Supreme Court of WA|2007-12-12|Before: Simmonds J

MITCHELL -v- SCHOFIELD [2007] WASC 303 (12 December 2007)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : MITCHELL -v- SCHOFIELD [2007] WASC 303

Contracts - Sale of land - Condition 13.3(a)(1) of Joint Form of General Conditions for the Sale of Land 2002 Revision - Date from which period there referred to ran where WAPC conditional approval given before contracts concluded and contracts subsequently varied

Contracts - Sale of land - How contract on standard form then in use might be accepted - When such contract was concluded - Whether the term in Condition 26 of Joint Form of General Conditions of Sale of Land 2002 Revision 'Contract Date' was relevant to Condition 13.3(a)(1)

Contracts - Sale of land - Whether Condition 13.3(1)(1) of Joint Form of General Conditions of Sale of Land 2002 Revision was self-executing - How contract required to be terminated for non-satisfaction of Condition 13.3(a)(1) - Whether repayment of deposit was required for that purpose - Whether 'Notice' within Condition 21 of Joint Form of General Conditions of Sale of Land 2002 Revision was required for that purpose

Contracts - General contractual principles - Construction of variation of contract by reference to language and structure of the document and the context to the document

Contracts - General contractual principles - Construction of contract where literal reading would produce absurdity

Contracts - General contractual principles - Rectification of variation of contract - Whether there was evidence to discharge the burden of proof required for rectification

Contracts - General contractual principles - Whether there was waiver of requirement for effective termination of contract - Whether party was estopped from relying on failure of other party to meet such requirement

1 This is the trial of an action in respect of contracts, largely in identical terms, to buy proposed lots 'off the plan' in a development in Gingin in this state. The proposed lots were provided for on a plan of subdivision for the development. Some time before the contracts were made the subdivisional development had received the conditional approval of the Western Australian Planning Commission (the WAPC). However, the subsequent approval of the WAPC, endorsed on the subdivision plan, did not come until some time after the contracts were made. The contracts to buy the proposed lots contained identical terms making endorsement of that approval within a time as provided for in the contracts, including any variation in that time, a condition of the contracts.

2 Some time after a variation of the contracts to extend the time for satisfaction of the condition referred to, the sellers purported to terminate the contracts for that condition's non-satisfaction, by letters that were subsequently withdrawn and replaced by other letters advising of termination.

3 The buyers say the contracts were not terminated, and seek relief on the basis the contracts are still on foot. The sellers say the contracts were terminated, and by a counterclaim seek the removal of caveats lodged by the buyers in respect of the interest they assert in the lots the subjects of their contracts.

4 I begin this judgment by providing the factual background which will enable me to consider the issues framed by the parties' respective pleaded cases. I will turn to describe the relief claimed by the parties, before outlining the issues framed by the parties' pleadings and submissions to me. After briefly describing the evidence before me, I will then deal with each of those issues, and in doing so make the factual findings necessary for those purposes. The final section of my judgment concerns my conclusions.

5 The matters I set out here are admitted on the pleadings, appear in the list of agreed facts and documents that was filed for the purposes of the hearing before me (exhibit 4), or appear otherwise to be common ground between the parties.

6 At all material times the defendants were the registered proprietors of the land known as Marchmont Estate, being Lot 9, Cheriton Road, Gingin, described as Lot 9 on Diagram 29145, and being the whole of the land comprised in Certificate of Title, Vol 1278, Folio 509 (the Land). The defendants had acquired the Land with a view to subdividing it into lots and selling the lots for profit (the Development).

7 As part of the normal process followed by the State's land titles authority, Landgate, the defendants were required to obtain from the WAPC an approval for a subdivision plan endorsed on that plan. By a letter dated 5 November 2003 from the WAPC to the defendants, the WAPC indicated it granted approval of the subdivision of the Land as shown on plans lodged by or on behalf of the defendants (the WAPC approval of 5 November 2003). However, this approval was subject to certain conditions, and was to precede the approval of the WAPC endorsed on the subdivision plan which is the focus of the proceedings before me.

8 The parties' contentions relate to the purchases of three lots in the Development. The first plaintiffs agreed to buy two such lots, Lots 311 and 327; the second plaintiffs agreed to buy the third such lot, Lot 315. Although for my purposes there is substantial similarity between the circumstances of the three agreements (collectively, the Contracts), there are also some points of difference between the first two and between them and the third which will justify a measure of separate treatment of those agreements.

9 By the form of offer and acceptance then in common use in this State, signed by the first plaintiffs with their signatures dated 23 May 2005, the first plaintiffs offered to buy the parcel being (then) proposed Lot 311 forming part of the Land. The immediate context to that signing was as follows.

10 On or around 23 May 2005, the agent of the defendants, Mr Tom Cabassi (Mr Cabassi), provided the first plaintiffs with a document entitled 'Contract for Sale of Land or Strata Title by Offer and Acceptance' of the Real Estate Institute of Western Australia (Inc) (REIWA) in the form bearing the identifier '08/03' (the Lot 311 Contract Form). On the Lot 311 Contract Form Mr Cabassi had inserted, in handwriting, details for the Lot 311 Form's 'The Buyer' (those details appearing as 'Robert Arthur Mitchell and Ruth Marie Mitchell', the first plaintiffs, with an address for them), 'Description of the Property' (those details appearing as 'Lot 311 Marchmont Estate as shown on attached plan' and '311') and 'Purchase Price' (those details appearing as '$85,000').

11 It may be that Mr Cabassi had also inserted in handwriting other details on the Lot 311 Contract Form. In any event, it appears not to be in contest that also on the Lot 311 Contract Form when the first plaintiffs signed it on 23 May 2005 were (among other handwritten details):

at Schedule cl (iv), 'Manner of payment', following the words 'A deposit of $', handwritten details appearing as '$1 500' of which 'nil' was inserted before the Form's 'paid herewith', '$1 500' was inserted before its 'shall be paid within', and '7' inserted before its 'days of acceptance'; and
at Schedule cl (v), at the Lot 311 Contract Form's 'Settlement Date': those handwritten details appearing as 'see clause 7 on issue of title': this was an apparent reference to Conditions, cl 7, returned to below.

12 On 23 May 2005, the first plaintiffs signed the Lot 311 Contract Form; in addition the date '23 05 05' appears after their signatures on the Lot 311 Contract Form. On the same day they provided the document to Mr Cabassi.

13 By letter dated 24 May 2005 to the First plaintiffs from Mr Cabassi and received by the first plaintiffs on or around 25 May 2005, Mr Cabassi wrote:

Please be advised that your offer to purchase Lot 311 Marchmont Estate has been accepted verbally at this price. The owners are away on holidays and will not be back until 24th June 2005.

This contract will be signed on their return.

Your deposit can be paid by EFT to [payment details].

Thank you for your contract, we will contact you as soon as the owners return.

14 At the foot of the letter, Mr Cabassi in handwriting had added the following to the letter:

I need to confirm price on the owners [sic] return. Regards Tom

15 On 12 July 2005, at the Lot 311 Contract Form's 'The Seller', and after the handwritten details appearing as 'Vernon Schofied [sic] and Christine Schofield as Trustees for the Schofield Trust' (the defendants), with an address for them, which had been inserted before the Lot 311 Contract Form's 'ACCEPTS the above offer', the first named defendant signed the Lot 311 Contract Form and added the date '12 07 05' after his signature.

16 By letter dated 18 July 2005 to the first plaintiffs from Mr Cabassi, he wrote, under the heading 'Re: Purchase of Marchmont Estate Lot 311', materially for my purposes:

We are pleased to confirm the purchase of the above property for cash, and enclose herewith a copy of the Offer and Acceptance for your records.

17 It is not in contest before me that by the date on which the first plaintiffs received the letter dated 18 July 2005 a contact for the sale of proposed Lot 311 had been entered into (the Lot 311 Contract).

Some of the provisions of the Lot 311 Contract

18 The provisions of the Lot 311 Contract included the following. I consider other provisions later in these reasons.

19 By sch cl (iv) of the Lot 311 Contract to which I have already referred, the first plaintiffs were obliged to pay to the defendants a deposit of $1,500, as I have already indicated. The first plaintiffs paid that deposit to the defendants' agent Cabassi Pty Ltd (Cabassi), and the deposit has not been repaid.

20 By Conditions cl 3 of the Lot 311 Contract, the Joint Form of General Conditions for the Sale of Land, 2002 Revision (the 2002 General Conditions) were 'incorporated into' the Lot 311 Contract, 'so far as they are not varied by or inconsistent with the express terms' of the Lot 311 Contract.

21 In addition, Conditions cl 7 of the Lot 311 Contract, to which as I have noted sch cl (v) 'Settlement Date' made reference, said this:

This contract is subject to clause 13 of the Joint Form of General Conditions for the Sale of Land 2002.

22 For convenience, I set out 2002 General Conditions cl 13 in full at the end of these reasons. I will set out particular parts of the clause in these reasons as they become of particular relevance.

23 The 2002 General Conditions cl 13 made provision for the case where the land the subject of the sale is not a 'Lot' at the 'Contract Date' (cl 13.1). I set out the definitions of 'Lot' and 'Contract Date' in the 2002 General Conditions below. It is common ground that the land the subject of the sale in the Lot 311 Contract was not a Lot at the Contract Date.

24 Cl 13.2 included that the 'Contract' was 'conditional' on an application for the subdivision of the Lot from the 'Original Land' being lodged with the WAPC within three months after the contract date, and the WAPC granting 'approval for the subdivision of the Lot from the Original Land' as there stipulated. The stipulation was (cl 13.2(b))

within 6 months after the Contract Date or any longer period as is specified in:

(1) the Contract;

(2) or a subsequent agreement in writing between the Parties.

25 The relevant definitions for the purposes of the present factual account were in cl 26, which said that, 'unless the context otherwise requires', the terms had the meanings as follows:

Contract means the contract between the Seller and the Buyer in which this document is incorporated and includes this document.

Contract Date means the date on which the last Party to sign the Contract signs it.

...

Land means the land which the Seller has agreed to sell to the Buyer.

...

Lot has the same meaning as the definition of lot in the Town Planning Act.

...

Original Land means the land of which the Lot forms part.

...

Party means, as the case requires, either the Seller or the buyer, or both the Seller and the Buyer.

...

Planning Commission means [the WAPC].

...

Subdivision Lot means the Land which is not a Lot as defined in the Town Planning Act and which is:

(a) the subject of the Contract; and

(b) described in the Contract.

...

Settlement Date means the date each Party must complete Settlement

(a) under clause 3.5; and

(b) any other relevant provision of this document or of Contract.

...

Subdivision Plan means a deposited plan including if applicable, a strata plan which includes the Lot.

26 It will be noted that the WAPC approval of 5 November 2003 had come some time prior to the offer that resulted in the Lot 311 Contract. That approval was, as indicated, conditional approval, which it was accepted before me was 'approval' within cl 13.2.

(a) The Contract is also conditional on the following.

(1) The Planning Commission endorsing approval on a Subdivision Plan within 6 months after approval for subdivision by the Planning Commission.

(2) The Subdivision Plan being in Order for Dealing within 3 months after the date of endorsement of approval by the Planning commission in accordance with subclause (1).

(b) Each period specified in subclause (a) will, if applicable, be extended as specified in:

(1) the Contract; or

(2) a subsequent agreement in writing between the Parties.

28 Among the other provisions in cl 13 were those relating to the issue of title and the settlement date, cl 13.9. Those provisions were principally that, as soon as practicable after the subdivision plan was in order for dealing, the seller had to apply for and arrange the issue of a separate Certificate of Title for the Subdivision Lot, and notify the buyer in writing, as soon as practicable after a separate Certificate of Title had been issued for the Subdivision Lot. Unless otherwise provided in the Contract, the Settlement Date would be the date which is 15 business days after the seller had notified the buyer that a separate Certificate of Title has issued for the Subdivision Lot, or, where the buyer had notified the seller that the buyer was aware that a separate Certificate of Title has been issued for the Lot, the settlement date would be 15 days after that latter notification.

29 By letter dated 14 November 2005 to the first plaintiffs from Mr Cabassi, he wrote as follows:

Re Marchmont Estate Lot 311

MARCHMONT ESTATE UPDATE

Roadworks are progressing well and will be completed before Christmas. Power, telephone and water are almost done. Fencing will commence as soon as all roadworks are finished.

Titles are now expected March/April 2006. This delay has led to some buyers having to pay Stamp duty on their Lots. The maximum deferment on paying the Stamp Duty is 12 Months from signing of Contract.

Some Contracts that have run out of time specified to Settle will need to have extensions completed.

Enclosed is a Variation of Contract for you to sign. Could you please sign at your earliest convenience and returned [sic] by fax or mail.

Should you have any queries or require further information please do not hesitate to contact me on [land line and mobile telephone numbers provided].

30 It appears not to have been in contest before me that the references in this letter to site or related works in the first paragraph of this letter included matters the subject of conditions in the approval of the WAPC approval of 5 November 2003.

31 The 'Variation of Contract' referred to in this letter and enclosed with it was a single page document as follows (text case and other formatting as in original):

VARIATION OF CONTRACT FOR SALE OF LAND

PARTICULARS OF CONTRACT

DATE 23-05-2005
PROPERTY LOT 311 MARCHMONT ESTATE GINGIN
SELLER/S: VERNON SCHOFIELD & CRISTINE SCHOFIELD AS TRUSTEES FOR THE SCHOFIELD TRUST [postal address provided]
BUYER/S: ROBERT & RUTH MITCHELL

PARTICULARS OF VARIATION

The Seller/s and Buyer/s AGREE to vary the contract as follows:-

The time referred to in clause 13.3(a)(1) of the 2002 General Conditions be amended from 6 months to 12 months.

32 Then followed spaces for witnessed and dated signatures, for the 'BUYER/S' and for the 'SELLER/S', and at the foot of the document, 'A true copy of this document has been received by each of the signatories hereto'.

33 Mr Cabassi had inserted by handwriting on this document the following:

Following 'DATE' the entry '23-05-2005';
Following 'LOT' the entry '311';
Following 'BUYER/S' the entry 'ROBERT & RUTH MITCHELL'; and
Following '6 months to', and in the underlined space, the entry '12'.

34 The first plaintiffs signed this document below 'BUYER/S' on 23 November 2005. The second named defendant on behalf of the defendants signed this document below 'SELLER/S' on 3 December 2005. As will become apparent shortly, the issues in this case largely concern this document so executed (the Lot 311 Variation) and its counterparts for the other lots. I will refer to the Lot 311 Contract as varied by the Lot 311 Variation as the Lot 311 Contract as varied. I will refer to the variations collectively made by these documents for the three Lots as the Variations.

The agreement to buy Lot 327, the Lot 327 Contract and its variation

35 By an offer and acceptance on the same form as that used for the purchase of Lot 311 and also signed by the first plaintiffs with their signatures also dated 23 May 2005, the first plaintiffs offered to buy the parcel of land being (then) proposed Lot 327 forming part of the Land.

36 The immediate context to that offer had been very much the same as that to the offer for Lot 311. That context involved Mr Cabassi providing the first plaintiffs with the form (the Lot 327 Contract Form) on or around 23 May 2005, as in the case of the Lot 311 Contract Form.

37 The Lot 327 Contract Form either as provided to the first plaintiffs or as signed by them was identical to the Lot 311 Contract Form, including the handwritten details on the Lot 327 Contract Form, except that:

For 'Description of the Property', the details were 'Lot 327 Marchmont Estate as shown on attached plan' and '327'; and
For 'Purchase Price', the details inserted were '$105,000'.

38 On 23 May 2005, the first plaintiffs signed the Lot 327 Contract Form; there is the same dating for their signatures on the document as appears on the Lot 311 Contract Form. On the same day they provided the Lot 327 Form so signed to Mr Cabassi.

39 By a letter dated 24 May 2005 to the first plaintiffs from Mr Cabassi and received by the first plaintiffs on or around 25 May 2005, Mr Cabassi 'advised' the first plaintiffs that their 'offer to purchase Lot 327 Marchmont Estate' had been 'accepted verbally at this price'. This letter was in identical terms, mutatis mutandis, to the letter to the first plaintiffs of the same date concerning Lot 311, with one difference. The letter concerning Lot 327 did not have an entry on it at the foot of the letter. It will be recalled that the letter concerning Lot 311 had such an entry, in handwriting, referring to Mr Cabassi's 'need to confirm price on the owners [sic] return'.

40 On 12 July 2005 the first named defendant signed and dated the Lot 327 Contract Form in the same way as his signature and its date appear on the Lot 311 Contract Form.

41 By letter dated 18 July 2005 to the first plaintiffs from Mr Cabassi, he wrote, under the heading 'Re: Purchase of Marchmont Estate Lot 327', in the same terms, mutatis mutandis, as the corresponding letter to them of the same date with respect the purchase of Lot 311. It is not in contest before me that by the date on which the first plaintiffs received the letter with respect to Lot 327 a contract for the sale of proposed Lot 327 had been entered into (the Lot 327 Contract).

42 The provisions of the Lot 327 Contract were thus identical to those of the Lot 311 Contract, save for the description of the property being sold and the purchase price. The deposit under the Lot 327 Contract was also paid to Mr Cabassi and has not been repaid.

43 By letter dated 14 November 2005 to the first plaintiffs from Mr Cabassi, he wrote, under the heading 'Re Marchmont Estate Lot 327 MARCHMONT SUB-DIVISION UPDATE', in identical terms to the corresponding letter to them of the same date with respect the purchase of Lot 311, enclosing as in that case a 'Variation of Contract'.

44 The 'Variation of Contract' form enclosed with the letter of 14 November 2005 relating to Lot 327 was identical to the corresponding document enclosed with the Lot 311 letter, including the handwritten details, except that the handwritten entry for 'LOT' was '327'.

45 The first plaintiffs signed the 'Variation of Contract' form relating to Lot 327 on 23 November 2005, and the second named defendant on behalf of the defendants signed it on 3 December 2005, the same dates respectively as for the Lot 311 'Variation Form'. The resultant document so executed (the Lot 327 Variation) was thus identical with the Lot 311 Variation except for the Lot concerned. I will refer to the Lot 327 Contract as varied by the Lot 327 Variation as the Lot 327 Contract as varied.

The agreement to buy Lot 315, the Lot 315 Contract and its variation

46 By an offer and acceptance on the same form as that later used for the offers to purchase Lots 311 and 327 and signed by the second plaintiffs with their signatures dated 7 April 2005, the second plaintiffs offered to buy the parcel of land being (then) proposed Lot 315 forming part of the Land.

47 The immediate context to that offer was very much the same as that for the later offers to purchase Lots 311 and 327. That context had involved, on or around 7 April 2005, Mr Cabassi providing the second plaintiffs with the form (the Lot 315 Contract Form), as in the case of the Lots 311 and 327 Contract Forms.

48 The Lot 315 Contract Form either as provided to the second plaintiffs or as signed by them was identical to the later Lots 311 and 327 Contract Forms, including the handwritten details on the Lot 315 Contract Form, except that:

For 'The Buyer', the details were 'Dick William Blom and Annie Irene Blom' with an address for them;
For 'Description of the Property', the details were 'Lot 315 Marchmont Est as shown on attached plan' and '315';
For 'Purchase Price', the details were '$95,000';
At sch cl (iv), 'Manner of payment', following the words 'A deposit of $', handwritten details appearing as '$3 000' of which '$3 000' was inserted before the Form's 'paid herewith', with no further entries made in that clause;
sch cl (v) 'Settlement Date', handwritten details appearing as 'On Issue of Title'; and
the addition of a handwritten Conditions cl 9: 'This contract subject to there being a 5 metre gate instaled [sic] instead of the regular size gate before settlement. Shared gate way with 314 and 315.'

49 There was no contention before me that either of the last two differences was material for my purposes. As will become apparent, none of the other differences are material, in my view.

50 On 7 April 2005 the second plaintiffs signed the Lot 315 Contract Form; in addition the date '7/4/05' appears for both of their signatures on the Lot 315 Contract Form. On the same day they gave the document to Mr Cabassi.

51 By a letter dated 21 April 2005 to the second plaintiffs from Mr Cabassi, and received by the second plaintiffs on that day, Mr Cabassi 'advised' the second plaintiffs that their 'offer to purchase Lot 315 Marchmont Estate' had been 'accepted verbally at this price'. This letter was in identical terms, mutatis mutandis, to the later letter to the first plaintiffs dated 24 May 2005 concerning Lot 327 and, with the difference noted for the latter letter, the letter to the first plaintiffs dated 24 May 2007 concerning Lot 311.

52 On 12 July 2005 the first named defendant signed and dated the Lot 315 Contract Form in the same way as his signature and its date appear on the Lot 311 Contract, except that it appears his surname above his signature is correctly spelt on the Lot 315 Contract Form.

53 By a letter dated 19 July 2005 to the second plaintiffs from Mr Cabassi, he wrote, under the heading 'Re: Purchase of Marchmont Estate Lot 315', in the same terms, mutatis mutandis, as the corresponding letters to the first plaintiffs dated 18 July 2005 with respect the purchases of Lots 311 and 327. It is not in contest before me that by the date on which the second plaintiffs received the letter with to Lot 315 a contract for the sale of proposed Lot 315 had been entered into (the Lot 315 Contract).

54 The provisions of the Lot 315 Contract with the second plaintiffs as buyer were thus identical to those of the Lots 311 and 327 Contracts, save for the description of the property being sold, the purchase price, the deposit entries, the settlement date entry, the additional Conditions cl 9, and the date for the signatures of the buyer. The deposit under the Lot 315 Contract was also paid to Mr Cabassi and has not been repaid.

55 By letter dated 14 November 2005 to the second plaintiffs from Mr Cabassi, he wrote, under the heading 'Re Marchmont Estate Lot 315 Marchmont Estate Update', in the same terms as the corresponding letters of the same date to the first plaintiffs with respect to their purchases of Lots 311 and 327, respectively, enclosing as in those cases a 'Variation of Contract'.

56 The 'Variation of Contract' form enclosed with the letter of 14 November 2005 relating to Lot 315 was identical to the corresponding documents enclosed with the Lot 311 letter and the Lot 327 letter, including the handwritten details, except that the handwritten entries for 'DATE' was '19-04-2005', for 'LOT' was '315', for 'BUYER/S' was 'DW & AI BLOM' and the number of months, substituting for 6 months, in the underlined space, was '13'.

57 The second plaintiffs signed the 'Variation of Contract' form relating to Lot 315 on 28 November 2005, and the second named defendant on behalf of the defendants signed it on 3 December 2005. The resultant document so executed (the Lot 315 Variation) thus differed in two ways from the Lot 311 Variation and the Lot 327 Variation, apart from the Lot and the buyers concerned. Those two points of difference were the date indicated under 'Particulars of Contract' and the number of months substituted under 'Particulars of Variation'. I will refer to the Lot 315 Contract as varied by the Lot 315 Variation as the Lot 315 Contract as varied.

58 By three letters from Mr Cabassi dated 27 March 2006, two to the first plaintiffs (one for Lot 311 and one for Lot 327), and one to the second plaintiffs (for Lot 315), Mr Cabassi wrote (emphasis in original):

The developer and surveyor have been working hard to have all conditions met for the development, but have found it very frustrating and trying to get work completed. All contractors have more work than they can handle and are constantly being delayed.

The indication is that Titles should be ready in May 2006. Works are almost completed and fencing should start soon and be in place by settlement.

The value of these blocks has increased dramatically and we have buyers wanting to purchase blocks, especially the one acre Lots. If you are interested in on-selling please give me a call for an update on the value of your block.

Shortly I will have the 'deposited plan' which I will forward onto you as soon as it is available.

I do apologise for the delays and look forward to notifying you of impending settlement.

Please do not hesitate to contact me on [landline or mobile telephone number] if you have any queries.

59 However, by three letters from Mr Cabassi dated 25 May 2006, two to the first plaintiffs (one for Lot 311 and one for Lot 327), and one to the second plaintiffs (for Lot 315), Mr Cabassi wrote to them enclosing 'a copy of the letter received from the owners of Marchmont Estate'. The letters enclosed were identical, dated 17 May 2006, and read as follows (the 17 May 2006 Letters):

Reference: Marchmont Estate, Gingin, WA

TO WHOM IT MAY CONCERN

Hereby advise that the Western Australian Planning Commission ('WAPC') has not endorsed its approval on the Sub Division plan for Marchmont Estate as required in clause 13.3(a)(1) of the joint Form of General Conditions for the Sale of Land (2002 Revision). The fundamental reason is that the Water Corporation will not agree to the plan as submitted, therefore the approvals required by the WAPC can not be satisfied.

I further advise that the endorsement referred to above has not been obtained within the time specified in the Contract for Sale of Land (including any Variation thereof) between you as Buyers and V and C A Schofield as Sellers. Accordingly, the contract is at an end. The Sellers Agent will refund all deposited monies to you without deduction. Upon further clarification from the WAPC we may re-offer the lots in Marchmont Estate for sale in due course.

60 There was provision of a space for signature over 'V Schofield OBE Managing Director International Contractors AQL Pty Ltd', followed by an address, apparently for that company. The 17 May 2006 letters appear to be on the letterhead for that company. It appeared not to be dispute before me that the first named of the defendants signed the originals in the space above his name so appearing and the name of the company.

61 The 17 May 2006 letters were all received by the first and the second plaintiffs respectively under cover of the letters from Mr Cabassi.

62 By a letter dated 31 May 2006 to the defendants from the first plaintiffs, they wrote as follows:

Ref: Marchmont Estate Lots 311 & 327

Dear Mr & Mrs Schofield

We believe we have a valid contract to purchase Lots 311 & 327 Marchmont Estate.

We dispute that your contract with us is at an end as our contracts are dated July 12 2005.

Your letter dated May 17 2006 states that you consider the contracts are at an end because the conditions of the sub division have not been met due to an issue regarding Water Corp. We request that you provide us with a copy of your written legal advice that supports the basis of your claim.

63 By an email of the same date to Mr Cabassi from the first plaintiffs, they said this, among other things:

Please advise Mr Schofield that our contracts with him to purchase lots 311 & 327 are valid until July 12 2006 and that we do not want our deposits refunded.

64 By a letter dated 1 June 2006 to the first plaintiffs from Mr Cabassi, he said he would hold on to the deposits paid under the Lot 311 Contract and the Lot 327 Contract as requested.

65 On or around 1 June 2006 the first named of the second plaintiffs telephoned Mr Cabassi and told him the first named of the second plaintiffs considered that the Lot 315 Contract as varied had not been terminated, and asked Mr Cabassi not to return the deposit paid under the Lot 315 Contract.

66 By an email dated 9 June 2006 to the first plaintiffs from Mr Cabassi, he said '[a]fter speaking to Vernon a new price Schedule' and attached a spreadsheet, 'Marchmont New Price List.xls', showing for the lots listed in the spreadsheet 'Original', 'New' and 'Market' values. Lots 311, 327 and 315 appeared among the lots listed in the spreadsheet, with the values 85,000, 93,000 and 110,000, respectively, appearing under 'Original'; 130,500, 153,000 and 138,000, respectively, appearing under 'New'; and 155,000, 173,000 and 165,000 appearing under 'Market'. It will be seen that the 'Original' values corresponded to the contract prices for the Lots only in the case of Lot 311; the 'New' values do not bear the same relationship in each case to either the 'Original' values or the relevant contract prices; and the 'New' values do not represent the same discount from the corresponding 'Market' values.

67 There is no evidence before me that a corresponding communication was sent to the second plaintiffs or either of them. However, as I will indicate below, there is evidence they were or became aware of at least similar matters, in the form of offers of new contracts by the defendants to purchasers of lots in the Development.

68 By three letters dated 19 June 2006 from the first named of the defendants, two to the first plaintiffs, one for Lot 311 and one for 327, and one to the second plaintiffs for Lot 315, the first named of the defendants wrote as follows (the 19 June 2006 Letters):

I refer to my letter dated 17th May 2006.

That letter is withdrawn.

I advise that as of 16th June 2006, the WA Planning Commission (WAPC) has not endorsed its approval of the subdivision planned for the Marchmont Estate as required under the Joint Form Of General Conditions for the Sale of Land (2002 Revision).

Accordingly, the contract is now at an end.

Yours faithfully

69 The letters had the same provision for signature as the 17 May 2006 Letters, with the name of the first named of the defendants appearing as Managing Director of the same company on the letterhead of which the 19 June Letters also appear. It does not seem to be in dispute before me that the later letters were signed by the first named of the defendants in the same way he signed the earlier letters.

70 All of the 19 June Letters were received by their addressees.

71 By a letter dated 26 June 2006 to the defendants from the first plaintiffs, the first plaintiffs wrote as follows

Ref: Marchmont Estate Lot 327

Dear Mr & Mrs Schofield

We acknowledge receipt of your correspondence and would respectfully request that you seek advice on your position from your legal advisor.

Our advice is that our contracts are still valid and we have advised the agent to hold our deposits.

Please refer all future correspondence with regard to Marchmont Estate to our lawyers [name of and address given].

72 No corresponding letter for Lot 311 was in evidence before me. However, it appears to be common ground either that a corresponding letter was provided in respect of Lot 311 or that the parties understood the letter just set out also applied in respect of that Lot.

73 By an email dated 24 July 2006 to the first plaintiffs from Mr Cabassi he wrote:

Rob and Ruth:

Received this letter Late Friday and thought it important that the group is aware of it.

Regards Tom

74 The attachment to this email, referred to in the email as 'expired contracts Letter.PDF', was dated 21 July 2006 (the 21 July 2006 Letter), and was as follows:

Our ref: VS/CAS

Your ref: Marchmont Estate

TO WHOM IT MAY CONCERN

To purchaser who's [sic] contracts have expired

I refer to Roy Weston's revised computation on the price of plots for the above estate.

These computations were given to Mr. T. Grocke, the chairman of the group, on 8th June 2006.

The prices shown on that computation are substantially discounted from the present valuation.

This offer has been made only to purchasers who's [sic] contracts have expired.

We advise that this generously discounted offer will be withdrawn as of 1st August 2006.

Regards

75 Then followed the signature of the first named of the defendants, signed in the same way, over the name of the same company and on what appears to be the same letterhead as the 17 May 2006 and 19 June 2006 Letters.

76 The 'computations' referred to may have been those shown in the spreadsheet that had been provided to the first plaintiffs attached to Mr Cabassi's email of 9 June 2006, above, although this was not made clear in the evidence.

77 There is no evidence of a corresponding communication addressed to the Second Plaintiffs or either of them.

78 By email dated 25 July 2006 to Mr Cabassi from the first plaintiffs, they wrote as follows:

Dear Mr Cabassi

In regards to the 'new' contracts for the blocks in the Marchmont Estate and the clause 13 which will now replace clause 13.3(a) of the joint form of general conditions for the sale of land, it has been brought to my attention that the Vendor is entering into a new arrangement with Water Corp for the payment of monies owed to Water Corp.

As I understand, the new arrangement takes payment of money owed to Water Corp out to at least 12 months, same length of time as the 'new' contracts - 12 months as relates to planning commission endorsement.

When to the best of your knowledge will titles be issued? Can new contract holders find themselves once again being held hostage to a process that involves problems between Water Corp and the Vendor?

Purchasers need full and frank disclosure as to what may transpire in this present set of circumstances. As you are well aware any 'new' contract holders now relinquish 'old' contracts in favour of new ones that can be cancelled in 12 months, leaving these contract holders with nothing but another empty promise. I do look forward to your reply.

Kind Regards

Robert Mitchell on behalf of the Marchmont Buyers Group

79 On 18 December 2006 the WAPC endorsed its approval on the subdivision plan for the Land.

80 On or around 8 January 2007, after the first plaintiffs and the second plaintiffs had lodged caveats against the Land, new titles were for issued for Lot 311, Lot 327 and Lot 315. On or around the same day caveats in respect of the interests claimed by the first plaintiffs and the second plaintiffs, as the case may be, were registered on the new titles.

81 These proceedings were commenced by writ of summons dated and filed on 20 March 2007.

82 The pleadings forming part of the papers for the judge are:

Minute of proposed re-amended statement of claim, amended pursuant to O 21 r 3, and re-amended pursuant to the order of Master Sanderson made on 7 June 2007; dated and filed on 9 July 2007 (the statement of claim);
Further re-amended defence and counterclaim, amended pursuant to O 21 r 3, re-amended pursuant to leave granted 8 June 2007, and further re-amended pursuant to directions made 11 July 2007; dated 10 August 2007 and filed (as noted by the Court's stamp, rather than the filing date shown on the pleading) 15 August 2007 (the defence and counterclaim); and
Amended reply and defence to counterclaim, amended pursuant to directions made on 25 June 2007; dated 16 August 2007 and filed 16 August 2007 (the reply).

83 The prayer for relief in the statement of claim for the first plaintiffs is for:

A declaration that the purported termination of the Lot 311 Contract was ineffective to terminate that contract;
A declaration that the Lot 311 Contract remains in full force and effect;
Orders for specific performance of the Lot 311 Contract;
In the alternative to such orders for specific performance, an order for payment damages in equity in lieu of specific performance;
Corresponding orders for the Lot 327 Contract; and
Costs.

84 The prayer for relief in the statement of claim for the second plaintiffs is for corresponding orders for the Lot 315 Contract.

85 By the defence and counterclaim the defendants seek, as against the first plaintiffs:

A declaration that, on their proper construction, the Lot 311 Contract and the Lot 327 Contract were validly terminated by the defendants;
In the alternative,
declaration that each of those Contracts, and in particular the terms of the Lot 311 Variation and the Lot 327 do not express the common intention of the parties to it and the documents embodying them were executed under a mistake;
An order that the Contracts should be rectified so as to express the common intention of the parties to them by, in the case of the Lot 311 Variation and the Lot 327 Variation amending them to read:

'(1) Clause 13.3(a)(1) of the General Conditions be amended to read 'the Planning Commission endorsing approval on a Subdivision Plan on or before 23 May 2006';

A declaration that the Lot 311 Contract as varied and as so rectified and the Lot 327 Contract as varied and as so rectified have been lawfully terminated by the defendants;
A declaration that the first plaintiffs have no caveatable interest in Lot 311 and Lot 327 and an order that the caveats registered on the titles to those Lots be forthwith removed from those titles.

86 By the defence and counterclaim the defendants seek, as against the second plaintiffs, corresponding orders, substituting '19 May 2006' for '23 May 2006'.

87 From the pleadings and the parties' submissions to me the issues for me are these:

1. What were the dates of expiry of the times for satisfaction of the conditions in 2002 General Condition cl 13.3(a)(1) of the Contracts as varied?
Were the defendants' purported terminations of the Contracts or any of them for the non-satisfaction of those conditions ineffective because none of those purported terminations came after the relevant dates of expiry? That is, were the purported terminations all premature?
Were the purported terminations of the Contracts for the non-satisfaction of those conditions ineffective for failure to repay the deposits under the Contracts?
Were the purported terminations of the Contracts for the non-satisfaction of those conditions ineffective for failure to use a notice as defined in those Contracts? That is, were the purported terminations ineffective for not being in notice form?

88 As will be seen a number of sub-issues arise under each of these issues.

89 At the trial the defendants indicated that, if any of the second, third or fourth issues was resolved adversely to them, there was no barrier to the grant of relief to the successful plaintiffs by way of specific performance.

90 The evidence before me was in the form of witness statements of the first and second named first plaintiffs, the first and second named second plaintiffs, the second named of the defendants and Mr Cabassi. All of these witnesses were cross-examined and in most cases re-examined before me, except for the second named of the defendants. She was cross-examined and re-examined before Templeman J on 2 August 2007, the transcript of which was before me.

91 In addition, as I have indicated, the parties had agreed a number of facts, and a set of documents, which were together put in as exhibit 4. Where I refer to a document, it is to the document as it appears in exhibit 4, except as I note.

Issue 1: the dates of expiry of the times for satisfaction of cl 13.3(a)(1) of the 2002 General Conditions of the Contracts as varied

93 The first sub-issue was one of construction of the respective Variations. As such a matter, were the dates of the expiry of the periods in the Contracts referred to as varied to be measured from at the earliest the date the defendants signed the Contracts as the plaintiffs contend? Or were the dates of the expiry of the periods in the Contracts to be measured from the dates indicated by 'Date' in their respective Variations, as the defendants contend?

94 Secondly, if the construction sub-issue just posed were resolved in favour of the plaintiffs' contentions, should the Contracts as varied be rectified so that the Contracts as varied would have the effect for which the defendants contend?

The first sub-issue: the question of construction of the respective Variations

95 As to the first sub-issue the parties' contentions rest on what they submit is the objective meaning to be given to the respective Variations. Both parties agreed that the literal meaning of the words appearing under 'Particulars of Variation' when read with the literal words of the Contracts cannot be employed, because that would produce an absurdity. That absurdity is to be seen when the 'extended' period is applied to 2002 General Conditions cl 13.3(b)(1) read literally. That would in the case of all of the Contracts have the 'extended' period expire before the dates of their conclusion, let alone the dates of conclusion of the Variations. That is because under cl 13.3(b)(1) on its literal reading the date for commencement of the period the Variations extend is that of the 'approval for subdivision by the Planning Commission'. That date was 5 November 2003. The longer of the periods in the Variations, that for the Lot 315 Variation (13 months), would on that reading have expired by the end of 5 December 2004, where the Lot 315 Contract was entered into at the earliest on 7 April 2005, which was itself earlier than the corresponding dates for the Lot 311 Contract and the Lot 327 Contract, as I will explain below.

96 The principal applicable principles when the literal reading of a contract would produce an absurdity are not in dispute.

97 The court should construe the contract in question so as to avoid the absurdity and to properly reflect the intention of the parties gathered objectively: Westpac Banking Corporation v Tanzone Pty Ltd [2000] NSWCA 25 especially [37] (Priestley and Fitzgerald JJA and Foster AJA); Dockside Holdings Pty Ltd v Rakio Pty Ltd [2001] SASC 78 [39] - [40] (Williams J), [1] (Olsson J) and [2] (Duggan J).

98 Gathering that objective intention involves the court assessing the meaning which the document would convey to a reasonable person having all of the background knowledge which would reasonably have been available to the parties in the situation they were in at the time of contracting: African Minerals Ltd v Pan Palladium Ltd [2003] NSWSC 268 [44] (Einstein J) and authority there cited. As stated in Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ) such an exercise:

requires consideration, not only of the text of the documents, but also the surrounding circumstances known to [the parties], and the purpose and object of the transaction (footnote omitted).

99 Particular phrases used in a contract are to be considered in this light: McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579.

100 Further, in approaching its task, the court should not without the authority of a statute 'attribute a different meaning to the words of a contract to the words ... simply because the courts regard the meaning as otherwise working a hardship on one of the parties': McCann [74] (Kirby J).

101 On the defendants' primary contentions when the content of the Variations and their circumstances are properly considered the Variations should be read as providing a reference point from which the extended periods commence, being the entry for 'Date' under the heading 'Particulars of Contract' in the relevant Variation. Whether or not that reference point is the one that would have applied absent the Variation in question, it is what, considering the matter objectively, the parties intended to use for the Contract as varied.

102 The plaintiffs submit that the 'Date' could not be the relevant reference point as that would have the effect of subjecting the sellers to obligations in respect of a subdivision plan approved by the WAPC, presumably of the sort described by cl 13.4(b)(2), for a period even before the Contracts were concluded.

103 2002 General Conditions cl 13.4(b)(2) reads as follows:

Following the lodgment of the application [with the WAPC for the subdivision of the Subdivision Lot from the Original Land] in accordance with subclause (a), the Seller must use best endeavours to:

(2) subject to the approval of the Planning Commission to the subdivision, arrange for preparation of a Subdivision Plan including the Subdivision Lot, and for the Subdivision Plan to be

(A) lodged at DOLA; and

(B) endorsed as in Order for Dealing,

104 Below, I will consider the dates at which the Contracts were concluded. For now I can indicate that, if the Variations could be taken to have in effect set the date of WAPC approval, for the purposes of all of the provisions of cl 13 at least and not only for the purposes of cl 13.3(a)(1), as the 'Date' in each case, the effect contended for by the plaintiffs would in my view arguably follow.

105 However, in my view, the defendants' submissions do not involve any such setting. On my understanding of those submissions, the 'Date' in each case is simply a reference point from which the extension period is to run so as to give a new, later, end point for the purposes of cl 13.3(a)(1). That is, the 'Date' has a prospective effect only. It is not meant to change the effect of any other provision in the Contract than cl 13.3(a)(1).

106 However, the difficulty with the defendants' primary submissions so understood is, as pointed out by the plaintiffs, the structure and language of the Variation documents. That structure and language indicate their operative part is the material appearing under the heading 'Particulars of Variation', which refers back to the Contract clause being modified. The language of the Variation and of the Contracts does not comfortably accommodate any other variation than of the figure in months there referred to under that heading. The 2002 General Conditions cl 13.3(a)(1) does not use 'date' anywhere in its text. Whether it should be understood to do so is a matter to which I return.

107 On the plaintiffs' view of the Variation documents, the earlier part of the documents, being that headed 'Particulars of Contract', under which 'Date' falls, is identifying only.

108 Viewing the earlier part of the Variation document as objectively identifying the Contract concerned is consistent with the contents of that part, even although the 'Date' coincides with a date appearing on the Contracts only in the cases of the Lot 311 Contract and the Lot 327 Contract. The 'Date' in the case of the Lot 311 and Lot 327 Contracts corresponds to the date of the buyers' signature. However, in the case of the Lot 315 Contract, it is not clear to what event in relation to the Lot 315 Contract the 'Date' in that case corresponded, as the 'Date' does not appear anywhere in the Lot 315 Contract. There was evidence from the second plaintiffs of their actual signature on the 'Date', although this is contradicted by the corresponding date on the Lot 315 Contract and the parties' agreed facts in exhibit 4 (par 59).

109 For all of the Variations, however, the 'Date' corresponded to a date shown in Mr Cabassi's records which on his evidence he associated with the date of the contract. I return to that date below, where I indicate that it appears incapable of being that date. However, at all events it is common ground that in each case the 'Date' with the other details supplied, some of which (as for the Lot 311 Variation and the Lot 327 Variation) had such details not precisely coinciding (the form of the names of the buyers) with the corresponding details on the Contracts, in fact sufficiently identified the Contract being varied. On the Plaintiffs' submissions, the 'Date' in each case did not do otherwise, and objectively would not have been understood any differently.

110 The defendants sought to meet the plaintiffs' submissions from the structure and language of the Variation documents by reference to the immediate context to the Variations, in the letters of 14 November 2005. These, it appears to have been contended, are more revealing than the more distant context of the Contract.

111 Those letters point to dates of expiry of the extension periods that would fall not long after the date for the expected production of titles. Those dates would more closely coincide with the expiry dates of the extension periods measured from the reference points contended for by the defendants rather than with the expiry dates of the extension periods measured from the reference points contended for by the plaintiffs.

112 Further, on the defendants' reading of the Variations there would be synchrony of the expiry dates across the Contracts, which had different extension periods. As the defendants point out, on the plaintiffs' contentions there would be a difference between the expiry dates of the Contracts of a month rather than, on the defendants' submissions, a matter of days. Under the Lot 311 Contract as varied and the Lot 327 Contract as varied, the expiry dates would on the defendants' submissions be 23 May 2006 in each case, while on the plaintiffs' submissions (as I will explain below) those dates would at the earliest be 12 July 2006. Under the Lot 315 Contract as varied, the expiry date would on the defendants' submissions be 19 May 2006, while on the plaintiffs' submissions (again, as I will explain below) it would be at the earliest 12 August 2006.

113 The plaintiffs' reply was that the 'immediate context' should not be taken as doing the work asked of it. I took this reply in part at least to be directing my attention to other aspects of the Contracts.

114 The language of the 14 November 2005 letters when read with the Variations in any event allowed a margin of at least about a month after the expected date for titles production, of March/April 2006, ignoring any time required to obtain titles after the endorsement of the WAPC approval on the subdivision plan. However, I note that that margin was even greater, on the proper construction of the Contracts, which allowed for further time for that purpose.

115 Under the Contracts account needed to be taken of the further period of three months, in cl 13.3(a)(2), for the subdivision plan so endorsed to be in order for dealing. It was not put to me that that further period was altered by the Variations, other than by the possibility for that period's later commencement. That further period in turn set the period by reference to which the seller's obligation to apply for, and I take it the possibility of, the issue of separate certificates of title arose: cl 13.9.

116 After account was taken of cl 13.3(a)(2) and cl 13.9, it could not readily be said there was evidence that the buyers understood or ought to have understood the sellers to have been providing in the Variation for a narrow margin. That is, the difference on the parties' submissions was between at their latest issues of titles falling sometime after 19 or 23 August 2006 and issues of titles falling sometime after 12 October or 12 November 2006. On both sets of submissions the latest dates were later by a significant margin than the one to two months after the March/April 2006 dates by which titles were expected.

117 There was evidence the first named of the second plaintiffs considered when he signed the Lot 315 Variation that it used a 'Date' which was not that on which he considered the Lot 315 Contract was entered into. As I will indicate that is the only evidence from any of the plaintiffs that they directed their minds to the relation between the 'Date' and the date of entry into the Contracts. But that evidence, if believed, was not in my view evidence as to the breadth of the margin being stipulated for.

118 Nor was there any evidence that the buyers understood or ought to have understood the sellers intended the synchrony in end dates the defendants' reading would produce, except to the extent the statement of the dates the titles were expected implied all of the titles would be issued at the same time within the March/April 2006 period indicated, and the buyers were aware or ought to have been aware that different extension periods were being offered for Contracts with the same dates of signature by the sellers. There was no evidence on the latter account.

119 However, the defendants contend that, even if the Contract is relevant as the plaintiffs contend, the 'Date' ought objectively to be seen as the reference point for the purposes of the extended period. That is because cl 13.3(a)(1) should be understood, in a case where the approval of the WAPC for the purposes of cl 13.2(b) had been secured before the entry into the Contract, as if the sub-clause read 'within 6 months after the date of the contract' instead of 'within 6 months after approval for subdivision by the Planning Commission'. The 'Date' in the Variation in each case appears under the heading 'Particulars of Contract' which on this contention would indicate that it is put forward as the date of the contract for the purposes of cl 13.3(a)(1) under the 'Particulars of Variation'. For reasons that will shortly appear, there is reason to consider the 'Date' in each case was inserted in the Variations as the date on which the Sellers 'verbally accepted' the buyers' offer.

120 It may be noted that, although the plaintiffs contended otherwise, a written offer may be accepted orally. This is so even in respect of a contract (like one for the sale of land) required by the Statute of Frauds to be in writing: see Heppingstone v Stewart [1910] HCA 59; (1910) 12 CLR 126 131 - 132 (Griffith CJ), 136 (Barton J) and 138 (O'Connor J).

121 Considerable argument was devoted to whether or not the offers that resulted in the Contracts in fact in the terms of those offers precluded their verbal acceptance, and, if those offers did not, whether or not a contract was formed that was superseded by the Contract as accepted in writing. I return to these matters below.

122 However, on any view, while there is evidence the verbal acceptances were in fact on the dates in question, the only evidence as to whether or not they were communicated on those dates is that they were not.

123 The evidence as to the dates of the verbal acceptances is in the settlement advice forms opened by Mr Cabassi for each of the Contracts once the first named of the defendants had 'verbally accepted' the Buyers' offer. In each of these forms there is an entry alongside 'Acceptance Date', described by Mr Cabassi in his evidence as the 'date of the contract', corresponding with the 'Date' appearing in the Variation of the Contract in question.

124 The evidence as to communication of the verbal acceptances is represented by Mr Cabassi's letters dated 24 May 2005 (for Lot 311 and Lot 327) and 21 April 2005 (for Lot 315). Assuming they were received by the Buyers on their respective dates, those would be the dates the Contracts were concluded: Latec Finance Pty Ltd v Knight [1969] 2 NSWR 79 81 (Jacobs JA), 82 (Sugerman JA) and 82 (Walsh JA). However, the respective dates of Mr Cabassi's letters are in all cases later than the 'Date' entries in the Variations.

125 On the defendants' submissions as I understand them, however, the parties should not be understood to have been sensitive to the niceties of the common law of contract formation. The use of 'Date' in each Variation should be seen to have been the parties' means of supplying a defined point which, as in Mr Cabassi's Settlement Advice Forms, it might be said, rendered resolution of those niceties unnecessary.

126 However, on the plaintiffs' submissions the parties should be taken to have already stipulated for a defined point of this kind for the purposes of cl 13.3(a)(1), where the WAPC had given its approval for the purposes of cl 13.2(b) before the entry into the Contract. That stipulation was part of a scheme in the Contracts for the setting of the date of each of the Contracts. That scheme was represented by the term 'Contract Date'. I have previously set out the definition of that term. The Contract Date of each of the Contracts was 12 July 2005, being the date on which the last of the parties (the defendants) signed them.

127 I was referred to a large number of contexts apart from cl 13 itself (although not expressly at least cl 13.3(a)(1)) in which 'Contract Date' was used. They were:

Under cl 2, 'Encumbrance': cl 2.5 and cl 2.6;
Under cl 3, 'Settlement': cl 3.5;
Under cl 8: 'Risk', cl 8.2, cl 8.3 and cl 8.7;
Under cl 9: 'Seller Representation and Warranty', cl 9.1 and cl9.2;
Under cl 10, 'Strata title': cl 10.2 and cl 10.8;
Under cl 11, 'Electricity/Underground power': cl 11.1, cl 11.4, cl 11.5 and cl 11.6;
Under cl 12, 'Sewer/Septic Tank: cl 12.1, cl 12.2, and cl 12.3; and
Under cl 16, 'Requisition on Title': cl 16.2.

128 Altogether apart from those provisions, I note the use of 'Contract Date' in cl 13 itself, beginning with cl 13.1, under the heading 'When this Clause applies', as follows:

This clause applies only if the Land is not a Lot at the Contract Date.

129 As I have previously noted, cl 13 is specifically incorporated into the Contracts, by their Conditions cl 7.

130 When cl 13 is read as a whole, and particularly in view of cl 13.1, it seems to me that cl 13.3(a)(1) should indeed be construed, where the approval in cl 13.2(b)(1) was obtained before while remaining current at the Contract Date, so that the date from which the period in that sub-clause runs is the Contract Date.

131 Of course the Contracts would not in fact have been entered into until their acceptance was communicated as I have indicated, unless 'Contract Date' can be seen as dispensing with the requirement of communication. Any such dispensation would, however, not be consistent with the Contracts Conditions cl 2, which reads:

Acceptance of this offer shall be sufficiently communicated to the Buyer if verbal or written notification shall be given by the Seller' or Seller's agent to the Buyer that the acceptance has been signed by the Seller.

132 If the Contracts were entered into or concluded by the communication that the defendants had 'verbally accepted' the relevant offers on their contract forms, then communication to the plaintiffs of the signing of the contract forms by the defendants would either have the effect of varying the original contracts or of substituting new contracts, in either case because of the effect of such signature on Contract Date and thus the rest of the Contracts, by reference at least to the clauses to which I have referred.

133 Reference was made in this connection (as I understood it) to categories 1, 3 and 4 of the four categories of contract associated with Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353, 360 and Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 62, 628, as described in Striker Resources NL v Australian Goldfields NL (in liq) [2006] WASC 153 [65] - [66] (E M Heenan J) as follows:

An obvious starting point for this analysis is the much quoted passage from the decision in [Masters] at 360:

'Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any one of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

...

The authorities recognise a fourth category by way of variation of the first category in [Masters]. In [Baulkham Hills] at 628 McClelland J described this fourth category as being one where the parties intend to be bound immediately by the terms which they have agreed upon, while expecting to make a further contract in substitution for the first contract containing, by consent, additional terms. In this regard, McClelland J relied on Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 317. There may be some controversy about the effect of such a fourth class of case but it is well accepted that, in such an eventuality, the initial agreement would be enforceable unless superseded by a later enforceable agreement - Tern Minerals NL v Kalbara Mining NL [(1990) 3 WAR 486].

134 It does not seem to me that it is necessary for me to determine which of these categories is the one into which the Contracts fall. On the construction of the Contracts I have described, the effect is the same.

135 The matter might be different, however, if the construction of cl 13.3(a)(1) was that it should be taken to use, not Contract Date, but the dates of conclusion of the Contracts. In that case, if the Contracts fell into category 1, rather than category 3 or 4, then the date from which the extended periods ran would be very close to the 'Date' in the Variations if the Contracts were concluded by the communications of the verbal acceptances. However, they would be later than 12 July 2005 if the Contracts were concluded by the communications of the defendants' signatures.

136 While a construction of cl 13.3(a)(1) that would not use the Contract Date as I have indicated is not one I would accept, I should indicate my view on which view of the date of conclusion of the Contracts I would take. I do this in view of the argument directed to the point by both counsel, and in case I am in error on the Contract Date point. I should add that on the view I take the date from which the extended periods would run would in fact be later than 12 July 2005.

137 It seems to me that the Contracts were not concluded by the communications of the verbal acceptances. On my view of each of the contract forms, when considering the nature of the subject matter to which they related, they required acceptance by endorsement of signature by the seller, in the absence of any other indication as to the manner of acceptance by the buyer. There was no such indication on the evidence before me.

138 In any event, it was not clear to me that the buyer would have taken the communications of the verbal acceptances as acceptance of the offers whose communication would give rise to a concluded contract.

139 As to the first point, there appears to be no contest as to the applicable principles.

140 An offeror may stipulate for any mode of acceptance of their offer, including stipulating that communication of the acceptance is unnecessary to the conclusion of the contract. However, if the parties wish to dispense with the requirement for communication of the acceptance 'such an intention must be made clear in the offer': Latec Finance, 81 (Jacobs JA), 82 (Sugerman JA) and 82 (Walsh JA). I have already indicated my reason for concluding that in this case the Contracts had not done that.

141 As the written offer to hire goods under a hire purchase contract in Latec Finance illustrates, the offer may be taken to stipulate 'an essential step in the procedure of acceptance', in that case the signing of the 'memorandum of acceptance', but not to dispense with the 'ordinary procedures which involve communication of the acceptance': 82 (Jacobs JA).

142 In Latec Finance the written offer provided that the offer 'shall not be binding upon you until the memorandum of acceptance endorsed hereon shall have been signed by you'. However, the offer may be taken to stipulate for an 'essential step' in the form of execution by both vendor and purchaser of a form of contract without such words: see Marek v Australasian Conference Association Pty Ltd [1994] 2 Qd R 521, 527 (Cooper and Byrne JJA), 521 (McPherson SPJ). Indeed, I note the following from S J Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd R 87, 92 - 93 (McPherson J), 87 - 88 (Macrossan J) and 98 (Shepherdson J), referred to in Marek 527:

It is pertinent before going further to observe that most, but admittedly not all, of the instances referred to in Masters v. Cameron as illustrations of that class are cases involving sales of land or interests therein, as to which the traditional expectation is strong that the parties do not intend to be bound until a formal contract is executed

143 I have already described the structure of the contract forms. They set out an offer in writing, and provide for signature by the seller. I note the Conditions cl 2 concerning acceptance by communication of such signature, which I previously quoted in full. While cl 2 does not state that communication of a signature is the only method of acceptance, it seems to me that cl 2, when read with the rest of the contract forms, offers some support for the view that it is essential to acceptance that there be the signature the contract forms provide for, while in my view confirming as I previously indicated that communication of acceptance (if not necessarily by the method provided for) is essential to the conclusion of the Contract.

MITCHELL -v- SCHOFIELD [2007] WASC 303 (12 December 2007)

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MITCHELL -v- SCHOFIELD [2007] WASC 303 (12 December 2007)

Legislation Cited (1)

Cases Cited (16)