Bondi Beach Astra Retirement Village Pty Ltd v Gora

Perpetuities Act 1984 s 15 LEGISLATION CITED : Real Property Act 1900 Retirement Villages Act 1999 Strata Titles Act 1973 s58

Caboche & Bond v Ramsay (1993) 119 ALR 215 Hall v Busst (1960) 104 CLR 206 John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc [2004] SASC 128 (Full Court) Laybutt v Amoco Australia Pty Limited (1974) 132 CLR 57 Mackay v Wilson (1947) 47 SR(NSW) 315 Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327 CASES CITED : Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) HCA 45; (1993) 177 CLR 635 Prudential Assurance Co Ltd v Health Minders Pty Limited (1987) 9 NSWLR 673 Reuthlinger v Macdonald and others (1976) 1 NSWLR 88 Reuthlinger v Macdonald & Ors unreported 20 October 1976 (L W Street CJ, Glass and Samuels JJA) Tonitto v Bassal (1992) 28 NSWLR 564 Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551 Young v Lamb [2001] NSWCA 225, 10 BPR 18,553

BONDI BEACH ASTRA RETIREMENT VILLAGE PTY LTD ACN 002 572 287 (plaintiff) PARTIES : Geraldine Lois GORA as co-executrix of the Estate of the late Clifford EVANS (first defendant) Rhondda Jean RYTMEISTER as co-executrix of the Estate of the late Clifford EVANS (second defendant) Lee Bronwyn EVANS as co-executrix of the Estate of the late Clifford EVANS (third defendant)

COUNSEL : R BRENDER/ N KIRBY (plaintiff) G A MOORE (defendants)

SOLICITORS : Stephen Wawn & Associates (plaintiff) McPhee Kelshaw (defendants)

• 35 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

2008/00278565 - BONDI BEACH ASTRA RETIREMENT VILLAGE PTY LTD v Geraldine Louise GORA & Anor as Executrices of the Estate of the Late Clifford EVANS JUDGMENT 1 HIS HONOUR: This litigation relates to entitlement to Lot 40 Strata Plan 22422, an apartment in the Bondi Beach Astra Retirement Village, former hotel premises in Campbell Parade, Bondi Beach. The Certificate of Title issued on 19 December 1987 shows the registered proprietors as Clifford Evans and Dorothy Evans as joint tenants, and records three notifications, two relating to restrictions under the Strata Plan and the third a caveat by the plaintiff. One restriction is to the effect that only a person aged 55 years or over is to occupy a Lot but a Lot may be the residence of the manager of the retirement village, and a younger person may reside with a person aged 55 years or over. 2 By a contract dated 1 July 1987 Mr and Mrs Evans bought Lot 40 for $107,000 from C G Maloney Pty Ltd (CGM), which can be thought of as the developer of the retirement village. The plaintiff (BBA) was not a party to the contract, but the complex terms of that contract included Special Conditions relating to a scheme to conduct the units in the Strata Plan as a retirement village in which BBA, referred to as the Service Company, was to take a part. The Special Conditions included: 1. The parties acknowledge that it is the intention that the lot hereby sold shall be a lot in a retirement village to be occupied by persons 55 years old and over and conducted with services appropriate to such a retirement village. The parties further acknowledge that the provisions, warranties and covenants hereinafter contained are directed to this end and each shall do all things required on its part to facilitate and make possible the concept of the retirement village and it is acknowledged that the benefit of this clause and special conditions 2, 6, 7, 8 and 12 hereafter appearing shall not merge on completion of the contract for sale.

7. The parties acknowledge that it would be proposed at the first Annual General Meeting of the Body Corporate that exclusive use of those parts of the common property comprising the swimming pool area, passageways and corridors on all floors, the courtyard areas, and the residents' facilities and lounges on the ground floor will be granted to the Service Company subject to the Service Company properly maintaining and keeping in good repair those areas and that in accordance with the Occupancy Agreement the Service Company will sub-licence all proprietors and occupiers of the residential lots to permit them to Use such areas. 3 Special Condition 2(a) obliged the purchasers to enter into two deeds on completion of the purchase, an Occupancy Agreement and a Buy-back Deed. In each of these deeds the parties were BBA and Mr and Mrs Evans; CGM was not a party. 4 The Evans completed their purchase and paid the price to CGM. The transfer to them was dated 22 September 1987 and was registered on 10 December 1987 after the lapse of a caveat; I infer that they settled the purchase on or about 22 September 1987. On 30 September 1987 they entered into two deeds, as required by the Purchase Contract; the Occupancy Agreement (Exhibit A, Tab 33) and the Buy-back Deed (Exhibit A, Tab 34). BBA's claims arise under those two documents. 5 (The pleadings treat the documents as made on or about 30 September, the date on the documents in evidence cannot be read and the caveat alleges execution on 16 September 1987. I cannot see that anything turns on the exact date). 6 Special Condition 3 of the Contract of Purchase contained complicated arrangements relating to entitlements to car spaces. By a Licence Agreement dated 18 September 1987 BBA agreed to give Mr Evans a licence to use car space 9 for as long as Mr Evans should remain a proprietor of Lot 40, for a premium of $8,000. The text of the Licence Agreement shows that BBA's entitlement to the car space, and entitlement to license use of it, depended on a proposed by-law of the body corporate giving exclusive use and enjoyment of many car spaces including car space 9 to the proprietor for the time being of Lot 52. It is an oddity that BBA was not the proprietor of Lot 52 or of any Lot at that time, nor so far as appears from evidence the proprietor of Lot 52 at any time. However no dispute has arisen out of the licensing. 7 Mr and Mrs Evans lived in the home unit until Mrs Evans died on 5 January 1995. Mr Evans continued to live in the unit until he died on 16 September 1997. He became sole proprietor as surviving joint tenant when Mrs Evans died, although this has not been notified on the Register. Mrs Evans held no other substantial assets and there has been no grant of administration of her estate. The defendants, who are daughters of Mr and Mrs Evans, are Executrices of Mr Evans' Will and were granted probate by this Court on 27 February 1998. 8 These proceedings were commenced by Statement of Claim on 1 May 2008. At that time CGM was also a plaintiff, but ceased to be a party with the filing of the Further Amended Statement of Claim on 1 July 2009. The Second Further Amended Statement of Claim was filed on 18 November 2009. 9 The claims fall into two principal groups. Claims 1 and 2 are a claim for a declaration establishing that there is an agreement binding the present parties to buy-back the unit for $107,000 after exercise of the buy-back option granted in the Occupancy Agreement, and specific performance. Claims 3 and 9 seek to establish alternatively that the defendants are bound by the Buy-back Deed and cannot dispose of Unit 40 without complying with it. There are ancillary claims. 10 The Occupancy Agreement according to its terms has parties of three parts, BBA the service company, the Evans as occupant and again the Evans as proprietor. Recital A refers to CGM finalising "the renovation of the Astra which is planned to be the residence of persons of 55 years of age and over". Recital B refers to the Evans becoming the proprietors of Unit 40. Recital C (and I have supplied an obviously omitted word) is: "The Service Company has [been] or will be as far as legally possible granted exclusive use and possession of the Communal Areas." Recital D is: "The parties hereto desire to enter into an agreement for the welfare, regulation and conduct of all unit owners at the Astra and the Occupant and the Proprietor have requested that the Service Company manage and administer the Astra and the Communal Areas to ensure that the residents of the village enjoy such reasonable privacy and quiet possession and enjoyment as is consistent with the physical characteristics of a retirement village designed for the residence of persons 55 years of age and over." 11 Clause 1 contains elaborate provisions under which BBA was to manage and administer the Communal Areas and Common Property, carry out obligations of Mr and Mrs Evans as proprietor, be their attorney to appoint a proxy to attend and vote at any meeting of the body corporate and to receive Notices; and BBA incurred many other obligations relating to Communal Areas and Common Property. In Clause 2 the Evans covenanted and agreed to do a number of things which in any event were their obligations as registered proprietors and as members of the Strata Corporation. However Clause 2 went further and imposed obligations on Mr and Mrs Evans to behave in ways which contributed to the good order of the retirement village. Under Clause 2(a) the Evans covenanted and agreed to pay a service fee to BBA; however in fact, as BBA's counsel asserted and admitted, BBA has never charged a service fee or been paid a service fee by the Evans or by anybody else. 12 By Clause 3(i) the Evans covenanted (Exhibit A Document 33 pages 8 and 9): "To acknowledge the right of the Body Corporate to grant by way of by-law under s 58(7) of the Strata Titles Act , 1973 exclusive use and possession of the Communal Areas and Car Parking Space to the Service Company as the proprietor of a lot in the Strata Scheme together with the right of the Service Company to grant licences to Occupants of the Village in respect of such areas and spaces and the Occupant will not challenge the validity of any such By-law or licence.

And the Occupant and the Proprietor acknowledges that these obligations shall enure for the benefit of all the residents of the village jointly and each resident of the village severally." 13 If Clause 3(i) has effect it operates to create a contractual convention, as a basis of the Occupancy Agreement, that the body corporate had the right asserted. It is not clear to me that the convention established is actually correct; although the terms of s 58(7) are very wide it seems doubtful to me that the body corporate could adopt, even unanimously, a by-law which granted exclusive use and possession of the Communal Areas to the proprietor of one Lot; this is repugnant to the ownership by proprietors of their Lots as they would not be entitled to use the Common Areas to have access to their Lots, and the bounds of the power in s 58(7) may well have been exceeded; the purposes for which that power was conferred could not be attained by a by-law which prevented Lot owners from having access to their units, residential units in nature, unless they obtained the leave and licence of somebody else. 14 However that may be, the contractual convention has no significant impact on the rights of the parties, for two reasons. The Body Corporate did by By-law 32 grant or purport the grant a right to BBA which in terms related to the Common Areas and Car Parking Spaces, but the By-law does not accord with what Clause 3(i) relates to because BBA was not a proprietor of a Lot in the strata scheme, and also because the right purportedly granted was not exclusive of proprietors. Clause 3(i) speaks of a right to grant licences to Occupants but By-law 32 obliges the grant of sub-licences, so that the grant of use and possession was not exclusive. I will give further consideration to By-law 32. 15 Clause 3 provided "In consideration of the covenants and agreements on the part of the occupant and the proprietor herein contained" BBA granted the Evans "the right to the reasonable use and enjoyment in common with all other residents at the Astra and any other persons authorised by the Service Company the Communal Areas of the Astra subject only to the performance and observance by the Occupant of the terms and conditions herein contained". 16 There is also a covenant to grant similar rights on the sale of the unit to another qualified occupant. The licence so granted was not assignable and was no more than a licence. 17 Clause 4 required BBA to maintain books of accounts, provide accounts and perform other management functions. Clause 5 related to BBA holding meetings with a Residents Committee. Clause 6 required payment to BBA of various sums upon the sale or transfer of the unit. 18 Clause 7 (pages 14 and 15 of Exhibit A, Document 33) sub-clauses (b)-(j)) provided for a number of events in which the right of occupancy was to cease; including underleasing or licensing the unit, continued default in observance of obligations, written complaint by ten residents confirmed by a meeting of residents, default in payment, becoming a permanent patient in a nursing home or hospital, the occupant's estate coming under laws relating to mental health or bankruptcy, leaving the unit unoccupied, attempting to sell otherwise and under the Occupancy Agreement. 19 Clause 8(a) provides: 8. (a) Upon the happening of any of the events referred to in Clause 7 hereof the Service company shall have the option at any time thereafter by notice in writing (hereinafter called "the Default Buyback Notice") served upon the Proprietor to require the Proprietor to transfer the Unit to the Service Company or its nominee for the price of One Hundred and Seven Thousand dollars ($107,000.00) whereupon the following terms and conditions shall apply: (i) the parties shall upon the service of the Default Buyback Notice be deemed to have entered into an Agreement upon the same terms and conditions as are contained in the Standard Agreement for Sale of Land -1986 Edition with the following alterations omissions and additions thereto:- (aa) Clause H shall be amended so that the 10% deposit is payable by the Service Company to the Proprietor or the Proprietor's Solicitor as stakeholder;

(bb) Clause K shall be amended so that vacant possession is given as at the date of completion;

(cc) Clause 6(a) and 6(b) of this Agreement shall become a condition of and incorporated in the Agreement;

(dd) There shall be attached to the contract pursuant to S. 52A(2)(a) of the Conveyancing Act 1919 the documents or copies of the documents referred to in the Fourth Schedule in the Standard Agreement for Sale of Land - 1986 Edition;

(ee) Within fourteen (14) days of the service of the Default Buyback Notice the parties shall exchange formal written Agreements containing the above terms and conditions. 20 Clause 8(b) is an acknowledgement that the right conferred under Clause 8 entitles BBA to register a caveat. Clause 9 relates to means of giving Notices which are authorised; these means are not made exclusive. They include sending a letter or sending a Notice by post directed to an occupant at the unit. 21 The Buy-back Deed (Exhibit A Document 34) was made between the same parties and includes recital B: "The Proprietor acknowledges that he shall not sell, transfer or otherwise dispose of his unit otherwise than pursuant to the provisions of this Deed …" 22 Clause 1 includes the following provisions: 1. The Proprietor shall not sell, transfer or otherwise dispose of his unit otherwise than pursuant to this Deed and the following procedures shall apply to such a sale or transfer:- (a) The Proprietor shall give to the Service Company one month's notice in writing of his intention to sell, transfer or otherwise dispose or his unit. Such notice once given shall not be withdrawn or revoked without the consent in writing of the Service Company.

(b) Upon the expiration of the said period of one month referred to in Clause 1(a) the Proprietor or the Service Company shall have the option by notice in writing (hereinafter called "the Buyback Notice") served upon the other no later than a further twenty-eight (28) days thereafter to require the Transfer by the Proprietor to the Service Company or its nominee of the unit for the price of One Hundred and Seven Thousand Dollars ($107,000) whereupon the following terms and conditions shall apply: …

And then there are detailed provisions about the contract which is to be entered into. 23 After a provision about an entitlement to lodge a caveat Clause 2 provides that if neither party gives a buy-back notice the proprietor may sell the unit to another qualified occupant but must procure that the purchaser enters into an Occupancy Agreement. 24 BBA in fact lodged a caveat prohibiting recording any dealing affecting the land, claiming "an equitable estate or interest as Purchaser pursuant to an Occupancy Agreement … " and giving the date of the agreement as 16 September 1987. No steps have been taken under the Buy-back Deed, but BBA wishes to establish by a declaratory order that it is effective. 25 The price in the Agreement for Sale was $107,000. It is an agreed fact, agreed for the purpose of the hearing before me, that the price of the unit when Mr and Mrs Evans purchased it would have been between 10% and 40% higher had they not been required to enter into buy-back arrangements. Because this agreement had been reached I limited the issues so as to defer consideration of evidence relating to the value of Lot 40 until I dispose of other issues. Evidence of value could still be significant. 26 The Strata Plan was registered on 11 February 1985. An inaugural meeting of proprietors was held on 13 February 1985 at which time CGM the original proprietor was the only proprietor. A first annual meeting was held on 12 December 1986. The Minute of that meeting (Exhibit A document 15) shows that Mr CG Maloney was present as representing proprietors and Mr P R Clisdell of Peter Clisdell Pty Ltd, Managing Agent was in attendance and was chairman. The Minute was signed on 24 November 1987 by the Chairman of a later meeting. The Minute shows the following about those who were present: PRESENT: Proprietors representing Units: Mr C. G. Maloney, representing Bondi Beach Astra Retirement Village Pty. Ltd. and C. G. Maloney Pty. Ltd.

IN ATTENDANCE: P. R. Clisdell of Peter Clisdell Pty. Ltd. - Managing Agent.

QUORUM: A quorum was declared having regard to the proxy vote entitlement of Mr C. G. Maloney, representing Bondi Beach Astra Retirement Village Pty. Ltd., as granted under the Service Agreement between proprietors and the Service Company as agreed under Clause 1(b) of that Service Agreement. 27 The defendants' counsel made a number of observations on these references to attendance, to the effect that the Minute did not state or establish whether proxies were produced and whether they were regular in form, and contended to the effect that it should be concluded from the Minutes that there were no regular proxies. Assuming (as I think I should) that there were service agreements with whomever by that time had become a proprietor of a unit by transfer from CGM, the probabilities favour Mr CG Maloney having had an entitlement to represent proprietors at the meeting on 12 December 1986 and I find that he did. 28 The resolutions in the Minutes include the following: ITEM 6: Body Corporate By-laws It was RESOLVED that the existing by-laws No. s 1 - 29 be confirmed unamended; however, it was further RESOLVED, having regard to the attached Annexure "A", that the By-laws, as described, being By-laws 30, 31, 32 and 33 be approved in their content as described hereunder and all resolutions were unanimously approved. 29 Annexure A contains new by-laws 30, 31, 32 and 33. By-Laws 30, 31 and 33 refer to the grant of various rights to the proprietors of named Lots. By-Law 32 is as follows: BY-LAW 32 - That exclusive use of those parts of the Common Property comprising the swimming pool area, passageways and corridors on all floors, the courtyard areas, and the residents' facilities and lounges on the ground floor will be granted to the Service Company subject to the Service Company properly maintaining and keeping in good repair those areas and that in accordance with the Occupancy Agreement the Service Company will sub-licence all proprietors and occupiers of the residential lots to permit them to use such areas. (UNANIMOUS RESOLUTION). 30 In my opinion there is no substantial evidence of any relevant irregularity in process at the meeting at which the body corporate adopted By-law 32. 31 On 19 February 1999 solicitors representing BBA wrote to the solicitors who had acted for Mr and Mrs Evans on their purchase in 1987, said that BBA wished to exercise its rights in respect of the re-purchase of the unit pursuant to the terms of the Buy-back Agreement and asked whether those solicitors had instructions to act on behalf of the estate. 32 On 23 February 1999 BBA's solicitors wrote a letter addressed to "The Executors of the Estate of the Late Clifford and Dorothy Evans" at the unit at the Astra. The letter began with a subject reference to buy-back of Unit 40, referred to the deaths of Mr and Mrs Evans and their purchase of Unit 40 and said: "… the contract provides that the company has the right to re-purchase the unit upon the death of the proprietors.

We are instructed that our client wishes to exercise its right to re-purchase the unit, and we would therefore be pleased if you would contact us in respect of making arrangements for the re-purchase of the unit by the company." 33 It appears that the letter was posted and addressed to the Executors at Unit 40. It has not been established when the letter came to the notice of the Defendants, but this probably happened late in February 1999. There are one or two respects in which the letter is not completely accurate. The letter referred to the Executors and to the Estate in slightly inaccurate terms, as Dorothy Evans had no Executors and there was only one estate which had executors. The Occupancy Agreement and the Purchase Contract are different contracts with different parties and the terms of the letter seem to treat them as one. 34 The letter must have come to the Notice of Mr Evans' Executrices in some way, because solicitors who then represented them replied on their behalf to BBA's solicitors on 10 March 1999. They asked for copies of the Purchase Contract and other documents relied on to support the re-purchase and a copy of any agreement relating to management of Communal Areas and Common Property "[t]o allow us to advise our clients concerning the re-purchase right asserted by your client …" They said "On the basis of the information currently available to them, our clients are unable to concede that your client does have the benefit of the re-purchase right that it asserts. However, that matter will be further considered once the requested documents have been made available." 35 BBA's solicitors replied by letter of 15 March 1999 and sent copies of the original Sales Contract and of what they called the residence agreement, meaning the Purchase Contract with CGM and the Occupancy Agreement with BBA. They said "Please obtain your client's instructions and we will prepare contracts for the buy back of the unit." They wrote again on 22 April 1999 and said among other things "We are instructed that our clients wish to proceed with the buy back of the abovementioned unit. Please advise whether you wish us to prepare contracts." They went on to discuss, inconclusively, the provisions of Clause 3(a) of the Occupancy Agreement relating to the deduction of various sums from the agreed price of $107,000. The reference to Clause 3(a) was inaccurate and should have been to Clause 6(a). 36 The defendants' solicitors replied on 28 April 1999 saying that they had reviewed the documents and there appeared to be at least one other Agreement and they asked for a copy of that document and any others. They said "When we have reviewed those documents we will finalise our advice to our client and respond to your letter." 37 BBA's solicitors replied on 17 May 1999 enclosing a copy of the Strata Plan By-laws and saying "… we look forward to proceeding on the buy back of the property in accordance with the terms of the deed." 38 The defendants' solicitors by their letter of 8 June 1999 requested further copies of Agreements relating to BBA's management of the Common Property, and making a number of comments on BBA's entitlement and obligations. They commented that BBA's functions and powers specified in the Occupancy Agreement appeared to go significantly beyond the rights conferred by the by-laws, leading to the assumption that there must be some other agreements between the Body Corporate and BBA. They then asked "If … there are no other agreements, on what basis does your client contend that it was authorised or empowered to enter into the Occupancy Agreement and to make to occupants of units … the representations to which we have referred?" (referring to obligations undertaken in the Occupancy Agreement). They then said "Until these matters are clarified, we are unable to recommend to our clients that the rights asserted by your client should be conceded." 39 Then BBA's solicitors asserted by letter of 15 June 1999 that BBA had the right to re-purchase the property and intended to do so and asked for confirmation that the defendants would exchange contracts in accordance with the terms of the original agreement. They again asked "Please advise whether you wish us to prepare the contracts." The defendants' solicitors replied on 7 July 1999; they did not agree with any of the claims and referred to an impending conference between the defendants and one of the partners Mr Cork on his return from leave in another twelve days. No other correspondence followed for some years. 40 By-law 32 was amended by a resolution passed on 18 December 2001, and a new by-law 34 was added. These amendments do not affect the rights now in dispute. 41 In July and August 2002 there was an exchange of "without prejudice" correspondence between the solicitors in which the possibility of a resale at a compromised higher price was discussed, but this came to nothing. The defendants' solicitors asserted their view and advice "that the documents are probably unenforceable." After this inconclusive correspondence all attention lapsed for more than five years. 42 Correspondence resumed on 10 October 2007 when the plaintiff's solicitors sent a letter in a firm tone to the defendants' then solicitors saying among other things: "We are instructed to confirm our clients require the buy back of the subject Unit number 40 for the sum of A$107,000 pursuant to the provisions of the contract for the sale of land dated 1st July 1987 and a Deed of Occupancy dated 30 September 1987, originals of which (signed by the deceased) are in our possession." This letter was written on behalf of BBA and CGM. The letter went on to assert that there was counsel's advice that the documents were valid and enforceable and to call for statements whether the defendants intended to conform with the Agreements, and if they would not, whether the defendants' solicitors would accept service of process. 43 In the re-opened correspondence the defendants' solicitors on 30 October 2007 asked to see counsel's advice, the plaintiff's solicitors declined on 5 November 2007 and they again repeated the statement about requiring buy back and the reference to commencement of proceedings. There was some more correspondence in January and February 2008 about details of dates of deaths and grant of probate and a letter of 1 April 2008 firmly stating an intention to commence proceedings and offering a final opportunity to comply before service. This letter was directed to the solicitors and not to the Executrices. Enclosed with the letter was a formal Buy-back Notice which stated a requirement for the Executrices to transfer the unit and exchange contracts; this was as clear a Buy-back Notice in accordance with Clause 8 of the Occupancy Agreement as could ever have been put together. It was not complied with and the litigation followed on 1 May 2008. 44 A primary issue is whether an effective buy-back Notice has been served. The terms of the allegation in the Second Further Amended Statement of Claim dealing with this are as follows after much amendment: 15. The plaintiff served a default buy-back Notice Particulars

By letters or Notices dated 19, 23 February 1999, 15 March 1999 and 22 April 1999, 15 June 1999, 10 October 2007, 5 November 2007 and or 1 April 2008. 45 The meaning of this allegation is that the Default Buy-back Notice and the exercise of the option were constituted by all eight letters, alternatively by the first seven letters, alternatively by the last letter. The conduct of the case by the plaintiff's counsel showed that counsel felt free to search through the letters and try to make a case from the best he could find in any one or combination of them, and he did not present his case on the basis that when the whole array was taken together, they together constituted a Default Buy-back Notice. A Black Letter lawyer might say that the pleading only raised for adjudication a case in which the first seven in the series constituted a Default Buy-back Notice, alternatively all eight and further alternatively the last of them on its own. This is what the pleading says but I do not think I should limit my understanding of it in that way. The form in which the allegation was made glossed the fact that there had been more than nine years delay between the Notice dated 23 February 1999 and the commencement of the proceedings. 46 As the plaintiff alleged a default buy-back Notice by a series of events concluding on 1 April 2008 it is not surprising that the defendants' pleading did not allege laches acquiescence and delay, and did not, until an amendment made during the hearing, allege abandonment of any contract which had been made, to be inferred from the many years of inactivity. It would have been futile to allege such matters in answer to the claim as pleaded, but they obviously came under consideration when the conduct of the claim at the hearing directed attention to events of February 1999 as the exercise of the option and not to the whole series, and they were debated at the hearing. 47 In reality only two documents in the series have any claim for consideration as notices of exercise of the option, the notice of 23 February 1999 and the letter and enclosure of 1 April 2008. The other letters do no more than provide context for the significant documents. The Statement of Claim masked what should be understood to be the legal effects of delay. If, as paragraph 18 alleged, the plaintiff had been ready, willing and able to comply with the contract and purchase the unit it would have pressed on, fairly soon after the Notice of 23 February 1999 by proffering, as in correspondence the plaintiff's solicitors professed readiness to do, a form of contract for exchange. The terms of the contract could be readily spelt out from provisions of Clause 8 and the timetable could also be understood; there was a contractual obligation to exchange contracts 14 days after exercise of option, and although strict compliance with that time limit was not required, the time limit fixed an indication of the pace at which BBA would have proceeded if it had been ready, willing and able to do so. 48 It is not possible for the plaintiff to rely on the Notice of 1 April 2008 as an exercise of the option because of provisions of the Retirement Villages Act 1999, which came into effect on 3 December 1999. Section 167 makes provision that an operator of a retirement village who holds an option to purchase residential premises from a resident must give written notice within 28 days after the resident permanently vacates the premises, otherwise the option lapses. Section 167 extends to the death of an owner of premises, and applies the concept of "permanent vacation" defined in s 8. Transitional provisions in Schedule 4 Clause 9 and Clause 13 have the effect that s 167 operates as if an owner who died before the commencement of the Act had permanently vacated on the commencement of the Act. If the option had not earlier been exercised, it lapsed on 31 December 1999. 49 The letter of 23 February 1999 is in my opinion the only event which comes under consideration as an exercise of the option. The terms of the letter do not follow closely what Clause 8(a) prescribed for the exercise of the option: notice in writing served upon the proprietor to require the proprietor to transfer the unit to the Service Company or its nominee for the price of $107,000. The letter does not in its terms make a requirement, or require transfer. Of course there is no reference to a nominee. The letter refers to the plaintiff's wish to exercise its right to re-purchase the unit and calls for arrangements to be made for the re-purchase. 50 It is well established that contractual provisions relating to circumstances in which and the manner in which an option to purchase land may be exercised must be observed. If the contract prescribes a method of exercise, that method must be strictly adhered to; see Tonitto v Bassal (1992) 28 NSWLR 564 at 574G (Sheller JA, with whom Handley JA and Hope AJA concurred). In that case the contract made detailed prescriptions for the manner of exercise, and not all the details were complied with, although what the party giving the Notice intended to achieve could be readily understood. 51 Central to an exercise of option is the expression of the intention to exercise it. In concept the use of some particular form of words may be essential for an effective exercise; but whether this is so is a matter of interpretation of the contractual provision dealing with the giving of Notice. According to Clause 8(a) what the Notice is to do is "to require the proprietor to transfer the unit for … for the price of $107,000." In the terms of the notice of 23 February 1999 no explicit requirement to transfer is made, and the price is not referred to. However there is a clear reference to the right to re-purchase the unit, a statement of a wish to exercise the right and a call for arrangements for the re-purchase. 52 There have been many cases where courts have addressed attempts to exercise options couched in language which expresses a wish or intention to exercise the option. Depending on which expressions precisely are used, it may be right to interpret a notice as an indication of a wish or intention to act effectually by some future notice. Notwithstanding the strictness which is appropriate, courts have not readily interpreted notices as mere forecasts or indications in advance. The view which has been taken, guided by a series of decisions in the High Court of Australia, is in my opinion well shown by the following passage from the judgment of Samuels JA in Prudential Assurance Co Ltd v Health Minders Pty Limited (1987) 9 NSWLR 673 at 681E The question which must be asked is to be extracted from the judgment of Dixon CJ in Ballas v Theophilos (No 2) (1957) 98 CLR 193 at 196 and may be formulated in this way: "Was the letter of 23 September 1986 a clear and unequivocal election to acquire the relevant property upon the terms specified in the option?" The answer is to be given by reference to the further question adopted by Isaacs J in Carter v Hyde (1923) 33 CLR 115 at 126, that is to say: "… Now, what would anybody when he received that letter fairly understand to be the meaning of it, in the circumstances of its receipt?" Finally, the terms of the letter itself for the purposes of applying Isaacs J's test are to be understood in the light of what Gibbs J (as he then was) said in Quadling v Robinson (1976) 137 CLR 192 at 201. There his Honour said: "… However, it is not always easy to determine whether the purported exercise of an option should be understood as attempting to vary the terms of the option or as intending to accept its terms without modification, notwithstanding that they may have been misdescribed, or notwithstanding that the grantee of the option may have indicated that he intends to perform the contract in a manner for which the terms of the option do not provide. Thus although a notice misstates the terms of (1987) 9 NSWLR 673 at 682 the option which it purports to exercise, it may nevertheless amount to an unqualified and unconditional exercise of the option." 53 At 683G McHugh JA stated the matter in similar but shorter terms, and at 677-678 Kirby P gave a formulation of the applicable principles governing options which stated the matter to the same effect, although at considerably greater length with more detailed references to High Court authority. It is important to note, from Kirby P's principle 5: 5. Nonetheless, every case depends ultimately upon its own facts and the proper construction of the document which is in dispute. 54 The approach taken by the Court of Appeal in that case is, I would respectfully say, strongly supported by the earlier High Court decisions there referred to, and has been adhered to; Young v Lamb [2001] NSWCA 225, 10 BPR 18,553. 55 In my opinion, when the notice of 23 February 1999 is taken as a whole and placed in the context of the contractual relationship to which the defendants as executrices had succeeded, it clearly and unequivocally manifested an intention to exercise the option and to require the executrices to comply by transferring the property. A clearer expression could have been devised, but the recipient could not have doubted the meaning of the notice and the giver of the notice could not have escaped from commitment. 56 The defendants' counsel contended that the notice of 23 February 1999 failed in effect because it was not clearly directed to the Executors (or the Executrices) of the Estate of the Late Clifford Evans, but also referred to Dorothy Evans; counsel observed that there was no such entity as "the Executors of the Estate of the Late Clifford and Dorothy Evans". However even the most general understanding of the transactions of Mr and Mrs Evans would enable the recipient to understand that the Notice was intended to act (whatever else it may have covered) as an exercise of rights arising on the death of the second of them. 57 The defendants' counsel contended that as at 23 February 1999, after the successive deaths of Mr and Mrs Evans and grant of probate of Mr Evans' estate it was no longer possible for the death of Mr Evans to ground the giving of a buy-back Notice. This argument was constructed on what were contended to be textual anomalies in the references in the Occupancy Agreement to the occupants as proprietor, to the Executor or Executors of an occupant and to interpretation provisions in Clause 10 relating to inclusion of the plural in words importing the singular. In the Schedule the reference to the occupant and to the proprietor are given meanings which extend to Executors, Administrators and Successors in title. An introductory statement preceding the recitals adopts meanings specified in the Schedule "unless the context otherwise requires". 58 Interpretation provisions in contracts can be a happy hunting ground for real and apparent logical anomalies arising from inclusions, transpositions from the singular to the plural and attempts to apply contractual provisions to all of a series of succeeding times and circumstances. It is inherently unlikely that parties to written agreements convey their true intentions in concealment under anomalies of these kinds. On the terms of the Occupancy Agreement as a whole I regard it as clear that the death of Mr Evans was an event giving rise to an option and was no less so after the Executrices had obtained probate of his will. 59 BBA's claim for specific performance rests on rights under the Occupancy Deed. Unless BBA's rights were acquired for value, BBA cannot obtain an equitable remedy such as specific performance; equity does not assist a volunteer, and an option conferred without consideration by a deed would not become a ground of equitable remedies. It is necessary to find valuable consideration in the provisions of the Occupancy Agreement itself. BBA cannot rely on consideration found in the provisions of the purchase contract, to which BBA was not a party. CGM assigned its rights under the purchase contract to BBA; assignment is alleged in the pleadings and not disputed. However the option was not conferred by the purchase contract and was not conferred on CGM, and the assignment and consideration furnished by CGM do not assist BBA's rights. 60 The defendant's counsel made a number of adverse observations on the contractual promises given by BBA to the Evans in the Occupancy Agreement. Counsel referred to illegality in a number of respects, but his submissions did not raise any serious question of illegality in relation to any contractual promise made by BBA. The force of counsel's contentions which claimed my attention was that they sought to show that contractual promises of BBA had no substance and that as consideration for any obligation undertaken by the Evans those contractual promises were illusory. 61 Rights purportedly conferred by By-law 32 are not conferred in respect of any lot, and they are not conferred on a proprietor. They are not exclusive rights, as By-law 32 in its own terms requires BBA to give licences to proprietors. In my opinion By-law 32 produced no practical effect. 62 At the basis of much of what BBA promised the Evans it would do is By-law 32, its apparent conferral on BBA of exclusive use of the common areas of the strata plan and the licence granted to the Evans by BBA to make use of the common areas. Underlying assumptions about what BBA could do with the common property rest on By-law 32. 63 In my opinion the right and opportunity of a lot owner to use common property, in an appropriate way is basal to an understanding of the rights of owners of lots in a strata plan. I do not see any express conferral of rights to use common property in the Strata Titles Act 1973; but that right is implied and is sufficiently conferred by the reference to the common property as common. It is common to all proprietors, and exclusive of anybody else. This basal assumption is context in which to approach s 58(7) of the Strata Titles Act, and demonstrates that it is only by following the means offered by s 58(7) and in accordance with its provisions that a by-law, made after the constitution of the body corporation and registration of its strata plan, can alter or qualify entitlements with respect to common property. 64 The rights which By-law 32 purportedly confers on BBA were not conferred upon a proprietor; BBA was not then a proprietor. It has been a proprietor on several occasions and for brief periods since then, but these were much later occasions when it has bought back lots under Occupancy Agreements and then re-sold them; rights in respect of the common property generally have no relation to those proprietorships. 65 In my opinion By-law 32 has never had any effect, and has never operated to give any exclusive rights to the plaintiff, to diminish any rights of proprietors with respect to common property, or to make the rights of proprietors dependent on any arrangement they have made with BBA. 66 Although much of what BBA promised the Evans it would do was illusory, in that it involved conferral on the Evans of licences and permissions to do things which they were entitled to do anyway, and also much of what was promised conferred little or no advantage because the Evans were entitled to have the subject matter of the promises performed for them by other persons or in other ways, there remained a core of advantage to the Evans in the promises given by BBA. The value given to them may not have been as great as a reading of the Occupancy Agreement might suggest; but there was value there, and in my opinion BBA is not a volunteer in its claim to enforce promises made by the Evans in the Occupancy Agreement. 67 Defendants' counsel contended that the Occupancy Agreement is void as against public policy in that clause 7, according to its terms, limits the rights of Mr and Mrs Evans as occupant and proprietor, by providing for events in which their rights in relation to Unit 40 would cease and determine. In my opinion it should be understood that notwithstanding anything in the Occupancy Agreement, Mr and Mrs Evans had the rights which came to them in accordance with the strata plan and the provisions of the Strata Titles Act 1973 which together form the constitution of the body corporate. BBA was not a member of the body corporate. Provisions of the agreement which purported to limit or provide for termination of the rights of the Evans operated only in accordance with and for the purposes of their contractual relationship with BBA. Their significance is in establishing events and circumstances in which BBA had contractual rights against them. In my opinion there is no rule of public policy which prevents the parties to the Occupancy Agreement from making the arrangements in clause 7. To this I make the large exception of the public policy against restraints on alienation of freehold land, with which I deal later. 68 It was also contended that under the Occupancy Agreement BBA assumed a number of obligations which could not lawfully be assumed by it because they related to tasks which should have been and perhaps were performed by a strata manager. The body corporate had a strata managing agent, Peter Clisdell Real Estate Pty Ltd, appointed at the body corporate's first meeting on 13 February 1985, and so far as appears in office ever since. If and insofar as the Occupancy Agreement provided for BBA to do things which the strata managing agent was obliged to do, such as effecting insurance, maintaining common areas, ensuring that repairs were carried out, paying rates and charges or other matters, there is not in my opinion any element of illegality. No law forbids BBA from contracting with the Evans to do something which the strata managing agent was also obliged, in a different way, to do in the interests of the Evans. 69 I heard arguments relating to severability of provisions of the contract should they be held to be illegal, but as in my opinion none were illegal I do not address those arguments. 70 As an element in a claim for specific performance of a contract for sale of land, the very long interval between the time in 1999 when the correspondence died away and the time in 2007 when it was resumed, broken only by ineffectual negotiations in 2002, it is extremely striking and very adverse to the grant of specific performance. BBA did not prepare or proffer or demand execution of a form of contract. For that matter, if it be relevant, it did not demand preparation of a form of contract by the defendants. BBA did not pay or offer to pay a deposit. The nature of the business, illustrated by the time scale in sub-par (ee), indicated the need for continued action to press for completion of rights arising under the notice of 23 February 1999. Holding real property brings obligations for outgoings. Continuing changes in the value of money, the value of real property, and the relative value of those two mean that equitable enforcement after a long period becomes unfair and unjust. Sales of real property have their own inherent urgency, more so in an age of inflation of money. 71 This is not a case where there was even the slightest act of part performance. There was no act by the defendants which recognised the existence of any obligation throughout the whole series of events. Notwithstanding that it should have been relatively easy for BBA to raise money to carry out the transaction, if it did not have money of its available, there is no indication in BBA's conduct, over a period of more than eight years, that it was ready or willing to go on with the contract and complete it, nor, apart from quite general considerations, is there any indication that it was able to do so. This long period of inactivity gave every indication to the defendants that the project of requiring a buy-back was not being persisted with, but had been abandoned, leaving the defendants to carry on in the position of proprietors of Unit 40, with continuing obligations to meet, and without the advantage of receiving the payment which would have come to them if BBA's claimed entitlement had been pursued. 72 There is the substance or at least very strong elements of several different traditional grounds for withholding an equitable remedy; BBA has, whatever it may profess, not shown itself to be ready or willing, nor indeed shown in a clear way that it has been able to complete the contract at the times when it was entitled and also contractually obliged to press on towards completion. BBA has been guilty of remarkable laches and delay, and has given the defendants every indication, by its behaviour, of acquiescence in the defendants' not complying with the exercise of the option. To step back from equitable remedies to the common law, the behaviour of both parties over such a long period of years leads to the finding that both had abandoned performance of the contract which had come into existence; neither side called for the advantages nor did anything to discharge any of the obligations for so long that abandonment is the correct interpretation of their behaviour. 73 The plaintiff's counsel sought to deflect consideration of the plaintiff's not having ever prepared or tendered a form of contract for exchange, either before, or for that matter after commencement of the proceedings, by observing that it is customary in vendor and purchaser of matters for the purchaser to prepare the contract. This does not deflect the consideration because the plaintiff's solicitors several times indicated that they had a project of preparing the documents, the terms of the documents were prescribed by the terms of the Occupancy Agreement, information relating to calculation of the price was wholly in the hands of the plaintiff, and a person in the plaintiff's position who was truly ready, willing and able to go on with the purchase would have pursued the defendants with a form of contract for them to sign, accompanied by insistence that they should sign it. 74 During his final address the plaintiff's counsel relayed to me, while dealing with readiness, willingness and ability to complete, his client's expression of being then willing to complete, and informed me that a bank cheque for $107,000 was available in Court then and there. I do not, of course, doubt that what counsel then said was true, but I did not accept the proffered undertaking or take control of the bank cheque in any way. 75 After this long period of inactivity BBA is not a purchaser whom equity should, in my opinion, assist. It would be oppressive to wake up this long dead exercise of option and set it in motion again. It is as dead as the Dodo, and as incapable of flight. 76 The plaintiff's counsel contended that if specific performance was withheld the plaintiff should recover damages for breach of contract. This is not a case where the plaintiff has been shown to be entitled to specific performance but it has been withheld on discretionary grounds, leading to a claim for compensation under the legislation referred to as Lord Cairns' Act. BBA is simply not entitled to specific performance. As circumstances in which the defendants could become obliged to complete the contract have never existed, it should not be said that their not having completed it has been a breach of contract which has caused BBA to suffer any loss. BBA did not do the things which it was obliged to do if it was to have an entitlement to performance. For that reason BBA has not in my opinion become entitled to any damages at common law. 77 For the foregoing reasons the proceedings should be dismissed. 78 It is doubtful whether BBA had an equitable interest and hence a caveatable interest in lot 40 when the caveat was lodged, but these doubts cease to apply when one of the conditions in which the option may be exercised has occurred; the option then has some claim to be regarded as a conditional contract to sell the land; see Laybutt v Amoco Australia Pty Limited (1974) 132 CLR 57 at 76 Gibbs J. The Buy-back Deed did not create an equitable interest or a caveatable interest, and the caveat does not refer to it. See Mackay v Wilson (1947) 47 SR(NSW) 315 at 325, Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327 at 72, 73 (Giles JA). 79 Judicial consideration of restraints on alienation has extended over many centuries and began with attempts to incorporate restraints on alienation into the title of freehold land. However for a long time the case law has almost always related to restraints on alienation imposed by contract in ways which seem not to affect title although they impose practical burdens on title. Under the Real Property Act 1900 and in the Torrens System the creation and registration of newly invented estates and forms of landholding is not practically possible, and only contractual restraints are likely to be devised or encountered. In the Occupancy Deed the provision authorising a caveat attempts to move some distance towards incorporating the option, and the restraint which it implies, into title; it does not succeed in doing so, but illustrates the nature of the restraint. 80 The restraint was imposed by CGM in the purchase contract in provisions which required the Evans to enter into the Occupancy Agreement and the Buy-back Agreement and thereby to confer rights on BBA, and not on CGM. There is no difficulty in recognising these contracts as restraints imposed on the Evans as purchasers and transferees by CGM as vendor and transferor of title when lot 40 was transferred to them. (As plaintiff's counsel alluded to the concept of trusts of contractual promises obtained by one contracting party for the benefit of another person who was not a contracting party, I should say that there is no indication in the facts that there was intention to create a trust of any promise, trusts are not involved and the relationships are all contractual). 81 The option created by the Occupancy Agreement is not limited in time; it lasts forever. It is not limited to the lives of the Evans, or the lives of their executors, and it is not limited to the continued existence of a residential retirement village; it is not limited at all. (It is not affected by perpetuities law; see Perpetuities Act 1984 s 15.) The Occupancy Agreement creates an implied contractual obligation not to transfer title in a way which would defeat the option. That is to say, the Occupancy Agreement restrains, effectively prevents, alienation to any transferee other than BBA itself. I should add to the last sentence the qualification "unless an opportunity to exercise the option is given", but economic circumstances make that no more than theoretically an exception because of the high likelihood that decline in the value of money, increase in the value of real property or both, well established in 1987, would continue and that at the end of the lifetimes of the Evans, or at one of the other events precipitating the option, lot 40 would be worth more than its 1987 price. That is the driving economic force which created the option arrangement, and means that the difference between what is found in the Occupancy Agreement and a total restraint on alienation leaving no recourse but to transfer the land to BBA is only nominally a difference. 82 Consideration of validity then should proceed on the basis that there is a total restraint on alienation of the freehold estate in fee simple, leaving the Evans and their successors with no recourse but to surrender it and receive the 1987 price. A total restraint on the alienation of the freehold estate in fee simple, which is what has been invalid since the origin of the law on restraints of alienation, is what the present facts present. 83 Plaintiff's counsel urged on me the view that there are public policy considerations which support the Court treating the restraint as effective. These contractual arrangements were said to serve general utility including the public utility of arrangements in which a retirement village is organised, BBA is placed in a position largely to manage the affairs of the village and persons aged 55 or over have the opportunity to contract to buy a unit and have the advantages of the organisation of the retirement village at a lower value than the unit would otherwise bring, if they agree and accept that the capital gain will not come to them but will go to the person organising the retirement village. Counsel accompanied this contention with the suggestion that the price at which the Evans bought had been reduced below what the price would have been if there had been no buy-back arrangement. The price reduction is not part of the contractual arrangement, although it is not difficult to suppose that there was such an element of choice. 84 Although counsel did not articulate matters this way, the public policy which he put forward should be re-stated as the public policy in freedom of contract, in allowing people to pursue what they understand to be their own interests and the means of achieving them, by whatever contracts they choose to make. This is a public policy consideration of high importance. In my opinion it is outweighed by the very long-established public policy consideration favouring free alienability of freehold estates in fee simple. There are very wide fields for freedom of contract in relation to the organisation of retirement villages. The subject is regulated by statute, but within that regulated environment there is room to organise retirement villages on a way which does not leave the capital gain to those who live in them, by employing other mechanisms; contractual licences not involving any transfer of property, leases which it is well established can be made in terms which prevent their being alienated, and can be made defeasible on the death of the lessee, and the grant of freehold estates for life. The public policy relating to freedom of contract can be fully served without impinging the public policy against restraining alienation of freehold estates in fee simple. 85 In Re Rosher (1884) 26 ChD 801 (Pearson J) the testator devised real property to his son subject to a right of pre-emption granted to the widow at a price one-fifth of the value of the property at the date of the testator's death. Pearson J held (at 810) that this was an absolute restraint on sale during the widow's life. Re Rosher was considered and approved in Reuthlinger v Macdonald and others (1976) 1 NSWLR 88 where Needham J said that the correctness of Re Rosher had not been doubted since. In Reuthlinger v Macdonald the restraint under consideration did not relate to real property but personalty, shares in a private company, and the restraint was not imposed on the transfer of ownership of the share, but was imposed by an agreement among shareholders made in association with the conversion of the share from non-voting preference shares into ordinary shares. Needham J, with the advantage of deep learning in property law, addressed whether Hall v Busst (1960) 104 CLR 206 decided that contractual restraints on alienation of property unrelated to transfers of property are void. 86 Needham J's consideration was broad and valuable. However what were there under consideration were contractual constraints on alienation of property unrelated to transfers of property, and that is not this case, where the restraints were imposed as part of and in accordance with terms of the agreement for transfer. Hall v Busst itself was a decision on a covenant executed by the purchaser at the same time as the contract of sale was executed, a covenant against transfer without the consent of the vendor. Needham J while following what in his view was decided by Hall v Busst expressed dissatisfaction with that decision. The application to the case before me of the decision in the majority in Hall v Busst is not open to the consideration which Needham J gave to it or to his Honour's doubts. Needham J pointed out at 98 that with one exception "… every case and every author's view referred to related to the question of restraint in association with the passing of property, either by will or inter vivos." Needham J's expression of his doubt was, at 99, "if I were free to decide the issue, I would hold that the doctrine does not apply to contractual restraints, unrelated to the grant or transfer of property. But the passage I have set out from the judgment of Dixon CJ (1960) 104 CLR 206 at 217, 218, appears in terms to state the contrary." 87 The Court of Appeal affirmed Needham J's decision: Reuthlinger v Macdonald & Ors unreported 20 October 1976 (L W Street CJ, Glass and Samuels JJA). There are expressions of approval of Needham J's discussion of the law: L W Street CJ at 1 and 3, Glass JA and Samuels JA at 5: it is not however completely clear that the Court of Appeal endorsed Needham J's expressions of doubt. 88 In Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551 Handley JA addressed the validity of an obligation in a contract for sale of land to re-sell the land to the vendor at the same price if industrial premises were not erected within two years. This restriction was quite unlike the subject of Dixon CJ's observations in Hall v Busst, which related to an indefinite prohibition of alienation, unqualified in time and circumstances. There was an express covenant not to transfer the land prior to erection of the premises and a provision that should the premises not be completed within 24 months, the land was to be sold back at the original price. The restriction on sale was no more than a negative stipulation which would otherwise have been implied; see Handley JA at 555B-C. Handley JA said, of the restrictions in that case, "restraints of this kind, arising as incidents of a personal contract for sale or other disposition of land stands right outside any legal doctrine which invalids contractual restraints on alienation." This judgment, with which Meagher JA agreed is, with respect, not open to doubt and illustrates that there is a wide field for operation for rights of re-purchase, options and rights of pre-emption in contracts associated with land sales, and also in contracts not associated with land sales, with appropriate qualifications in time and circumstances and falling short of indefinite prohibitions of alienation. 89 In Caboche & Bond v Ramsay (1993) 119 ALR 215 there is some consideration by Gummow J at pages 226-228 of law relating to restraints on alienation, and the curiously narrow distinctions which can arise in it. The restraint in that case, and the circumstances in which it was created and operated, have no real relation to the present facts. Gummow J dealt with contractual constraints at pp 231-232, expressed the view "furthermore, it would appear in the case of contractual restraint that the question is one of degree …." and referred to Reuthlinger, somewhat largely, at 94-101. Gummow J's observation was referred to with approval in Moraitis at [81]. In my understanding the matter of degree is the degree to which the contractual restraint impedes the public policy favouring free alienability. On the present facts there is really no question of degrees; both documents have the practical effect of entirely limiting alienability to re-sale at the original purchase price, and to BBA or its nominee. 90 Observations of Brennan J in Nullagine Investments Pty Ltd v The Western Australian Club Inc (1993) HCA 45; (1993) 177 CLR 635 show his Honour's view that when this doctrine is applied to contractual restraints the application must be based on public policy. I understand that the public policy referred to is the public policy in favour of free alienability of property. By contrast, the degree to which that public policy is injured by an arrangement such as that in Wollondilly Shire Council v Picton Power Lines Pty Ltd is slight. The restraint in Moraitis, which the Court of Appeal did not allow to be debated on appeal, could be regarded as operating as a complete prohibition, by the reasoning adopted in Re Rosher, although that case related to contractual licence and not a property right. What Brennan J's observation excludes, where the restraint is imposed by contract and not by the instrument granting the interest, is repugnancy to the grant of the interest. 91 In Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327, 14 BPR 26,339 which related to a contractual restraint on signing a contractual licence to occupy a market stand, Giles JA (dissenting), in obiter dicta not necessary for decision but no less valuable for that, at par [70]-[84] considered the possible application of the law of restraints against alienation in that case; but without reaching a conclusion, as the Court of Appeal did not allow the issue to be raised. There was further consideration by Hodgson JA at pars [100]-[146]. 92 There was also consideration of the law and its operation on right of first refusal granted to the vendor in the contract of sale of land, in John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc [2004] SASC 128 (Full Court) where after an extensive review of Australian and other authorities at [99] to [120] the Full Court concluded at 121 "… it would appear to be established by the authorities that a right of first refusal will attract the operation of the doctrine in certain circumstances. Relevant factors will be the scope of the initial prohibition, whether the right exists for a limited period or indefinitely, whether the grantor of the right must extract a similar promise from subsequent purchasers and whether the right is to be exercised by reference to a fixed price." 93 When their Honours' view is applied to the Buy-back Deed in this case, consideration of the relevant factors is altogether adverse to validity. A similar exercise when applied to the Occupancy Agreement is also adverse to the validity of the option. 94 In my opinion, both the Occupancy Agreement and the Buy-back Deed impose invalid restraints on alienation, the provisions relating to the option are not effective for that reason and provisions requiring buy-back have no operation. BBA's claim should be dismissed for this additional reason. 95 My conclusion is that BBA fails on claims 1 and 2, and also on claims 3 and 9 and the ancillary claims. BBA is not entitled to the interest claimed in the caveat. My order is: Give judgment for the defendants with costs. **********

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