Ms Bond prepares the documents
52 An agreement in principle having been arrived at between the Vendors and Milad, it was Ms Bond's task to prepare the put and call option contracts. Her computer software failed, however, and she was unable to prepare the documents on 8 November in her usual way. The trial judge explained what followed:
"With the consent of Ms Luchetti, an attempt was made to solve the problem by the utilisation of the forms Ms Luchetti had prepared in respect of Gallwey, with appropriate changes. This appears to have compounded the problems because, at a late stage in the arrangements for the Gallwey transaction, Gallwey had proposed, not a change in the total period to settlement, but a change in the length of the put and call options from 10 months to 12 months, with a compensating reduction of the time for settlement, to be specified in the contract to come into existence upon the exercise of either option, from 3 months to 1 month. … Ms Luchetti had actually made the change in her documents, which Ms Bond came to utilise for the purposes of the later transaction, and that Ms Bond did not appreciate this fact. As a result, when Ms Bond attempted to overcome her software problem by producing documents that utilised Ms Luchetti's documents, but did so hastily and under considerable pressure, amongst numerous other errors of less importance, two vital errors occurred. Instead of the put and call options specifying a term of 10 months, they specified a term of 52 weeks. This, of course, had been intended by Ms Luchetti, although it was neither intended by Ms Bond nor was it the figure that had been given by both Mr Davis and Mr Turner [the person acting on behalf of Hawden], on 29 and 30 October respectively, when confirming the Hawden agreement in writing, nor was it the figure that had been given by either Mr Davis or Ms Bond in their respective conversations with Mr Raad and Mr Kerz, nor did it correspond to the period specified in Mr Kerz's letter, however that letter should be understood. Much more seriously, the error was then compounded, in all the contracts produced by the computer except one, by the specification of 13 months as the contractual period to completion. Thus the total effect if the agreement was to be concluded without amendment would be to tie the properties up for 25 months before payment of the purchase price would be due. No specific period of extension beyond the 13 months (10 months option period plus 3 months to settlement, or 12 months option period plus 1 month to settlement) contemplated in respect of the Gallwey transaction had ever been suggested in respect of the transaction with [Medsara] according to any witness."
53 It was common ground during the appeal that neither Ms Bond nor any of the Vendors intended to enter into a contract with Medsara whereby the period from the contract date to the date of completion would be capable of being more than 13 months. The effect of Ms Bond's error, however, was to extend the potential completion date by a further 12 months to a potential 25 months. This was fundamentally different to what was intended by the Vendors.
54 The trial judge inferred that, by reason of the pressure Ms Bond was under in attempting to bring about an exchange of contracts by noon on 8 November 2002 (or indeed by any time on that day), "she simply did not check the documents as they were produced in anything like an effective manner". This finding was not challenged.
55 In order to effect the intended exchange of counterparts, one set of contractual documents was picked up by Milad S Raad and Associates from Ms Bond's office. The trial judge found:
"It was obvious to Mr Kerz and Mr Raad that various details had to be filled in, and that there were defects in the documents. Mr Kerz drew Mr Raad's attention to the specification, in one of them, of a period to settlement of 13 months on top of an option period, not of either 10 months or 13 months, but of 12 months."
56 The trial judge noted that Mr Kerz testified that he "assumed" that this very long period to settlement had been negotiated by Milad. Milad, when his attention was drawn to the term, asked only "are they [the contracts] all the same?". Mr Kerz checked them and told Milad that they were all the same.
57 His Honour pointed out that, in fact, the contracts were not all the same. In the case of the El-Hage contracts, the figure "3" and not "13" had been specified as the number of months to settlement. There are two possible reasons for this mistake. One is that, when Ms Bond was keying in the details necessary to complete the contract forms, she typed only "3" and not "13". The other is that there was some error on the part of the computer in this regard.
58 According to Mr Kerz, when he saw the El-Hage contracts he noticed that a stroke in black ink had been placed in front of the figure "3" without that alteration being initialled. Thus, the document specified 13 months, not three months. Ms Bond denied that she had inserted the ink stroke. Mr Kerz and Milad denied that they had done so.
59 Medsara argued that Ms Bond effected the alteration in her office while the Vendors argued that Mr Kerz or Milad must have done so at Medsara's office.
60 At trial, Medsara attempted to establish, through the evidence of a forensic documents examiner, Ms Novotny, that the alterations were probably made before the El-Hage contract left Ms Bond's office. The trial judge, however, found that Ms Novotny's evidence was "quite inconclusive". His Honour referred expressly to an answer by Ms Novotny in cross-examination when she agreed (subject to certain conditions) that her view did not "exclude the possibility of the one being done later" and said:
"In my opinion, the question has to be answered upon the direct evidence, conflicting as it is, of Ms Bond on the one side and Messrs Raad and Kerz on the other, and upon a consideration of the inherent probabilities of the situation."