenement, creates a right of access in favour of Mr Ford, who is the registered proprietor of the dominant tenement. Order 1A would require Ms Mustapha to execute a transfer in favour of Tallwoods International. Order 1B would require Ms Mustapha to execute a transfer in favour of Tallwoods. 24Each alternative order recognises that, as Ms Mustapha is the registered proprietor of the servient tenement, she must be the transferor who creates the right of access. Order 1A would be ineffective so long as Mr Ford is the registered proprietor of the dominant tenement. Recognising this, Tallwoods tendered evidence at the hearing that Mr Ford has agreed to transfer Lot 896 to either Tallwoods International or Tallwoods if the court will only make an order that Ms Mustapha execute the transfer in favour of one of those companies, and not in favour of Mr Ford. Order 1B seems to have been prompted by the comment made in Ms Mustapha's solicitor's 15 March 2013 letter to the effect that there was no basis upon which Ms Mustapha should be required to execute a transfer in favour of any person other than "the vendor". Both the comment and the response seem to be misconceived, as Tallwoods was not the registered proprietor of the dominant tenement at the date of the contract of sale, and on no view did special condition 19 contemplate the creation of a right of access in favour of Tallwoods. 25In submissions both Tallwoods and Ms Mustapha put their respective cases solely upon the basis of the proper construction of special condition 19. Ms Mustapha's Submissions 26It is convenient to commence by setting out the construction of special condition 19 propounded by Ms Mustapha. 27Ms Mustapha primarily based her argument on the following statement of principle by Macfarlan JA in Schwartz v Hadid [2013] NSWCA 89 at [31]; "Considering the issue on this assumption, it is notable that the primary judge did not indicate how the language of paragraph 1.2 was capable of accommodating the construction he adopted. As I pointed out in Jireh International Pty Ltd v Western Exports Services Inc [2011] NSWCA 137 at [55]: "... So far as they are able, courts must of course give commercial agreements a commercial and business-like interpretation. However, their ability to do so is constrained by the language used by the parties. If after considering the contract as a whole and the background circumstances known to both parties, a court concludes that the language of a contract is unambiguous, the court must give effect to that language unless to do so would give the contract an absurd operation. In the case of absurdity, a court is able to conclude that the parties must have made a mistake in the language that they used and to correct that mistake. A court is not justified in disregarding unambiguous language simply because the contract would have a more commercial and businesslike operation if an interpretation different to that dictated by the language were adopted". (See also Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [18])." 28It is to be noted that in Schwartz v Hadid Basten JA at [3] agreed with the statement of principle in the reasons of Meagher JA. Meagher JA observed at [84] in relation to the deed which was the subject of the dispute: "The language which the parties have used is in these and other respects susceptible of more than one meaning". His Honour then set out the following statement of principle: "[85] Because the language is ambiguous or susceptible of more than one meaning, it is unnecessary to take up Mr Hadid's invitation to consider whether this Court was correct to conclude in Franklins Pty Ltd v Metcash Trading Ltd that on the current state of High Court authority, the identification of ambiguity is not a pre-condition to examining evidence of surrounding circumstances: see Franklins Pty Ltd v Metcash Trading Ltd at [14]-[18], [63], [388]; MBF Investments Pty Ltd v Nolan [2011] VSCA 114 at [197] - [202]; Home Building Society Ltd v Pourzand [2005] WASCA 242 at [25] - [32]; Lion Nathan Australia Pty Ltd v Cooper's Brewery Ltd [2006] FCAFC 144; 156 FCR 1 at [46], [51] - [52], [238]; Ralph v Diakyne Pty Ltd [2010] FCAFC 18 at [46], [47]; Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; 86 ALJR 1 at [2] - [5]; and Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 at [52]. For the same reason, Dr Schwartz's submission that the primary judge was not entitled to have regard to evidence of surrounding circumstances known to the parties must be rejected. However, it remains necessary to consider whether his Honour made impermissible use of material answering that description. [86] The correct approach to the construction of a commercial contract, such as the Deed, is discussed in Franklins Pty Ltd v Metcash Trading Ltd, esp at [19]. The underlying task remains one of construing the words which the parties have used. In construing the language in question, regard must be had to the other parts of the text so that, as far as possible, the various provisions are given a consistent or congruent operation: Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; 129 CLR 98 at 109; Wilkie v Gordian Runoff Ltd [2005] HCA 17; 221 CLR 522 at [16]. The meaning to be ascribed to the language adopted by the parties is to be assessed objectively, in the sense that it is not governed by the subjective beliefs or understandings of the parties, but rather by what a reasonable person would understand by the use of that language: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]. In a commercial context that usually requires that the preferred meaning is that which makes commercial sense and gives effect to the aims and purposes of the parties, to the extent that they can be identified legitimately from the text and context. Of course, minds may differ as to what constitutes "business common sense" in a particular case: Maggbury Pty Ltd v Hafeli Australia Pty Ltd [2001] HCA 70; 210 CLR 181 at [43]. In the end, it remains the position that the meaning ascribed to the language must be an available one, albeit adopting an approach to construction which is not "narrow or pedantic". Reference to notions of commercial or business common sense does not permit "judicial rewriting" of an agreement in disregard of the language which the parties have adopted: Australian Broadcasting Commission v Australasian Performing Right Association Ltd at 109; Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337 at 352; Jireh International Pty Ltd v Western Exports Services Inc [2011] NSWCA 137 at [55]." 29The fulcrum of Ms Mustapha's argument was the word "create" in the expressions "The Vendor proposes to create" and "assist the Vendor create" in special condition 19. She argued that the clear literal meaning of "create" in this context was that it was the vendor, Tallwoods, which was the party intended to do the creating of the easement. Ms Mustapha was not required to create the easement. In so far as she was required to assist Tallwoods, that obligation was only to assist Tallwoods as the creator of the easement. 30Ms Mustapha therefore ascribed to the word "create" when used in connection with "the Vendor" the meaning that it was the vendor who was intended to be the proximate creator, or the direct instrument of the creation of the easement. 31 Ms Mustapha's case was that there was one plain and literal meaning of the expression "the vendor proposes to create" in special condition 19, which was that "the plaintiff is to create the easement". At the time of the contract of sale the one person, called Lisa Lynn, controlled both Tallwoods and Tallwoods International. That meaning accorded with the terms of the draft transfer creating grant which was annexed to the contract. The only meaning which is open and available is the literal meaning. She submitted that the construction contended for by Tallwoods was impermissible because it was an attempt to ignore the clear meaning of the words used and to impose a construction to conform to what was claimed to be a commercial and businesslike interpretation of the special condition. 32The case put by Ms Mustapha was therefore put firmly on the basis that if the contract provided that the vendor proposed to create an easement, then the only available meaning is that the vendor alone must be the party which creates the easement by the execution of the necessary transfer. 33If, contrary to her primary submission, the wording of special condition 19 was ambiguous, Ms Mustapha argued that the following surrounding circumstances supported the construction of the term for which she contended. First, at the date of the contract Tallwoods and Tallwoods International had a common director and shareholder, being Ms Lynn. Secondly, it would not make business or commercial sense for Tallwoods to have what could potentially be an endless right to come back and require Ms Mustapha to create an easement in favour of Lot 896. Thirdly, Ms Mustapha has not at any time had a contractual obligation to either Tallwoods International or Mr Ford to create the easement, and Ms Mustapha was not made aware of any obligation to create the easement in favour of Tallwoods International or Mr Ford before the completion of the contract of sale. 34Ms Mustapha also argued that if the word "create" in special condition 19 is ambiguous, the term should be construed contra proferentem. 35It is necessary to consider whether the meaning of the word "create" ascribed by Ms Mustapha to the use of the word in special condition 19 is in fact as clear and singular as Ms Mustapha claims. 36Even in cases where the language used by the parties to a contract is not strictly ambiguous it may, as Meagher JA noted in Schwartz at [85] be "susceptible of more than one meaning". It is an attribute of the English language that many words and expressions are capable of subtly different meaning depending upon the context in which they are used. Commonly, the starting point for a proper construction of a contract is that part of the exercise described by Meagher JA at [86] where his Honour said: "The underlying task remains one of construing the words which the parties have used. In construing the language in question, regard must be had to the other parts of the text so that, as far as possible, the various provisions are given a constant or congruent operation". Further: "In a commercial context that usually requires that the preferred meaning is that which makes commercial sense and gives effect to the aims and purposes of the parties, to the extent that they can be identified legitimately from the text and context". Tallwoods' Submissions 37In its submissions Tallwoods ascribed a different meaning to the word "create" in the context of special condition 19. Tallwoods relied upon aspects of the definition of "create" in the Macquarie Dictionary, as follows: "1. to bring into being; cause to exist; produce... 5. to be the cause or occasion of;..." 38Whereas Ms Mustapha argued that "create" required that the vendor be the proximate cause or direct instrument of the creation of the easement, Tallwoods submitted that the vendor could be the creator of the easement in a less direct way that did not require that the vendor be the party that actually executed the transfer granting easement. According to Tallwoods, the proper meaning to be given to the word "create" was one which permitted Tallwoods as the original vendor to be the instigator of a process which ultimately led to the creation of the easement, and it was immaterial whether other parties were required to cooperate in the process of creation, or even that another party was required to be the direct instrument for the creation of the easement as the party that executed the transfer granting easement. 39Tallwoods relied upon the last sentence of special condition 19 by submitting that in a clear and straightforward way that sentence provides that the special condition - meaning the whole of the special condition - shall not merge on completion. That meant, so it was argued, that the process of creation of the easement proposed by Tallwoods as vendor could be implemented before completion or after completion. If it were implemented before completion then it would be necessary for Tallwoods as the registered proprietor of the servient tenement to execute the transfer as transferor. If the proposal was implemented after completion then Tallwoods would be required to call upon the obligation of Ms Mustapha, as purchaser, to do all things reasonable and necessary to assist Tallwoods to create the easement. It would follow that, if by that time Ms Mustapha was the registered proprietor of the servient tenement, she would be required to execute an amended draft transfer granting easement as transferor. 40Tallwoods pointed to the fact that the proposal to create the easement is stated in special condition 19 to be "in substantial accordance with the Draft Transfer Granting Easement" which was annexed to the contract of sale. The special condition itself spoke of the proposal to create the easement, and did not stipulate who was to be transferor and who was to be transferee. The draft which was attached to the contract identified the correct dominant and servient tenements, as was necessary to create the intended easement. However, in so far as it identified a particular transferor and a particular transferee, that reflected the current identity of the registered proprietor of each of those tenements, but that was not a matter of substance. If the registered proprietor of either tenement changed, either because of the completion of the contract of sale, or because of a sale of the dominant tenement to a third party, it would follow as of course that consequential amendments would need to be made to the draft transfer to ensure that the correct party was making the grant in favour of the correct party entitled to the enjoyment of the grant. 41At the end of the day Tallwoods' position was that the meaning of special condition 19 was clear, and expressed in sufficiently meaningful terms, to show that the parties to the contract of sale had the intention that the vendor proposed that an easement would be created over the land the subject of the contract in favour of the contiguous Lot 896, and that the vendor could cause the creation of the easement either by its own hand or with the assistance of the purchaser after completion. If the special condition demonstrates sufficiently clearly an intention to create the easement, there is no apparent reason why it would have been intended that the creation could only occur if the vendor itself executed the transfer, so that the purchaser would gain a windfall if that did not occur, in the sense that the purchaser would be freed from the burden of Lot 895 being made the servient tenement of the easement. Consideration 42In the present case the word "create" where it appears in special condition 19 does not necessarily require that the vendor be the immediate instrument of the creation. The word is capable of having that meaning, and the fact that the annexed draft transfer granting easement identifies Tallwoods as the transferor tends to support the argument that the word was intended to have that meaning. On the other hand, it is an available meaning for the word "create" that Tallwoods as the vendor will be the initiator of a process whereby other parties contribute by their actions to the ultimate result of the creation of the easement. It will not be a misuse of the word "create" to say that the director or producer of a movie is the creator of the movie, even though a great many hands will be involved in completing the movie. In this sense the existence of the proposal on the part of the vendor to create an easement is consistent with the vendor preparing an appropriate transfer and requiring a party who has the legal right to create the easement to do so by executing the transfer. The inclusion in special condition 19 of the obligation on the purchaser to do all things reasonable and necessary to assist the vendor to create the easement supports the construction that the word "create" was objectively intended to have a meaning which did not require the vendor to be the actual instrument of the creation. 43Special condition 19 is a term of a contract for the sale of land. Such contracts are prepared many times daily by solicitors throughout the length and breadth of the State. Many such contracts of sale are prepared in a setting which would readily be understood as being commercial, but in many cases contracts of sale of land will have a private aspect. In either setting it would ordinarily be expected by the parties that, once the objective of a particular special condition has been identified and agreed between the parties, the solicitor for one of the parties would draft an appropriate term, and the solicitor for the other party would satisfy him or herself as to the appropriateness of the drafting, and if necessary enter into negotiations to agree a satisfactory wording. It would ordinarily be expected by the parties for the relevant term to be drafted in as simple and straightforward a manner as possible to reflect the underlying intention, and that the parties would cooperate in implementing the agreed special condition. In this context the adoption of an approach to the task of construing the contract that is not "narrow or pedantic", as noted by Meagher JA, would be an important practical consideration. 44It is necessary for the court to determine which of the available meanings of the word "create", in the necessary objective sense, was intended by the parties to the contract of sale. 45In the present case that at least requires consideration of the whole of the text of the special condition, as well as the commercial consequences apparently intended to be achieved by the provision. 46In the present case special condition 19 clearly states a proposal by the vendor to create a particular type of easement which would burden the subject land and benefit a contiguous property. It must be inferred that the purchase price which was agreed allowed for the fact that if the vendor's proposal was implemented the subject land would be burdened by a right of access. There is no apparent reason why it would matter to the purchaser whether the easement was created before completion or afterwards, or whether it was created by a transfer executed by the vendor or by the purchaser. Subject to one argument which will be considered below, Ms Mustapha did not suggest any good reason why the parties would have intended Tallwoods to lose the right to create the easement if it did not do so itself before completion. 47The last sentence of special condition 19 clearly provides that "this special condition shall not merge on completion". That expression is universally understood in conveyancing circles as having the meaning that the particular term will survive completion, and continue to apply to the party who is subjected to obligations by the term. The natural meaning of the sentence is that the whole of the special condition was intended to survive completion. 48Ms Mustapha submitted in argument that the agreement in the last sentence that Special Condition 19 would not merge on completion was only intended to apply to the prohibition on the purchaser from making an objection, claim or demand, and was not intended to apply to the obligation on the purchaser, if required by the vendor, to do all things reasonable and necessary to assist the vendor to create the easement. Ms Mustapha did not provide any persuasive reason why that limited effect of the last sentence would have been intended by the parties. 49If Ms Mustapha's argument were correct, her obligation to do all things reasonable and necessary to assist Tallwoods to create the Right of Carriageway would merge on completion, but the prohibition on her making objections, claims and demands would not. 50Prior to completion Tallwoods, as registered proprietor, did not require any assistance from Ms Mustapha to create the Right of Carriageway. It could simply execute an appropriate transfer granting easement. 51It is after completion that Tallwoods would require Ms Mustapha's assistance. After completion Tallwoods would lose the power to create any interest in Lot 895 when Ms Mustapha became registered proprietor. That is an obvious practical reason why the last sentence of Special Condition 19 would be required to prevent Ms Mustapha's obligation to assist from merging on completion. 52If, in the absence of Special Condition 19, Tallwoods had created the Right of Carriageway between contract and completion, the existence of the new easement burdening the title to Lot 895 would have become a defect in title. Given the location of the easement relative to the whole of Lot 895 (it divides the whole of the lot into two separate parts) and its intended use as a roadway, the newly created easement may well have had the effect of so materially altering the character of Lot 895 that it would be in substance a different thing than that which Ms Mustapha had contracted to buy. Subject to the terms of the contract, Ms Mustapha may have had a right in equity to rescind the contract. 53Clause 6 of the contract provides: "6 Error or misdescription 6.1 The purchaser can (but only before completion) claim compensation for an error or misdescription in this contract (as to the property, the title or anything else and whether substantial or not)..." 54The right to claim compensation in clause 6 is affected by clause 7, which materially provides: "7 Claims by purchaser The purchaser can make a claim (including a claim under clause 6) before completion only by serving it with a statement of the amount claimed, and if the purchaser makes one or more claims before completion - 7.1 the vendor can rescind if in the case of claims that are not claims for delay - 7.1.1 the total amount claimed exceeds 5% of the price; 7.1.2 the vendor serves notice of intention to rescind; and 7.1.3 the purchaser does not serve notice waiving the claims within 14 days after that service; and 7.2 if the vendor does not rescind, the parties must complete and if this contract is completed..." 55Under these provisions Ms Mustapha would have been required to make any claim arising out of the creation of the Right of Carriageway by Tallwoods before completion. Otherwise, her right to do so would be lost by reason of the combined operation of clauses 6 and 7. Any other rights she may have had in this regard would have merged on completion. 56Special Condition 19 had the effect of preventing Ms Mustapha making a claim under clauses 6 and 7, as a consequence of the agreement between the parties that permitted Tallwoods to create the proposed Right of Carriageway. 57It follows from the above that Ms Mustapha's right to make a claim because of the creation of the Right of Carriageway would have been lost on completion by operation of the other terms of the contract. There was strictly no need for the inclusion of the last sentence in Special Condition 19 to prevent the prohibition against Ms Mustapha making a claim about the creation of the Right of Carriageway merging on completion (although it should be acknowledged that it may have appeared to the drafter of Special Condition 19 to be beneficial to make the last sentence apply to the prohibition against the making of claims for more abundant caution). 58This reasoning suggests that, to give the last sentence meaning and effect, it must have been intended to prevent Ms Mustapha's obligation to provide reasonable assistance to Tallwoods in the creation of the Right of Carriageway from merging on completion. 59That is in any case the result of simply applying the ordinary meaning of the last sentence, which does not differentiate between any of the preceding parts of Special Condition 19. 60If Ms Mustapha's obligation to provide reasonable assistance was intended to survive completion, then Special Condition 19 can only have the meaning for which Tallwoods contends. As Ms Mustapha will become the registered proprietor after completion, the assistance must include executing an appropriate transfer granting easement, as the easement will not be able to be created in any other way. 61For these reasons I prefer the construction of Special Condition 19 put forward by Tallwoods. 62I have mentioned above that I would deal with an argument put forward by Ms Mustapha as to a practical, commercial reason why her suggested construction of Special Condition 19 should be preferred. The argument was put on the assumption that the court found that the meaning of Special Condition 19 was ambiguous. The court has not made such a finding. However, the argument may nonetheless be relevant to the proper construction of the term given the general principle that contracts should be given a meaning that is commercially beneficial. The argument was that, if Special Condition 19 was not limited to requiring Tallwoods as registered proprietor to execute any proposed transfer granting easement before completion, then Tallwoods' right to oblige Ms Mustapha to do so after completion would be open-ended as to time. If Tallwoods did not immediately require Ms Mustapha to create the easement, the title to Lot 895 could be subject to a perpetual but unexecuted obligation to create the easement. 63Even if it is acknowledged that this argument has some force, it is not sufficient to overcome the analysis of the meaning of the ordinary words used in Special Condition 19 that has been undertaken above. Furthermore, the argument may be more hypothetical than real. The only way of getting vehicular access from Grangewood Avenue to Lot 896 is by use of the roadway constructed on the proposed easement, and Lot 896 is used for the maintenance of an 18 hole golf course. While the possibility existed that Tallwoods may have simply left its rights under Special Condition 19 in abeyance, that outcome was highly improbable. It would stultify the benefit of ownership of Lot 896. Furthermore, and although it is not necessary to examine the issue in detail, it is likely that Special Condition 19 would be held to be subject to implied conditions which would prevent Tallwoods from delaying for an unreasonable time in requiring Ms Mustapha to comply with the provision. It is not necessary to consider exactly what this timeframe would be, beyond stating that Tallwoods clearly did not delay for an unreasonable time before requiring Ms Mustapha to comply with the provision. 64Ms Mustapha also relied upon the contra proferentem maxim, on the assumption that Special Condition 19 is ambiguous. I have held that the provision is not ambiguous in the relevant sense, so the maxim has no application: see CE Heath Underwriting & Insurance (Australia) Pty Ltd v Edwards Dunlop & Co Ltd (1993) 176 CLR 535 at 548; Bank of Queensland Ltd v Chartis Australia Insurance Ltd [2013] QCA 183 at [38] and [71]; and Phillips v NZI Insurance [1999] NSWSC 845 per Bell J at [18]. 65The orders of the court will be as follows: (1)Order that the defendant execute and provide to the plaintiff's solicitors the transfer granting easement attached to the letter from Simpson & Partners Solicitors Pty Ltd to Mr Michael Birch dated 15 February 2013 (a copy of which is included at Tab 7 of Exhibit A) within 7 business days of the making of this order. (2)Order that the defendant arrange for the production of the title for Lot 895 in Deposited Plan 1079140 to the Land and Property Information and take all other steps necessary to enable registration of the transfer granting easement referred to in order (1). (3)Order the defendant to pay the plaintiff's costs of the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 28 October 2013