Contracts - General contractual principles - Construction and interpretation of contracts - Other matters - Option by purchaser to require vendor to buy back property if rezoning application unsuccessful - Purchaser's obligation to use "best endeavours" to obtain rezoning - What constitutes - Whether failure to take particular step constitutes failure to use best endeavours if application would have been unsuccessful anyway.

Lord v Trippe (1977) 14 ALR 129; Harry v Fidelity Nominees Pty Ltd (1985) 4 SASR 458; Hawkins v Pender Bros Pty Ltd (1990) 1 Qd R 135; Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd (1984) 3 NSWLR 613; Egan v Geraghty (unreported) Court of Appeal Supreme Court of Queensland 16 February 1994, referred to.

Solicitors for applicant: Murdoch Clarke Cosgrove and Drake

GREEN CJ This is a claim by the first plaintiff, or in the alternative a claim by the second and third plaintiffs for an order for the specific performance of an agreement for the sale of land. Claims for damage have also been made but by consent those claims have been adjourned sine die. I make the following findings.

2. The second and third plaintiffs were in partnership as surveyors. They thought that a piece of land at Falmouth had development potential and after some discussion elicited an offer from Mr Bruce Hogarth on behalf of the owner of the land Mariposa Pty Ltd, in which company Mr Hogarth had an interest, to sell the land for $220,000. At the time the land was zoned "coastal rural" for the purposes of the Fingal Planning Scheme. The second and third plaintiffs only agreed to pay that price in the expectation that they could subdivide the land as a residential development. The second and third plaintiffs were not able to finance the purchase or the development of the land themselves and entered into an arrangement with Hobart financiers who were prepared to finance the purchase through their company H and S Properties Pty Ltd. In October 1988 the second and third plaintiffs acquired the shareholding of the first plaintiff with a view to using it for the purpose of purchasing and developing properties such as the subject property.

3. On 31 October 1988 the second and third plaintiffs, Mr Hogarth and Mr Page a member of Zeeman, Kable and Page who were solicitors for the defendant met in Mr Page's office with a view to settling an agreement for the sale of the land. A good deal of discussion took place about various aspects of the contract. During the course of that discussion the second and third plaintiffs asked Mr Page to include words in the contract to the effect that the contract could be completed by a nominee of the purchaser. Mr Page indicated that this was not necessary and a heated discussion ensued. Following telephone discussions between the second and third plaintiffs and Mr Whitehouse, a member of Murdoch Clarke Cosgrove and Drake who were the solicitors for the second and third plaintiffs and H and S Properties Pty Ltd, and between Mr Page and Mr Whitehouse in which Mr Page agreed that the contract could be amended at settlement by adding a reference to a nominee, the contract was signed without any reference to a nominee. By that contract the defendant agreed to sell the subject land to the second and third plaintiffs. The third and fourth lines of the contract then read:

"Hamilton and Andrew McGregor of 43 Quail Street St

Helens in Tasmania (hereinafter called 'the purchaser') of

the other part".

4. Thereafter the following exchange of correspondence took place between Murdoch Clarke Cosgrove and Drake and Zeeman Kable and Page.

Murdoch Clarke Cosgrove and Drake to Zeeman Kable and Page

8 November 1988

"Mariposa P/L

We refer to your letter to us of the 31st October. Our

client wishes to nominate another Purchaser and to save the

necessity of Statutory Declarations etc., our client would

like to amend the Agreement by adding the words "and/or

nominee" after the word "Purchaser" in the appropriate place

on the front page of the Agreement. We return herewith our

copy of the Agreement so that this can be done.

Would you be good enough to let us have it back in due

course."

Zeeman Kable and Page to Murdoch Clarke Cosgrove and Drake

23 November 1988

"Re: Mariposa Pty Ltd to Messrs. A Hamilton and A McGregor

We acknowledge receipt of your letter of the 8th inst. The

matter therein raised will be attended to at or prior to

settlement.

This matter is due for completion on the 30th inst. Please

therefore let us have Transfer for execution."

Murdoch Clarke Cosgrove and Drake to Zeeman Kable and Page

28 November 1988

"re: Mariposa Pty Ltd to Parland Pty Ltd

Subject to search and identification of the land, receipt of

satisfactory Council Certificates, satisfactory answers to

the enclosed Requisitions and any further Requisitions which

may be found to be necessary, we are sending by mail this

day a Transfer for your perusal and if in order for

signature by your client company.

However, as settlement is due on the 30th November, we

forward herewith a copy of the proposed Transfer and request

that you arrange for the preparation and execution of a

Transfer in this form.

Please forward settlement figures to us as a matter of

urgency."

5. On 2 December 1988 the sale was completed and Zeeman Kable and Page handed to the agents of Murdoch Clarke Cosgrove and Drake the completed transfer of the property which showed the defendant as the transferor and the first plaintiff as the transferee together with the contract dated 31 October 1988 with a typed amendment which resulted in the third and fourth lines of the contract reading as follows:

"Hamilton and Andrew McGregor of 43 Quail Street St or their

Nominee Helens in Tasmania/(hereinafter called 'the

Purchaser') of the other part".

That amendment was initialled by the parties in the margin.

6. The first part of cl15 of the contract reads as follows:

"15 In the event that the Purchaser having used his best

endeavours to obtain such rezoning shall not have been

successful in having the Property so rezoned as to permit

the subdivision thereof as a residential development with

three (3) years from the date of completion, then the

Purchaser may by notice in writing to the Vendor require the

Vendor to purchase the Property from the Purchaser upon the

following terms:-"

7. Then followed a list of terms. Clause 15 concluded with the proviso:

"PROVIDED HOWEVER that the right of the Purchaser pursuant

to this clause shall not be capable of being exercised

before the 30th day of November 1990 nor later than the 30th

day of November 1991."

8. I shall hereinafter refer to the right conferred by cl15 as "the repurchase option".

9. Murdoch Clarke Cosgrove and Drake sent the following letter dated 4 December 1990 to Zeeman Kable and Page:

"re; Parland Pty Ltd (A Hamilton and A McGregor) and

Mariposa Pty Ltd - 10.33ha at Falmouth

We enclose herewith a copy of Clause 15 of the Agreement for

Sale in relation to the above matter dated 31st October,

Settlement of our client's purchase was effected on the 2nd

day of December, 1988. Our client has been unsuccessful in

having the property rezoned to permit the subdivision

thereof as residential development. We are therefore

instructed to give notice that our client requires Mariposa

Pty Ltd to purchase the property upon the terms set forth in

Clause 15 of the Agreement dated 31st October, 1988.

Accordingly, completion of the re-purchase shall be due on

the 5th March next.

Our client's application for rezoning was heard at a Public

Hearing on the 17th January, 1990. The application was

dismissed and advice to that effect was given by letter to

our client dated the 5th July, 1990 from the Town and

Country Planning Commissioner's Office.

We remind you that Title particulars to this property are

comprised in Certificate of Title Volume 4160 Folio 37 and

we look forward to the receipt of a Memorandum of Transfer."

Although it was pleaded differently it is now conceded by the plaintiffs and accepted by the defendant that the notice given by that letter was given on behalf of the first plaintiff only and that that is the only notice which was given by anyone pursuant to cl15.

10. The defendant has refused to purchase the property back.

11. The plaintiffs' claim is made in a number of alternative ways but their primary contention is that the first plaintiff "was and remains 'the Purchaser' pursuant to the Contract and entitled to the benefit of the defendant's obligations thereunder remaining after completion". I shall deal with that claim first.

12. In essence the defendant's defence to that claim is that the first plaintiff was not a contracting party and in particular was not "the purchaser" for the purposes of the contract and was therefore not entitled to exercise the repurchase option, that the repurchase option was not effectively exercised by anyone and that the plaintiff or plaintiffs did not use its or their "best endeavours" to obtain the rezoning of the land as required by cl15 of the contract.

13. Counsel for the defendant submits that the first plaintiff did not become a contracting party but should be regarded as no more than an entity nominated by the second and third plaintiffs to be the transferee. Counsel relied upon the following passage from the judgment of Aickin J in Lord v Trippe (1977) 14 ALR 129 at 143:

"It is common enough practice in real estate transactions

for the contract itself to provide that the transfer is to

be made to the purchaser or his nominee, but that gives a

power to substitute or nominate a different transferee, not

a different contracting party. The vendor becomes bound to

transfer to the nominee upon the purchaser paying or

procuring the payment of the purchase money and otherwise

complying with the terms of the contract. Indeed a

purchaser under a contract of sale which contains no such

expression provision may, in the absence of special

circumstances, require the vendor to transfer to some third

party nominated by him. As Jessell MR said in Egmont v

Smith (1877) 6 Ch D 469 at 474: 'An ordinary contract of

sale is not only to convey to the purchaser, but to convey

as the purchaser shall direct.' Moreover, a purchaser under

a contract of sale may, in the absence of special

circumstances, assign his interest in the contract and the

assignee then becomes entitled to all the rights of the

purchaser upon notice being given to the vendor. The vendor

has, in this sense also, a right to nominate a transferee to

take the transfer of the property comprised in the

contract."

Counsel also relied upon the decision in Harry v Fidelity Nominees Pty Ltd (1985) 4 SASR 458 and the following passage at 460 from the judgment of King CJ in that case:

"The initial problem is to determine the legal effect of the

words "and or nominee" in the description of purchaser(s).

The ordinary notion of nominee is a person who is nominated

by another for a purpose: Lord v Trippe (1977) 14 ALR 129,

per Mason J at p 141. But for what purpose was the

respondent authorized to make the nomination? There can be

no doubt that the respondent was bound by the contract

initially. Otherwise the contract would be inoperative;

Vickery v Woods [1952] HCA 7; (1952) 85 CLR 336, per Dixon J at p 343. Is

the effect of the words simply to empower the respondent to

nominate another to take the transfer? If so, it is a usual

and well understood transaction. Indeed without any such

provision a purchaser may nominate another to take the

transfer and the vendor is required to transfer to that

nominee for 'an ordinary contract of sale is not only to

convey to the purchaser, but to convey as the purchaser

shall direct': Egmont v Smith (1877) 6 Ch D 469, per Jessell

MR at p 474; Lord v Trippe (1977) 14 ALR 129, per Aickin J

at p 144. Do the words 'and or nominee' in the description

of purchaser(s) mean any more than that?

Construing the words literally and without reference to the

rest of the contract or to the general law of contract, it

would be possible to attribute to them the meaning that the

respondent is empowered to nominate a purchaser in the sense

of substituting the nominee for the respondent as the

contracting party and of thereby procuring his release from

his obligations under the contract. I suppose that the

location of the words 'and or nominee' in the place provided

for the description of purchaser(s) is some pointer towards

that meaning. The document was prepared, however, in a real

estate and not a legal office and the pointer is therefore

not strong. The notion of a vendor binding himself to

accept an unknown nominee in place of the named purchaser as

the party to whom he must look exclusively for performance

of the contact is unusual. It is not a transaction into

which one would expect a sensible vendor to enter. Indeed

it is by no means clear that such a provision could be made

legally effective. The substitution could only occur if the

nominee subsequently agreed, for fresh consideration or

under seal, to perform the respondent's obligations under

the contract. For the respondent to be released not by

reason of a subsequent novation agreement but by the effect

of the words 'and or nominee' in the original agreement, a

great deal would have to be implied into those words. I

would be most unwilling to construe a contract as containing

a provision of such unusual character and dubious validity

unless the language of the contract was quite clear."

14. Whilst accepting the above statements and also accepting that in this particular case there was evidence of the conveyancing practice referred to in those passages it must be kept in mind that every case must be determined on the basis of the circumstances and terms of the particular contract under consideration.

15. In my view the following circumstances militate in favour of a conclusion that the first plaintiff was not merely the transferee of the property but was a contracting party.

16. The contract was "between ... the vendor of the one part and Andrew Hamilton and Andrew McGregor or their nominee (hereinafter called 'the purchaser') of the other part". Prima facie the effect of those words is that if Hamilton and McGregor did not nominate anyone the contract was between the vendor of the one part and Hamilton and McGregor (thereinafter called "the purchaser") of the other part and that if they did nominate someone then the contract was between the vendor of the one part and the person nominated (thereinafter called 'the purchaser') of the other part. It follows that prima facie the person nominated was a contracting party and that the word "purchaser" refers to the person nominated wherever it appears in the contract. Another internal indication supporting that construction is provided by the fact that the only way in which the rezoning referred to in cl15 could have been achieved was by an objection by the owner or occupier of the property pursuant to the Local Government Act 1962, s727(4). If the defendant's contention is correct and for the purposes of cl15 "the purchaser" should be construed as referring to the second and third plaintiffs notwithstanding that the first plaintiff was nominated as the transferee, the clause would have been unworkable from the beginning because the second and third plaintiffs were not the owners and would not have had standing to lodge the objection which was necessary to achieve the rezoning.

17. If the effect of the words should be regarded as ambiguous extrinsic evidence is admissible to explain them. The parties have without objection tendered and relied upon evidence surrounding the making of the contract and must be taken to have tacitly accepted that extrinsic evidence is admissible to explain or clarify the words in the written contract.

18. Mr McGregor gave evidence that at the discussion on 31 October 1988 there was a "clear indication" that the land would not only be purchased in a company name but that "the contract would be completed in a company name". Mr Hamilton also said that "the contract would be completed in the name of the company" and that he and Mr McGregor "were there to sign as the nominees for the company". Mr Whitehouse gave evidence that he said to Mr Page on 31 October 1988 that "McGregor and Hamilton were not to be the purchasers and that they were fronting for a company". In my view those statements suggest that the role of the first plaintiff was not merely to be the entity in which title was to vest but the party which was to carry forward the contract to completion. Completion of a contract for the sale of land is usually regarded as taking place when the purchaser accepts the vendor's title, the estate is conveyed and the purchase price is paid. But a contract such as the contract in this case which by virtue of cl15 continued to operate and was capable of giving rise to legal obligations after the settlement of the sale from the defendant cannot be said to have been "completed" until the potential operation of cl15 had been exhausted. As Stable J observed in Killner v France (1946) 2 All ER 83 at 86 the meaning to be attributed to the word "completion" is "a complete conveyance of the estate and the final settlement of the business". In the case of this particular contract it could not

be said that "the business" incidental to the transaction was finally settled until the potential operation of cl15 had been exhausted. It is of course clear from the contract that the word "completion" as used in cl15 itself is being used in the more limited sense of completion of the sale from the defendant but that does not detract from the prima facie meaning which should be given to the word when it was being used by the parties in the pre-contractual discussions. Although not decisive in themselves I am more readily able to infer that that is the construction I should put on the contract and the dealings between the parties by virtue of two other considerations. First, save to tender notes made by Mr Page the defendant has not called any evidence about the matter and in particular did not call Mr Page or Mr Hogarth or anyone else to give evidence to rebut the conclusion that those inferences should be drawn. Secondly, the notice to complete the purchase back was not given by the second and third plaintiffs but was given by the first plaintiff and the letters dated 14 March 1991 and 12 April 1991 from Zeeman Kable and Page to Murdoch Clarke Cosgrove and Drake which were sent as a result of that notice were headed respectively "Parland and Mariposa Pty Ltd" and "Parland Pty Ltd and Mariposa Pty Ltd" and neither contained any query or suggestion that the first plaintiff was not entitled to invoke cl15 because it was not a contracting party. Those letters do not comprise part of the contractual dealings between the parties but they could be regarded as implied admissions by the defendant that the first plaintiff was a contracting party which was entitled to exercise the repurchase option. However I do not place undue weight on those letters and I do not overlook the indication in the letter of 12 April 1991 that other matters of defence would be relied upon in addition to the assertion that the plaintiff had not used its best endeavours.

19. The circumstances in this case were different from those which King CJ obviously regarded as being of importance in Harry v Fidelity Nominees Pty Ltd (supra). In this case the nominated purchaser was known to the defendant and there was no question of the defendant having to "look to" the first plaintiff for performance of the contract as the purchase moneys were already in the hands of the solicitors for the defendant when the contract was amended, the contract was not prepared in a real estate office but in a legal office and the circumstances of this case do not persuade me that construing the provisions of the contract so that the first plaintiff became "the purchaser" would result in a contract which could be regarded as of "dubious validity".

20. Counsel for the defendant submitted that there was insufficient evidence to prove that the first plaintiff was in fact nominated by the second and third plaintiff as the purchaser. I find that the second and third plaintiffs intended to nominate the first plaintiff under the contract, that on 30 November 1988 the defendant understood that the second and third plaintiffs had so nominated the first plaintiff and that the transfer tendered by Murdoch Clarke Cosgrove and Drake showed the first plaintiff as the transferee. In the absence of any evidence to the contrary I am prepared to infer that the first plaintiff was nominated by the second and third plaintiffs for the purposes of the contract.

21. I hold that the contract between the second and third plaintiffs and the defendant was varied by substituting the first plaintiff as the party entitled to exercise the repurchase option. Alternatively I hold that the contract between the second and third plaintiffs and the defendant should be regarded as having been discharged and a new contract between the first plaintiff and the defendant substituted therefor.

22. Counsel for the defendant submitted that there was no sufficient evidence that the first plaintiff determined to exercise the repurchase option. Although minutes of a meeting of the first plaintiff have not been produced both Mr Hamilton and Mr McGregor have given evidence that the first plaintiff did so decide to exercise the repurchase option. In the light of that evidence and in the absence of evidence showing that the letter from Murdoch Clarke Cosgrove and Drake to Zeeman Kable and Page dated 4 December 1990 was written without the authority of the first plaintiff I infer that the first plaintiff determined that it should exercise the repurchase option and that it did so by causing that letter to be sent.

23. Counsel for the defendant also submitted that the letter dated 4 December 1990 from Murdoch Clarke Cosgrove and Drake to Zeeman Kable and Page did not constitute "notice in writing to the vendor" as required by cl15. Clause 14 of the contract permitted notices under the contract to be served on Zeeman Kable and Page but the defendant submits that as this notice was not addressed to the defendant it was not a notice to the defendant. In my view as the text of the letter reveals that by it it was intended to "give notice that (the first plaintiff) requires Mariposa P/L to purchase the property" the letter could be construed as being addressed to the defendant. But even if that is not correct I am prepared to infer that the letter of 4 December 1990 was a "notice in writing to the vendor" as required by cl15. Service of the notice of 4 December 1990 could not have been taken by Zeeman Kable and Page or anyone else as being directed to anyone but the defendant. Answers to interrogatories reveal that the letter was in fact transmitted to Mr Hogarth. There was no suggestion from Zeeman Kable and Page that they or the defendant did not regard it as sufficient notice to the defendant and the first plaintiff would have been induced to reasonably believe that it had given good notice. The defendant has not called Mr Hogarth, anyone from Zeeman Kable and Page or anyone else as to the issue. I find that the first plaintiff gave notice in writing to the defendant requiring the defendant to repurchase the land.

24. The first plaintiff's right to require the defendant to repurchase the land depended upon the following conditions in cl15 being satisfied:

1 That the first plaintiff "used (its) best endeavours to

... (have) the property so rezoned as to permit the

subdivision thereof as a residential development."

2 That the first plaintiff was unsuccessful in its attempt

to have the property so rezoned.

3 That the notice to the defendant to repurchase the land

was given between the 30 November 1990 and the 30 November

25. Conditions 2 and 3 having been satisfied the issue is whether condition 1 was satisfied.

26. At the time when the contract was executed the Fingal Municipality had provisionally approved a planning scheme which regulated the use to which the subject land could be put and had also made an interim order which had the effect of zoning the subject land "coastal rural" land upon which subdivision as a residential development would have been prohibited. Subsequently that scheme was provisionally approved by the Town and Country Planning Commissioner. In order to achieve the rezoning of the subject land for the purposes of cl15 the first plaintiff lodged an objection to the scheme with the Town and Country Planning Commissioner pursuant to the Local Government Act 1962, s727(4). That objection was heard and eventually dismissed by a special commissioner who was empowered to exercise the functions of the commissioner. In essence the determination of the issue of whether the first plaintiff used its best endeavours to obtain the rezoning turns on whether it used its best endeavours to pursue that objection.

27. Counsel for the defendant abandoned tentative submissions he initially made raising the question of whether the first plaintiff's objection was competent.

28. The test of what amounts to 'best endeavours" for the purpose of a clause of this kind was discussed by the Full Court of the Supreme Court of Queensland in Hawkins v Pender Bros Pty Ltd (1990) 1 Qd R 135. At 150 Shepherdson J, in whose reasons in respect of this issue the other members of the court concurred, approved the primary judge's view that such a clause imposes an obligation upon the developer to:

"... apply itself conscientiously to the task of securing

approval with the vigour which would be expected if it were

prudently attempting to secure its own interests ...".

Shepherdson J also cited the test propounded by Buckley LJ in IBM United Kingdom Ltd v Rockware Glass Ltd (1980) FSR 335, 343 that such a clause required the covenantors:

"... to take all those steps in their power which are

capable of producing the desired results, namely the

obtaining of planning permission, being steps which a

prudent, determined and reasonable owner, acting in his own

interests and desiring to achieve that result would take

...".

Shepherdson J then referred to the decision of the High Court in Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 and continued at 152:

"In my view, the test stated by Lord Justice Buckley is not

essentially different from that stated in the High Court

although as I have said the High Court was dealing with a

distributorship agreement. The High Court recognises that

the covenantor, while bound to the other contracting party,

must not go beyond the bounds of reason in doing all he

reasonably can in the circumstances to achieve the

contractual object but no more than the contractual object.

If Lord Justice Buckley's test is to be criticised it could

perhaps be because it does not sufficiently emphasise the

aspect of reasonableness.

What I think is clear is this - that in discharging its

obligations the covenantor is not required to act in such a

way that he faces ruin (Terrell v Mabie Todd and Co Ltd

(1952) 2 TLR 575, 575). It is in this area that the

combined aspects of prudence and reasonableness take

effect."

Those passages and the way in which the decision of the primary judge was treated subsequently in the reasons for judgment make it clear that although the test which was being applied was objective in that it applied the standards of a reasonable man, it was also accepted that the covenantor's actions must be viewed in the light of the particular circumstances in which the covenantor was placed. In my view I should adopt the test applied in Hawkins v Pender Bros Pty Ltd (supra) subject to the proviso that a party should not be regarded as having failed to satisfy a condition requiring it to use its best endeavours if that failure was not material to the lack of success of the application in respect of which those endeavours were being used. Authority for that proposition can be found in Nina's Bar Bistro Pty Ltd v MBE Corporation (Sydney) Pty Ltd (1984) 3 NSWLR 613 and Egan v Geraghty (unreported) Court of Appeal Supreme Court of Queensland 16 February 1994. The reference in Hawkins' case at 155 to the fact that the primary judge was:

"... not prepared to find either that it acted in breach of

the clause or that any other way of proceeding would have

brought it to earlier success or indeed success at all'."

suggests that the court in that case also regarded the materiality of the steps taken by a party to the success or failure of an application to be a relevant consideration. In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken. That is not to say however that the reasonableness of a party's endeavours should be judged with the benefit of hindsight. The reasons for a failure to obtain approval would only be relevant insofar as they ought to have been foreseen by that party.

29. Mr Hamilton and Mr McGregor acted for the first plaintiff in its endeavours to achieve the rezoning. They submitted a written form which contained the words:

"OBJECTION - see enclosed letter, report and plan

(Objection to coastal rural zoning - zoning of closed

residential sought in accordance with enclosed development

plan sought.)" (sic)

30. This form was enclosed with a covering letter with which was also enclosed a development plan and a report from Hamilton McGregor Pty Ltd which was strongly supportive of the plan. The main areas covered by that report were: Ownership And Zoning; Location, Land And Surrounds; Existing Use; Potential Land Use; Market Demand And Need. Under a heading "development plan" the following topics were covered: Layout; Roads; Environmental Aspects. The submission was also supported by a geophysical report on soil classification and drainage characteristics and a detailed plan of tree planting.

31. For the purposes of preparing the application Messrs Hamilton and McGregor sought advice from Mr Alex Brownlie who was the planning officer in the Town and Country Planning Commissioner's office responsible for northern Tasmania and who Mr McGregor regarded as the "foremost expert ... at that time" upon whom they could rely. In formulating their application they largely followed his advice. In addition to obtaining Mr Brownlie's advice and preparing the written materials to which I have referred the first plaintiff through Messrs Hamilton and McGregor had discussions with and sought advice from the Council Clerk of the Fingal Council, had discussions with local residents, both individually and at a Community Centre meeting, sank thirty test holes on the property for the purposes of the geophysical report and appeared at the hearing before the special commissioner to argue the case. The special commissioner dismissed the objection for the following reasons:

"Given the slow residential growth rate and the present

availability at Falmouth of land for residential

development, I am not convinced of the need for the rezoning

of the subject land for residential purposes at the present

time. This view is reinforced having regard to the

Council's overall development policy involving substantial

capital investment in sewerage services at Scamander and

having regard also to the apparent strong local opposition

to the rezoning and development of the subject land."

32. The defendant called a town and regional planner who expressed the following opinion about "what chance the application ... had of succeeding and whether any different proposal would have had a greater chance of success".

"In summary, I consider that the proposal for rezoning and

subdivision had little to no chance of success because the

proposed subdivision could not meet the development criteria

and scheme objectives for the zone requested and the

submission for a rezoning was inadequate. This

consideration is made, based on the following rationale.

The submission;

- did not address relevant broader planning issues relating

to landuse and the provision of infrastructure within the

municipality

- did not address the specific objectives of the Fingal

Planning Scheme 1987 or the requirements of the relevant

zones

- did not provide the essential level of services within the

proposed subdivision appropriate to the zone requested and

had development proceeded, the subsequent economic provision

of services normally required with a 'Closed Residential'

Zone would have been difficult to achieve given the proposed

lot density

- was not sufficiently comprehensive in that it did not

include an identification and analysis of all relevant

issues associated with a rezoning, prepared by a qualified

Town Planner and contained no evidence of effective public

consultation and liaison with Council and accordingly was

the subject of considerable local opposition.

...

Advice has also been requested with regard to what the

potential for success might have been should a more

sensitive application have been submitted. It is however,

somewhat difficult to assess in hindsight what Council may

have approved at the time. Certainly, with the introduction

of more stringent assessment requirements inherent in the

Land Use Planning and Approvals Act 1994 and the subsequent

release of serviced and unserviced lots in other areas in

the municipality and along the east coast in general, it

would now be difficult to argue for any rezoning of the

subject land to allow for its residential development. At

the time however, a properly prepared submission for

rezoning to 'Low Density Residential' which addressed the

preceding points and had general public support gained

through consultation may well have succeeded."

As well as relying upon that opinion counsel for the defendant also submitted that the steps taken by the first plaintiff were inadequate in that the plaintiff was not represented by a solicitor at the hearing, it did not engage a town planner, it presented no evidence to rebut an adverse report from the Council's planning consultant Mr Moses and it made no specific representations as to why it should not have to provide the level of services which would be normally required under the proposed planning scheme.

33. In considering whether I am satisfied that the plaintiff used its best endeavours I take into account the following:

1 I have no reason to doubt that Messrs Hamilton and

McGregor on behalf of the first plaintiff used what from

their point of view were their best endeavours. They put a

great deal of time and effort into the submission and on the

evidence there would be no basis for concluding that they

presented what they knew was a defective objection. Insofar

as the test of whether best endeavours have been used is

subjective the condition was amply satisfied.

2 I am not persuaded that the failure to instruct a

solicitor to act for the first plaintiff prejudiced the

objection. The evidence does not show that the objection

was unsuccessful because of any lack of objectivity in its

presentation or any lack of understanding of any matter of

law.

3 Messrs Hamilton and McGregor were most appropriate persons

to represent the first plaintiff. They had extensive local

knowledge and local contacts, they had experience in town

planning and a substantial part of their training as

surveyors involved town planning.

4 In considering Mr Douglas' evidence I take into account:

4.1 that the defects in the submission which he identified

were largely not relevant to the reasons advanced by the

special commissioner for refusing the application;

4.2 that Mr Douglas' opinion was formed without any

knowledge of the steps which had been taken by the first

plaintiff in addition to the written materials it had

prepared;

4.3 that in the end Mr Douglas' opinion amounted to no more

than that a differently prepared submission "which ... had

general public support ... may well have succeeded".

5 The Commissioner's decision was largely based upon

considerations which could not have been overcome no matter

what endeavours the plaintiff used. The plaintiff did take

steps to consult and discuss its objection with local

residents and in any event there was no guarantee that the

"local opposition" could have been overcome no matter how

persuasive the plaintiff was. Nothing the first plaintiff

could have done could have overcome the considerations that

the growth rate in the area was slow and that enough land

was already available for residential development.

6 I have no reason not to conclude that Messrs Hamilton and

McGregor used their best endeavours to effectively present

the first plaintiff's objection at the hearing. I am more

ready to make that finding by virtue of the fact that the

defendant called no evidence to suggest the contrary

notwithstanding that Mr Hogarth was present at the hearing

and would have been able to give evidence as to how

effective was their presentation.

7 The first plaintiff sought and acted upon the advice of Mr

Brownlie who was on evidence which was not challenged "the

foremost expert" in the field available to the plaintiff.

That consideration together with the evidence of the steps

which the plaintiff took to advance the objection are in my

view arguably sufficient by themselves to show that the

first plaintiff used its best endeavours.

34. I am satisfied that the plaintiff used its best endeavours to obtain the rezoning referred in cl15.

35. I find that the defendant was obliged to repurchase the subject land. The defendant accepts that there are no reasons why specific performance should not be ordered in the exercise of my discretion and indeed both parties agree that such an order would provide the most appropriate remedy.

36. I order that cl15 of the contract in writing referred to in par8 of the Statement of Claim whereby the defendant agreed to purchase the property referred to therein from the first named plaintiff be specifically performed and carried into execution.