LIQUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD

It would further seem that, in April 1988, Mr and Mrs Britt entered into an agreement to purchase the business of a liquor shop from Floridon for $150,000.00 plus stock at valuation, it being a term of the agreement inter alia) that completion was to be conditional upon, and interdependent with, the granting by Floridon of a lease of the two shops for a term commencing on the date of completion of the agreement until 31 December 1992.

Although it is not the subject of express evidence, it seems clear enough that, at some time prior to 14th June 1988, the Licensing Court had approved of the transfer of the Off-Licence (Retail) from Floridon to Mr and Mrs Britt, for, on 14th June 1988, by lease subsequently given Dealing No Y141220, Floridon granted to Mr and Mrs Britt a lease of the two shops for a term of 4 years 6 months mid 17 days terminating on 31st December 1992 subject to an option for renewal for a further term of 5 years.

It Would further seem that the purchase by Mr and Mrs Britt of the liquor shop business was financed substantially by way of a loan obtained by them from Mercantile Credits Ltd ("Mercantile") since, on 14th June 1988, Mr and Mrs Britt executed 'in favour of Mercantile a Traders' Bill of Sale - later registered in the office of the Registrar General - pursuant to which Traders' Bill of Sale Mr and Mrs Britt charged 'in favour of Mercantile (inter alia) the goodwill of the business, certain enumerated items of plant mid tenant's fixtures, and the stock 'in trade of the business. Since the holding of the Off-Licence (Retail) in respect of the two shops was essential for the conduct of the liquor store business, the charging of goodwill of the business would have operated to charge the benefit of the Off-Licence (Retail) in favour of Mercantile as part of its security for the repayment of its loan. (see, for example, Gaye v Johnston!; Duncan v Ridd?; Bogeta Pty Ltd v Wales) As I have previously recorded, GYG became registered as the proprietor of the land upon which the Shopping Mall is erected in November 1991. GYG is a company the shares in which are held by a Dr Gangemi, his wife and their adult children, Dr Gangemi and his wife being directors, but most, if not all, decisions of any significance affecting GYG's property and business interests being taken by Dr Gangemi, commonly - but not inevitably so - after some form of informal discussion with members of his family. Decisions of a minor, or routine, nature relating to the Shopping Mall were, for the most part, left in the hands of a Mrs Sweet, the Centre manager who lived and worked in Orange.

Notwithstanding that the evidence would indicate that - despite his being a medical practitioner by profession - Dr Gangemi and his company had been involved with the ownership and management of commercial property for a significant period of time, the evidence (see Appeal Book at 338-339) would indicate that the events which gave rise to these proceedings represented the first occasion upon which - except as the owner of premises upon which such a business was conducted - GYG or Dr Gangemi was concerned with a liquor store business.

Mr and Mrs Britt did not exercise the option of renewal contained in the lease, but continued in possession of the two shops after 31st December 1992, so that, as provided for in the lease, thereafter they held as monthly tenants in accordance with the terms provided for in the lease.

1. (1936) 37 SR 454
2. [1976] 2 NSWLR 105
3. [1977] 1 NSWLR 105.

Whether or not the fact be that, when they acquired the liquor shop business from Floridon, they had over-extended themselves, or, that, after they acquired the liquor shop business, Mr and Mrs Britt were affected the competition of other liquor shop businesses - including that which, as it would seem, had been established "just around the comer" by Liquorland - it would seem to be the fact that, by no later than the middle of 1993, the business of "Britt's Liquor Store" had fallen upon hard times and Mr and Mrs Britt were endeavouring to sell their business.

Although it would seem that, prior to that time, there had been inconclusive discussions between Mr Britt - who for this purpose - represented both himself and his wife - Liquorland, GYG and other prospective purchasers, nothing of any present relevance appears to have occurred until shortly prior to 24th January 1994, at which time, so it would seem, Liquorland offered to purchase the business from Mr and Mrs Britt for $195,000.00. Although the evidence is not entirely clear, it would seem probable that that offer came to the attention of Dr Gangemi who - because he considered that the retention of a liquor store within the Shopping Mall was desirable - then gave instructions to Mrs Sweet to endeavour to negotiate the purchase by GYG of the liquor store business.

Before continuing with the narrative, it is convenient, here, to record that, in the course of his Judgment, Brownie J said (inter alia) (Appeal Book at 385):

"T prefer the evidence of each of Mrs Sweet and Dr Gangemi to the evidence of Mr Britt whenever there is any conflict..... His recollection of the events of 1 and 2 February is very poor and I do not think his evidence is reliable. In particular, I do not accept his evidence of his belief as at 1 February: I do not think it can be reconciled with his conduct that day."

However, to revert to the narrative: according to Mrs Sweet, she called on Mr Britt on 25 January 1994, and, when she did so, said to him: "I understand that Liquorland have made you an offer of $195,000.00. Dr Gamgeni has instructed me to advise you that his company will match that offer." to which Mr Britt replied:

"Would you be prepared to wipe off my arrears of rent and outgoings?" - which arrears then amounted to approximately $26,000.00. Mrs Sweet further says that she then said:

"We will wipe off the whole of the arrears of outgoings and half the arrears of rent." to which Mr Britt replied:

"That sounds alright to me, thanks. Will you put it in writing so I can take it home to show Pat what I got for the business." and, - at the conclusion of their meeting

"T will ring Colin Longman and ask him to draw up the contract."

• Mr Longman being the solicitor to Mr and Mrs Britt.

At some time during the course of 25th January 1994, Mrs Sweet prepared a letter which, omitting formal parts, was as follows:

"Re: PURCHASE OF BUSINESS KNOWN AS 'BRITT'S LIQUOR STORE'

I confirm our offer to purchase your business as follows: Agreed purchase price $195,000.00 Less agreed amount to cover all rent and outgoings until settlement $11,640.00

I will contact your solicitor and confirm the purchaser's details."

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAB

Mrs Sweet also says that, shortly after her meeting with Mr Britt, she telephoned Mr Longman and introduced herself as the manager of the Shopping Mall, and that, when she did so, Mr Longman replied "I have been expecting your call". In her Affidavit sworn in these proceedings, Mrs Sweet deposed (inter alia): "I gave Mr Longman the details he would require for the contract regarding the name of the purchaser, its registered office address, its company number, and the name and address of its Solicitors. I then said: 'I expect that you will require ten percent deposit." Mr Longman said: "Ten percent isn't necessary. Five percent will be fine." Mr Longman then said words to the effect: 'Can we set a settlement date of Monday 21/2/94 to allow for a stock take on either the Sunday night or the Monday morning? This will also fit with the next hearing of the Licensing Court in Orange. Who do you have in mind for the stock take and who will be the licensee?' I said: "I will obtain instructions and let you know.' Mr Longman said: 'I will DX the contract to your solicitors. They should have it by Friday morning (28/1/94)."

Despite what Mr Longman had said to Mrs Sweet in his telephone conversation, no form of contract had been received by GYG's solicitors by Ist February 1994. That being so, Mrs Sweet telephoned Mr Longman to enquire what was happening, and, when she did so, was told by Mr Longman "My client has not yet given me final instructions to draw (the contract) up".

Thereafter, Mrs Sweet went to see Mr Britt and, when she did so, said "Brian, what's going on with the sale" to which Mr Britt replied "Liquorland have made me an increased offer'.

Having regard to the issues which were debated before Brownie J and on the hearing of this appeal, it is convenient to pause here to record that, during the course of her cross-examination on the hearing before Brownie J, Mrs Sweet gave the following (inter alia) evidence: "Q. You didn't think at that point, did you, that there was an enforceable agreement between the centre and the Britts? A. No I didn't.

Q. And you did not say to Mr or Mrs Britt, "Look, you have a binding agreement to seel us your business at $195,000.00'?

Q. And you didn't say that to the centre's solicitors?

Q. Because it was clear in your mind, wasn't it, at that point that all bets were off, Liquorland had made a higher bid and there was nothing the centre could do, as you understood it, to require the Britts to sell the centre (sic) at $195,000.?

Q. And did you talk to Mr Gangemi at that point about what was going on?

Q. And I assume you told Dr Gangemi that Liquorland made a higher offer and the Britts were not going to go and settle with you at $195,000.00?

A. I didn't tell him that. I just said Liquorland had made a higher offer.

A. My instructions were to purchase the business if I had to meet that offer, meet it, or increase it to endeavour to purchase the business.

Q. So Dr Gangemi didn't say to your, 'Look Janene', I assume he called you Janene, 'We have a binding agreement at $195,000.00. Go tell the Britts that'?

In her Affidavit, Mrs Sweet further deposed: 16. I telephoned Dr Gangemi to obtain instructions in relation to the matter.

17. I then called on Mr Britt again on 1/2/94 and made an offer which I knew was greater than Liquorland's increased offer. During the afternoon of that day I called on Mr Britt, for a third time, and he said: 'Liquorland have increased their offer again.' I then made Mr Britt an offer of $230,000.00 for the purchase of his business and licence, less a full write-off of his rent and outgoings arrears. At approximately 4 pm and in the presence of Mr Britt's two sons, Mr Britt said: 'I accept your offer.' Mr Britt and I shook hands on the deal. I then said to Mr Britt: "Would you now phone Colin Longman, advise him of the sale, and ask him to draw up the contract.' Mr Britt said: 'Yes, I will.' Mr Britt immediately phoned Mr Longman in my presence and I heard him say 'I have sold my business to the Centre for $230,000.00. Would you please draw up the contract.' I then said to Mr Britt: "You had better phone Liquorland and tell them that you have sold to us.' Mr Britt agreed and immediately phoned Mr Djukic of Liquorland. I heard Mr Britt say: 'Hello Dushan. I have sold my business to the Centre.' it appeared that Mr Britt couldn't get a further word into the conversation and I said to him: 'Do you want me to speak to him'. Mr Britt handed me the phone and I said: 'I am the manager of the Centre. I confirm what Mr Britt has told you. We have just purchased his business.' Mr Djukic said: "What was the purchase price?' I said: 'I can't disclose that.' Mr Djukic then said: "Brian was ringing me. I would like to speak to him'. I handed the phone to Mr Britt and left the premises."

Again, in the light of the issues that were debated before Brownie J and on the hearing of the appeal, it is convenient to record, here, that, in the course of her cross-examination, Mrs Sweet gave the following (inter alia) further evidence: - "Q. So in your view, when you had the conversation that you have just told us about, you were in the same position as you were on 25 January, it was 25 January all over again in the sense that Mr Britt had agreed, as you understood it, to sell the business to the centre, the business and the licence to the centre? A. With the exception that he had given his solicitor instructions to draw a contract. He said 'Will you please draw the contract' and he confirmed with his solicitor that he had sold and he had agreed with me that he would accept our offer of $230,000.

Q. Did he do that on 25 January, you told us? A. I didn't hear him speak to Mr Longman.

Q. But as you understood him, he had accepted your office on 25 January.

Q. And he had rung is solicitor on 25 January and asked him to draw up a contract?

Q. So it was just the same on | February from your point of view?

Q. You don't know as you told us what Mr Britt said to his solicitor on 25 January because you weren't privy to that conversation?

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAB

Q. You happened to be there when he rang his solicitor on I February you told us?

Q. But there wasn't any other difficulty (sic) as you saw it on that day, between that day on (sic) 25 January was there?

Q. And as you told us the only discussion you had with Mr Britt since, and it was a short one, was the price of the business and licence and how the arrears of rent and outgoings were to be dealt with?

Q. So is it fair to say that you did not discuss when the agreement would be completed?

Q. And is it fair to say no agreement was reached on when the agreement would be completed?

Q. And there was no agreement on I February about a deposit, was there?

Q. And you knew from your previous dealings that a deposit was almost always paid in a transaction like this?

Q. And there was no agreement reached on I February about when and how stock would be valued? OBJECTION (LAWRY): REJECTED

Q. You didn't agree with Mr Britt on 1 February about when the stock would be valued? OBJECTION (LAWRY): REJECTED.

Q. Did you talk about it on I February how the stock would be valued?

The only, the only issue that was different to our original conversations on 25 January was this increased purchase price.

Q. So as you understood it on 1 February when Mr Britt said 'I accept your offer' you were back to 25 January in necessarily the same posture except the price had gone up?

Q. Let me finish the question. You were back to 25 January in necessarily the same posture except the price had changed?

A. Yes, with regards to the conditions of the sale, that is true. " It should further be noted that, at the conclusion of her evidence, Mrs Sweet gave the following evidence in answer to questions from Brownie J: - "Q. As at I February what was your belief as to whether or not the contract, to be binding, had to be in writing?

A. I believed that a contract should be formalised in writing. While negotiations took place, an agreement was reached then it was formalised in writing.

Q. As you understood it back on 1 February what happened if it was not formalised in writing?

Despite what had occurred when Mrs Sweet was with Mr Britt on Ist February 1994, it would appear that Mr Britt spoke to Mr Djukic later during the day, at which time it was arranged that Mr Djukic would go to Orange that evening with a view to discussing with Mr Britt the purchase of the liquor store business by Liquorland.

Before he left for Orange, Mr Djukic had discussed the prospective purchase of the business with Liquorland's "in house" solicitor, Mr Hatzis, who, before he and Mr Djukic left for Orange, had prepared a form of contract for the sale by Mr and Mrs Britt to Liquorland of the liquor shop business. As did the form of contract for the sale by Floridon to Mr and Mrs Britt, the form of contract prepared by Mr Hatzis dealt with a variety of matters such as the basis upon which stock in trade was to be sold and paid for, the time at which, and the circumstances in which, completion of the contract, and the taking of possession, should take place, the steps to be taken in relation to the transfer of the Off-Licence (Retail), warranties to be given by Mr and Mrs Britt and the like.

The form of contract also contained a provision - later deleted as the result of the negotiations which were to take place - making completion of the contract subject to and conditional upon the grant of a lease of the shops to Liquorland.

Mr Djukic, accompanied by Mr Hatzis, set off for Orange at about 6 pm on the evening of | February 1994, arriving at the home of Mr and Mrs Britt some hours later. At first, the discussions involved only Messrs. Djukic and Hatzis, on the one hand, and Mr Britt, on the other, although, during the Course of those discussions which led ultimately to a purchase price of $240,000.00 plus stock at valuation being agreed upon, Mr Britt spoke on the telephone on a number of occasions with his accountant.

After a purchase price had been agreed upon, Messrs. Djukic and Hatzis, accompanied by Mr Britt went to the home of Mr Longman, so that the terms of the proposed contract might be discussed with him and so that, if the terms of the proposed contract could be agreed upon, the contract, as settled, could be executed by Mr and Mrs Britt prior to the return of Messrs. Djukic and Hatzis to Sydney on the following morning.

As the result of the discussions which took place at Mr Longman's home, a number of amendments were made to the form of contract which Mr Hatzis had earlier had prepared, such amendments including, not only the addition of matters which were then discussed, but also - as I have earlier recorded - the deletion of the clause which had dealt with the grant of a lease of the shops to Liquorland.

When the terms of the contract had been settled, it was executed by Mr Djukic, on behalf of Liquorland, and by Mr Britt, whose signature was witnessed by Mr Longman. That having been done, Mr Longman then telephoned Mrs Britt to advise her in relation to the form of the contract, and, after Mr Longman had done so, Mrs Britt agreed to execute the contract. Thereafter, the Messrs. Djukic and Hatzis, together with Mr Britt, returned to Mr and Mrs Britt's home, where Mrs Britt executed the form of contract.

In the Affidavit which she swore in these proceedings Mrs Sweet gave the following (inter alia) further evidence: "18. At about 9.30 am the following morning (2/2/94) I called on Mr Britt at his liquor store as a show of good faith. Mr Britt said to me: 'You are going to kill me.' I said: 'Brian, I don't want to know.' I then left Mr Britt's shop and phoned Dr. Gangemi and said to him: 'There is something wrong.' Dr. Gangemi said: I will phone Mr Britt immediately. You go back around to his shop.' When I arrived back at Mr Britt's

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAY

shop he was speaking on the phone. He handed the phone to me and I had a brief conversation with Dr. Gangemi who advised me that Mr Britt had signed a contract with Liquorland late the previous night."

In the Affidavit which he swore in these proceedings Dr. Gangemi deposed (inter alia): - "11. On the 2nd February, 1994 I learn't (sic) that Mr Britt had negotiated a further agreement with Liquorland at 10 pm the previous night.

Having heard this I telephoned Mr Britt immediately and we had the following conversation: I said: Hello Brian, this is Dr. Gangemi, whats (sic) going on.

Britt said: I sold to Liquorland at 10 pm last night.

I said: Thats (sic) not very business like, you have a contract with us. As far as Iam concerned, you have done a dis service (sic) to the people of Orange. The manner in which you have carried out these negotiations is disgraceful.

Having regard to Dr. Gangemi's statement that, in the course of his conversation with Mr Britt, he had said "You have a contract with us", it is convenient to record, here, that, in the course of his cross-examination, Dr Gangemi gave the following (inter alia) evidence: -

"Q. You didn't believe when you said that, that you could force him to sell to you, did you?

A. I didn't, I wasn't aware of that at that point, I am not a legal man.

Q. It was always your understanding that whatever was said between Mr Britt and Mrs Sweet there was going to have to be an exchange of written agreement?

A. Eventually, but it was also my understanding when you have reached that far in negotiations it should only be a matter of time before the matter is resolved.

Q. But you knew that unless written agreements were exchange (sic) you could not force the matter to be resolved your way -

You believed that unless written agreements were exchanged - A. At that point my mind did not consider it. At that point I was concerned about what he had done.

Q. You were offended to what you saw as a breach of a moral obligation? A. Breach of an obligation.

Q. Breach of a moral obligation? A. I think it went further than - Q. You didn't say that?

Q. You didn't say, 'Look Brian, you have got to sell to us, we had an agreement?'

Q. You didn't say to him, 'You have got to sell to us because of that agreement?'

Q. You didn't believe at the time you had an enforceable agreement?

A. I didn't' believe - at that time I didn't consider that matter."

In her Affidavit sworn in these proceedings Mrs Sweet further deposed (inter alia): - 19. Shortly after my return to my office Mr Patrick O'Sullivan from Liquorland phoned me. He referred to the lease proposal put to Mr Britt dated 21/1/94 and said words to the effect: 'The proposal you have put to Mr Britt is basically fair enough. Someone has done their homework.

The 4% turnover rent cuts in at about $764,000.00 on a base rent of $31,000.00. Mr O'Sullivan then said: 'We will forward a proposal to you."

On 3rd February 1994, Mrs Sweet wrote to Mr mid Mrs Britt a letter which, omitting formal parts was as follows: - "Re: Tenancy of Shop 17, Summer Centre in accordance with the hold over provision of your expired (sic) lease, I have to advise that G.Y.G. Holdings Pty Ltd require you to deliver up possession of Shop

Due regard should be given to Special Condition 20 of the lease.

Ihave prepared a statement of all rent and outgoings due to that date and I have to advise that the amount due and payable is $29,282.74.

I also attach a Irrevocable Authority Form for signature.

10 Would you please ensure that this form is returned to me by noon on Monday, 7th February, 1994.

Non return will result in further action being taken immediately."

The form of irrevocable authority referred to in that letter, which irrevocable authority was addressed to Mr Longman, omitting formal parts was as follows-

"TRREVOCABLE AUTHORITY We, Brian Francis Thomas BRITT and Patricia Jean BRITT of 13 Banksia Street, Orange in the State of New South Wales HEREBY IRREVOCABLY AUTHORISE AND DIRECT you to pay G.Y.G. Holdings Pty Ltd of 88-102 Summer Street, Orange in the State aforesaid,

20 the sum of Twenty Nine thousand two hundred and eighty two dollars seventy four cents ($29,282.74) as at 3rd March, 1994 from the proceeds following the sale of our business known as Britts Liquor Shop, carried out at Shop 17, Summer Centre Shopping Mall, 88-102 Summer Street, Orange being arrears of rent and outgoings."

25 One pauses, here, to note that the demand for payment of all outstanding rent and outgoings, which rent and outgoings were to be paid out of the purchase price to be paid by Liquorland, was inconsistent with there then being a present obligation on Mr and Mrs Britt to sell the business to GYG at the price, and on the conditions, which Mrs Sweet said had been agreed upon.

30 In light of this, and, also, of what was later to occur, it might also be noted, here, that where the subject matter of a contract for sale is that of a business as a going concern, time is usually regarded as being of the essence (see, for example, Tadcaster Tower Brewing Company v Wilson+, Boyns v Lackey> On 4th February 1994, following a telephone conversation with a Mr Hesse of

35 Liquorland, Mrs Sweet wrote to Liquorland a letter which omitting formal parts was as follows: - "Re: Proposed Lease - Shop 17, Summer Centre, Orange I refer to our telephone conversation this morning, and now confirm our offer of lease

BASE RENT: $31,000.00 p.a. 45 REVIEW DATES: Ist June, 1995 - thence annual, C.P.I.

% ACTUAL OUTGOINGS: 3.87% - budget period ended 30.4.94 $265,000 TURNOVER RENT: 4% of annual audited sales, or base rent whichever is the greater.

4. [1897] 1 Ch 705, 711
5. (1958) 58 SR and cases there cited

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAD

OPTION: To be exercised with not more than 12 months notice and not less than 9 months notice. Rent to be determined at average of rental paid in the preceding two years.

5 | USE: Liquor shop. OPTION TERM: 5 years. EXTENDED TERM: 5 years."

Tile form of irrevocable authority which had been forwarded to Mr and Mrs

10 Britt not having been received by her, Mrs Sweet, in the early hours of 9th February 1994, had the locks on the shops changed and the premises secured. Although it is not clear that this was so, the probability is that, thereafter, there were negotiations between Mr Longman and the solicitors for GYG as to the terms upon which Mr and Mrs Britt might be permitted re-entry to the premises,

15 and that, as part of the conditions agreed upon, Mr and Mrs Britt agreed to execute an amended form of irrevocable authority. Whether that be so or not, it is the fact that, on 11 February 1994, Mr and Mrs Britt executed a form of irrevocable authority and direction, addressed to Mr Longman, which form of authority and direction, omitted formal parts was as follows: - "We hereby

That immediately the sale of our liquor store (Britts Liquor Shop, Shop 17, Summer Centre Shopping Mail) and or the licence relating thereto has completed, you will pay, in first priority, G.Y.G. Holdings Pty Ltd of 88-102 Summer Street, Orange the sum of: $29282.74.

25 2. In the event that the sale referred to in item 1. herein does not take place on or before the 3rd March, 1994 we agree to make application for bridging finance and direct you apply any bridging finance obtained, in first priority, towards the costs as detailed in item 1. herein.

3. That this authority and direction shall apply to any Solicitor and or firm of

30 Solicitors instructed by us in relation to this matter.

We further undertake: 1. Not to cause any disturbance in the centre whatsoever.

Not to assault, molest, harass or otherwise interfere with any person (either owner, tenant, administrator, invitee or other person whatsoever) or threaten to do any such act or thing to any person.

35 3. Not to do any thing which may or may be likely to bring into disrepute the Summer Centre, its owners, occupiers or administrators.

4. To remove all signs displaying the words 'Britts Liquor Shop' and 'Liquor'.

5. To remove all fixtures owned by us prior to our vacating the premises." and that, thereafter, Mr and Mrs Britt were permitted re-entry to the shop premises.

40 One pauses, here, to note that the apparent demand for, and acceptance of this form of authority was also inconsistent with any obligation on the part of Mr and Mrs Britt to sell to GYG.

Meantime, on 7th February 1994, Liquorland had applied to the Licensing Court to have the Off-Licence (Retail) transferred to it provisionally pursuant to

45 the provisions of s61(3) of the Liquor Act 1982 which application was acceded to. It is to be noted, that, before any provisional grant of such an application might be made, the application must be consented to in writing by the relevant transferrer of the subject licence.

Following the letter which Mrs Sweet had written to Liquorland on 4th

50 February 1994, negotiations as to the grant to Liquorland of a lease of the shops continued for a period in excess of 2 months. The position in this regard is

sufficiently recorded by Brownie J, in his Judgment, in the following terms, - "Thereafter, (GYG) and (Liquorland) negotiated, from 2 February to about 10 April, as to the possibility of Liquorland leasing Shop 17 from (GYG), for use as a liquor outlet, using what had been the Britts' liquor licence. The negotiations involve a rich variety of details concerning the proposed lease. I think it is sufficient to say that throughout the negotiations the parties proceeded on the basis or assumption that the (Liquorland's) written contract for the Britts was effective, and that if the Britts had agreed to sell the business to (GYG) on 1 February, a topic which was not mentioned at any stage, that contract had been obliterated by the written contract of 2 February. There is ample material, not contradicted or challenged, capable of being regarded as conduct by (GYG) consistent with this position, or admitting this position, or as representing to (Liquorland) that this was the position."

Meantime, on 28th February 1994, Mr and Mrs Britt wrote to Mrs Sweet a letter which omitting formal parts was as follows: -

"EXTENSION OF OCCUPANCY - SHOPS 17 and 18 TRADING AS BRITTS LIQUOR STORE

I refer to the Irrevocable Authority and Direction executed by us on 11 February, 1994 and request an extension of the occupation of the above mentioned shops on a weekly basis. The occupation would be able to be terminated by providing one (1) week's notice by either party, and would continue under the current terms and conditions. We also request that the date provided in CL2 of the Authority and direction be extended to 17 March, 1994 by which time it would be hope that Liquorland will be in a position to settle the purchase of my (sic) business." to which letter Mrs Sweet replied on Ist March 1994 in a letter which Omitting formal parts, was as follows: -

"Re: Extension of occupancy - Shops 17 and 18 Summer Centre I refer to your letter dated 28th February, 1994, in which you request: -

(a) an extension of occupancy of shops 17 and 18 on a weekly basis beyond Thursday, 3rd March, with such extended occupancy to be subject to termination by either party giving one (1) week's notice: and

(b) an extension to 17th March of your undertaking to obtain bridging finance for the purpose of settling the rent and arrears to 3rd March, 1994, due by you, in the event that the settlement of the sale of your business to Liquorland is not completed by that latter date. I advise that, despite several weeks of negotiations, we have been unable to reach agreement with Liquorland regarding a lease to them. This leaves a position of uncertainty at this point as to their intentions, bringing with it the distinct possibility that their settlement with you may not occur until a date, unacceptable to us, beyond your requested extended date for obtaining bridging finance. Given this uncertainty, I advise than (sic) an extension of tenancy will be granted only if payment of all rent and arrears is made by bank cheque by no later than 9 a.m. on Thursday, 3rd March, 1994. Any further enquiries should be directed to our solicitor, Mr Peter Cornock, phone 02 634 2878."

Again, one pauses to note that the demand for payment of arrears was inconsistent with any obligation on the part of Mr and Mrs Britt to sell to GYG.

Although it is not clear that this was so, the probability is that, by this time, Dr. Gangemi had attended at the offices of the Liquor Administration Board with a view to ascertaining what, if any, steps GYG might take in order to obtain a transfer to itself of the Off-Licence (Retail), and that, at the time of his so doing, his attention was directed to the provisions of s42 of the Liquor Act 1982,

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell J&)I

following which, he instructed GYG's solicitors to file with the Licensing Court an application for the transfer to GYG of the Off-Licence (Retail).

In the morning of 3rd March 1994, Mrs Sweet went to the shop premises and demanded possession of them from Mr and Mrs Britt. At the same time, so it would seem, Mrs Sweet handed to Mr Britt, who, as it would seem, was the holder of the Off-Licence (Retail), a letter from GYG's solicitors which letter omitting formal parts was as follows: - "Re: Application to Transfer Off-Licence (Retail) Premises: Britt's Liquor Store, Orange Shops 17 and 18 Summer Centre, Orange Application has been made as owner in possession to transfer the above licence from your name. As required by the Liquor Act we hereby give you notice that the Application is listed for hearing at the Licensing Court of New South Wales, Level 10, 323 Castlereagh Street, Sydney at 10.00 a.m. on Monday the 7th March 1994." the assertion, in such application, as to the character in which GYG claimed to lodge that application, clearly having been false.

On the same day, Mr Hatzis wrote to GYG's solicitors a letter which, omitting formal parts, was as follows: -

"Re: Purchase of Off Licence Retail Serial No. 301821 from BF and PJ Britt Liquorland (Australia) Pty Ltd has entered into an agreement, dated February 2, 1994 to purchase this licence, together with plant and equipment and goodwill of the licensed premises. The licence was subsequently provisionally transferred to our Company's nominee.

We have become aware that your client GYG Holdings Pty Ltd and/or its directors have made an application to the Licensing Court of New South Wales for transfer of the licence to the lessor (or its nominee) as owner in possession Pursuant to $42 of the Liquor Act. Although our Company's nominee has not seen served with the notice required pursuant to that section of the Act, we understand that the matter is listed for hearing before the Licensing Court of New South Wales on March 7,1994.

Your client's application is entirely inconsistent with our Company's equitable rights in the licence, which our company has agreed to acquire for valuable consideration.

We seek your undertaking in writing by 2 pm tomorrow, Friday March 4, 1994, that our client lessor will not proceed with the application before the Licensing Court.

In the absence of receiving your undertaking by that time, we shall take such action as we consider necessary without further notice to you (including proceedings before the Equity Division of the Supreme Court) to protect our Company's proprietorial interests in the licence."

No such undertaking as had been sought having been given, on 4th March 1994 application was made ex parte on behalf of Liquorland to the Duty Judge in the Equity Division for (inter alia) the grant of an injunction restraining GYG from prosecuting its application pursuant to s42 of the Liquor Act 1982 and for leave to give short notice of a Summons to Continue any such injunction which might be granted. As I understand it, the bases upon which that application was made were, first, that - so it was submitted - notwithstanding the terms of s42 of the Liquor Act 1982, the mere fact of ownership of the premises to which the Off-Licence (Retail) related did not give GYG standing to make the application (a submission based upon Esanda Ltd v Rossides® and, second, that, in any event, the beneficial interest in the Off-Licence (Retail) belonged to Liquorland.

Notwithstanding that, in the circumstances, he might, in the exercise of his discretion, properly have refused to do so (see Dalgety Wine Estates Proprietary Ltd v Rizzon7) the Duty Judge appears to have acceded to that application, injunctions of the type sought being granted up to and including 9th March 1994

• on which latter day they were continued until 23rd March 1994 - which date was made the return day for the Summons which Liquorland had sought leave to file.

When the proceedings came before McLelland CJ in Eq - he seemingly then being the Duty Judge in the Equity Division - on 23rd March 1994, His Honour, so it seems, granted Liquorland leave to amend the proceedings by joining Mr and Mrs Britt as additional parties - Defendants and to file an Amended Summons in which was sought the following (inter alia) relief -

"1. An order that the first defendant be restrained from lodging or prosecuting an application to the Licensing Court of New South Wales pursuant to s42 of the Liquor Act 1982 with respect to off-licence (retail) Serial No. 301821 issued under the Liquor Act 1982, until the Licensing Court of New South Wales has confirmed or otherwise dealt with the provisional grant of transfer by it to the plaintiffs nominee under s41 of the Liquor Act 1982 of off-licence (retail) Serial No. 301821, or until the Licensing Court of New South Wales has determined an application to it by the plaintiff for the removal of off-licence (retail) Serial No. 301821, whichever occurs later.

2. An order that the first defendant be restrained from exercising off-licence (retail) Serial No. 301821 issued under the Liquor Act 1982, until the Licensing Court of New South Wales has confirmed or otherwise dealt with the provisional grant of transfer by it to the plaintiffs nominee under s41 of the Liquor At 1982 of off-licence (retail) Serial No. 301821, or until the Licensing Court of New South Wales has determined an application to it by the plaintiff for removal of off-licence (retail) Serial No. 301821, whichever occurs later.

A declaration that the first defendant is not entitled to make application to the Licensing Court of New South Wales under s42 of the Liquor At 1982 with respect to off-licence (retail) Serial No. 301821.

An order restraining the first defendant from lodging an objection with the Licensing Court of New South Wales to the provisional grant of application for the transfer to the plaintiffs nominee of off-licence (retail) Serial No. 301821.

A declaration that the plaintiff has the beneficial interest off-licence (retail) Serial No. 301821 issued under the Liquor Act 1982. " At the same time, McLelland CJ in Eq ordered that the proceedings stand adjourned until 12 April 1994 before the Duty Judge.

On 12th April 1994, the proceedings were listed before Brownie J, then the Duty Judge in the Equity Division, at which time Mr RS Angyal appeared for Liquorland, Mr I Lawry appeared for GYG and Mr Wilson appeared for Mr and Mrs Britt. It should be noted, however, that, although Mr and Mrs Britt had been Joined as parties-Defendants to the proceedings, the Affidavits upon which Liquorland relied in the hearing before Brownie J included one which had been sworn by Mr Britt in support of Liquorland.

Although applications listed before the Duty Judge in the Equity Division in such circumstances are most commonly dealt with as interlocutory applications, either, for the grant, or, for the continuation, of injunctions pending the final determination of the proceedings, and although the hearing before Brownie J

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAB

appears to have commenced upon the basis that the hearing was one for interlocutory relief only, that situation appears not to have continued.

After Mr Angyal had read Mr Britt's Affidavit and a further Affidavit sworn on behalf of Liquorland by Mr Farley - the National Real Estate Manager of Liquorland - Mr Lawry sought, and was granted, on behalf of GYG, leave to file the Cross-Claim to which I have earlier referred, to which Cross-Claim only Mr and Mrs Britt were joined as Cross-Defendants, and by which Cross-Claim, as amended during the course of the hearing, GYG sought the following relief - "1. A declaration that there is a binding and enforceable agreement between the cross-claimant as purchaser and the cross defendants as vendors for the purchase and sale of the business including the off-licence (retail) conducted at premises known as shops 17-18 The Summer Centre, 100 Summer Street, Orange and bearing licence number 301821 ('the agreement for sale').

An order that the cross defendants specifically perform the agreement for sale.

Such further or other order as the nature of the case may require.

Later - at some time after the morning adjournment - it appears to have been agreed between the parties that "the matter is to be heard as a final hearing". Thereafter - as is commonly the case with matters heard before the Duty Judge in the Equity Division - the hearing proceeded at such times on 12th April 1994 and on the two following days as Brownie J was able to make available to the parties. At the conclusion of the hearing, Brownie J reserved his decision, the existing injunctions being continued until the disposition of the proceedings.

In the light of the fact that there were no pleadings, and in the light of the difficulties which were thought to arise when the appeal from the Declaration and Orders made by Brownie J was first listed for hearing, it is convenient, here, to record that it has since been agreed between Liquorland, GYG and Mr and Mrs Britt, that the issues debated at the hearing before Brownie J were as follows: - "1. the plaintiff/appellant Liquorland (Australia) Pty Ltd commenced these proceedings seeking injunctive relief against an application made by the first defendant/first respondent GYG Holdings Pty Ltd under s42 of the Liquor Act 1982. GYG's application sought transfer to it, as owner in possession, of a liquor licence in the name of the second defendants/second respondents, the Britts.

2. Liquorland also sought a declaration against both GYG and the Britts that it had the beneficial interest in the licence. Liquorland based its claim on a written agreement with the Britts made on 2 February 1993 to purchase their licence and liquor shop business in Orange.

3. At the hearing of the matter, GYG riled a cross claim seeking a decree of specific performance of an oral agreement with the Britts made on | February 1994 to purchase their licence and business. GYG contended that its entitlement to proceed under s42 of the Liquor Act 1982 arose out of the agreement to purchase and not otherwise.

The main debate before the primary judge thus was whether GYG had an enforceable oral agreement to buy the Britt's business and licence.

GYG submitted that, on the evidence, it and the Britts intended to and did enter into binding legal relations on the afternoon of 1 February and that the subsequent conduct of Liquorland precluded it from any entitlement to relief.

Liquorland submitted that no contract came into existence then. Liquorland further submitted that, if a contract then came into existence, GYG had elected against it; abandoned it; agreed to its discharge; or was estopped as against

Liquorland from asserting its existence. It also submitted that the cross claim was a nullity because there was no evidence that stamp duty had been paid on the alleged agreement.

In addition, it was submitted that specific performance should not be ordered because of GYG's laches and unclean hands or because GYG was not ready, willing and able to perform the contract.

GYG also submitted that until the written approval of Liquorland's parent company was obtained, no contract was formed or in existence; AB 80X." and that the issues to be debated on the appeal were those debated before Brownie J except for the issue referred to in para8.

When, in the course of his Judgment, Brownie J came to deal with those issues, he dealt, first, with the issue whether what had occurred in the conversation between Mrs Sweet mid Mr Britt on Ist February 1994 constituted a binding contract immediately binding Mr and Mrs Britt to sell and GYG to buy the liquor store business. When he did so his Honour said. -

"The plaintiff submitted that what happened on 1 February was in no way different to what had happened on 25 January,and pointed to some answers given in cross-examination to that effect, but neither the cross-examination nor the submission dealt with the differences established by the evidence: the formal words of acceptance, accompanied by the shaking of hands; the immediate communication to Mr Longman of the facts of the decision to sell to the first defendant; and the immediate communication to the plaintiff of that fact.

What is left is an argument of law, as to what follows from the words and conduct of Mrs Sweet and Mr Britt on I February. On the plaintiffs primary case, no binding contract was formed. As I have said, the words and the conduct described seem to me to have demonstrated an objective intention to enter into a binding contract, but the parties expected a written contract to be prepared by their respective solicitors.

The proposed sale from the Britts to Liquorland involved a question of vesting in Liquorland a right to occupy Shop 17, and it is understandable that those acting for both the Britts and Liquorland thought in terms of the legal need for a written contract, but the proposed sale from the Britts to the first defendant was in a different position, involving no need for a written contract: the Britts were lessees holding over as monthly tenants, and all that was proposed was the consensual surrender of that tenancy to the first defendant, the lessor.

No doubt, the ordinary response of a solicitor would be that any contract for the sale of a business for $195,000, or $230,000 should be reduced to writing, but so far as the evidence extends, no lawyer actually thought, or advised, that the contract needed to be written, as distinct from it being desirable that it be written.

However, the evidence did not deal with any advice given, but with the subjective views of the actors, and their words and conduct.

The question must be judged objectively, and the subjective views of Mrs Sweet and Mr Britt are insignificant, compared to the answer to the question: what did their words and conduct convey? In my judgment, the answer is that they intended to conclude a contract, binding immediately, and acted as though they had achieved that aim, but they also intended that there be a written contract produced.

The plaintiffs second submission was that the contract was one failing within the third of the categories discussed in Masters i,. Cameron (1954) 91 CLR 353 at 360-364: that is, the parties did not intend to be bound unless and until they executed a formal contract. I do not accept this. It seems to me to be plain that

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAB

this was not Mrs Sweet's intention, either subjectively or objectively. She, like Dr. Gangemi, wanted the Britts bound, and she set out to do what she could to make it seem to Mr Britt that he and his wife were bound. Her knowledge of the law left her uncertain that she had achieved this result, and the later conduct of the plaintiff persuaded her (temporarily) that she had not, but that is a different question, and I conclude that her words and conduct demonstrated an intention to create a binding agreement, if and to the extent that this could be achieved.

Further, the words and conduct of Mr Britt seem to me to demonstrate a willingness on his part to bind himself and his wife. In particular, the evidence of Mrs Sweet, largely corroborated by Mr Britt, and uncontradicted by either Mr Longman or Mr Djukic, as to what Mr Britt and Mrs Sweet told them, is telling.' Next, his Honour dealt with the question whether or not - assuming that what had been agreed upon between Mrs Sweet on Mr Britt on Ist February 1994 would otherwise have constituted a binding contract - the apparent contract was so uncertain as to be unenforceable. In this regard his Honour said: - "Then it was argued that the contract was so uncertain as to be unenforceable. I do not accept this submission, either. In my judgment the better view is that it was a contract of the type discussed in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) Conv R 55-299; the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting a further written contract, containing terms dealing with incidental matters, in substitution for the first oral contract. See to Pagnan SpA v Feed Products (1987) 2 Lloyds Rep 601, and Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd 18 NSWLR 540.

Those matters of detail were not regarded by the parties as significant, as at | February, and they were content to leave them to be worked out later, as they had been similarly content on 25 February; and indeed, some of the matters of detail had been worked out by Mrs Sweet and Mr Longman in the meantime, without difficulty or delay."

That having been done, his Honour then turned to consider the question whether, even if what had occurred between Mr Sweet and Mr Britt on Ist February 1994 amounted to a binding and enforceable contract, GYG, by its conduct after 2nd February 1994, had "waived any right to rely on the contract". In this regard, his Honour said: - "The plaintiff then submitted that by its conduct after 2 February the first defendant had waived any right it had to rely on the contract formed on the afternoon of February 1. Nothing occurred to cause the first defendant to have to make any election between inconsistent rights. What is relied upon is a course of conduct in which the plaintiff asserted the existence of a written contract made early on 2 February, and the first defendant assumed that this was effective, so as to obliterate its contract of February 1, and acted accordingly. But waiver is a deliberate act, made with knowledge, and the evidence of Mrs Sweet and Dr. Gangemi establishes that they had assumed the truth, as a matter of law, of the plaintiffs implied assertion that its contract, and not the first defendant's contract, was effective.

Although, in the various passages from his Judgment which I have set out above, Brownie J ascribed the various submissions with which he there dealt to Liquorland, we were informed on the hearing of the appeal that those submissions were, on the hearing before Brownie J, adopted by Mr and Mrs Britt as providing answers to the claim made against them in GYG's Cross-Claim.

After lie had dealt with the three issues to which I have earlier referred, Brownie J then turned to consider Liquorland's submission that, by reason of its conduct, GYG was estopped from denying that any binding contract had been made between it and Mr and Mrs Britt on Ist February 1994. In this regard his Honour said: -

"Finally, the plaintiff asserted that the first defendant was estopped by its conduct from denying that its contract of I February was effective. Apart from the fact that there is no evidence at all that the plaintiff relied upon the supposed representation of the first defendant, as distinct from the plaintiff having made the representation itself, the notion that it would be unconscientious for the first defendant to retreat from its position seems to me to offend common sense: on the evidence, what happened was that the plaintiff, through Mr Djukic, knew on the afternoon of 1 February of the first defendant's contract, but deliberately set out to try to have Mr Britt repudiate that contract; and then it asserted that it had succeeded in this unconscientious enterprise.

On the basis of the conclusions which he had earlier recorded, his Honour continued: -

"The foundation for (Liquorland's) claim therefore fails, and the claim should be dismissed, with costs so far as (GYG) is concerned."

Having done so, Brownie J then dealt with the Cross-Claim and the Issues arising In it, which issues, if I may be forgiven for saying so, he dealt with in a singularly perfunctory way. Thus, his Honour said: - "The first defendant brought a cross-claim against the Britts, claiming a declaration that there is a binding and enforceable agreement between it and them for the sale of the business, including the liquor licence, and an order that the contract be specifically enforced.

In defence to the cross-claim, some additional arguments were advanced. First, it was said that the first defendant was guilty of delay. The period of delay does not seem to me to be significant in the circumstances, but in any event it was brought about by the misconduct of Mr Britt and Liquorland.

Secondly, it was said that the first defendant did not have clean hands, a submission which merged into a submission that the first defendant had to 'do equity'. In brief, it was contended that it would be unfair to the Britts to compel them to sell to the first defendant. The contrary seems to me to have been established.

Then, it was said that the first defendant had not proved that it was ready or willing to perform its contractual obligations. The evidence of Dr. Gangemi shows that it is.

Finally, it was said, by the plaintiff, that the specific performance of the contract would be unfair to it, but what I have said as to the estoppel point answers this submission too."

Having recorded those findings, Brownie J then concluded: - "On these findings, I need not go on to examine the further arguments raised, for it follows that, as between the parties, (GYG) is entitled to have the liquor licence transferred to it."

His Honour then proceeded to make the formal Orders and Declaration to give effect to his Judgment.

Being dissatisfied with that result, Liquorland, within the time allowed by the rules of Court, duly filed a Notice of Appeal, by which Notice of Appeal it sought, first, that the Declaration and Orders made by Brownie J be set aside, and, second, that, in lieu thereof, there be made (inter alia) the Declarations and Orders sought by it in Prayers I to 3 and 5 in its Amended Summons.

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAY

Despite the Declaration and Orders made by Brownie J on the Cross-Claim, Mr and Mrs Britt did not file a Notice of Appeal. - The hearing of the appeal having been expedited, the appeal was first listed for hearing before the Court - differently constituted - on 16th August 1994, at which time Mr AG Whealy QC appeared with Mr Angyal for Liquorland while. Mr Lawry appeared, as before, for GYG; not surprisingly, in the circumstances, there was no appearance on behalf of Mr and Mrs Britt.

When the appeal was called on for hearing, the Court was obliged to Point Out to the parties that, having regard to the Declaration and Orders made by Brownie J on the Cross-Claim - to which Cross-Claim, as I have previously recorded, only Mr and Mrs Britt had been joined as parties-Cross-Defendants - from which Declaration and Orders no Notice of Appeal had been filed by Mr and Mrs Britt, it would not be possible, even if the Court were to uphold the various grounds of appeal taken by Liquorland in its Notice of Appeal, to make any Declaration and Order which would have the effect of Mr and Mrs Britt being required to join in any application to the Licensing Court for the grant of Liquorland's application to transfer the Off-Licence (Retail). That this was so was due to the fact that, unless, and until, the Declarations and Orders made by Brownie J on the Cross-Claim were set aside Mr and Mrs Britt were bound, by order of the Court, to perform a contract which was anterior in point of time to that relied upon by Liquorland, and the performance of which contract would involve Mr and Mrs Britt in joining with GYG in an application to have the Off-Licence (Retail) transferred to GYG. The position, in this respect, is sufficiently stated by Sir Hugh Cairns LJ (as he then was) in Ferguson v Wilson8. as follows: - "I suppose that there can be no controversy but that, before (Act 21 and 22 Vict. c 27) a Bill filed in the Court of Chancery stating a contract and alleging that the subject matter of the contract no longer existed or could no longer be made over to the plaintiff, or a suit in which those facts appeared, must, as a matter of course, have been dismissed; a Court of Chancery could have no jurisdiction in such a case.(see also per Turner LJ Craney v Bugg!®) In the event supposed, therefore, the only remedy which might be granted to Liquorland was an inquiry as to damages.

This being so, the Court directed that the hearing of the appeal might stand adjourned so that Liquorland, after informing Mr and Mrs Britt - whose rights and obligations in the matter might thereby be affected - of their intention to do so, might apply to be joined nunc pro tunc as an _ additional party-Cross-Defendant to the Cross-Claim, and, if that application be acceded to, might then seek leave to appeal, out of time, from the Declaration and Orders made by Brownie J on the Cross-Claim.

On 26th August 1994, the proceedings in the Equity Division and in the Appeal were listed before me so that I might then make such Orders, and give such Directions, as, in all the circumstances, appeared to be necessary or desirable. When the proceedings were so listed Mr Whealy and Mr Angyal appeared, as before, for Liquorland, Mr Lawry, as before, for GYG and Mr M.A. Robinson appeared for Mr and Mrs Britt.

8. [1866] LR 2 Ch 77, 91
9. (1866) LR Ch. at 87
10. [1971] 1 NSWLR 13

At the time, I granted leave to Liquorland to file a Notice of Motion seeking the making of the appropriate procedural, and other, Orders, such Notice of Motion to be, and be deemed to have been, made returnable instanter, and, having done so, ordered, by consent, first, that the proceedings in the Equity Division be, and be deemed to have been, amended as, on and from 12th April 1994 by adding Liquorland as an additional party-Cross-Defendant to the Cross-Claim, and second, that so much of the Notice of Motion as sought an Order that Liquorland be granted leave to appeal, out of time, against the Declaration and Orders made by Brownie J on the Cross-Claim stand adjourned until the hearing of the appeal. That having been done, and after I had been given certain directions intended to crystallise the issues which had been debated before Brownie J, and which were to be debated on the hearing of the appeal, I ordered that, unless - which I was informed was improbable - Mr and Mrs Britt wished to take an active part in the hearing of the appeal, Mr Robinson be released from further attendance.

When the Appeal was called on for hearing before the Court, as presently Constituted, on 16th September 1994, Mr Whealy and Mr Angyal appeared, as before, for Liquorland and Mr Lawry appeared, as before, for GYG, but, as had been foreshadowed, there was no appearance by, or on behalf of, Mr and Mrs Britt.

A consideration of the issues to be debated which I have recorded above will make it clear that the first question to be determined on this appeal is whether:

• (a) as GYG would have it, the matters which were agreed upon between Mrs Sweet and Mr Britt on Ist February 1994 constituted a concluded contract for the purchase and sale of the liquor store business, albeit that it was clearly contemplated that a formal agreement later be executed between GYG, on the one hand, and Mr and Mrs Britt, on the other - or

(b) as Liquorland would have it, the matters which were agreed upon between Mrs Sweet and Mr Britt represented no more than a limited consensus, not binding either party to purchase or to sell the liquor business, which limited consensus would not fructify into a concluded contract unless, and until, the formal agreement, which it was clearly contemplated would later be executed, be executed by GYG and Mr and Mrs Britt and exchanged in accordance with what was submitted to be the usual practice.

As is apparent from what I have just recorded, it is common ground between Liquorland and GYG that what was agreed upon between Mrs Sweet and Mr Britt on I st February 1994 did amount to at least a limited consensus, the area of dispute between the parties being whether what then occurred amounted to a concluded contract. In such cases - but particularly so where the parties have not reduced even the limited consensus into writing - it is clear that it is legitimate for a court which is called upon to resolve the dispute to ascertain what was the parties' intention by drawing inferences from their words and conduct, not only in relation to the making of the limited consensus, but also their words and conduct both before, and after, the reaching of that limited consensus (see, for example, Barrier Wharfs Ltd v W Scott Fell and Co Ltd!! Howard Smith and Co Ltd v Varawa!2 B. Seppelt and Sons Ltd v Commissioner for Main Roads!3 Allen v Carbone!4 Australian Broadcasting Corporation v XIVth Commonwealth

11. (1908) 5 CLR 647, 669 per Griffith CJ
12. (1907) 5 CLR 68

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JAD

Games Ltd!5) It seems also to be well enough established that, in carrying out the task of determining, in such a case as this was, what was the relevant intention of the parties, a court may have regard, not only to the matters upon which the parties have reached a consensus, but also to the areas in respect of which they have failed to reach any consensus; and, further, that the court may have regard to what appears to be the established, or at least common, practice in relation to agreements of the type in question.

Notwithstanding the various matters upon which Brownie J relied to support his conclusion that the matters agreed upon between Mrs Sweet and Mr Britt on I February 1994 brought into being a concluded contract for the purchase by GYG, and the sale by Mr and Mrs Britt, of the liquor store business, which concluded contract - although it was later to be reduced into a more regular form

• was not conditional upon the execution and exchange of that more formal agreement, I am of the view that, in so concluding,his Honour fell into error. The reasons which lead me to that view are as follows: -

even if one is to set to one side the apparent differences between Mrs Sweet and Dr Gangemi as to what was to be the purchase price to be paid for the business and the manner of its payment, the only matter which was expressly agreed upon between Mrs Sweet and Mr Britt on Ist February 1994 was the purchase price to be paid for the liquor store business;

even if it were permissible to have regard to what had earlier been discussed between Mrs Sweet and Mr Longman, and to regard those matters as being necessarily included in any agreement for the purchase and sale of the business, the form of the several agreements for the purchase of the business from Floridon and for the sale of the business to Liquorland would indicate that there was a significant number of matters which were customarily the subject of agreements for the sale and purchase of such a business which had not been agreed upon either prior to or on Ist February 1994;

further, the fact that such an agreement had been executed when Mr and Mrs Britt bought the business from Floridon and the fact that they were to execute such an agreement when they sold the business for Liquorland would tend to indicate that the customary commercial practice in relation to the sale and purchase of such businesses was one in which no concluded contract came into being unless, and until, a formal agreement embodying the terms of the contract had been executed and exchanged in the conventional way;

despite the fact that, when he spoke to Mr Britt on 2 February 1994, Dr Gangemi claimed that GYG then had a concluded contract, every action which was taken by, either, Mrs Sweet, or, by GYG, thereafter and prior to 2nd March 1994 was, in my view, inconsistent with any belief on the part of either Mrs Sweet or Dr Gangemi that GYG then had a concluded contract, and consistent only with a belief on the part of each of them that GYG had no enforceable rights against Mr and Mrs Britt;

further, the fact that, despite GYG's having filed an application seeking, in purported reliance upon the provisions of s42 of the Liquor Act 1982, a transfer of the Off-Licence (Retail) to it, GYG through its solicitors continued to negotiate with Liquorland in respect of a proposed lease of the shops to Liquorland is, in my view, inconsistent with any belief on the part of those representing GYG that GYG had ally enforceable rights against Mr and Mrs Britt.

In the light of the various matters to which I have referred, I conclude that what was agreed upon between Mrs Sweet and Mr Britt on Ist February 1994 was, at best, a limited consensus - that consensus being limited to the price to be paid by GYG for the business if the contemplated purchase and sale were to proceed - and that it was not the intention of the parties that any concluded agreement for the purchase, and sale, of the business should come into being unless, and until, the detailed terms of that proposed agreement had in fact been agreed upon, been reduced into writing, executed by the parties and exchanged in the conventional way.

It would follow from this conclusion that the Declaration and Orders made on the Cross-Claim by Brownie J ought to be set aside and, no ground for denying efficacy to the agreement made on 2nd February 1994 between Mr and Mrs Britt and Liquorland having been raised by either Mr or Mrs Britt or GYG, the several Declarations and Orders sought by Liquorland in its Amended Summons should be made.

But even if my view that no concluded contract for the purchase and sale of the liquor business came into being be in error, it seems to me that by reason of the events which occurred on, and after, 2nd February 1994 and before 12th April 1994, GYG had lost any right which it might otherwise have had to seek, and obtain, an order that any agreement for the purchase and sale of the liquor store business which had been made between itself and Mr and Mrs Britt be specifically enforced. I say this since it seems to me that those events would evidence one or other of three Situations, any one of which would, by 12th April 1994, have denied to GYG any right to claim an order for specific performance.

1. that, by reason of the facts that neither GYG nor Mr and Mrs Britt after Ist February 1994 took any steps to perform the contract, but, on the contrary, proceeded upon the basis that there was no contract between them, they had so conducted themselves as, and, thus, ought to be held to have agreed between themselves, to abandon or abrogate the contract (see, for example, Summers v the Commonwealth!© DTR Nominees Pty Ltd v Mona Homes Pty Ltd!7.

2. alternatively, by reason of the events occurring after Ist February 1994, GYG was to be regarded as having accepted the repudiation by Mr and Mrs Britt of the contract and, thus, to have terminated the contract, its sole rights thereafter as against Mr and Mrs Britt being a right - which it did not seek to enforce in its Cross-Claim - to claim damages for breach of contract. In this regard, it is to be noted - since, on the hearing of the appeal, Mr Lawry argued that the contrary was the case - that, even if those representing GYG did not appreciate that GYG had a binding contract, their actions on behalf of GYG, being totally inconsistent with the existence or continued existence of any contract, constituted an election to accept the repudiation by Mr and Mrs Britt (see, for example, Sargent v ASL Developments Ltd!8;

3. further alternatively, so it seems to me, even if one is to put to one side GYG?'s action in locking Mr and Mrs Britt out of the premises in February 1994, the later actions of GYG in lodging with the Licensing Court an application for the transfer of the Off-Licence (Retail) to Itself pursuant to the provisions of s42 of the Liquor Act 1982, together with its actions, on the following day, in

16. (1918) 25 CLR 144
17. (1977-1978) 138 CLR 423
18. (1974) 131 CLR 634, 644 et seq per Stephen J (as he then was)

WRJUORLAND (AUSTRALIA) PTY LTD v GYG HOLDINGS PTY LTD and ORS (Powell JA)I

dispossessing Mr and Mrs Britt of the shops in which the liquor store business, the subject of the contract for purchase and sale, was being conducted, could hardly be characterised as other than being a repudiation of GYG's obligations wider the contract; it following - since, in general, the plaintiff in a suit for specific performance must establish that he has performed the obligations on his part to be performed before the commencement of the proceedings and that he is ready and willing to perform his future obligations under that contract - that, at the time of its Cross-Claim being filed, GYG was not in a position to establish a fact which was critical to its claim, and, that for this reason as well, its Cross-Claim should have been dismissed (see, for example, Measures Bros. Ltd v Measures! Australian Hardwoods Pty Ltd v Commissioner for Railways2° For these reasons I would propose that the following Declarations and Orders be made: - 1. ORDER that the Appeal be upheld.

2. ORDER that the Declaration and Orders made by Brownie J on 28th April 1994 be set aside.

(a) MAKE DECLARATIONS in terms of Prayers 3 and 5 in the Amended Summons;

(b) MAKE ORDERS in terms of Prayers | and 2 in the Amended Summons;

(d) ORDER that, except to the extent to which the same are the subject of any prior inconsistent Order as to costs, the First Respondent pay the

Appellant's costs of the Appeal; (e) ORDER that the First Respondent pay the Appellant's costs of the proceedings;

(f) ORDER that the First Respondent pay the costs of the Second and Third Respondents of the proceedings and of the Cross-Claim.

(g) RESERVE liberty to any party to apply to a Judge in the Equity Division for such Order, or Orders, consequent upon the setting aside of the Declaration and Orders made by Brownie J, as may seem necessary or desirable.

4. ORDER that, if qualified, the First Respondent have a Certificate under the provisions of the Suitors' Fund Act 1951.

1. Appeal upheld;
2. Declaration and orders of Brownie J of 28 April 1994 set aside;
3. In lieu thereof:

(a) make declarations in terms of terms of prayers 3 and 5 of the amended summons;

(b) make orders in terms of prayers 1 and 2. in the amended summons;

(d) order that, except to the extent that the same are the subject of any prior inconsistent order as to costs, the first respondent pay the appellant's costs of the appeal;

(e) order that the first respondent pay the appellant's costs of the proceedings;

(f) order that the first respondent pay the costs of the second and third respondent to the proceedings and of the cross-claim;

19. [1910] 1 Ch 336; [1910] 2 Ch 248 (CA)
20. [1961] 1 WLR 425

(g) reserve liberty to any party to apply to a Judge in the Equity Division for such order, or orders, consequent upon the setting aside of the declaration and orders made by Brownie J, as may seem necessary or desirable; and 5 4. Order that, if qualified, the first respondent have a certificate under the provisions of the Suitors Fund Act 1951.

10 Counsel for the Appellant: AG Whealy QC/ RS Angyal Solicitors for the Appellant: A Hatzis Counsel for Respondent (GYG): IAN Lawry

15 Solicitors for the Respondent (GYG): Collins Cornock and Co Counsel for the Respondent (Britts): No appearance (submitting) Instructed by: CJ Longman