Plaintiff v Defendant

Supreme Court of Victoria|2005-06-23|Before: Hargrave, J

SALE OF LAND - Purchaser's statutory right to avoid contract of sale - Rescission by purchaser - Whether vendor entitled to relief from avoidability - ss.6, 14 Sale of Land Act 1962 (Vic).

CONTRACT - Rectification - One party to a contract a deregistered corporation - Whether deregistered corporation a necessary party to rectification proceeding - Assignment of benefit - Whether assignment agreement manifested intention to effect immediate assignment or mere intention to assign at a later unspecified date - Specific performance - Equitable assignment - Assignor a deregistered corporation - Whether assignor a necessary party to proceeding.

1 In October 1990, the plaintiff, Heather Jenkins ("Mrs Jenkins"), was the owner of a property in Kooweerup Road, Yellingbo on which she, together with her husband Tom Jenkins ("Mr Jenkins"), conducted a reception centre and restaurant business known as "Camelot Castle". For convenience, I will call the land and improvements thereon "Camelot Castle".

2 In October 1990, Frantisek (Frank) Olgyay ("Mr Olgyay") and his wife Helena Olgyay ("Mrs Olgyay") were, through their company, Visualeyes Pty Ltd ("Visualeyes"), entitled to be registered as the proprietors of three unimproved blocks of land in Daniella Court, Rye in the State of Victoria ("the Rye land").

3 In October 1990, George Nagy ("Nagy"), a real estate agent and good friend of Mr and Mrs Olgyay, suggested to Mr and Mrs Olgyay that they should join him in purchasing Camelot Castle and then conducting the reception centre and restaurant business. Following inspections of Camelot Castle by Mr and Mrs Olgyay and Nagy, and certain negotiations, an agreement was reached between Mr and Mrs Jenkins on the one hand and Mr and Mrs Olgyay and Nagy on the other, to the effect that:

(1) Mrs Jenkins would sell nine-tenths[1] of her interest in Camelot Castle to Visualeyes, a company representing the interests of Mr and Mrs Olgyay, and Charnock Properties Pty Ltd ("Charnock"), a company representing the interests of Nagy. The purchase consideration was $1,520,000.

(2) In lieu of the payment of a cash deposit by Visualeyes and Charnock, it was agreed that Visualeyes would transfer the Rye land to a company associated with Mr and Mrs Jenkins, Condor Pacific Consolidated Ltd ("Condor"). A notional value of $300,000 was put on the Rye land for the purpose of calculating the amount of the deposit and the balance of purchase moneys payable in order to complete the sale transaction (the "deposit agreement").

4 By a contract of sale in writing dated 30 October 1990, Mrs Jenkins sold nine-tenths of her interest in Camelot Castle to Visualeyes and Charnock for the sum of $1,520,000 (the "Camelot contract"). The Camelot contract provided that a deposit of $300,000 was payable and had been paid, leaving a balance of $1,220,000 which was payable on 1 April 1992, some 17 months later. In the meantime, possession was to be given to Visualeyes and Charnock as purchasers.

5 By a contract of sale in writing dated 30 October 1990, Visualeyes sold the Rye land to Condor for the sum of $300,000 (the "Condor contract"). The Condor contract stated that the purchase consideration of $300,000 had been paid.

6 The Camelot contract and the Condor contract were drawn up by Nagy and contained a number of deficiencies. In particular, although the Condor contract reflects the deposit agreement, the Camelot contract does not expressly do so.

7 Following the execution of the contracts of sale and associated documentation, Mr and Mrs Jenkins and their family moved out of Camelot Castle into rented accommodation in Doncaster. Mr and Mrs Olgyay and their daughter, Yvette Olgyay, moved into Camelot Castle and, with assistance from Nagy, commenced operating the reception centre and restaurant business.

8 At this time, no money had changed hands and the Rye land was yet to be transferred to Condor on behalf of Mrs Jenkins. The contract of sale of the Rye land provided that Visualeyes, which had provided an executed transfer of land, was required to provide the titles to the Rye land within a period of nine calendar months.[2] In respect of the sale of Camelot Castle, the balance of the purchase consideration, a sum of $1,220,000, was due to be paid on 1 April 1992.

9 Things did not go according to plan. In about April 1991, Mr and Mrs Olgyay, Yvette Olgyay and Nagy vacated Camelot Castle. On 7 May 1991, they purported to rescind the contract of sale of Camelot Castle for non-compliance with s.6 of the Sale of Land Act and also for fraudulent misrepresentation. The Sale of Land Act issue is pursued. The fraudulent misrepresentation assertion is not. Visualeyes contends that, as it and Charnock validly rescinded the Camelot contract, it is no longer obliged to complete the Condor contract and transfer the Rye land in satisfaction of the deposit due under the Camelot contract.

10 Mrs Jenkins contends that the rescission by Visualeyes and Charnock of the Camelot contract was wrong in law and amounted to a repudiation of the Camelot contract. She alleges that Condor, which was deregistered on 24 June 1993 and is not a party to this proceeding, assigned all of its rights to her prior to its de-registration. Accordingly, Mrs Jenkins is entitled to treat the deposit payable in respect of the Camelot contract, constituted by the agreement of Visualeyes under the Condor contract to transfer the Rye land to Condor, as forfeited. Mrs Jenkins alleges that she is entitled, as assignee of all of Condor's rights, to specific performance of the Condor contract or alternatively to a declaration that Visualeyes holds the Rye land on a constructive trust for her.

11 Although named as a defendant on the writ and subsequent court documents, Charnock was de-registered in 1993 and has not been re-registered and served. It is not a party to this proceeding and Visualeyes is the only defendant. Nagy, who was in control of Charnock at all relevant times, did not give evidence.

12 The oral evidence in the proceeding occupied more than five days. In large part, this was due to the fact that the events in question took place some 14 years ago, all witnesses reconstructed much of their evidence, not all documents were available and, in some cases, the integrity of some documents was in question. Furthermore, a great deal of time was taken pursuing collateral credit issues, especially in cross-examination of Mr Jenkins.

13 In the end, the factual issues became very narrow.

14 The critical factual issue in the proceeding is the determination of the time at which Condor executed the documents by which it sought to assign its interest as purchaser under the Condor contract to Mrs Jenkins. The relevant documents are dated 31 December 1991. The plaintiff submits that they were executed on or about that date and, in any event, no later than the time at which Condor was deregistered on 24 June 1993. On behalf of the defendant, it is contended that I should find that the assignment documents were not executed until after Condor was deregistered. Accordingly, the assignment documents were therefore ineffective to assign anything to Mrs Jenkins and she cannot succeed in her case to enforce the Condor contract.

15 On behalf of the defendant, it is also argued that the assignment documents, even if executed before Condor was deregistered, are ineffective at law to constitute an assignment of Condor's rights under the Condor contract to Mrs Jenkins.

16 The remaining factual issues relate to the claim by Visualeyes that it and Charnock validly rescinded the Camelot contract. In this regard, the critical issue is the amount secured by the mortgage granted by Mrs Jenkins to the National Australia Bank over Camelot Castle, which mortgage was to remain in place until completion of the transaction in April 1992.

17 It is first necessary to note that, although Mrs Jenkins is the plaintiff in this proceeding, all of the business decisions relevant to this dispute were, on the part of Mrs Jenkins, effectively made by Mr Jenkins. It was said in evidence that Mr Jenkins consulted her about all of the business decisions made in her name, and about all of the documents which she signed, and I do not doubt that this was so. However, this does not diminish the underlying truth. Mr Jenkins made all of the relevant business decisions at issue in this proceeding on behalf of Mrs Jenkins and Mrs Jenkins signed, or prepared, documents according to the wishes and directions of her husband. She trusted her husband who, she said in evidence a number of times, she believed was experienced in business matters.

18 In the years leading up to the events in question, it appears that Mr Jenkins was involved in the business of buying and selling properties. The Jenkins family lived at 96 Springvale Road, Donvale (the "Springvale Road property"). In addition to the principal house at the Springvale Road property, there was a large tract of land. Mr Jenkins gave evidence that he owned the land and that he intended to sub-divide it and to build homes on it. For this purpose, he arranged for Condor to obtain a builder's licence. However, as events transpired, prices for vacant land were high and he determined to sell the lots which had been sub-divided in an undeveloped state.

19 With the decision to sell the Springvale Road property in an undeveloped state, it appears that Mr Jenkins looked around for a new project. In any event, in 1988 Mr Jenkins identified Camelot Castle as the next business project for the Jenkins family.

20 For reasons which are not clear from the evidence, and which do not matter, it was decided to purchase Camelot Castle in the name of Mrs Jenkins. This was done and, shortly prior to Christmas 1988, the Jenkins family moved into Camelot Castle and commenced conducting a reception centre and restaurant business from those premises. In addition, a substantial project of renovating and extending the existing Camelot Castle buildings was undertaken. The work was undertaken by Condor, which held a building licence, and was funded by Mrs Jenkins and another company related to the Jenkins family, Jencor Holdings Pty Ltd ("Jencor").

21 Although the evidence on the issue is confusing and unsatisfactory, there seems little doubt that the moneys which were advanced to Condor to enable it to conduct the renovations and extensions were, to a substantial extent, borrowed by Mrs Jenkins and Jencor and, by reason of guarantees, became secured by the mortgage given by Mrs Jenkins over Camelot Castle to the National Australia Bank (the "NAB mortgage").

22 Unfortunately, no party sought to adduce into evidence any contemporaneous record which would have disclosed the extent of the amount secured by the NAB mortgage given by Mrs Jenkins to the National Australia Bank over Camelot Castle. I note in particular that the defendant, who bore the onus of proof in respect of establishing non-compliance with s.6 of the Sale of Land Act, did not seek to obtain the relevant documentary proof from the books of account of the National Australia Bank. A subpoena to produce documents would or might have resulted in production of documents evidencing this important fact.[3]

23 In his evidence, Mr Jenkins said he believed that all of the moneys which had been advanced for the purposes of the renovations and extensions became, in one way or another, secured by the NAB mortgage. However, Mr Jenkins could only give broad-ranging estimates of the amount secured by the NAB mortgage at the time of the Camelot contract. These estimates ranged between $500,000 and $700,000. It is clear that Mr Jenkins was doing the best that he could from memory and reconstructing on the basis of the amount borrowed to purchase Camelot Castle in the first place, the amount borrowed to finance its renovation and extension, the extent to which funds for the extensions were contributed from available monies on hand, and taking repayments into account. This evidence is confusing and inconsistent. However it is all of the evidence which I have before me on this issue.

24 I intend to act on the evidence of Mr Jenkins as to the amount secured by the NAB mortgage at the time of the Camelot contract. I do so because, notwithstanding its uncertainty, it involved Mr Jenkins making concessions against the interests of his wife and, at least in this regard, he appeared to me to be doing the best he could to remember how much was owing to the National Australia Bank at the relevant time. Accordingly, I find that the amount secured by the NAB mortgage at the time of the Camelot contract was somewhere between $500,000 and $700,000.

(2) Mr and Mrs Olgyay, George Nagy and the Rye land

25 Mr and Mrs Olgyay emigrated to Australia from Czechoslovakia in 1968. They went back to Czechoslovakia for a short time but have lived in Australia continuously for nearly 30 years. Mr Olgyay is a spectacle maker by trade and conducted a spectacle making business in Barkly Street, St Kilda and subsequently, Acland Street, St Kilda.

26 Nagy is also a Czech national. He conducted a real estate business in Barkly Street, St Kilda near the Olgyay's business. Mr and Mrs Olgyay met Nagy and became good friends. Mrs Olgyay said that she and her husband trusted Nagy because he was a good friend, and because he was a Jehovah's Witness "and they never lie".

27 By 1990, Mr and Mrs Olgyay had purchased some land at Labrador in Queensland. They were unable to keep up the mortgage payments. In this context, Nagy introduced Mr and Mrs Olgyay to Frank Romeo of Frank Romeo & Associates, solicitors. Mr Romeo said that he would "take over the mortgage repayments" in respect of the Labrador property in exchange for transferring the Rye land to Mr and Mrs Olgyay.

28 As a result, by contract of sale dated 15 October 1990, Ferlow Nominees Pty Ltd (a company associated with Mr Romeo) sold the Rye land to Visualeyes for a stated purchase consideration of $120,000 (the "Ferlow contract"). Settlement was stated to be 25 January 1991 or within seven days of the approval of the relevant plan of subdivision, whichever was the later. It would appear that no money changed hands, with the $120,000 being satisfied by the transfer of the Labrador land to Mr Romeo or a company associated with him.

29 Next, Nagy approached Mr and Mrs Olgyay with an idea. He said that he had something interesting for them to look at, involving a reception centre. He said it was hard to explain and that Mr and Mrs Olgyay should go and have a look. Mr and Mrs Olgyay, accompanied by Nagy, inspected Camelot Castle and, as a result of negotiations conducted principally between Nagy and Mr Jenkins, the Camelot contract and the Condor contract were drawn up and signed.

30 According to Mr and Mrs Jenkins, the Camelot Castle business was running profitably when, in about mid-1990, Nagy approached Mr Jenkins and enquired whether Camelot Castle was for sale. I accept this evidence. There is some evidence of a prior contact between Mr Jenkins and Nagy, but it was not explored in evidence. It does not appear to have been anything other than a passing dealing, at its highest.

31 There was some evidence about the negotiations which followed and which culminated in the execution of the Camelot contract and the Condor contract. In particular, there was dispute as to the extent of the involvement of Mr and Mrs Olgyay in the negotiations. I do not intend to canvass this evidence or resolve this dispute. In my view, it is irrelevant in circumstances where it is common ground between the parties that, whatever involvement Mr and Mrs Olgyay had in the negotiations, the deposit agreement was reached prior to the execution of the contracts. I find that it was the common intention of Mr and Mrs Jenkins, Nagy and Mr and Mrs Olgyay that Visualeyes would convey the Rye land to Condor (as nominee of Mrs Jenkins) in lieu of the stated deposit in the Camelot contract of $300,000.

32 The uncontested evidence was that it was Nagy who suggested to Mr and Mrs Jenkins that it would be wise for them to put the Rye land into a corporate vehicle rather than to transfer it into the personal name of Mrs Jenkins, notwithstanding that Mrs Jenkins was the vendor of Camelot Castle and entitled to the deposit. As a result, Condor was put forward by Mrs Jenkins as the transferee of the Rye land.

33 As I have said, the uncontested evidence, which is supported by objective facts, is that all parties intended that the stated deposit of $300,000 under the Camelot contract would be satisfied by Visualeyes transferring the Rye land to Condor (effectively as nominee of Mrs Jenkins) for a stated consideration of $300,000. No money was to change hands and none did.

34 In fact, the Camelot contract does not reflect the deposit agreement. As to the deposit, it provides:

"DEPOSIT of $300,000 by 30.10.1990 (of which $300,000 has been paid)."

35 On the other hand, the Condor contract does (albeit in a clumsy way) reflect the deposit agreement. Special Condition A of the Condor contract provides:

"A. This sale is subject to and conditional upon the Purchaser accept the above land, namely Lot 9-10-11 Daniella Court, Rye as full deposit for Camelot Castle, Kooweerup Road, Yellingbo."

36 There is a claim by Mrs Jenkins for rectification of the Camelot contract. It is alleged that the Camelot contract should be rectified to give effect to the deposit agreement. As appears hereafter, I am satisfied that rectification should be ordered by replacing the provision of the Camelot contract concerning the deposit, set out above, with the following provision:

"That the deposit of $300,000 be paid by a transfer from Visualeyes Pty Ltd to Condor Pacific Consolidated Ltd of Lots 9, 10 and 11 Daniella Court, Rye by 30 July 1991 in accordance with the written contract between Visualeyes Pty Ltd as vendor and Condor Pacific Consolidated Ltd as purchaser dated 30 October 1990."

37 Apart from the rectification issue, there are a number of respects in which it is contended on behalf of Visualeyes that the Camelot contract and the Condor contract are uncertain and unenforceable. I do not accept these submissions. I will not interrupt this factual account to deal with the relevant aspects of the contracts which are alleged to be uncertain. These uncertainty arguments are considered separately hereafter.

38 Mr Jenkins was concerned that the certificates of title to the Rye land were not available prior to the Jenkins family vacating Camelot Castle. He wanted some proof that Visualeyes was in fact able to transfer the Rye land to Condor. As a result, he was shown a copy of the Ferlow contract. Furthermore, Visualeyes executed a transfer of land in respect of the Rye land in favour of Condor and provided it to Mr and Mrs Jenkins at or about the time of the Condor contract. This was also dated 30 October 1990.

(4) Sale of Land Act Issues

39 A statement pursuant to s.32 of the Sale of Land Act was prepared in respect of the Camelot contract. A defence has been raised by Visualeyes under s.6 of that Act. Sections 6(1) and 6(2) apply to a "terms contract" for the sale of land where the land is subject to a mortgage. The Camelot contract was a terms contract because Visualeyes and Charnock were entitled to possession of the land before they became entitled to a transfer of land. Accordingly, ss.6(1) and 6(2) were applicable. They provided at the relevant time:

"6(1) Where land is subject to a mortgage the mortgagor shall not sell the land under a terms contract unless the mortgage relates only to that land and the contract provides that the consideration for the sale of the land shall be satisfied, to the extent of any mortgage money owing at the date upon which the purchaser is entitled to possession or receipt of the rents and profits of the land sold, by the purchaser assuming as from that date the obligations of the mortgagor under the mortgage.

(2) Where land is subject to a mortgage, the mortgagor shall not enter into a terms contract which relates to that land unless the contract expressly states that the land is subject to a mortgage or mortgages and gives the particulars specified in Schedule 1 of such mortgage or mortgages."

"(3) Any terms contract entered into in contravention of any of the provisions of this section shall be voidable by the purchaser at any time before the completion of the contract..."

Section 14(1) of the Act provided at the relevant time:

"14(1) Except where otherwise expressly provided any terms contract which is entered into in contravention of any of the provisions of this Act shall be voidable by the purchaser at any time before completion of the contract and any person who has paid any money under such agreement shall be entitled to recover the same: Provided that a terms contract shall not be voidable by the purchaser if a court is satisfied that the vendor has acted honestly and reasonably and ought fairly to be excused for the contravention and that the purchaser is substantially in as good a position as if all the relevant provisions of the Act had been complied with."

40 There is an issue as to whether the s.32 statement forms part of the Camelot contract. In this regard, the Camelot contract expressly states that the vendor's statement required by s.32 of the Sale of Land Act "is attached to, and included in, this Contract Note." Whether or not the s.32 statement was in fact annexed, it was expressly incorporated by reference in the Camelot contract and forms part of it. In any event, given that it is conceded that the Camelot contract, including the s.32 statement, does not comply with s.6 of the Sale of Land Act, nothing turns on this issue.

41 It is common ground that the Camelot contract did not give all of the particulars specified in Schedule 1 to the Sale of Land Act. In particular, it is contended on behalf of Visualeyes that the s.32 statement incorrectly stated the amount secured by the NAB mortgage.

42 The s.32 statement relevant to the Camelot contract has been prepared on an out-of-date form. It is the version published by the Law Institute of Victoria, the Real Estate Institute of Victoria and the Victorian Stock Agents' Association in December 1987. It does not reflect amendments made to the Sale of Land Act, and to Schedule 1, in 1989. This explains a number of the deficiencies in the s.32 statement, insofar as compliance with s.6(2) of the Sale of Land Act is concerned.

43 The s.32 statement for the Camelot contract provided as follows in respect of the NAB mortgage:

Particulars of any mortgage/s (registered or unregistered) -

* which is/are not to be discharged by settlement,

* OR voluntarily supplied by the vendor pursuant to s.27(3) of the Act (optional) -

*(d) Particulars of any unremedied default/s are as follows - Nil."

The form states "*Delete as appropriate wherever *(where an asterisk) appears."

44 As I have stated, I find that the amount secured by the NAB mortgage at the time of the Camelot contract was between $500,000 and $700,000. Accordingly, the particulars given in paragraphs 1(b) and (c) of the s.32 statement are incorrect.

45 Whilst Mr and Mrs Jenkins were still in possession of Camelot Castle, there was discussion between Mr Jenkins and Nagy concerning the lengthy settlement period for the Camelot contract and the possible need for Mr and Mrs Jenkins to raise further funds on the security of Camelot Castle in the period before settlement. Against this background, a document titled "CONSENT TO MORTGAGE" was drawn up and executed (the "consent to mortgage"). The evidence is unclear as to who prepared the consent to mortgage. It provides:

Charnock Properties Pty Ltd and Visualeyes Pty Ltd being the purchasers of Lot 72E Volume 9862 and Folio 101 hereby consent to Heather Jenkins being the registered owner of title Volume 9862 and Folio 101 at her own discretion to encumber or to mortgage the property whether it is 1st or second mortgage for fundraising purposes over the term of the contract dated 30/10/1990 with the proviso that any mortgage 1st or second, does not exceed the purchase price and that the registered owner being Heather Jenkins will clear the debt on settlement and provide a clear title to Charnock Properties Pty Ltd and Visualeyes Pty Ltd so settlement can take place."

46 The consent to mortgage bears the common seals of Charnock and Visualeyes and has been signed by Mrs Jenkins.

47 Although executed after the Camelot contract, and thus not relevant to s.6 of the Sale of Land Act, the consent to mortgage is of considerable relevance to the issues arising under s.14 of the Sale of Land Act.

48 Some weeks after the documents were signed, Mr and Mrs Jenkins and their family moved out of Camelot Castle and moved into rented accommodation in Runymede Street, Doncaster. Mr and Mrs Olgyay and their daughter Yvette moved into Camelot Castle and, together with Nagy, commenced conducting the reception centre and restaurant business.

49 Yvette Olgyay moved into Camelot Castle but did not work full-time there. She had other full-time employment and helped out as a waitress at Camelot Castle in the evenings and on weekends. Yvette Olgyay said that she did not want to become involved full-time in working at Camelot Castle, and this situation did not change when her father had a stroke in February 1991.

50 On 13 February 1991, Mr Olgyay suffered a stroke. He was severely impaired and required hospitalisation and then extended rehabilitation. It was clear that he would never be able to work at Camelot Castle again.

51 On 7 April 1991, Mrs Olgyay left for Czechoslovakia to sort out some personal family business relating to land which was previously owned by her family and had been seized by the communist government. Mrs Olgyay did not return to Australia until 7 May 1991.

52 In April 1991, Nagy sought legal advice as to whether Visualeyes and Charnock could avoid their obligations under the Camelot contract. He consulted Roberts & Roberts, solicitors. By letter dated 26 April 1991, Roberts & Roberts wrote to Mr Nagy confirming verbal advice to him that the Camelot contract was voidable by Visualeyes and Charnock because of non-compliance by Mrs Jenkins with ss.6(1) and 6(2) of the Sale of Land Act. The letter also advised that there may be a case against Mrs Jenkins for fraudulent misrepresentation as to the size of the buildings at Camelot Castle but that such a case was likely to fail. The letter concluded by seeking written instructions from both Visualeyes and Charnock before taking the "drastic step" of serving a notice of rescission of the Camelot contract.

53 Following the Roberts & Roberts letter, Visualeyes and Charnock each executed a written authority to Roberts & Roberts directing that firm to terminate the Condor contract for breach of the Sale of Land Act and on the grounds of fraudulent misrepresentation. The authority is undated, but was obviously executed on or before 7 May 1991. On 7 May 1991, Roberts & Roberts wrote to Mrs Jenkins giving notice on behalf of Visualeyes and Charnock that they rescinded the Camelot contract on the grounds of non-compliance with the Sale of Land Act and fraudulent misrepresentation ("the rescission notice"). The rescission notice did not state what provision of the Sale of Land Act was relied upon or give any particulars of the alleged fraudulent misrepresentation.

54 The written authority to Roberts & Roberts bears the common seal of Visualeyes and, adjacent thereto, the signature of Yvette Olgyay as a director. It would appear that Mr Olgyay has signed as secretary. However, it is apparent from the evidence of Yvette Olgyay that she was the one who made the decision to execute the authority instructing Roberts & Roberts to rescind the Camelot contract.

55 As I have said, on 7 May 1991, Roberts & Roberts wrote on behalf of Visualeyes and Charnock and rescinded the Camelot contract. Also on 7 May 1991, Mrs Olgyay returned from Czechoslovakia. She was surprised when she was collected at the airport by Yvette and Mr Olgyay and then driven from the airport to a property in Rosebud, and not to Camelot Castle. Obviously enough, she had no involvement in the decision to instruct Roberts & Roberts to terminate the Camelot contract. Nor, it would appear, did Mr Olgyay have any real involvement in this decision.

56 Although it does not matter as a matter of law, the inference is clear that the Olgyays and Nagy decided in early 1991 to see if they could get out of the obligations to complete the Camelot contract and the Condor contract. I infer that they were not making a success of running the business at Camelot Castle and, in any event, the stroke suffered by Mr Olgyay, coupled with the reluctance of Yvette Olgyay to work at Camelot Castle on a full-time basis, made continuing that business impractical and uneconomic.

57 There was much evidence, and in particular cross-examination as to credit, concerning the extent of the knowledge of Mr and Mrs Jenkins, in particular Mr Jenkins, that the Olgyays and Nagy had vacated Camelot Castle prior to the service of the rescission notice on 7 May 1991. Apart from credit issues, nothing turns on this. The fact is that Mr and Mrs Jenkins knew of the rescission notice and instructed solicitors to seek further particulars of the grounds of rescission. None were forthcoming. Further, I infer in response to the rescission notice, a caveat was lodged on behalf of Condor over the Rye land on 8 July 1991 (the "Condor caveat").

58 There was evidence about Mr Jenkins seeking to telephone Camelot Castle in about mid-1991 and, after the phone rang out, Mr and Mrs Jenkins (together with one or more children) driving to Camelot Castle and then discovering, for the first time, that the Olgyays and Nagy had vacated it. Both Mr and Mrs Jenkins said that Camelot Castle had been left in a poor state of repair, making it difficult for them to re-enter possession and immediately resume conducting the Camelot Castle business. In the end, nothing turns on this evidence. It seems that it was only raised as to credit issues or, perhaps, in some unspecified way to the alternative claim of Mrs Jenkins framed in constructive trust.

59 In November 1991, proceedings were issued in this Court on behalf of Condor against Visualeyes. The proceeding sought specific performance of the Condor contract (the "Condor proceeding").

60 Visualeyes prepared its own notice of appearance in the Condor proceeding. It stated that its address for service was 79 Laura Street, Knoxfield, Victoria.

61 A defence was filed to this proceeding on 19 December 1991. Thereafter the proceeding was not prosecuted. On 7 December 1999 it was dismissed pursuant to Rule 34.05 of Chapter 1 of the Rules of this Court.

62 The events which occurred next are critical to the resolution of this proceeding. There are three documents dated 31 December 1991 which evidence an intention on the part of Condor to assign all of its assets, including its rights under the Condor contract, to Mrs Jenkins. On behalf of Visualeyes, it is contended that I should find that, on the balance of probabilities, these documents were in fact signed well after 31 December 1991 and after Condor was de-registered.

(1) an agreement expressed to be made on the 31st day of December 1991 between Condor and Mrs Jenkins (the "assignment agreement");

(2) a "Sale of Real Estate Nomination Form" whereby Condor purported to nominate Mrs Jenkins as purchaser under the Condor contract ("the nomination");

(3) a "Purchaser's Declaration" under the Stamps Act 1958 in connection with the nomination ("the purchaser's declaration").

64 Both Mr and Mrs Jenkins said that the three assignment documents were signed at or about the date which they bear. They said that the assignment agreement, the nomination and the purchaser's declaration were all signed on the one day. However, cross-examination revealed that Mr and Mrs Jenkins were themselves relying upon a presumption as to regularity. If the documents were dated 31 December 1991 then that is when they would most likely have been signed.

65 I find that neither Mrs Jenkins nor Mr Jenkins has an independent recollection of the day on which the assignment documents were signed. However, I accept their evidence that the three documents in question were all signed on the one day.

66 The assignment agreement is a curious document. Although Mr Jenkins said that he had advice from his solicitor, Marcel Alter, as to what should go into such an agreement, it is likely that the document was prepared by Mr Jenkins himself. It is a most unsatisfactory document. However, when it is read together with the nomination and the purchaser's declaration its intent is, in my view, clear enough. It is necessary to set out the whole of the document:

One thousand nine hundred and ninety one B E T W E E N

CONDOR PACIFIC CONSOLIDATED LTD of c/o T. & H. Jenkins 96 Springvale Road, Donvale in the State of Victoria (hereinafter called ('Borrower') of the one part and HEATHER JENKINS of 96 Springvale Road, Donvale in the State of Victoria (hereinafter called 'The Sole Secured Creditor') or Lender of the second part

AND WHEREAS Condor Pacific Consolidated Ltd is the owner of a business building and selling of property and any other potential business and selling of property and any other potential business acquisitions under the name of Condor Pacific Consolidated Ltd in Australia (hereinafter called 'The Business')

AND WHEREAS Condor Pacific is currently in some financial difficulties in repaying back its loan to Heather Jenkins ('Sole Secured Creditor') or Lender

AND WHEREAS Heather Jenkins has provided to it a loan totalling $250,000.00 repayable back by 31st December 1991

AND WHEREAS Condor Pacific Consolidated Ltd has agreed to and in pursuance to monies made available by Heather Jenkins to Condor Pacific Consolidated Ltd in the form of a loan and in the amount of $250,000.00 the Company hereby agrees to assign all rights and interests in the Business including registered name, trade marks, art works, equipment, and stock as stated in the meeting of 31st December 1991. This will also include any transaction carried out in the past or in the future by the Company, to be deemed as property of Heather Jenkins, and of which it will now state that all interest held by the Company will be assigned over to Heather Jenkins who also will continue to prosecute any action past or present with all due diligence and all proceeds or assets recoverable will be transferred exclusively to Heather Jenkins.

1. Condor Pacific Consolidated Ltd will transfer to Heather Jenkins all its rights titles and interests in the Business and assets which will hold or is holding.
2. The above transfers will be in full lieu of monies outstanding to date which have been borrowed by the Company.
3. Condor Pacific Consolidated Ltd warrants that at all times while trading it only had one 'Secured Creditor' which is and was Heather Jenkins.

IN WITNESS WHEREOF the parties hereto have set their hands and seals the day and year first hereinbefore written.

THE COMMON SEAL of CONDOR PACIFIC CONSOLIDATED LTD )

67 The assignment agreement was executed on behalf of Condor by its common seal being affixed in the presence of Mr Jenkins and Irene Giannakos. Ms Giannakos was a director and secretary at the time. Mr Jenkins was neither. He had resigned as a director in 1986. It would appear that the view was taken that Mrs Jenkins should not sign as a director of Condor as she was the assignee under the document. There was nothing preventing her from signing in both capacities, but she did not do so. An issue is raised as to whether, as a result, the assignment agreement is ineffective. For reasons appearing hereafter, I do not believe that this is the case.

68 The nomination suffers from a similar defect. Mr Jenkins has signed on behalf of Condor. Once again, I do not believe that anything turns on this.

69 Under the terms of the nomination, Condor as purchaser nominates Mrs Jenkins as nominee in respect of the Condor contract. The nomination is clearly prepared on the mistaken basis that there is a right of nomination contained in the Condor contract. In fact, there is none. However, the nomination is still of great significance in this case. Although it is not, by itself, sufficient to give Mrs Jenkins an entitlement to specific performance of the Condor contract if it is otherwise enforceable, in the absence of Condor as a party, the nomination is nevertheless an important piece of objective evidence surrounding the assignment agreement. As appears hereafter, I believe that I am entitled to have regard to the nomination and its terms, and to the evidence that it was executed at the same time as the assignment agreement, in considering whether the assignment agreement constitutes an effective assignment of Condor's rights under the Condor contract to Mrs Jenkins.

70 The nomination identifies the Condor contract in the handwritten section of it. This is in the handwriting of Mrs Jenkins. The mistaken reference to the vendors being both Visualeyes and Charnock, rather than just Visualeyes, is of no significance. It is an obvious error.

"As the property is expressed as sold to the Purchaser 'or Nominee' then pursuant to the conditions of the contract the Purchaser Nominates the Nominee as substitute purchaser to take a transfer or conveyance in lieu of the Purchaser.

The Purchaser and the Nominee acknowledge that they are jointly and severally liable for the due performance of the obligations of the Purchaser under the Contract and the payment of any expenses resulting from this nomination (including any Stamp Duty)."

72 The purchaser's declaration is also important as a piece of objective contemporaneous evidence which may be of assistance in construing the assignment agreement. It is obviously a standard form of declaration, intended to ensure that double stamp duty is not payable where a nominee takes a conveyance under a contract of sale.

73 The purchaser's declaration appears to have been signed before someone independent. It is not a document between Mr and Mrs Jenkins, as are the assignment agreement and the nomination. However, the Justice of the Peace who witnessed the declaration was not called to give evidence. Indeed, his identity could not be recalled, other than it was thought he was an accountant. Mrs Jenkins did say, however, that she recalled that the purchaser's declaration was signed (declared) by her on the same day as the assignment agreement and the nomination. I accept this evidence.

74 The material part of the purchaser's declaration is paragraph 1. It provides:

"By agreement made with the Nominee prior to the date of the abovementioned Contract I was orally appointed as Agent to execute this Contract."

75 Although Condor may not have been, strictly speaking, the agent of Mrs Jenkins in connection with the Condor contract, it was her nominee or "vehicle". It was not put to her in cross-examination that her declaration was false.

76 The "above mentioned Contract" referred to in paragraph 1 of the purchaser's declaration is a reference to the contract described in the document by Mrs Jenkins completing, in her handwriting, the essential particulars of the Condor contract. I set these particulars out hereunder, with the handwritten portion completed by Mrs Jenkins in italics:

"VENDOR - Visualeyes Pty Ltd & Charnock Properties Pty Ltd

77 As with the nomination nothing turns on the mistaken reference to the vendors being both Visualeyes and Charnock, rather than just Visualeyes.

78 The mistake as to the day of sale is not as easy to understand. It is one thing to group Visualeyes and Charnock together as vendors, in circumstances where they had a joint obligation to ensure that the Rye land was transferred to Condor in satisfaction of the deposit payable by them under the Camelot contract. It is another thing altogether to make a mistake as to the date of the Condor contract, which was also the date of the Camelot contract. As will appear hereafter, this mistake, when taken together with other facts, indicates that the three assignment documents were all back-dated. Indeed, the purchaser's declaration itself has obviously been altered. The original purchaser's declaration was produced in court as exhibit "M". It contains obvious alterations to the date and also to the signature on behalf of Condor. However, notwithstanding that the original was available and had obviously been altered, there was no cross-examination on behalf of the defendant as to these alterations. Nor were any submissions directed to the fact of the alterations or their effect. It is not possible from my own examination of the original purchaser's declaration to ascertain what date was originally written in as the date the declaration was made. The handwriting is apparently that of the Justice of the Peace who witnessed the statutory declaration. That handwriting indicates that the purchaser's declaration was declared on the 31 day of December. As to the year, the date has been altered to 1991. It is not possible for me to reach any conclusion as to what year was originally written in by the Justice of the Peace. There is a combination of overwriting and the use of liquid paper.

79 The assignment agreement was clearly not intended to constitute an assignment of the rights of Condor under the Camelot contract only. On the other hand, the evidence was that this was the only asset of any value which Condor owned at the time. There is ambiguity about the time at which the assignment is to take place, given the frequent use of the future tense throughout the document - "agrees to assign", "will be assigned over to Heather Jenkins", "will be transferred exclusively to Heather Jenkins", "will transfer to Heather Jenkins". On the other hand, the document was obviously drawn without the benefit of any real legal assistance. Whatever input Mr Alter may have had appears to have been at a superficial level, by giving oral advice to Mr Jenkins as to the matters which should be contained in a proposed assignment agreement.

80 Furthermore, the assignment agreement cannot be construed in a vacuum. It is necessary to consider the objective surrounding circumstances and to take account of business common sense. If an immediate assignment to Mrs Jenkins was not intended, what purpose would a document such as the assignment agreement serve? Although it speaks in terms of an assignment in the future, it makes no reference to when the assignment will take place. If it is viewed as a mere statement of intention to assign, then it is no more than agreement to agree. Why would business people such as Mr and Mrs Jenkins go to all of the trouble to draw up an elaborate document such as the assignment agreement for the purpose of stating what they intended to do at some unspecified time in the future? This makes no sense.

81 The position is complicated by reason of the fact that it is contended on behalf of Visualeyes that there is confusion and uncertainty about the true date upon which the assignment agreement, and other related documents, were in fact drawn up and executed.

82 The minutes of the annual general meeting of Condor for the year ended 31 December 1991 lend support to the submission on behalf of Visualeyes that the assignment agreement was not intended to effect an immediate assignment. The relevant minutes state:

"Because of recession production is down, costs are escalating - overdraft has also been increased with Heather Jenkins' consent and securing the loan. Considering if things don't improve in next 12 months to close the company and to assign all assets and funds and any future interests pending in earning any capital to be exclusive property and ownership of Heather Jenkins."

83 The nomination, which is also dated 31 December 1991, points the other way. It clearly states that Mrs Jenkins nominates Condor as "substitute purchaser to take a transfer or conveyance" of the Rye land in lieu of Mrs Jenkins. This is consistent with an intention by Condor to effect an immediate assignment to Mrs Jenkins at the time the assignment agreement was executed.

84 The purchaser's declaration also supports an intention to effect an immediate assignment to Mrs Jenkins at the time that the assignment agreement was executed. In the purchaser's declaration, Mrs Jenkins, who signed on behalf of Condor, declared for the purposes of the Stamps Act 1958 that she executed the Condor contract on behalf of Condor as agent for herself. The purchaser's declaration was obviously intended to be used, in conjunction with the nomination, to achieve a transfer of the Rye land to Mrs Jenkins without the payment of additional stamp duty.

85 The position is further confused by the handwritten minutes of an annual general meeting of Condor dated 30 September 1992. The minutes record:

"The directors have agreed that the company will close its doors by no later than 30th June, 1993 which will give it sufficient time to complete and finalise all transactions. The Company on that [this] day also has provided a Deed in 1991 to Heather Jenkins transferring all assets of the Company and any future moneys forthcoming from any litigation or pay outs to go direct to Heather Jenkins, from that [this] day on."

The bold type in the excerpted passage indicates alterations appearing in the minutes. It is apparent from the photocopy minutes which are available that, as originally written, these minutes stated that Condor had "on this day" provided a deed to Mrs Jenkins and that it was intended that Condor's assets would go to Mrs Jenkins "from this day on". Subsequently, the minute has been altered in handwriting so that the two references to "this day" read as references to "that day" and the reference to the Deed being provided "in 1991" has been inserted.

86 The evidence about the circumstances of the alterations to this minute was unsatisfactory. Mrs Jenkins had no recollection of the circumstances in which the 30 September 1992 minutes were altered. Mr Jenkins, yet again, gave confusing and inconsistent evidence about this matter. Without being specific about the time, he gave evidence of a conversation with Mr Alter in which Mr Alter said that it was necessary that the minutes of Condor record that the assignment agreement had been executed on "a specific date." He said that it was only because Mr Alter said this that the minutes were altered. Mr Alter was not called as a witness.

87 Notwithstanding the unsatisfactory state of the evidence in relation to the minutes of the meeting of Condor on 30 September 1992, the form in which the minutes were originally written is a strong indication that the assignment agreement, which I infer is the "Deed" referred to in the minutes, was in existence by the time the minutes dated 30 September 1992 were prepared. If that is so, and the minutes dated 30 September 1992 were prepared before Condor was deregistered on 24 June 1993, then the assignment agreement was executed well prior to deregistration of Condor. If this be correct, the assignment agreement has been backdated and, probably, the nomination and purchaser's declaration also.

88 However, as I have said, there is doubt as to the reliability of the dates which are written on the critical documents, including the minutes of Condor. This doubt is added to by the final minutes of Condor. These final minutes appear on the same page of the Condor Minute book as the 30 September 1992 Minutes.[4], They state:

"MINUTES OF LAST AND FINAL MEETING OF CONDOR PACIFIC CONSOLIDATED LTD. ANNUAL GENERAL MEETING: 30TH JUNE 1993

MEETING AGM: Consented by all directors to de-register company and to fulfill (sic) all committments (sic) as stated in the AGM Meeting of 1992. Thus CONCLUDING the final task of the company. This meeting was then concluded after completing all the business transactions.

(illegible) Chairman (common seal affixed) (signed Tom Jenkins)."

The only part of the available photocopy of these minutes which is illegible is the date. This is a relevant gap in the evidence. Neither Mr Jenkins nor Mrs Jenkins could recall when these minutes were prepared. Condor was deregistered on 24 June 1993 as a result of it failing to file any annual returns after that due on 31 December 1990. If the date on the final minutes was after 24 June 1993, which appears likely, then it was after Condor was in fact deregistered. It would appear that these final minutes have been prepared in an endeavour to regularise the situation, in circumstances where it was intended that Condor would be de-registered by default and it was not known when this would happen. By this I mean that it was clear on the evidence that no formal application was ever made by Condor for deregistration. Rather, following consultation between Marcel Alter and Mr Jenkins, a decision was made to allow the company to be deregistered as a result of it ceasing to file any annual returns or other documents required under applicable legislation.

89 As there are other facts relevant to the resolution of the critical factual issue as to the date of execution of the assignment agreement, my findings on this issue appear later in these reasons.

90 The resolution of the factual issue as to the date on which the assignment agreement was executed is further confused by the evidence given by Mr Jenkins as to service of a copy of the assignment agreement, the nomination and the purchaser's declaration upon Visualeyes and its directors. In his evidence, Mr Jenkins was adamant that he personally served copies of the assignment agreement, the nomination and the purchaser's declaration in January 1992 or shortly thereafter. I do not accept this evidence.

91 Mr Jenkins was a most unsatisfactory witness. He gave definite evidence about matters where he was obviously reconstructing and had no independent recollection. He was non-responsive. His demeanour demonstrated disrespect for the Court, its processes and for counsel for the defendant. I am satisfied that Mr Jenkins has an honest belief that his (or, more accurately, his wife's) cause is a just one and that he has convinced himself as to the truth of evidence which was obvious reconstruction. However, this is one issue on which the evidence of Mr Jenkins ought be rejected completely. Indeed, I am satisfied that he had no belief that it was true and that he was telling lies in order to fill up a perceived gap in his wife's case concerning the need to give notice of the assignment agreement and nomination to Visualeyes.

92 The oral evidence of Mr Jenkins as to service of a copy of the assignment agreement, the nomination and the purchaser's declaration was that he served a copy of each of those documents at 79 Laura Street, Knoxfield at approximately 7.30pm or 8.00pm on a day after the documents were executed which he could not recall, other than:

"... it could have been months. I mean it wasn't years."

93 Mr Jenkins said in his oral evidence that he served the documents by placing them in the letterbox at 79 Laura Street, and then walking away. At the time he put the documents in the letterbox, there was a man walking out of the house. He could not identify that man. He did not speak to him. He walked away because he had been told by Marcel Alter not to create any problems at the time he served the documents.

94 Mr Jenkins also gave evidence that, at the time he served the documents by leaving them in the letterbox it was already dark. He could not recall what day of the week he served the documents.

95 This evidence was inconsistent with paragraph 14 of an affidavit sworn by Mr Jenkins on 3 December 2002 in this proceeding, in order to have a default judgment set aside. In that affidavit, Mr Jenkins swore:

"14. On a Thursday in mid to late January of 1992 at approximately 7.30 p.m., I served the said Assignment, Nomination form and declaration on Visualeyes Pty Ltd by delivering the same to Frank Olgyay at 79 Laura Road, Knoxfield in the State of Victoria which was the registered address of Visualeyes Pty Ltd."

96 This sworn evidence by Mr Jenkins, as recently as December 2002, was inconsistent with his sworn evidence before me, in the following ways:

(1) The Affidavit evidence was clearly intended to convey a precise recollection as to the month, day of the week and time of service. In oral evidence, Mr Jenkins could only recall the time.

(2) The Affidavit conveys the impression that the documents were delivered to Mr Olgyay. That was clearly not the case. In oral evidence, Mr Jenkins swore that he placed the documents in the letterbox of the place he believed the Olgyay's resided at that time.

(3) Mr Jenkins did not swear in his oral evidence that 79 Laura Street was the registered office of Visualeyes. To the contrary, he said that he believed that the registered office was at an accountant's office, and that he also served the documents at the accountant's office.

97 The only specific evidence about service which Mr Jenkins was able to give was that he left the documents at the letterbox at 79 Laura Street at approximately 7.30pm and that it was dark. When faced in cross-examination with the obvious proposition that, with daylight saving, it could not have been dark at 7.30pm in Melbourne in January or February, Mr Jenkins became evasive and even questioned whether daylight saving was in place in 1992.

98 I do not accept the evidence of Mr Jenkins that he served the registered office of Visualeyes with copies of the assignment documents. In my opinion, Mr Jenkins was deliberately vague about the place at which he believed he served the registered office of Visualeyes. His evidence that the registered office at which he served the assignment documents was:

"... to the best of my recollection I believe the office was around either Malvern - between Malvern and Vermont, all in that area - I don't know specifically where it was but it was in that jurisdiction in the Eastern side of Melbourne"

is simply not credible. Further, I reject his evidence that he spoke with an accountant at the registered office which he served.

99 The oral evidence of Mr Jenkins is also inconsistent with the further and better particulars given by the plaintiff of the allegation that the nomination was served on Visualeyes. In the further and better particulars dated 18 June 2003, the plaintiff has relied upon paragraph 14 of the affidavit sworn by Mr Jenkins.

100 Particulars were also given of service of the nomination upon Charnock by being handed to Nagy at 83 Iona Street, Rye. There was no need to serve Charnock. Mr Jenkins acknowledged this in his evidence. He said that he did not serve a copy of the nomination on Charnock. His only explanation was that the solicitors had made a mistake for unspecified reasons. He acknowledged that he had instructed the solicitors. I infer that Mr Jenkins believed, at the time that he gave instructions for these further and better particulars, that it was a necessary part of the plaintiff's case that she establish service of the nomination upon Charnock. I find that Mr Jenkins deliberately gave false instructions to the solicitors who were then acting about service on Charnock, because he mistakenly believed that it was an essential part of the case of Mrs Jenkins that she establish service of the nomination on Charnock.

101 During 1992, there was correspondence written by Finkelstein, Lipschutz & Alter, on behalf of Condor with respect to the Rye land. At no time in this correspondence did Finkelstein, Lipschutz and Alter refer to the fact, if it was the case, that the rights of Condor under the Condor contract had been assigned to Mrs Jenkins.

102 Nothing happened of any significance in relation to the Camelot contract or the Condor contract in the period to March 1999. The Ferlow contract remained uncompleted and Ferlow continued as registered proprietor of the Rye land.

103 Yvette Olgyay gave evidence that, from the Olgyay's perspective, they could simply not afford to engage a solicitor to advise them about a matter which seemed very complicated. In 1996 she approached the firm of solicitors who presently act for Visualeyes. However, no action seems to have been taken until March 1999.

104 From the perspective of the Jenkins, they were otherwise occupied. The National Australia Bank had taken possession of Camelot Castle in January 1992 and proceeded to sell it by mortgagee's sale. Thereafter, there were proceedings between the National Australia Bank on the one hand and Mr and Mrs Jenkins and an associated company, Harvord Pty Ltd, on the other. The details of these proceedings are not relevant to the determination of the case before me. Apart from a brief description of their nature, and some cross-examination of witnesses by reference to some findings of fact at both first instance and on appeal, there is no evidence before me as to the outcome of those proceedings. In any event, any findings of fact made in those proceedings would not, absent an admission, be admissible as evidence in this proceeding.[5] The relevant matter to note here is that it was not until April 1999 that the Court of Appeal of this Court delivered its judgment in the appeals instituted by Mr and Mrs Jenkins. I infer that the time and resources of Mr and Mrs Jenkins were, in the period until 1999, devoted to their disputes with the National Bank. In the meantime, their position in respect of the Rye land was protected by the Condor caveat.

105 In March 1999, the Assistant Registrar of Titles gave notice to Condor pursuant to s.89A(3) of the Transfer of Land Act 1958 that the Condor caveat would lapse on 22 April 1999 unless written notice was given which satisfied the requirements of s.89A(3) of the Transfer of Land Act. Those requirements included the need to specify that proceedings are on foot in a court of competent jurisdiction to substantiate the claim of the caveator. There is no evidence as to whether any such notice was given.

106 By letter dated 12 April 1999 from Marcel Alter, who had by this time moved from Finkelstein, Lipschutz & Alter to the firm of Tischer Liner & Co, asserted that he acted on behalf of Condor and referred to the Condor proceedings. No mention was made in the letter of any assignment to Mrs Jenkins of the rights of Condor under the Condor contract.

107 In any event, the caveat did not lapse as a result of the operation of s.89A of the Transfer of Land Act. In fact, the Condor caveat was not removed until an order was made to this effect by the County Court in September 2001. In the meantime, as appears hereafter, Mrs Jenkins lodged a caveat to protect her interest.

108 On 19 September 2000, Visualeyes commenced proceedings in the County Court of Victoria against Ferlow, the Australian Securities and Investment Commission ("ASIC") and the Registrar of Titles ("the Registrar") ("the County Court proceedings").

109 Visualeyes made the following claims in the County Court proceedings:

(1) As against Ferlow, Visualeyes claimed, in effect, specific performance of the Ferlow contract. This was necessary because Visualeyes was still not registered as the proprietor of the Rye land.

(2) As against ASIC, Visualeyes claimed that, pursuant to s.576(1) of the Corporations Law as at 24 June 1993, all of the property previously owned by Condor before its deregistration was vested in ASIC. Visualeyes sought against ASIC declarations that:

(a) it had no right title or interest in the Rye land; and

(b) the Condor contract was void and unenforceable.

The claims for declarations against ASIC (as successor in title to Condor) were based upon the deposit agreement and an allegation that the Camelot contract had been validly rescinded. There was also a claim that the Condor contract was void for uncertainty. There was no allegation that the Camelot contract was void for uncertainty. In relation to the deposit agreement, Visualeyes pleaded as follows:

"8. Further, Heather Jenkins ("Jenkins") was at all relevant times:

(a) prior to 30 October, 1990 the registered proprietor of the reception centre known as Camelot Castle ('Camelot');

9. On or about 30 October, 1990 Jenkins agreed to sell to Visual and Charnock Properties Pty Ltd ('Charnock') a nine-tenths interest in Camelot, and Visual and Charnock agreed to purchase such interest ('the Camelot contract').

The Camelot contract is in writing and dated 30 October 1990 and executed by both parties. A copy of the Camelot contract is in the possession of the solicitors for the plaintiff and may be inspected by appointment.

There were terms of the Camelot contract, amongst others, as follows:

(a) that Visual and Charnock would pay consideration of $1,520,000;

(b) that an initial deposit of $300,000 by Visual and Charnock would be satisfied by the transfer of the Rye blocks to Jenkins ('the Camelot deposit');

(d) that at the time the balance was paid, Visual and Charnock would become the registered proprietor of a nine-tenths interest in Camelot as tenants in common, and Jenkins would become the registered proprietor of a one-tenth interest as tenant in common in Camelot.

Pursuant to the Camelot contract or otherwise, on or about 30 October 1990 Condor agreed to purchase the Rye blocks from Visual for consideration of $300,000 and Visual agreed to sell them ('the Condor contract').
It was a term of the Condor contract that the sale was subject to and conditional on Condor accepting the Rye blocks as full deposit for the purchase of Camelot pursuant to the Camelot contract."

(3) As against the Registrar, Visualeyes claimed an order for removal of the Condor caveat.

110 On 24 September 2001, the County Court proceeding came on for trial. There was no opposition to the orders sought. Ferlow had already provided the transfers of land and certificates of title in respect of the Rye land and neither ASIC nor the Registrar opposed any of the relief which was sought. Accordingly, perhaps based on a reading of some of the contractual documents and some submissions, the County Court declared that ASIC (as successor in title to Condor) had no right, title or interest in the Rye land, declared that the Condor contract was void and unenforceable and ordered that the Condor caveat be removed (the "County Court judgment").

111 I was troubled by the fact that Visualeyes did not join Mrs Jenkins as a party to the County Court proceeding. Although it was strictly true as a matter of law that the assets of Condor had vested in ASIC, the Olgyays well knew that Mrs Jenkins was the vendor under the Camelot contract and that she had put Condor forward as, in effect, her nominee to receive the deposit consideration. As recently as April 1999, Mr Alter (who was known to be the solicitor representing Mr and Mrs Jenkins and Condor in relation to the matter) had written seeking to maintain the Condor caveat. Furthermore, Yvette Olgyay gave evidence of sporadic telephone contact from Mr Jenkins in which he told her, in effect, that the Olgyays would never get the Rye land. Obviously enough, the dispute was and remained one between the Jenkins family and the Olgyay family. On the other hand, it was submitted on behalf of Visualeyes that it was entitled to proceed without joining Mrs Jenkins as a party to the County Court proceedings. The rescission notice had not been met with any substantive response, Condor had been de-registered for seven years and no notice had been received of any assignment to Mrs Jenkins. In the end, nothing turns on the issue. In final address, counsel for Visualeyes abandoned any reliance upon an issue estoppel or res judicata arising from the judgment in the County Court proceeding. It is accepted by Visualeyes that, if Mrs Jenkins can establish her claim as assignee from Condor, the County Court judgment is not capable of founding an issue estoppel or res judicata against Mrs Jenkins as she was not a party. Further and in any event, the County Court judgment was obtained as a result of consent or non-opposition and not after a trial on the merits.

112 Unfortunately for the Olgyay interests, the County Court judgment did not bring an end to the matter. Prior to the trial of the County Court proceeding, Ferlow had already provided transfers of land and certificates of title in respect of the Rye land. As a result of these documents being lodged with the Registrar, I infer that notice was given under s.89A of the Transfer of Land Act to Condor and came to the attention of Mr and Mrs Jenkins. On 27 August 2001, which was prior to the County Court judgment, Mrs Jenkins lodged a caveat over the Rye land in her own name (the "Jenkins caveat"). She stated the grounds of her claim:

"As nominated purchaser under a Contract of Sale from Visualeyes Pty Ltd and dated the 30th day of October 1990."

The Jenkins caveat remains on the titles to the Rye land.

113 On 5 March 2002, this proceeding was commenced by Mrs Jenkins.

114 Curiously, on 2 July 2003, Mr Jenkins wrote to the Registrar on the letterhead of "Condor Pacific Consolidated" (a business name which he had registered by this time) in respect of the Condor caveat and the application to remove it. It must be remembered that, by this time, the Condor caveat had been removed by the County Court judgment. However, the position of Mrs Jenkins was protected by the Jenkins caveat. For some reason, Mr Jenkins was motivated to write to the Registrar about an application to remove the Condor caveat and, in the course of doing so, referred to the Condor proceedings which had been commenced in 1991 and dismissed in 1999. This conduct by Mr Jenkins shows his confused thinking and, in my view, demonstrates his continuing failure to appreciate that Condor had no rights after its de-registration.

Pleadings, Concessions and Remaining Issues for Determination

115 Fortunately, there are few contested factual issues which must be determined in order to resolve this difficult case. Furthermore, as a result of concessions made on both sides during the course of final address, some of the pleaded issues have evaporated.

116 By her statement of claim, Mrs Jenkins alleges the Camelot contract, the deposit agreement and the Condor contract. As a result of the deposit agreement, she alleges that there is a disconformity between the agreement as to the deposit contained in the Camelot contract and the common intention of the parties constituted by the deposit agreement. She claims rectification of the Camelot contract as a result. In its defence, Visualeyes, in substance, admits the making of the Camelot contract, the Condor contract and the deposit agreement. However, it pleads that each of the Camelot contract and the Condor contract is void for uncertainty and denies that Mrs Jenkins is entitled to rectification of the Camelot contract to accord with the deposit agreement. Alternatively, if a right to rectification is otherwise established, it is alleged that the Court has no power to order rectification in the absence of Charnock as a party to the proceeding.

117 Next, Mrs Jenkins pleads that Visualeyes and Charnock have repudiated the Camelot contract by failing to complete it, abandoning possession of Camelot Castle and wrongfully purporting to rescind the Camelot contract. Mrs Jenkins alleges that, as a result, the deposit constituted by the Rye land has been forfeited. In response, Visualeyes pleads that it and Charnock were entitled to rescind the Camelot contract pursuant to s.6(3) of the Sale of Land Act due to non-compliance by Mrs Jenkins with the provisions of ss.6(1) and 6(2) of that Act.

118 Next, Mrs Jenkins pleads that Condor nominated her as substitute purchaser under the Condor contract and that, for this reason, she is entitled to enforce it. In final submissions, it was conceded that this claim could not succeed in the absence of Condor being a party and seeking to enforce the Condor contract for the benefit of Mrs Jenkins. Accordingly, this basis of the claim by Mrs Jenkins was abandoned.[6]

119 Next, Mrs Jenkins alleges that, by the assignment agreement, Condor assigned all of its right title and interest in its assets, undertakings and choses in action to her. Accordingly, it is alleged that Mrs Jenkins is entitled to have the Condor contract completed and to become the registered proprietor of the Rye land. In effect, Mrs Jenkins pleads that she is entitled to specific performance of the Condor contract as assignee of the rights of Condor. The case was conducted on this basis.

120 In its defence, Visualeyes contends that the assignment agreement was not entered into, that if it was it was not effective to assign Condor's rights under the Condor contract to Mrs Jenkins and that, in any event, no notice was given to Visualeyes of the assignment agreement. It is alleged that the absence of notice has the result that, if the assignment is proved, Mrs Jenkins cannot succeed in her claim in the absence of Condor as a party to the proceeding.

121 In oral argument, counsel for Visualeyes conceded that, if I was satisfied that the assignment agreement was entered into prior to deregistration of Condor and that it was, on its proper construction, effective to assign the rights of Condor under the Condor contract to Mrs Jenkins, that it was unnecessary that Condor be made a party to the proceeding. Accordingly, this aspect of the defence was abandoned.[7]

122 As to the denial that the assignment agreement was entered into, it is alleged that the assignment agreement was not properly executed by Condor because it was signed on its behalf by Tom Jenkins who was not, at the time, a director of Condor.

123 In oral argument, counsel for Visualeyes sought to add a further defence. She submitted that I should find that the assignment agreement was not executed on the date it bears (31 December 1991) but was in fact executed after deregistration of Condor on 24 June 1993.

124 Finally, it is pleaded on behalf of Mrs Jenkins that Visualeyes holds the Rye land on a resulting trust, or as a constructive trustee, for her. The resulting trust claim was abandoned in final address. The constructive trust claim is a difficult one and all aspects of it are denied on behalf of Visualeyes.

125 If the Camelot contract is void for uncertainty then the associated Condor contract will also fail. The only purpose of the Condor contract is to provide the deposit due under the Camelot contract.

126 On behalf of Visualeyes, it is contended that the Camelot contract is uncertain for a number of reasons. In the first place, it is contended that there is a disconformity between the description of the property being sold on the first page of the Camelot contract and the description given in Special Condition B on p.2 of the Camelot contract. I do not accept this submission. On p.1 of the Camelot contract, the property being sold is described in the following terms:

This describes the property with sufficient certainty. However, also on the first page of the Camelot contract, it is expressly stated that the sale of the property is subject to:

"4. Any special conditions set out on the back of this Contract Notice."

Accordingly, the description of the property quoted above is subject to the special conditions on p.2. Special Condition B states:

"The Vendor is to remain as registered proprietor as to 1/10 of the equity in the real property being the land contained in Certificate of Title Volume 9862 Folio 101 with the purchaser being the registered proprietor of the remaining 9/10 of the property as tenants-in-common."

127 In my view, there is no need to resort to any special rule of construction, such as the need to give a beneficial construction to contracts prepared by businessmen without legal assistance[8], in order to give certainty to the description of the land being sold. Quite clearly it was only 9/10ths of the real estate.

128 Second, it is contended on behalf of Visualeyes that there is uncertainty as to the chattels being sold under the Camelot contract. It was submitted that, as with the description of the real estate being sold, there is no mention on the first page of the Camelot contract of any equity in the chattels being retained by Mrs Jenkins as vendor. I do not accept this submission. The description of the chattels on the first page of the Camelot contract is certain. It is limited to an inventory attached to the Camelot contract. Further, the second part of Special Condition B provides:

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Cases Cited (7)