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sellers purported to terminate the contracts for that condition's non-satisfaction, by letters that were subsequently withdrawn and replaced by other letters advising of termination.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

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

PARTICULARS OF VARIATION

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

1. 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. 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?
2. 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?
3. Were the purported terminations of the Contracts for the non-satisfaction of those conditions ineffective for failure to repay the deposits under the Contracts?
4. 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.

144 It further seems to me that the conclusion that signature by the seller is an 'essential step in the procedure of acceptance' becomes irresistible when account is taken of the incorporation into the contract forms of the 2002 General Conditions, with their use of the term 'Contract Date'.

145 This is not to say that in a particular case, even one using documents like the contract forms, that the parties might not be taken to have dispensed with execution by the other party, by way of acceptance of a written offer, of a document, whether the written offer or a writing acknowledgement. However, there is no evidence of such dispensation in this case.

146 Further, it is not clear to me that the Cabassi letters of 21 April 2005 and 24 May 2005 indicate the communication by the seller's agent of an intention by or for the seller to dispense with a written execution by them. This in my view is particularly the case for the Cabassi letter of 24 May 2005 with respect to Lot 311, with its endorsement at the foot of the letter to which I previously referred. However, for the cases of the letters for the other Lots, I note Syd Mirror Pty Ltd v The Humble Fishmonger Pty Ltd [2004] NSWSC 584 [29] (Barrett J):

In commercial circles, the "acceptance" of an "offer" (particularly when it is expressed as an offer principally as to price) and the making of a "deal" (a word which, in this case, may or may not have been spoken at the crucial meeting) very often do not connote contractual conduct. This is especially so where exchange of contracts is expressly contemplated.

147 This is of course not a case involving an offer 'principally as to price' - the contract forms set out the terms of the contract the subject of the offer in all of the respects expected in such a contract. Nor was it a case of exchange of contracts, although there was a provision for signature by the seller by way of acceptance.

148 However, the use of the qualifier 'verbally' after 'accepted' it seems to me points away from 'contractual conduct'.

149 On the plaintiff's argument, the readings of cl 13.3(a)(1) I have indicated I accept and the view I would take of the sub-clause if I did not so construe it, the entries in the Variations for the 'Date', whether or not they should be taken as simply identifying, were in error. This was an error which could be 'informally rectified' as it was put to me (in the sense, as I understood it, of the approach to construction in Westpac Banking Corporation and Dockside Holdings), if not ignored. That is because the intention of the Variations which should be objectively gathered from their structure and language, both pointing to the Contracts, cl 13.3(a)(1), was in each case to capture the duration of the period for the satisfaction of the condition in the sub-clause for the purpose of extending it as the Variations provided. The reference to 'Date' was then one that should be read by reference to the date that it could be objectively gathered from the structure and the language of the Variations they were meant to refer to.

150 For the reasons I have previously given I agree that those are the conclusions I should draw from my findings.

152 The defendants contend, if the Variations should be construed as I have indicated that they should be construed, then each of the Lot 311 Variation, the Lot 327 Variation and the Lot 315 Variation should be rectified so as to express the common intention of the relevant parties that cl 13.3(a)(1) of the 2002 General Conditions in the respective Contracts as varied should read to stipulate that the period for the WAPC endorsing approval on a subdivision plan was to end on the date falling 12 months or 13 months, as the case may, after the entry for 'Date' on the relevant Variation. That is, the date, for the Lot 311 Contract and the Lot 327 Contract, would be 23 May 2006, and for the Lot 315 Contract would be 19 May 2006.

153 There is no contest as to the general principles applicable to rectification of a contract. For my purposes, they are well summarised in Budget Stationery Supplies Pty Ltd v National Australia Bank Ltd (Unreported, NSWSC Eq No 4303 of 1993, 25 September 1996), affirmed sub nom National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (1997) 217 ALR 365 (NSW CA) (see especially 372, Sheller JA and 382, Handley JA), in which Santow J refers to among other authorities Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336 and Bacchus Marsh Concentrated Milk Co Ltd (in liq) v Joseph Nathan & Co Ltd [1919] HCA 18; (1919) 26 CLR 410, saying this (BC 9604518 at 75 - 76):

For a party to obtain rectification of a document which both that party and the other party mistakenly think records their agreement, the party seeking rectification must demonstrate by "convincing proof" that there was a common intention, which continued up to the moment of execution of the contract, and which that document fails to record; see, for example, [Maralinga] at 350 per Mason J Thus it follows that if only one party is mistaken about the lack of correspondence between that party's intention and the words in the document, that party is, without more, not entitled to relief; see, for example, Slee v Wark [1949] HCA 57; (1949) 86 CLR 271.

However, when one party mistakenly believes that the document correctly expresses the parties' common intentions, and the other party is aware of that mistake, in principle rectification is available; see Isaacs J in [Bacchus Marsh Concentrated Milk] at 427. Such principle has been applied in both the United Kingdom; see for example Roberts (A) and Co Ltd v Leicestershire County Council [1961] Ch 555 and in Australia, for example, Johnstone v Commerce Consolidated Pty Ltd [(1976] VR 463 affirmed by the Full Court on this point [1976] VicRp 78; [1976] VR 724 at 731-2.

Buckley LJ in Bates (Thomas) and Son Ltd v Wyndham's (Lingerie) Ltd [1980] EWCA Civ 3; [1981] 1 WLR 505 at 516, sets out the following requirements for rectification in a case of unilateral mistake: (i) One party believed that the document sought to be rectified expressed the parties' common intention, but he was in error in this belief; (ii) The other party knew of the failure of the document to express that intention, and knew that such a failure was due to the mistake of the first party; (iii) The other party failed to draw the mistake to the attention of the first party; and (iv) That mistake was one calculated to benefit the unmistaken party.

The High Court in Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 at 431, dealt with unilateral mistake but as leading to rescission rather than rectification. It referred to the judgment of Buckley LJ with approval.

In Taylor v Johnson (supra) at 432 the question of what the other party 'knew' is elaborated in terms which make it clear that the High Court based its conclusion on the other party being:

'aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake or apprehension about either the content or subject matter of that term [being a fundamental term] and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension.'

That proposition is further explained (at 432-3 per Mason ACJ, Murphy J and Deane J) in the following statement:

'In such a situation it is unfair that the mistaken party should be held to the written contract by the other party whose lack of precise knowledge of the first party's actual mistake proceeds from wilful ignorance because, knowing or having reason to know that there is some mistake or misapprehension, he engages deliberately in a course of contact which is designed to inhibit discovery of it.'

It is thus clear that in the context of unilateral mistake leading to rescission at least, though not necessarily extending to unilateral mistake leading to rectification, the unmistaken party may be "aware" that circumstances exist which indicate that the first party is entering the contract under some serious mistake or misapprehension of the kind described. Such a person cannot then shelter behind wilful ignorance when in such circumstances that party knows or has reason to know that there is some mistake or misapprehension and he engages deliberately in a course of conduct designed to inhibit discovery of it; Taylor v Johnson.

154 No external manifestation of the common intention is required, although such lack may have evidentiary significance: Bishopsgate Insurance Australia Ltd v Commonwealth Engineering (NSW) Pty Ltd [1981] 1 NSWLR 429, 431 (Yeldham J).

155 The difficulty for an argument as to rectification from any common intention is showing such an intention common to both the buyer and the seller for each of the Contracts.

156 In my view, for the reasons given in the previous section of my reasons, the entry for 'Date' for each of the Variations is not an external manifestation of a common intention to have cl 13.3(a)(1) read as the defendants contend.

157 Nor, in my view, is there 'convincing proof' that the parties had such a common intention. For this purpose, the relevant evidence is what the parties testified to as their beliefs in relation to the matter at the time they executed the Contracts. For that evidence I need to indicate what I find has been established as to those beliefs.

158 All of the plaintiffs testified that they assumed the details Mr Cabassi filled in on the Variation documents were correctly filled in, with one exception.

159 The exception was the first named of the second defendants. In his witness statement (exhibit 2) he testified that, while he did not take 'particular note' of the 'Date' on the Lot 315 Variation document, he 'assumed that Mr Cabassi had set out the correct contract date'. However, in cross-examination, he testified as follows (20 August 2007 ts 71):

PENDLEBURY, MR: In your witness statement, you state at paragraph 11, 'I assumed that Mr Cabassi had set out the correct contractor [sic] date but I did not check our copy of the lot 35 [sic] contract in that regard'? --- That's correct.

You then state: 'I noted that the extension of time for the lot 315 contract was written as 13 months'? --- Correct.

At the time, I put to you that you did the sums based 19 April 2005 being the starting date for that 13-month period? --- No, I took 12 July into consideration, because that's when the document was last signed.

So at that particular point in time, you were conscious, were you of the fact that the date you'd entered into the contract was, as you say, 12 July 2005? --- That's correct.

Did you seek to bring that to the attention of Mr Cabassi? --- No.

And at that time ---

160 At this point, counsel for the plaintiffs called for the questioner to make clear whether he was asking the witness to testify as to his precise state of mind at the point of signing the Lot 315 Variation, or he was asking the witness to testify as to his general understanding. In my view the questions were in fact clear on which the questioner was asking the witness to address. In any event the witness makes clear which he was addressing in the later questioning following (20 August 2007, ts 72):

PENDLEBURY, MR: Mr Blom, at the time you signed that document, you're telling this court that you understood that the reference to the date of 19 April 2005 was wrong. Is that - - -?---That's correct.

At that time, and you did nothing to - - -?---That's how I felt.

And you didn't bring this to the attention of Mr Cabassi?---No, because I received a phone call and he asked me to send it back as soon as possible - - -

Right. So the answer to my - - -?--- - - - in the overnight mail.

And the answer to my question then is, 'No'?---No.

Thank you. I put to you, Mr Blom, that your evidence that you are giving now in this regard is untruthful; that in fact what you thought at the time was that the 13-month period that you were agreeing to started on 19 April 2005?---I thought it was 12 July.

Did you convey that mistake - - -?---No, I didn't.

- - - that you identified to anyone?---No, I didn't.

Did you convey it to your wife?---No, I can't say I did.

161 Counsel for the defendant put to me in closing submissions that in view of the contradiction in the witness's testimony, I should not believe any of what he said, without corroboration. He appeared to submit to me that there was no corroboration.

162 I am not satisfied the witness at the time of signing understood the Lot 315 Contract as varied to operate as the last extract from his testimony indicates. However, I am also not satisfied he considered the entry for the 'Date' set the date when the 13 month period expired. In my view of the totality of his evidence, I consider he approached the matter as the other plaintiffs did, assuming that the entries on the Lot 315 Variation were correct. I consider the matter of the 12 July 2005 starting date was the result of his reflections on the matter subsequent to the completion of his witness statement exhibit 12 influencing his recollection of his state of mind and related matters at the time.

163 All but one of the plaintiffs testified as to what they assumed at the time was the effect of the Variations.

164 The first named of the first plaintiffs testified (exhibit 6 par 14) he 'believed the period being extended was the period commencing from the date when the Lot 311 and Lot 327 Contracts were made'. The second named of the first plaintiffs testified (exhibit 7 par 12) she 'assumed that the extension of time would operate from the date from when the Vendors signed the Lot 311 and Lot 327 Contracts'.

165 The first named of the second plaintiffs testified (exhibit 2 par 11) that he 'assumed that this extension of time ['13 months' in the Lot 315 Variation] would run from the contract date', but, as I have indicated, subsequently elaborated on this by reference to the date of 12 July 2005, the date when the defendants signed the Lot 315 Contract. The second named of the second plaintiffs did not testify as to the matter at all.

166 Counsel for the defendants in each case objected to the answer that the witness assumed the period would run from when the relevant contract was entered into or made. To the extent the answer described the plaintiffs' views as to the proper interpretation of the Contracts as varied, in my view the answer was properly objected to. The plaintiffs could not, it seems to me, testify as to the proper construction of the Contracts. However, in my view the plaintiffs could testify to their belief as to the effect of what they had agreed to by the Variations where they were not aware that there was an inconsistency in each case between the Contracts and the description in the Variation: compare Maralinga 349 (Mason J) where the parties were aware of the difference between the words of the written contract and their antecedent bargain. It seems to me that lack of awareness is what they meant by their answers.

167 None of the plaintiffs testified that they believed that the effect of what they had agreed to by the Variations was an extended period that ran from the entry in 'Date'.

168 In the case of the defendants, the only evidence is from the second named of them. However, she had signed the Variation documents in the absence of the first named of the defendants, and no issue was taken with such signature on behalf of the two of them. Her beliefs are then in my view determinative of the matter so far as the defendants are concerned.

169 The second named of the defendants testified (exhibit 1 par 22) that

[b]ecause Tom [Cabassi] completed the details in the variation, and he had all of the contract details, and because the Purchasers had already signed the variations, I assumed the details were all correct.

[w]hen I signed each and every first variation for a contract I understood that the effect of each variation was to extend the time in clause 13.3(a)(i) of the General Conditions for the WAPC to endorse their approval on the subdivision plan from six months from the date of entering into the contract to the number of months set out in the variation that is, from the date set out at the top of the document [emphasis added].

170 On the basis of this review of the evidence I do not consider that the defendants have discharged their burden of proof that the plaintiffs and the defendants had a common intention in the regard emphasised in the testimony of the second named of the defendants.

171 The difficulty for an argument as to rectification from a unilateral mistake (with which I consider I should also deal) of which the other party was aware is showing awareness of such a unilateral mistake. There is no evidence sufficient to show that any of the plaintiffs - including the first named of the second plaintiffs - was aware of the belief of the second named of the defendants just emphasised. In particular, on the basis of the approach to the construction of the Variations I took in the previous section of my reasons, and the plaintiffs' evidence (including the evidence of the first named of the second plaintiffs that I accept in this respect) as to the lack of close attention they paid to the entries for 'Date' in the Variations (a lack of attention which would not be inappropriate on the structure of the documents), it is not apparent to me that there were grounds for an inference that they were aware of such a belief. For the same reason I do not consider there was a reason to know of it, or in any event (on the evidence as to Mr Cabassi's production and time for return of the Variations) any deliberate engagement in a course of conduct designed to inhibit discovery of any error (Budget Stationery Supplies, 76). In the absence of such evidence, the defendants should not obtain rectification on this basis.

172 It follows that the defendants' claim for rectification must fail.

Issue 2: whether the purported terminations of the Contracts were premature

173 The parties agreed no reliance could be placed on the 17 May 2006 letters. At the very least they had been withdrawn.

174 As to the 19 June 2006 letters, there was no argument that they (putting aside the matters of the deposits paid under the Contracts and the form of the letters, both of which I reach shortly) did not purport to be a termination of the Contracts. However, shortly I will have occasion to review the applicable principles that determine whether or not at general law there was a purported termination, by words or conduct. That is because a sub-issue has been raised as to whether or not there was another, later, purported termination.

175 On the resolution of Issue 1, the purported termination by the 19 June 2006 letters was premature. As a consequence, it seems to me, although the parties' arguments did not address the point, that on general principle the conduct of the defendants represented by the 19 June letters was a repudiation of the Contracts. This would have given the Plaintiffs the right to elect whether or not to accept the repudiation and treat the Contracts as terminated. See Crouch v Joseph (Unreported, WASC (Anderson J), Library No 9004, 22 August 1991) 22; and Contract Law in Australia [35-240] (accessed 27 November 2007).

176 The defendants put to me that the 19 June 2006 letters should, however, be treated as speaking on a continuing basis, so that, at least where there was subsequent conduct of the defendants consistent with treating the Contracts as terminated, I should consider the dates of such subsequent conduct. I took it that, for the purpose of showing subsequent conduct of the defendants consistent with treating the Contracts as terminated, I should consider the 21 July 2006 Letter signed by the first named of the defendants as I have previously indicated, and the offers of new contracts to purchasers whose contracts had 'expired', offers which were referred to in the 25 July 2006 e-mail from the first named of the first plaintiffs. That letter, it will be recalled, was addressed to 'purchasers who's [sic] contracts have expired' and referred to 'revised computation on the price of plots for the above estate' being 'computations ... given to Mr T Grocke, the chairman of the group, on 8 June 2006'.

177 As I previously indicated, 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. As I will indicate, however, there were offers whether in these or other terms for new contracts for the Lot 311 Contract and the Lot 327 Contract, of which the first plaintiffs were aware, and for the Lot 315 Contract, of which the second plaintiffs were aware.

178 In any event, the defendants submitted, the 21 July 2006 letter or the offers of new contracts should itself or themselves be viewed as a purported termination of the Contracts.

179 There is an immediate difficulty with the 21 July 2006 letter as a part of or itself a purported termination of the Lot 315 Contract. There is no evidence that the 21 July letter was received by the second plaintiffs. However, there was evidence that the first named of the second plaintiffs had received the spreadsheet referred to, approximately 10 days after the 17 May 2006 letter (cross-examination, 20 August 2007, ts 73 - 74). Further, there was evidence that the first named of the second plaintiffs understood that the first named of the defendants was, 'as late as 25 July 2006', offering the second plaintiffs a 'new contract', in place of the Lot 315 Contract, which the first named of the second plaintiffs understood was seen by the defendants as an 'old' contract (cross-examination, 20 August 2007, ts 75). There was no evidence on the point from the second named of the second plaintiffs.

180 On the evidence of the first named of the second plaintiffs I find that he was aware that the defendants were as at 25 July 2006 offering the second plaintiffs a new contract in place of the Lot 315 Contract.

181 There is also evidence that 'as at 24 July 2006' the first named of the first plaintiffs was aware that the defendants were offering a new contract to the First plaintiffs in place of the Lot 311 Contract and the Lot 327 (cross-examination of the first named of the first plaintiffs, 20 August 2007, ts 91).

182 On that evidence I make the finding that the first named of the first plaintiffs was aware that the defendants were as at 24 July 2006 offering the first plaintiffs new contracts in place of the Lot 311 Contract and the Lot 327 Contract.

183 If the defendants' submission was made good, there was a termination at a date falling after the expiry of the extended period under the Lot 311 and the Lot 327 Variations, of 12 months measured from the Contract Date, of 12 July 2005. As I will indicate below, that date, under the 21 July 2006 letter, was, arguably at least, as late as 1 August 2006, while the offers were understood still to be current as at 24 or 25 July 2006.

184 However, for reasons I will shortly set out, I do not consider that submission was made good.

185 In any event, for the Lot 315 Contract the termination dates in question fell before the expiry of the extended period under the Lot 315 Contract as varied, of 13 months measured from the Contract Date, of 12 July 2005, that is, 12 August 2006. No other conduct of the defendants, subsequent to the 19 June letters and occurring before the WAPC, on 18 December 2006, endorsed its approval on the subdivision plan for the Development, was referred to by the defendants or is evident to me. Accordingly, the defendants' submission in respect of the Lot 315 Contract must, in my view, rely on a continuing effect of the 19 June letter for the Lot 315 Contract, after consideration of the facts that unlike the 17 May 2006 letters the 19 June 2006 Letter had never been withdrawn, and that the defendants had never taken any other position than that the Contracts had 'expired'. Such effect would be one continuing past 12 August 2006, the date of expiry of the extended period under the Lot 315 Contract as varied.

186 Accordingly I begin my analysis of the defendants' submission by considering whether or not the 19 June letter considered without the 21 July 2006 letter or the offers of new contracts had the continuing effect referred to.

187 In my view the 19 June 2006 letters did not have any such continuing effect. I note the view in Crouch BC9101016 at 22 of an equivalent question in that case. That view Anderson J described as follows (ibid):

By their telephone conversation with Mr Offer in June, they purported to avoid the contract but they had no ground upon which to do so at that time. It is a difficult question whether that groundless attempt at recission had some continuing operation so that when the time for fulfilment of the special condition expired, their entitlement to avoid the contract was exercised. I am inclined to think that the defendants' repudiatory conduct prior to 30 September, had no continuing operation. It seems more in accordance with principle to say that unless and until their repudiatory conduct was accepted by the plaintiff as putting an end to the contract, it had no effect and they could change their mind and hold the plaintiff to the contract notwithstanding that in the interim an event had occurred entitling them to terminate it. But it is not necessary to determine that question in this case.

188 In my view the 19 June 2006 letters were a purported termination as at that date, a termination which the plaintiffs did not accept. It is true that a person purporting to terminate a contract can rely on any state of affairs that would have justified such conduct, and not just that state of affairs to which their purported termination is referred: Contract Law in Australia [37-030] (accessed at 27 November 2007) and authorities there cited. However, the 19 June 2006 letters did not purport to terminate as at any later date at which some other or even a continuing state of affairs might exist. Indeed, the 19 June 2006 letters appeared to rest on a state of affairs 'as of 16 June 2006' being the date as of which the 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)'.

189 On this view, the lack of a withdrawal of the 19 June 2006 letters, and the lack of any other position being taken by the defendants than that the Contracts had 'expired', add nothing.

190 Further, it seems to me the 21 July 2006 letter, as regards the Lot 311 Contract and the Lot 327 Contract, and the offer of new contracts, in both cases considered as related to the termination by the 19 June 2006 letter, also add nothing. The letter and the offer so considered simply confirm the position in the 19 June 2006 letter, my view of which I have already described.

191 However, as I have previously indicated, the defendants also submitted that the 21 July 2006 letter and the new offers themselves constituted purported terminations. The 21 July 2006 letter it will be observed spoke of offers being withdrawn 'as of' 1 August 2006. I consider it arguable that the 21 July 2006 letter spoke to that later date. As to the new offers there is no evidence that they were understood to have extended beyond the dates of 24 or 25 July 2006, as the case may be, except by reference to the 21 July 2006 letter, which as I have said there is no evidence the second plaintiffs received, and which spoke to offers ending 'as of' 1 August 2006.

192 It is clear on the evidence before me that the 21 July 2006 letter and the new offers were intended to be related, and understood by the plaintiffs as related, to the 19 June 2006 letter. That is, they rested on a previous termination, and provided for its consequences (the expiry of the Contracts). However, as I will explain, conduct of such a sort might represent a purported termination, although I do not consider that the conduct in this case meets that description on the applicable principles as I understand them.

193 The principles applicable to what under general law relevant for my purposes constitutes an effective termination are not in contest. They are set out in Sargent v ASL Developments Ltd [1974] HCA 40; (1974) 131 CLR 634. See also Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) [1993] HCA 27; (1993) 182 CLR 26.

194 For my purposes, I take the following passage from Sargent to set out the applicable principles: 646 (Stephen J):

The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease (Viscount Dilhorne in the Kammins Ballrooms Case [[1971] AC, at . 873]; Herring CJ in the Coastal Estates Case [[1965] VR, at p. 436]; Kitto J in Tropical Traders Ltd v Goonan [(1964) [1964] HCA 20; 111 CLR 41, at p. 56]). However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election (Elder's Trustee Case [(1941) 65 CLR, at p 618]). There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right (Croft v Lumley [(1858) [1858] EngR 626; 6 HL Cas 672 [10 E.R. 1459]]; Matthews v Smallwood [[1910] 1 Ch, at p 786]). For an election there need be no actual, subjective intention to elect (Scarf v Jardine [(1882) 7 AC, at p 361]), an election is the effect which the law attributes to conduct justifiable only if such an election had been made (per Kitto J in Tropical Traders Ltd v Goonan [(1964) 111 CLR, at p 55]); cf. S Kaprow & Co Ltd v Maclelland & Co Ltd, per Wrottesley LJ [[1948] 1 KB 618, at pp 629-630].

See also 637 (McTiernan ACJ) and 655 - 656 (Mason J).

195 I do not need to concern myself with the question of when the general law requires communication of the election to terminate (on which see Contract Law in Australia, [37-050], accessed 27 November 2007), as there is no question but that the conduct here was communicated to the first plaintiffs.

196 Conduct which (as here) is related to a purported previous termination is it seems capable of itself being a purported termination where the conduct is open only on the contract being terminated at all events. See Contract Law in Australia [37-050], accessed 27 November 2007; and Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235 243 (buyer entering into a new contract of purchase).

197 In this case, however, there was no conduct referable to a right to terminate arising after the 19 June 2006 letter. Nor was the conduct inconsistent with the defendants reserving their position with respect to the exercise of any such right prior to or after the time for any acceptance by the plaintiffs of the offers in question. The conduct, it should be remembered, was in the form of offers made by one party to others for new contracts.

198 That is, the 21 July 2006 letter and the offers of new contracts were not themselves effective terminations of the Lot 311 Contract and the Lot 327 Contract at general law.

199 This conclusion is sufficient to dispose of the present proceedings in the plaintiffs' favour, as the defendants do not contend that 2002 General Conditions cl 13.3(a)(1) was self-executing nor that there was any other way of exercising the right to terminate for non-satisfaction of cl 13.3(a)(1) than that previously described. I note in passing that the concession that 2002 General Conditions cl 13.3(a)(1) was not self-executing was in my view properly made: see Kirk Contractors v Lasnom Pty Ltd (Unreported, WASC, Library No 950262, 31 May 2005) Owen J 25 - 27, and authorities there cited, on the counterpart provision in a previous version of the Joint Form of General Conditions; and Mario Casella & Sons Builders Pty Ltd v Duckworth [2005] WASC 245 [67] and [68] (Hasluck J), on cl 13.7 in the 2002 General Conditions.

200 However, the plaintiffs contend in any event that there were other requirements for an effective termination by the defendants for the non-satisfaction of the extended periods under the Contracts as varied, and the defendants did not comply with those requirements in this case in respect of the purported terminations which I have discussed in this section. In case I am wrong on the conclusions I have arrived at in this section, and in deference to the parties' arguments directed to me on the requirements contended for by the plaintiffs, I turn to their contentions and those arguments.

Issue 3: whether the purported terminations were ineffective for failure to repay the deposits under the Contracts

201 The plaintiffs contend that in order effectively to terminate the Contracts for non-satisfaction of cl 13.3(a)(1) the defendants had to repay the relevant deposit. As will become apparent, that contention appears to me to reduce to one that there was a requirement to tender the relevant deposit. The plaintiffs say that any such requirement was not met in this case. The defendants say that, if there were any such requirement (which they deny) and it was not met (which they also deny) the plaintiffs waived the requirement, by asking the defendants' agent, Mr Cabassi, not to repay their deposits. Finally, the defendants say that whether or not there was a waiver, the plaintiffs were estopped by their conduct from relying upon any failure to refund the deposit as a basis for the lack of an effective termination.

202 It will be seen then that four sub-issues arise under the present heading.

The first sub-issue: was the return of the deposit required for an effective termination for non-satisfaction of cl 13.3(a)(1)?

203 For this requirement, the plaintiffs refer to 2002 General Conditions cl 13.7(a)(1) read with (b)(1) and (4). For convenience I set these out below:

13.7 Termination of the Contract

(a) If:

(1) any condition specified in this clause is not satisfied within the time specified for satisfaction of that condition;

...

subclause (b) will apply.

(b) Where subclause (a) applies, the following apply.

(1) The Deposit and any other money paid by the Buyer under the Contract, must be promptly repaid to the Buyer.

...

(4) Subject to subclause (1) to (3), no Party will have any claim or right of action against the other arising from the termination, except in respect to any matter which arose before the termination.

204 The plaintiffs also heavily rely upon the decision in Kirk Contractors. In that case land was sold that was not a lot or lots within the meaning of the Town Planning and Development Act 1928 (WA) at any material time. There was a Contract of Sale of Land by offer and acceptance that incorporated by reference the 1991 Joint Form of General Conditions for the Sale of Land (the 1991 General Conditions). The plaintiff, without objection from the defendants, put up a copy of the 1991 General Conditions in full text. I will make reference to that document accordingly.

205 The contract in Kirk Contractors was also subject to a Special Condition making the Offer 'subject to [Stirling] approving the subject vacant lot for strata title within 60 days of acceptance'. The 1991 General Conditions also included in cl 14 cl 14(5) and (8) as follows, as set out in Kirk Contractors 5 - 6 and 26:

[(5)] If the land is or includes a strata lot or any estate or interest therein then -

(a) the Vendor shall at the vendor's expense (if the vendor has not already done so) seek all necessary approvals to the development of which the land is intended to form part and expeditiously complete or cause to be completed that development in accordance with the contract; and

(b) the contract shall be conditional on

(i) the approval of the [State Planning] Commission to the strata plan within 6 months after the date of the contract or within such longer period as is stated in the contract; and

(ii) the strata plan being duly registered or in order for dealings within 3 months after the date of endorsement of that approval by the Commission or the date of the contract (whichever is the later).

...

(8) If any of the Conditions referred to in this Condition are not fulfilled within the time or respective times stipulated, the Vendor shall repay to the Purchaser the deposit and all other moneys (if any) paid by the Purchaser to the Vendor under the contract without deduction and upon repayment the contract shall cease to have effect and neither party shall have any claim of any nature against the other.

206 It will be seen that 1991 General Conditions cl 14(5) and cl 14(8) correspond to 2002 General Conditions cl 13.3(a)(1) and cl 13.7(b), respectively. However, there are differences in the language to which I will need to return.

207 Neither the Special Condition nor the conditions in 1991 General Conditions cl 14(5) were satisfied. Relevantly for my purposes Owen J, having determined that neither the Special Condition nor cl 14(5) was self-executing (a conclusion to which I previously referred), said this as to cl 14(8) (26 - 27):

In my opinion the proper construction of this provision is that the contract remains on foot until the vendor has complied with the stipulations contained within it, namely the repayment of all moneys paid by the purchaser without deduction. Then, and only then, does the contract cease to have effect. Up until that time, the obligations of the parties continues. This is inconsistent with an interpretation that the contract comes to an end, automatically and without more, immediately on the passing of the time limit. The word 'shall' that appears in the condition does not mean that the vendor must, as an automatic consequence of the non-fulfilment of the condition, repay all moneys to the purchaser. What it means is that if the vendor wishes to treat the contract as being at an end he or she can only do so by repaying the deposit and other moneys. For the sake of completeness (although not relevant to this case) I think that if a purchaser wished to terminate for non-fulfilment of Condition 14 the normal rules relating to termination for failure of a non-promissory condition would apply.

208 In considering whether the defendant had effectively terminated the contract by a letter dated 22 March 2004 to its agent Mair & Co forwarded on the same day by Mair & Co to the plaintiff buyer for non-satisfaction of 1991 General Conditions cl 14(5) Owen J said this (42 - 43):

I will start with the Condition 14(5). It is a necessary element of termination under Condition 14(8) that the defendant repay to the plaintiff the deposit and other moneys paid by it under the Contract. The defendant says that it satisfied this element when Mair and Co tendered the money to the plaintiff in the letter of 22 March 1994 (Ex 26). In Jowitt's Dictionary of English Law, 2nd Ed, the term 'tender' is defined in these terms:

'an offer by a debtor to his creditors of the amount of the debt. The offer must be in money, which must be actually produced to the creditor, unless by words or acts he waives production: therefore, a mere statement by the debtor that he has the money in his possession ready for payment is not sufficient, even if the creditor says he will not receive it.---.The offer must also be unconditional.'

It seems to me that there was no tender of the deposit money to the plaintiff in this case. First, the implication of what Mair and Co said is that they had the money in their possession and would pay it when the plaintiff acknowledged that the Contract was at an end. This difficulty is not cured by the action of the plaintiff's solicitors in their letter of the following day (Ex 78) refusing to accept the money. Secondly, the tender was not unconditional. The agents said: 'Could you please advise this office in writing as soon as possible of your agreement that this contract is at an end and we will refund the deposit immediately'. In Brennan v Pitt, Son & Badgery Ltd (No 2) (1901) SR NSW 92 a mortgagor tendered to the mortgagee a sum of money 'in satisfaction' of the mortgage and, when this was refused, said he would not pay the amount without a receipt. A H Simpson CJ in Eq said at 98-99:

'As I understand the law, there is a clear distinction between a conditional tender and a tender under protest. Neither party has a right to require the other party to make any admission, but he may guard himself from his own act being taken as an admission by protest. The tender in this case was in my opinion conditional. [The mortgagor] in the first instance tendered the money 'in satisfaction of [the] mortgage'. This [the mortgagee] refused to accept. In cross-examination [the witness] said, '[The mortgagor] then said he would not pay the amount without a receipt in discharge of the amount due under the mortgage'. This is equivalent to saying, I only tender the money on condition of your accepting it as the full amount due. The tender is therefore bad.'

I think that a similar rationale applies here. The defendant, through its agent, was insisting on receipt of an admission that the plaintiff had no further rights in the matter as a condition of releasing the deposit monies. There was no repayment, actually or by tender, as Condition 14(8) requires and the purported termination on that ground was ineffective.

209 I will have occasion to return to the latter extract in relation to the second and third sub-issues below. For now, I note the equation of repayment of the deposit with tender. It seems to me that a requirement for repayment may indeed be equated with an effective tender. I will return to what is an effective tender under the next sub-issue.

210 However, whether or not the equation above is made, it seems to me that there is a material difference between the 1991 General Conditions cl 14(8) and the 2002 General Conditions cl 13.7(b) which makes the conclusion in Kirk Contractors as to the former one that is not transferable to the latter context. That difference is the language in cl 14(8) of 'upon repayment the contract shall cease to have effect'. It seems to me that the Court in Kirk Contractors lays emphasis on that language for its conclusion as to the requirement for repayment (or tender of repayment) of the deposit for an effective termination of the contract in that case. It does not seem to me that the language in cl 13.7(b)(4), that '[s]ubject to subclause (1) to (3), no party will have any claim or right of action against the other arising from the termination', is to a similar effect. Indeed, if anything, it tends against the construction of cl 13.7(b) for which the plaintiffs contend. That is, it might tend to indicate that the right to repayment is a right 'arising from termination' (emphasis added), not an ingredient of termination.

211 However that may be, the conclusion seems to me to emerge strongly when one brings into account the other circumstance in cl 13.7(a) to which cl 13.7(b) is made to apply, namely, that in cl 13.7(a)(2). This appears to refer to cll 13.5 and 13.6:

If:

...

(2) a Party withdraws from, and terminates the Contract, following the imposition of a condition by the Planning Commission,

212 This provision's counterpart in the 1991 General Conditions was cl 14(6), but was in my view to a materially different effect. It provided for a party to give the other 'notice in writing that the Condition is unacceptable and thereupon the approval shall be deemed to have been refused'.

213 In my view cl 13.5 when read with cl 13.7(a)(2) is inconsistent with repayment of the deposit being required for a termination in the situation described in the latter. It also in my view strongly points away from any such requirement for the situation described in cl 13.7(a)(1).

214 Accordingly, I conclude that repayment of any deposit is not required for an effective termination for non-satisfaction of cl 13.3(a)(1).

The second sub-issue: was any such requirement met for any of the purported terminations?

215 If I am wrong in the prior conclusion, this sub-issue and the next two arise. Unlike those two, however, relatively little argument was devoted to the present sub-issue.

216 I have already indicated that I consider that tender of repayment would be sufficient for satisfaction of any such requirement. Thus, it is not fatal that no actual repayment was made with any of the conduct relied upon as terminations by the defendants.

217 However, I do not consider there was any tender of repayment in any such case. There was at most the statement in the 17 May 2006 letters that 'the Sellers Agent will refund all deposited monies to you without deduction'. The 19 June 2006 letters indicated that letter was 'withdrawn'. The failure to make any corresponding statement in the latter letters or subsequently might be seen to be explained by the buyers' statements, both in response to the 17 May 2006 letters and subsequently, that they did not wish their deposits to be refunded, a matter to which I will return shortly. But whether or not that failure might be so seen, it does not seem to me that there was a tender of payment of the deposit at any time. Rather, there was at most a statement that tender would be made. Unlike the corresponding statement in Kirk Contractors that statement was unconditional. However, on that authority, it was not the actual tender that the requirement, if it applied to cl 13.7(b), entailed (see 42 - 43, quoted above).

218 Accordingly, if the requirement had applied, it was not met.

The third sub-issue: was any such requirement waived?

219 If I am wrong in my conclusion on the first sub-issue, and if I am correct on my conclusion on the second sub-issue, then on the defendants' submissions the present sub-issue and the next present themselves.

220 On Kirk Contractors any requirement to repay a deposit could be waived. The doctrine of waiver as applicable to cover conduct which establishes that a person has chosen not 'to insist on the performance of a provision inserted in a contract for its benefit' continues to be a part of the law: see Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd [2005] WASCA 106, [40] - [48] (Steytler P), [89] (McLure JA), especially [48] (source of quotation). However, to be effective in the present context the waiver must be of production of the deposit. Kirk Contractors and the authority on which the court there relies (at 42 - 43) distinguish an indication that repayment of the deposit would not be accepted. I consider that distinction goes to the matter of whether or not the other party is waiving a requirement for payment as opposed to stating that the occasion for payment has not in the view of the other party arisen.

221 In this case it seems to me that the waiver was of the latter, not of the former sort.

222 The conduct constituting waiver relied upon by the defendants is:

• the email of 31 May 2006 to Mr Cabassi in response to the 17 May 2006 letters relating to Lots 311 and 327 in which the first plaintiffs say they considered their contracts to purchase Lots 311 and 327 to be 'valid until July 12 2006' and 'do not want our deposits refunded';
• the telephone call of 1 June 2006 to Mr Cabassi, it seems in response to the 17 May 2006 letter relating to Lot 311, in which the first named of the second plaintiffs said he considered the Lot 315 Contract had not been terminated and asked Mr Cabassi not to return the deposit under the Lot 315 Contract; and
• the letter dated 26 June 2006 to the defendants relating to Lot 327 in which the first plaintiffs state that their 'advice is that our contracts are still valid and we have advised the agent to hold our deposits'.

223 No other conduct appears to have been relied upon.

224 I would take it that the contention is that the plaintiffs' response to the 17 May 2006 letters should be seen as waiving the requirement for repayment for any later purported termination for non-satisfaction of cl 13.3(a)(1) that came before 12 July 2006 at least. In my view any such contention can only readily be maintained for the first plaintiffs. The position with respect to the second plaintiffs is not it seems to me at all clear in respect of any purported termination after the 17 May 2006 letters. In any event the corresponding date to 12 July 2006 for the Lot 315 Contract as varied was 12 August 2006. However, I also take it that the defendants also rely on the continuing failure to repay the deposits to any of the plaintiffs as evidence, with the three listed matters, from which it should be inferred that the defendants understood all of the plaintiffs had waived the requirement for repayment.

225 Approaching the matter in terms of the last sentence, I am not able to conclude there was a waiver of the requirement in the terms Kirk Contractors indicates are called for. The plaintiffs had it seems to me at most indicated they would not accept repayment as they regarded the Contracts as not terminated. The plaintiffs were not it seems to me indicating they were waiving any requirement for repayment in the sense I have described of the deposits under the Contracts.

226 Accordingly, I consider that if there was a requirement for effective termination of the Contracts that the deposits be repaid that requirement had not been waived.

The fourth sub-issue: were the plaintiffs estopped from relying on any such requirement?

227 The conclusion on the matter of waiver may not itself determine the position as to estoppel. The doctrines can be seen as distinct: see Wiltrading [42], [44], [45] and [51]. However, in this case, it seems to me that my basis for the conclusion I have just reached is fatal to the application of estoppel as contended for by the defendants.

228 The requirements for an estoppel do not appear to be in contest before me. They may be taken for my purposes to be those described in Walton Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387, 428 - 429 (Brennan J):

In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.

229 The conduct that it is contended met the requirement in (2) must have been 'clear and unambiguous' (Foran v Wight [1989] HCA 51; (1989) 168 CLR 385, 411, Mason CJ) or 'unequivocal' (Wiltrading [51]).

230 The conduct relied upon as meeting the requirement in (2) is that previously referred to as constituting a waiver. It seems to me that at the least the conduct so relied upon did not amount to an unequivocal indication that the defendants should consider that the legal relationship between them and the plaintiffs did not include that they were required to repay the relevant deposit.

231 I should note that if, however, the conduct could be so viewed, then in my view there was here evidence of reliance by the defendants in the form of abstaining from producing the deposits under the Contracts when they purported to terminate them, and in circumstances where, as the plaintiffs knew, their opportunity to do so was a time limited one. If then I had not concluded there was not conduct of the plaintiffs meeting the requirement in (2) from Walton Stores I would have found the requirements for an estoppel as described in the passage from that authority quoted above made out.

232 However, for the reasons I have indicated, I do not consider the defendants' contentions as to an estoppel in this case to be made out.

233 This takes me then to the plaintiffs' contentions, which arise for determination if the defendants had met the requirements for an otherwise effective termination, that any such terminations were ineffective for their failure to meet the requirements of the Contracts as to the form of any such terminations.

Issue 4: whether the purported terminations were ineffective for failure to be in notice form

234 Two sub-issues arise under the present heading.

235 One was that an effective termination for non-satisfaction of cl 13.3(a)(1) required a notice in the form stipulated for a 'Notice' in the 2002 General Conditions.

236 The other sub-issue, which arose if there was such a requirement, was whether or not the requirement was satisfied in this case.

The first sub-issue: was there a requirement for notice of termination?

237 The Plaintiffs' contentions rest on the provisions in 2002 General Conditions cl 21 for 'Notice'. That provision, under the heading 'Notice', provides for the requirements for a Notice, when it is to be treated as duly served, and consequential provisions.

238 I took it that my attention was particularly being drawn to cl 21.1, headed 'Requirements for a Notice', which is as follows:

A Notice to be given under the Contract must be:

(a) in writing; and

(b) in the English language; and

(c) signed by the Party giving it or that Party's Representative.

239 I return below to the elements of cl 21.1, particularly cl 21.1(c). For now, my focus is on whether or not a notice satisfying the requirements of cl 21, and in particular of cl 21.1, was a requirement for an effective termination under cl 13.7.

240 The plaintiffs contended that the 2002 General Conditions established a minimum requirement for the giving of notice by a party wishing to terminate the Contracts under them. The plaintiffs referred me to the provisions in the Contract on its termination by either party. Those provisions are, apart from cl 13.5 to which I have previously referred in another respect, cl 2.7, cl 16.5, cl 16.7, cl 24.2 and cl 24.15. All of these provide for 'Notice' by one party to the other party of the former's termination of the contract, or, under cl 13.5, their election 'to withdraw from and terminate the Contract'. This is with the exception of cl 24.2(e), which states that where 'the Buyer repudiates the Contract' the seller may 'terminate the contract by notice to the Buyer'. However, I agree with the plaintiffs' submission that the use of 'notice' rather than 'Notice' here at least should be seen as a typographical error, given the use of 'Notice' elsewhere in cl 24.2.

241 The plaintiffs submit that the failure to stipulate in cl 13.7 or elsewhere in that clause for 'Notice' of termination for non-satisfaction of the condition in cl 13.3(a)(1) where there was such a requirement for termination under cl 13.5 should be understood in terms of the failure of the drafter to appreciate that the words chosen did not make cl 13.3(a)(1) self-executing. I have previously referred to my agreement with the defendants' concession that cl 13.3(a)(1) was not self-executing.

242 In combination, the plaintiffs submit, these matters indicate that the 2002 General Conditions were intended to modify the general law which as I previously indicated does not necessarily require a notice, whether in writing or otherwise, of an election to terminate a contract by requiring a notice of termination. Those requirements had to be strictly complied with, which would provide greater certainty in the matter of termination.

243 I was referred to Capper v Thorpe (Unreported, WASC, Library No 960220, 24 April 2006) 19 - 21 (Owen J). That authority was, however, on the provisions in the 1991 General Conditions with respect to service of a default notice. It was not in question that the provisions as to service of a notice in the 1991 General Conditions cl 21(2) applied to the default notice in that case. Those provisions corresponded to 2002 General Conditions cl 21.5. Owen J concluded (22) that the provisions were not ones creating a rebuttable presumption as to service, but rather were of a deeming character.

244 I have concluded that a 'Notice' was not required to effect a termination for non-satisfaction of the 2002 General Conditions cl 13.3(a)(1). My reasons are the following.

245 The 2002 General Conditions appear to me to indicate where they do, and do not, require a notice to be 'given under the Contract' in the language of cl 21.1 if certain results are to be achieved, in relation to termination and indeed in other contexts. Such other contexts include those in cl 1.2, cl 4.4, cl 5.2, cl 6.9, cl 8.5, cl 10.4, cl 14.4, cl 14.5, cl 14.10, and cl 15.3. I also note cl 19.3 providing for 'written notification', to which it may be cl 21 would apply, although I do not need to arrive at any concluded view on the point.

246 Further, I note that in Kirk Contractors Owen J, in the context of the 1991 General Conditions cl 14(8) corresponding to 2002 General Conditions cl 13.3(7), indicated (in a part of a passage from his judgment I quoted above) his view (while acknowledging the matter was 'not relevant to this case') that if a purchaser wished to terminate for non-satisfaction of the condition corresponding to 2002 General Conditions cl 13.3(a)(1) 'the normal rules relating to termination for failure of a non-promissory condition' would apply (27). Under the 1991 General Conditions, there was a provision, cl 21(1) whose opening words were very similar to 2002 General Conditions cl 21.1. Under the 1991 General Conditions, although for the most part there was no reference to a 'notice' in connection with termination of the contract, there was such a reference, in connection with termination by a Vendor following a requisition on title by the Purchaser, in cl 8(3), corresponding to 2002 General Conditions cl 16.5.

247 In my view, there is no absurdity in taking the context of termination for non-satisfaction of cl 13.3(a)(1), as referred to (obliquely, as to the requirement for an election to terminate for such non-satisfaction) in cl 13.7(a)(1), as being a context in which a 'Notice' is not required to effect a termination of the Contract, and thus where there might be termination without a 'Notice' in accordance with the general law.

248 If a 'Notice' was not required, it might be suggested that one might have been given, and, if so, the requirements of cl 21 would apply. No such suggestion was made to me in this case, however. In any event, it does not seem to me that the 19 June 2006 letters were or purported to be a notice, and even less was this so of any of the other conduct relied on by the defendants as a termination.

249 However, if I am wrong in my conclusion that there was no requirement for 'Notice' for termination for non-satisfaction of 2002 General Conditions cl 13.3(a)(1), the next sub-issue arises. In deference to the parties' argument, I consider that sub-issue next.

The second sub-issue: was any requirement for 'Notice' satisfied?

250 The plaintiffs' submissions, as I understand them, were that the only writing that might otherwise have met the requirement in cl 21.1 was the 19 June 2006 letters and the 26 July 2006 letters. The 19 June 2006 letters and the 26 July 2006 letters did not meet the requirement as they were not 'signed by the Party giving it or that Party's Representative'.

251 I was reminded of the importance of the consideration of certainty of strict compliance with cl 21 in relation to the giving of notice, even if such compliance might produce what appeared to be an absurdity. This consideration was referred to in Capper 20 quoting with approval from Miller v Barrellan (Holdings) Pty Ltd (1981) 2 BPR 97143.

252 The provisions for signature on the 19 June 2006 letters and on the 26 July 2006 letters were, as I have earlier indicated, for the first named of the defendants, over the description 'Managing Director' with the following text 'International Contractors' and 'AQL Pty Ltd' with what appears to be that company's address. In addition, also as I have earlier indicated, the 19 June 2006 letters and the 26 July 2006 letters appear to be on the letterhead of that company.

253 I consider that, if cl 21 applied to the 19 June 2006 letters and the 26 July 2006 letters, cl 21.1(c) was not satisfied.

254 I note for this purpose cl 26.1'Party' and 'Representative', as well as cl 26.5(e).

255 I have previously set out the definition of 'Party' in cl 26.1. That definition it seems to me on its face would call for signatures from both defendants.

In this document and the Contract, unless the context otherwise requires, the following applies:

(e) Reference to the singular includes the plural and vice versa;

257 I consider that it is arguable this provision has the effect that either of the defendants could sign for both, at least where the relevant signatory has the authority of the other to sign for that person. However, I do not need to reach a final view on the point.

258 I also note the definition of 'Representative' in cl 26.1 as follows:

In this document, unless the context otherwise requires, the following words and expression have the following meanings:

Representative means a person who is either a Legal Practitioner or a Settlement Agent and who has been properly appointed to act for a Party in relation to Settlement.

259 Here, the company AQL was not a party. Nor was the company a 'Representative'. The first named of the defendants appeared, by reference to the manner of signature and the letterhead employed, to be signing as or for the company.

260 It follows in my view that, if the requirements of cl 21 of the 2002 General Conditions applied to the 19 June letters and the 26 July 2006 letters, those requirements were not met.

261 I have concluded that none of the Contracts was effectively terminated on the findings I have set out.

262 I earlier indicated that on such conclusions it was conceded by the defendants there was no barrier to the grant of relief to the successful plaintiffs by way of specific performance.

263 Accordingly, it would seem to me that the appropriate orders in this case would at the least be that the declarations sought by the plaintiffs should be made, and that the orders sought by them for specific performance of the Contracts should also be made.

264 Further, it would follow that the defendants have not succeeded in any of their claims for relief by way of counterclaim.

265 However, I will hear further from the parties as to the orders that should be made.

Appendix: Clause 13 of the Joint Form of General Conditions for the Sale of Land 2002 Revision

13 Subdivision

13.1 When Clause applies

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

13.2 Contract conditional

The Contract is conditional on the following.

(a) An application for the subdivision of the Lot from the Original Land being lodged with the Planning Commission within 3 months after the Contract Date.

(b) The Planning Commission granting approval for the subdivision of the Lot from the Original Land within 6 months after the Contract Date, or any longer period as specified in:

(1) the Contract; or

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

(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.

(a) The Seller must, if the Seller has not already done so, lodge an application with the Planning Commission for the subdivision of the Subdivision Lot, from the Original Land, within 15 Business Days after the Contract Date.

(b) Following the lodgement of the application in accordance with subclause (a), the Seller must use best endeavours to:

(1) obtain the approval of the Planning Commission, to the subdivision of the Subdivision Lot from the Original Land; and

(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:

13.5 Unacceptable condition imposed by Planning Commission

If the Planning Commission grants approval for the subdivision of the Lot from the Original Land subject to a condition with which either the Seller or the buyer, acting reasonably:

(a) is unwilling to comply with; or

(b) considers it to be prejudicial;

the Party who:

(c) would be bound to comply with the condition; or

(d) is prejudiced by the condition,

May within 10 Business Days of being notified of the condition elect by Notice to the other Party to withdraw from and terminate the Contract.

(1) the Lot is a proposed Strata Lot; and

(2) approval for the subdivision of the Strata Lot from the Original Land is exempt from the requirement to obtain the approval of the Planning Commission, on the basis that the relevant approval may be granted by a local government,

each reference in clauses 13.2 to 13.5 and 13.7 to the Planning Commission means a reference to the relevant local government.

(b) Without affecting clause 13.4, where the Subdivision Lot is a proposed Lot on a Strata Plan, the Seller must use best endeavours to arrange for the Subdivision Plan, being a Strata Plan, to be registered at DOLA within the period specified or referred to in Section 70(4) of the Strata Titles Act.

(1) any condition specified in this clause is not satisfied within the time specified for satisfaction of that condition; or

(2) a Party withdraws from, and terminates the Contract, following the imposition of a condition by the Planning Commission,

subclause (b) will apply.

(b) Where subclause (a) applies, the following apply.

(1) The Deposit and any other money paid by the Buyer under the Contract, must be promptly repaid to the Buyer.

(2) If the Deposit has been invested by the Deposit Holder in accordance with clause 1.9, the Buyer will be entitled to the interest on the Deposit.

(3) If any other money has been paid to the Deposit Holder by the Buyer, and invested by the Deposit Holder with a Deposit Financial Instiution, the Buyer will be entitled to the interest on that other money.

(4) Subject to subclause (1) to (3), no Party will have any claim or right of action against the other arising from the termination, except in respect to any matter which arose before the termination.

13.8 Strata Lot - obligation to construct development

If the Contract includes an obligation for the Seller to construct a building or other permanent improvement in connection with the sale of a Strata Lot to the Buyer, the Seller must:

(a) undertake the construction of the building or permanent improvement:

(1) in a proper and workmanlike manner; and

(2) in accordance with any plans or specifications which are attached to, or incorporated in the Contract; and

(b) where on the Contract Date construction has not commenced, commence construction as soon as practicable after the Contract Date or on any date specified in the Contract and following commencement of construction, cause:

(1) construction to proceed; and

(2) the construction of the building or other permanent improvement to be completed,

as soon as practicable after commencement of construction.

(a) As soon as practicable after the Subdivision Plan is In Order for Dealing, the Seller must:

(1) apply for, and arrange for the issue of a separate Certificate of Title for the Subdivision Lot; and

(2) notify the Buyer in writing, as soon as practicable after a separate Certificate of Title has been issued for the Subdivision Lot.

(b) Unless otherwise provided in the Contract, the Settlement Date will be the date which is:

(1) 15 Business Days after the Seller notifies the Buyer that a separate Certificate of Title has issued for the Subdivision Lot; or

(2) where:

(A) the Buyer is aware that a separate Certificate of Title has been issued for the Lot; and

(B) the Buyer has notified the Seller that the Buyer is aware that a separate Certificate of Title has issued for the Lot,

15 Business Days after the Buyer has so notified the Seller.