Supreme Court of WA|2005-06-10|Before: Mr J

Soiland Pty Ltd v Ridgepoint Corporation Pty Ltd [2005] WASC 124 (10 June 2005)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : SOILAND PTY LTD -v- RIDGEPOINT CORPORATION PTY LTD [2005] WASC 124

Injunction - Oral agreement to assign sub-lease - Part performance - Arguable case - Agreement in principle - Damages an adequate remedy - Ability to pay damages - Relative strengths of cases - Specific performance before breach - Undertaking as to damages and third parties affected - Interests of third parties - Agency - Estoppel - Delay - Quality of evidence - Degree of disclosure - Turns on own facts

A & Ors v Hayden & Ors (No 1) (1984) 56 ALR 73

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Ampol Ltd v Caltex Oil (Australia) Pty Ltd [1986] HCA 2; (1986) 60 ALJR 225

Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101

Austral Standard Cables Pty Ltd V Walker Nominees Pty Ltd (1992) 26 NSWLR 524

Australia and New Zealand Banking Group Ltd v Widin [1990] FCA 474; (1998) 102 ALR 289

Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199

Award Holdings Pty Ltd FL v Fairmont Nominees Pty Ltd & Ors [2001] WASC 179

Bullock v Federated Furnishing Trades Society of Australasia (No 1) [1985] FCA 19; (1985) 5 FCR 464

Carlton and United Breweries (NSW) Pty Ltd v Bond Brewing NSW Ltd (1987) 76 ALR 633

Castelmaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148

Cayne v Global Natural Resources Plc [1984] 1 All ER 225

Cooper v Griffiths [2003] WASC 55

Cretanor Maritime Co Ltd v Irish Marine Management Ltd [1978] 3 All ER 164

Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349

Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670

Gilbert v Endean (1878) 9 Ch D 259

Hasham v Zenab [1960] AC 316

Katz v Jones [1967] NZLR 861

Kingswood Estate Co Ltd v Anderson [1963] 2 QB 169

Maddison v Alderson (1883) 8 App Cas 467

Mahoney v Lindsay (1980) 55 ALJR 118

Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353

McBride v Sandland [1918] HCA 32; (1918) 25 CLR 69

Mott v Mount Edon Goldmines (Australia) Ltd (1994) 12 ACLC 319

Owens v Harris Bros (1932) 34 WALR 110

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1

Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235

Port Kennedy Resorts Pty Ltd & Ors v Huat & Ors [2000] WASCA 328

Smith Kline & French Laboratories (Australia) Ltd and Another v Secretary, Department of Community Services and Health (1989) 89 ALR 366

Soanes v London and South Western Railway Co (1919) 88 LJKB 524

State Transport Authority v Apex Quarries Ltd [1988] VicRp 26; [1988] VR 187

Steadman v Steadman [1976] AC 536

Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486

Wakeham v MacKenzie [1968] 1 WLR 1175

Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387

Watson v Delaney (1991) 22 NSWLR 358

Wolverhampton Corp v Emmons [1901] 1 KB 515

Cardile v LED Builders (1999) 198 CLR 380

Co-operative Insurance Society Ltd v Argyll Stores Ltd [1997] UKHL 17; [1998] AC 1

Dillwyn v Llewelyn (1862) 4 De GF and J 517; [1862] EngR 908; (1862) 45 ER 1285

J C Williamson Ltd v Lukey [1931] HCA 15; (1931) 45 CLR 282

Tanwar Enterprises v Cauchi [2003] HCA 57; (2003) 77 ALJR 1853

Walsh v Lonsdale (1882) 21 Ch D 9

1 COMMISSIONER MCKERRACHER QC: This is the plaintiff's application for a further extension of an interlocutory injunction originally granted by Master Sanderson in chambers on 23 March 2005. By that injunction the defendant was restrained from assigning or otherwise dealing with its interest as sub-lessee in approximately 8 hectares of land located at Talbot Road in the Perth International Airport ("the land"). The injunction was extended by Master Sanderson on 6 April 2005.

2 On this application for it to be further extended until trial there was a substantial body of additional evidence and argument.

3 The Commonwealth is the registered proprietor of the Perth International Airport. It leases the land and its surrounds to Westralia Airports Corporation Pty Ltd ("WAC").

4 WAC in turn has granted certain sub-leases of parts of that land to Westgroup Pty Ltd ("Westgroup") under different leases ("the Westgroup Leases"). Westgroup is insolvent and Receivers and Managers have been appointed in respect of the Westgroup Lease.

5 With the consent of WAC, Westgroup sub sub-leased its interest in 8 hectares of land to Whitewood Pty Ltd ("Whitewood") on 12 April 2001. Receivers and Managers have also been appointed to Whitewood. They are the same receivers because, as it transpires, those companies are part of a larger group of companies.

6 On or about 21 December 2001 Westgroup, with the consent of WAC, granted a further sub sub-lease to the defendant of another 8 acres (the "sub-lease"). It is in relation to this sub-lease that these proceedings relate.

7 The validity of the sub-lease has been in issue for some time due to competing claims over the land or parts of it and due to the fact that Westgroup dealt with the land when it and all Westgroup's leasehold interests were subject to a charge to the National Bank of Australia Ltd ("the bank").

8 Priority issues arose including a dispute between the bank and another financier in relation to these leases. That dispute, at least in part, has been ventilated in previous proceedings culminating in the decision of the Full Court in FUL 9 and FUL 10 of 2004.

9 As further background material, it emerged that the plaintiff had originally been engaged by the defendant to assist it to find land at the airport where it could carry out its business. After allocating one of the leases referred to above, the plaintiff discovered that the business could not be conducted at that location and with the approval of all parties except the bank, the land being made available to the defendant was exchanged in what has been described as "the land-swap". As a result, the land ultimately made available to the defendant by sub-lease was the land the subject of this action.

10 The plaintiff says that the defendant agreed to assign 50 per cent of the sub-lease to it ("the assignment agreement") and has failed to do so. Rather, it has given up or will, unless restrained, give up that sub-lease to third parties.

11 By indorsement on an amended writ of summons filed on 6 May, the plaintiff asserts that the defendant is the sub-lessee of the land by virtue of a sub-lease entered into in December 2001 and stamped 20 December 2001. It is between WAC, Westgroup, the defendant and others.

12 It is claimed that by the assignment agreement in 2002 the defendant agreed to assign a 50 per cent interest in the sub-lease to the plaintiff in consideration of the plaintiff performing certain works on the land. The amended indorsement to the writ contends that the defendant has repudiated the assignment agreement by entering into negotiations to surrender the sub-lease and/or in the alternative by denying the force and effect thereof. The relevant relief sought by the plaintiff by way of the amended indorsement is:

"1 a declaration that by reason of the assignment agreement the plaintiff has an equitable interest in the land;

2 a declaration that the defendant holds its interest in the land on trust for itself and the plaintiff;

3 an order that the defendant do specifically perform the assignment agreement;

4 alternatively, damages;

5 an interim and permanent injunction restraining the defendant from assigning or otherwise dealing with the sub-lease and its interest in the land, without the prior written consent of the plaintiff."

13 On the hearing of the application for the extension of the injunction I gave leave for counsel for the receivers Mr C G Colvin SC, to be heard in opposition to the application. The receivers had not been joined as defendants. I also gave leave for Mr D A Lenhoff to appear on behalf of one Thomas Bruce Cameron, a director of Whitewood, to be heard in support of the application for the injunction.

14 Mr D R Williams QC for the plaintiff focused on the formulation of the test of "a serious question to be tried" by Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 at 407 where his Lordship in rejecting any higher or more rigid standard said:

"Your Lordships should in my view take this opportunity of declaring that there is no such rule. The use of such expressions as 'a probability', 'a prima facie case', or 'a strong prima facie case' in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried."

15 His Lordship went on to observe that it was no part of the court's function at this stage to resolve conflicts of evidence on affidavit nor decide facts on which the claims of either party may ultimately depend or to decide difficult questions of law which call for detailed argument and mature consideration. His Lordship observed that that was one of the reasons for the introduction of the practice of giving an undertaking as to damages. His Lordship went on to say (at 407):

"So unless the material available to the court at the hearing of the application for interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought."

"If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

It is where there is doubt as to the adequacy of the respective remedies and damages available to either party or to both, that the question of balance of convenience arises. ... Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo."

16 The plaintiff urged me to preserve the "status quo". In this context, "status quo" means the state of affairs in the period immediately before issue of the summons or writ seeking the permanent injunction or the period immediately before making the application for interlocutory relief if there is unreasonable delay between the issue of the summons or writ and the interlocutory application.

17 The majority judgments in Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) [1998] HCA 30; (1998) 195 CLR 1, Castelmaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 and Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 which I will discuss below do not focus on preservation of the "status quo" in the same sense as it was referred to by Lord Diplock in American Cyanamid. On the other hand its importance and its source as a concept has been recognized in Port Kennedy Resorts Pty Ltd & Ors v Huat & Ors [2000] WASCA 328 where it was said at [59]:

"In our opinion, an important factor in assessing the balance of convenience is the determination of the status quo. We would adopt the statement of the learned author of Seaman: Civil Procedure in Western Australia, 52.1.7 that 'the status quo may often be that state of affairs from which springs a serious question to be tried as to the invasion by the defendant of a legal or equitable right of the plaintiff for the enforcement of which the defendant is amenable to the jurisdiction of the court'."

18 In my view, preservation of the status quo is capable of being an important consideration if one comes to the assessment of the balance of convenience (especially if other factors appear to be evenly balanced). However, some cases lend themselves much more readily to that exercise than others. An example of where the preservation of the status quo had to vie with the interests of third parties is seen in Patrick Stevedores Operations at [39] and [40] and in the discussion which follows. It is, in my view, only one factor to consider.

19 In a practical sense determination as to what may in fact be the "status quo" at the time of issue of the proceedings is in itself in issue. In the present case it is of limited assistance as the parties disagree as to what was the status quo. The plaintiff says its agreement is the status quo; the defendant and the receivers say it is not as for two years the receivers have disputed the defendant's entitlement to make the agreement. The status quo for which the defendant contends is in reality a status quo where at the time of issuing proceedings there was a challenge of some weight to the validity of the very sub-lease.

The general approach in Australia to interlocutory injunctions

20 On the general approach, while the High Court have adopted an approach which may produce a similar outcome to that expressed by Lord Diplock, it has been expressed in different terms and the process, it is submitted by counsel for the defendant, Mr A R Beech SC and counsel for the receivers, Mr Colvin SC, gives rise to a different methodology. As observed by Mason A-CJ in Castelmaine Tooheys (supra) at 153:

"In order to secure such an injunction the plaintiff must show:

(1) that there was a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief;

(2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and

(3) that the balance of convenience favours the granting of an injunction.

Recently, two members of this Court have held that the plaintiff must establish that there is a 'serious question to be tried', to use the expression favoured in American Cyanamid v Ethicon Ltd (supra) in preference to the 'prima facie case' test which was adopted in Beecham Group Ltd v Bristol Laboratories Pty Ltd [1968] HCA 1; (1968) 118 CLR 618 at 622 ... In my opinion that is the correct test to be applied, at least in the majority of cases: see 'Declarations Injunctions and Constructive Trusts', University of Queensland Law Journal, vol 11 (1980) 121, at p 128."

21 More recently in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 the High Court again reviewed the correct approach and Gleeson CJ said at 216:

"When a plaintiff applies to a court for an interlocutory injunction, the first question counsel may be asked is: What is your equity? If the plaintiff, who has commenced an action seeking a permanent injunction, cannot demonstrate that, if the facts alleged are shown to be true, there will be a sufficiently plausible ground for the granting of final relief, then that may mean that there is no basis for interlocutory relief. That is what happened here. Underwood J looked at the allegations in the statement of claim, supported as they were by the evidence of Mr Kelly, and after hearing argument, concluded that even if those allegations were true, they could not justify the final injunctive relief sought by the respondent. On that ground he refused interlocutory relief. That approach was in accordance with practice and principle. Of course, if Underwood J made an error in concluding that the respondent had no equity, then his decision was flawed. But having regard to the way the case was conducted by the parties, he asked the right questions. The central issue in this appeal is, or ought to be, whether he gave the right answer."

"The extent to which it is necessary, or appropriate, to examine the legal merits of the plaintiff's claim to final relief, in determining whether to grant an interlocutory injunction, will depend upon the circumstances of the case. There is no inflexible rule. It may depend upon the nature of the dispute. For example, if there was little room for argument about the legal basis of a plaintiff's case, and the dispute is about the facts, a court may be persuaded easily, at an interlocutory stage, that there is sufficient evidence to show prima facie an entitlement to final relief. The court may then move on to the discretionary considerations, including the balance of convenience."

22 I consider that it is now well established that an applicant for interlocutory injunctive relief must first satisfy the court that the claim is not frivolous or vexatious and in other words that there is a serious question to be tried: Castlemaine Tooheys Ltd v South Australia (supra) at 153. There have been slightly different formulations of that test in the High Court in Australian Broadcasting Corporation (supra) and Patrick Stevedores Operations (supra) but that part of American Cyanamid has certainly stood the test of time in this country.

23 As to the different verbal formulations, one can also take guidance as did Owen J in Mott v Mount Edon Goldmines (Australia) Ltd (1994) 12 ACLC 319 at 321 from the words of Dawson J in A & Ors v Hayden & Ors (No 1) (1984) 56 ALR 73 at 79:

" ... A court ought not to be misled by an over strict application of verbal formula to depart from its primary duty to do complete justice in the case."

24 If common law damages will be an adequate remedy and the defendant will be able to pay them, an interlocutory injunction should not normally be granted: American Cyanamid Co v Ethicon Ltd (supra) at 408 and Castlemaine Tooheys (supra) at 153. That inquiry may also be framed, in my view, as to whether it is just in all the circumstances that the plaintiff should be confined to that remedy: Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349 at 379; State Transport Authority v Apex Quarries Ltd [1988] VicRp 26; [1988] VR 187 at 193.

25 If the applicant has established that there is a serious question to be tried and that damages is not an appropriate remedy, it is necessary then to address the balance of convenience. This analysis has also been described as the balance of the risk of doing an injustice: Cayne v Global Natural Resources Plc [1984] 1 All ER 225 at 237.

26 The serious question to be tried condition and the balance of convenience are not necessarily independent of each other. In Castlemaine Tooheys Ltd v South Australia (supra) at 154 Mason A-CJ (as his Honour then was) pointed out that the degree of likelihood of success is a factor related to the balance of convenience and that it might be that a probability or even a distinct probability of success might need to be shown if the injunction might adversely affect the public interest. The two questions are not independent of each other and an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even, but a claim of less strength which nevertheless raises a serious question to be tried may attract interlocutory relief where there is a marked balance of convenience in favour of it: Bullock v Federated Furnishing Trades Society of Australasia (No 1) [1985] FCA 19; (1985) 5 FCR 464 at 472.

27 With those tests in mind, I turn to consider the evidence. Kevin Trevor Pollock swore several affidavits as an "authorised agent" of the plaintiff. He has had many years of experience in earthmoving and buying and developing industrial and residential land in the Perth metropolitan area. Mr Pollock relates the fact that in about December 2001 the defendant purchased the sub-lease from Westgroup for $1,000,000 with an annual rent of $1. The term of the sub-lease was until 2046 with an option to extend to 2095.

28 An assignment agreement is said to have been reached "in 2002" between the plaintiff and the defendant " ... to jointly develop the land with a view to sub-leasing parts of it to commercial tenants for mutual profit in the future". In those negotiations Mr Pollock represented the plaintiff and the defendant was represented by Messrs Carl and Frank Cardaci, both of whom also swore affidavits for the defendant.

29 Mr Pollock asserts that there were terms of the assignment agreement that:

1 The plaintiff would carry out earthworks to the value of $1,000,000 to match the $1,000,000 the defendant had paid for the sub-lease;

2 thereafter the plaintiff and defendant would equally contribute to the cost of development, the plaintiff by way of the supply of earthworks including fill, labour and machinery (collectively with the earthworks referred to in 1 as the "works") and the defendant by way of monetary and other contributions; and

3 in consideration of the works the defendant would assign to the plaintiff a 50 per cent interest in the sub-lease.

The assignment agreement has not been reduced to writing, but during 2002 and 2003 the plaintiff carried out works on the WAC land that it says was to a value of approximately $900,000 in performance of its obligations under the assignment agreement.

30 On 27 March 2003 the receivers were appointed by the bank to Westgroup. At about that time Mr Pollock was informed by both the receivers and by the defendant that the receivers had raised a challenge to the nature of the defendant's interest in the sub-lease and, in particular, the location of the land which was the subject of the sub-lease. Mr Pollock agreed, again orally, with Mr Carl Cardaci on behalf of the defendant at that stage that the plaintiff would suspend the works under the agreement until such time as the defendant resolved the dispute with the receivers.

31 Mr Pollock then moved very much forward in time (some two years) in his initial affidavit to 11 March 2005 in which he says that Mr Mark Cardaci, on behalf of the defendant, told him that the defendant intended to resolve the dispute with the receivers by assigning the sub-lease to a third party at the receivers' request.

32 He also gave evidence on information and belief through being told by Mr Peter Lees of WAC that the leasehold of comparable undeveloped land located near the WAC land within the same zoning and subject to the same head lease as the WAC land recently sold for between $35 and $40 per square metre in consequence of which his estimate as to the current value of the land was between $2.8 million and $3.2 million. He also swore to the fact that although he was unable to quantify the profits, he believed that there would be substantial potential profits to the plaintiff after developing the land.

33 Mr Carlo Cardaci, by affidavit, denied that any such assignment agreement had ever been reached and said that the only agreement reached between the parties in relation to the sub-lease was that the land would be provided to the defendant, cleared of concrete rubble and provided to it in a level state with an environmental clearance for any contaminants. As a result he said that he and his brother informed Mr Pollock in or about 2000 that Centurion, a company related to the defendant, proposed to construct a transport distribution facility on the land because Centurion was in need of a state of the art transport distribution facility that could accommodate its growing business requirements.

34 Originally different land to that ultimately the subject of the sub-lease had been selected and that land had been levelled and cleared but approval for its development had not been granted by WAC due to objections raised by owners of the neighbouring land regarding the noise pollution that may result.

35 In or around mid-2001 WAC had not granted approval for development of the facility on the land and the Cardacis complained to Mr Pollock who then advised the Cardacis that they could exchange this block for another 8 hectare block of land which became the site the subject of the sub-lease. (This was described as the "land swap".)

36 On the land there were still recycled building materials such as concrete, mounds of rubbish and rubble. The Cardacis advised Mr Pollock that they would agree with the land swap only if Mr Pollock agreed to remove from the land all of the rubbish and rubble that was present on the site as a result of the recycling plant that Mr Pollock or interests associated with him had conducted on the land.

37 That was agreed and as a result Mr Pollock pursuant to that agreement, carried out a clean up of the land during 2002. Mr Cardaci said he was anxious that the clean up should proceed as quickly as possible in order that the construction of the proposed transport distribution facility could commence. He says that the defendant and Centurion, a related company, also spent funds in compaction and soil testing and other tests in relation to the land.

38 Mr Cardaci also denies the further alleged agreement was reached in or about March 2003 or any time between the defendant and the plaintiff that the defendant could suspend work pending resolution of any priority dispute that the defendant may have had with the receivers.

39 There was, however, a dispute in relation to the priority of leasehold interests in the WAC airport land and an allegation that approximately 5.73 hectares of land the subject of the sub-lease overlapped with land the subject of a sub-lease provided by Westgroup to Whitewood.

40 After the appointment of the receivers there was no further progress by the defendant or Centurion in relation to the construction of the transport distribution facility, partly due to the dispute as to the nature and extent of the defendant's interest in the land.

41 After their appointment, the receivers, the defendant and other interested third parties were extensively engaged in discussions and negotiations regarding the entire land the subject of Westgroup's lease from WAC, including the sub-lease.

42 Mr Cardaci maintained that it was imperative that Centurion obtain a site in the very near future upon which to construct the proposed transport distribution facilities. He said that Centurion carries on a business whereby it contracts with various large mining corporations to receive and store parts for mining machinery, it creates a stock inventory for each customer when it receives a spare part or item of machinery. Centurion could no longer cope with the volume of stock it was required to store and had to use various premises around Perth as storage depots. The land at the airport the subject of the sub-lease, he said, was ideal for their purposes.

43 Mr Cardaci gave evidence that he had been informed by Mr Ryan, one of the receivers, that an "in principle" agreement had been reached between the receivers and a joint venture group to purchase the Westgroup airport interest and to negotiate the creation of new leasehold interests in the airport land ("the main agreement").

44 Because of the nature of the priority dispute and because of the defendant and Centurion's need for suitable land to construct the transport distribution facility, the Cardacis negotiated with the joint venture group to purchase a sub-lease from the joint venture group once it purchases the leasehold interests from WAC. Trentwood Corporation Pty Ltd ("Trentwood") is the corporate entity that it was proposed by the Cardacis would acquire the leasehold interests. Trentwood has also executed a heads of assignment agreement with the joint venture group and the defendant ("the Trentwood agreement").

45 The Trentwood agreement is comprised in a letter from Fiocco's Lawyers on behalf of Trentwood dated 11 March 2005 to the joint venturers and the defendant confirming that the parties wished to record an in principle assignment agreement as described. In part it reads:

"The parties have agreed that the terms of the purchase, by way of an assignment, are to be confirmed by way of a binding Heads of Agreement, to be effected by the signing of this letter by the parties. This Heads of Agreement will have binding effect on the parties until such time as a formal agreement has been executed by the parties."

It then proceeds to set out the six matters agreed and concludes in seeking the consent. The consent in writing of the joint venturers was duly provided by their signature.

46 The main agreement is expressly conditional upon the surrender by the defendant of the sub-lease. To that end a draft deed of surrender of the sub-lease has been prepared. It provides for a payment to the defendant of a surrender sum of $1,328,400. The surrender is fundamental to the transaction. If it does not proceed there would also be no sub-lease to purchase from the joint venture group by Trentwood, as contemplated in the Trentwood agreement. As a consequence, if the defendant were unable to surrender its sub-lease "all of the deals surrounding the WAC airport land will be unable to proceed".

47 The documentation for the broader transaction under the main agreement was approaching completion at the time of Mr Cardaci swearing his affidavit and I was informed during the hearing that the final documentation had been executed by the parties on 5 May. The final executed version was not in evidence nor did those opposing the extension of the injunction seek to make anything in their favour of the execution per se.

48 In addition to the frustration of those agreements, Mr Cardaci said that if Centurion, through Trentwood, was unable to build the proposed transport distribution facility Centurion would suffer significant business losses.

49 Mr Pollock accepts that between 2002 and 2004 the Cardacis spoke to him of various plans that they had to construct a transport distribution facility. The point was reiterated for Mr Pollock that, apart from the removal of the concrete rubble referred to in Mr Cardaci's affidavit, it was also necessary to perform earthworks on the land before it could be developed for any commercial use. The suggestion was that the work done on the land was of a nature more consistent with the assignment agreement than simply clearing the land. The Cardacis had other land options for development of the their transport facility according to Mr Pollock.

50 Mr Pollock asserted that although the Cardacis had informed him that the main agreement was effectively conditional upon the defendant agreeing to surrender the sub-lease, that the defendant had not agreed to the surrender and was not in a position to do so until the issue of the plaintiff's claim was resolved. Because of the terms of the main agreement none of the parties to it would incur any contractual obligations or rights against any of the other parties if the defendant did not agree to the surrender pending the resolution of the proceedings.

51 He was concerned that the defendant proposed to surrender the sub-lease for only $1,328,400 when the true value of the land, as at 16 December 2002, was $3,795,000 according to a commercial valuation.

52 Mr Pollock contended that the plaintiff's prospective one-half interest in the land according to that valuation was then $1,897,500. It was asserted for the plaintiff that the surrender by the defendant would be to the detriment of the defendant and to its prospective creditors (potentially including the plaintiff) and to the benefit of Trentwood and Centurion, which were related to the defendant.

53 Damages, it was said, was not an adequate remedy because the defendant was only a $2 company and owned no land.

54 On the topic of the effect of the injunction on third parties, Mr Pollock said that in April 2004 the solicitors for the receivers were informed that either the plaintiff or entities introduced by it were willing to buy the sub-lease on terms not less favourable than those contemplated by the main agreement and on the basis that the prospective buyers would not require a surrender of the sub-lease and would indemnify the sub-lessors in respect of any claims against them resulting from such a sale. That offer was rejected.

55 Mr Pollock explained that he had marshalled the interests of third parties to make offers that would stand in the place of the proposed transaction that the receivers wished to implement. Evidence was adduced of a rejection by solicitors for the receivers of such an offer. Mr Pollock confirmed that an offer made by one Allen Caratti on behalf of a company controlled by him, namely Sunland Asset Pty Ltd, to purchase the Westgroup lease for $4.5 million had been made but it had received no response from the receivers in relation to that offer.

56 Mr Pollock denies receiving any information that the bank and the receivers had actually reached the main agreement. He was told only that negotiations for the sale of the Westgroup sub-lease were continuing. He said he had made it clear to all affected that the issue of the assignment agreement needed to be resolved before any sale could be finalised.

Earlier dealings explained by the defendant

57 In further response to these exchanges, the role of the plaintiff in relation to the defendant and its acquisition of land at the airport was explained by Mr Francesca Cardaci on affidavit. Initial discussions regarding acquiring land had taken place between Mr Pollock and Mr Cardaci's son and subsequently from the discussion between Mr Cardaci and Mr Pollock he knew that Mr Pollock was trying to acquire land at Perth Airport from WAC. He says that in 2000 Mr Pollock requested the defendant to provide him with funds in order that he would be able to continue to negotiate with WAC to acquire the Perth Airport land in exchange for which the defendant would be granted the sub-lease over an 8 hectare lot on part of the Perth Airport land that Mr Pollock would acquire from WAC.

58 Mr Frank Cardaci said that at no time during any of his dealings with Mr Pollock regarding the sub-lease or at any other time until notice was given in the term of these proceedings did Mr Pollock advise them that he had acted on behalf of the plaintiff or any other entity. The sub-lease was purchased from Westgroup and the payment of the annual rent was made to Westgroup and there were no other corporate entities mentioned by Mr Pollock during his dealings with him. He always assumed that when he was dealing with Mr Pollock that Mr Pollock was acting as a director of Westgroup.

59 Included amongst the materials was a facsimile forwarded by Mr Pollock to Mr Loraway of the bank on 20 July 2004 which referred to possible arrangements for sale of various of the parcels of land yet did not assert any entitlement of any description on the part of the plaintiff under the assignment agreement.

60 It is submitted for those opposing extension of the injunction that in this communication and indeed in all written communications no reference was ever made by Mr Pollock to the assignment agreement.

61 My attention is also drawn to the fact that this communication on 20 July 2004 illustrates an early awareness on the part of Mr Pollock that negotiations were ensuing for a prospective disposal of the interest that the plaintiff now seeks to restrain in May 2005.

Was the defendant giving up its interest too cheaply?

62 The fourth affidavit of Mr Pollock deposed to the area of the WAC land sub-leased by Westgroup under the sub-lease (22.14 hectares) and notwithstanding that the defendant land comprises 8 hectares and therefore 36.1 per cent of the Westgroup land, the defendant will receive only 30 per cent of the proposed sale proceeds. Similarly, notwithstanding that the land sub-leased by Whitewood from Westgroup comprised 8 hectares and 36.1 per cent of the Westgroup land, Whitewood would receive only 25 per cent of the proposed sale proceeds. Notwithstanding that the balance of the Westgroup land not sub-leased comprised 6.14 hectares and 27.7 per cent of the Westgroup land, Westgroup (or the receivers) would receive 45 per cent of the proposed sale proceeds.

63 Mr Pollock swore to the fact that Mr Carl Cardaci told him that the Cardacis had had discussions with the receivers but had made no commitment to dispose of the sub-lease and they would consult with the plaintiff before doing so.

64 Mr Pollock said that at about the end of February 2005 he spoke again with Mr Carl Cardaci by telephone when he reiterated the plaintiff's concern that the defendant intended to dispose of its interests in the sub-lease, but was told that the defendant had made no commitments in this regard with the receivers and that the defendant would consult with the plaintiff before doing so. He said that Mr Carl Cardaci told him that he and his brother were going overseas for approximately 10 days and nothing further would happen until their return.

65 However, Mr Carl Cardaci says that while he did meet Mr Pollock in the presence of Mr Caratti, that Mr Pollock advised him during the meeting that Mr Pollock wanted to buy back all of the leasehold interest land at the airport and for that reason did not want the defendant to surrender or assign its sub-lease. Mr Cardaci says that at no time during the meeting did Mr Pollock advise him that he was speaking for and on behalf of the plaintiff, nor did he refer at any time to any interest the plaintiff allegedly had in the sub-lease. Mr Cardaci says that he told Mr Pollock at the meeting that the documentation in respect of the assignment or surrender of the defendant's sub-lease was still being prepared and revised by solicitors and that whilst the defendant had not signed any surrender or assignment documentation in respect of the sub-lease, he was of the opinion that the defendant was morally and legally bound to the receiver and manager and to the syndicate to execute any and all documentation in respect of the sale of the leasehold interest land to the syndicate.

66 Various other matters were discussed on this occasion. Suffice it to say that the parties were very much at odds with what transpired at this and other meetings. I am quite unable to resolve any of those conflicts on the basis of the affidavit evidence at this stage.

67 Additional evidence opposing the main agreement came from Mr Thomas Bruce Cameron, sole director and shareholder of Whitewood, the only asset of which was the capital sub-lease of 8 hectares of land at the airport ("the Whitewood land") which was sub-leased from Westgroup.

68 Mr Cameron, as a director, has personally guaranteed Whitewood's repayment of loans of $1.6 million from the bank. The bank appointed the receivers to Whitewood on 4 April 2003.

69 Shortly stated the effect of Mr Cameron's evidence was that his exposure under the personal guarantee would be unnecessarily heightened if the receivers were permitted to pursue the main agreement that the plaintiff seeks to restrain. That is because the benefit to Whitewood under that transaction, Mr Cameron says, is disproportionately low compared with the benefit that it should be entitled to on a pro rata basis. This is computed on a similar basis to the percentage figures set out in Mr Pollock's fourth affidavit.

70 Unless the receivers were restrained from assigning the sub-lease and proceeding with the main agreement and apportioning the funds as they planned, he would remain personally liable for that part of Whitewood's debt to the bank of approximately $500,000. He deposed to the fact that he had instructed his solicitors to issue proceedings to restrain the receivers from proceeding with the sale of the Westgroup lease. I have no information as to whether or not proceedings pursuant to those instructions have been commenced.

71 The receivers wish to be joined as defendants but that application was not pursued on this particular hearing.

72 They explained that the appointment of Mr Ryan in particular by the bank as receiver of Westgroup and Whitewood was part of a wider appointment of the bank over a group of 15 companies operated under the control of Mr Pollock.

73 Prior to his appointment the bank had been negotiating a moratorium arrangement with Mr Pollock in respect of the banking facilities and security arrangements of the 15 companies, including those of Westgroup and Whitewood. It would be difficult not to infer in those circumstances that Mr Pollock was a reasonably experienced businessman. The fact that the receivership is of the Pollock group also makes it clear, which I think is not in dispute, that Mr Pollock is very familiar with the broad nature of the ownership, the leases and the sub-leases at the airport.

74 The receivers gave an account, which was not disputed, that to give effect to the land swap, the respective plans to each of the sub-lease documents were simply exchanged.

75 Complicated priority disputes and disputes as to amongst other things, the validity of the sub-lease, had arisen. The dispute over the entitlement to the sub-lease lay behind the compromise negotiated over many months by the receivers which culminated in the main agreement.

76 From the point of view of the defendant the effect of the compromise under the main agreement was that in consideration for surrendering the sub-lease the defendant would receive 30 per cent of the sale proceeds offered for the acquisition of all of the Westgroup leases.

77 In addition to the negotiations which have ensued by the receivers, the disposition of the Westgroup interests in the airport land had been widely advertised.

Involvement of the defendant in negotiations

78 According to the receivers, the defendant was actively involved in this process giving rise to expressions of interest. Through that process Mr Carl Cardaci was shown all expressions of interest which were submitted, had negotiated with some of the interested parties, attended meetings with WAC in relation to the expressions of interest and proposed sale and agreed who the successful tenderer should be and at what price.

79 The receivers with Mr Carl Cardaci ultimately formed the view that the best expression of interest received was from the joint venturers, in consequence of which on 12 August 2004 Mr Ryan wrote to the syndicate confirming that the main agreement had been reached.

80 This communication (the main agreement) on letterhead of Taylor Woodings, chartered accountants, labelled "Subject to Contract", relevantly reads:

"We refer to your discussions with Michael Ryan yesterday in relation to the purchase of leasehold interests in the land located at Abernathy Road, Perth International Airport ('WAC land interests') from Westgroup (and other interested parties).

We confirm that 'in principle' agreement has been reached for you to purchase the WAC land interests for $4.428 million plus GST, subject only to:

• WAC's approval for the 'sale' of the WAC land interests to you on the agreed terms (including as to land use); and

• agreement on timing for settlement (having regard to the legal requirements in order to effect the sale of the land interests concerned).

We have instructed our solicitors to prepare a formal contract and provide it to you for your solicitors to review as soon as possible.

In the meantime we would be grateful if you would please acknowledge your agreement as set out above by executing the enclosed duplicate of this letter and returning it to us. Could you please also let us know the name(s) of your solicitors so that this can be progressed to settlement as soon as possible."

81 The syndicate members to whom that letter was forwarded signed and returned a copy of it and the receivers say that since that date they and other parties to the main agreement and other entities affected by the main agreement have been actively pursuing its finalisation.

82 Included in these steps was that of obtaining the resolution of the creditors of Whitewood to vary the deed of company arrangement, which effectively adopted and ratified the main agreement. The receivers also believed that the conditions necessary for settlement could be satisfied within the near future.

83 Mr Francis, one of the receivers, deposed to the fact that on 1 November 2004 he attended a meeting at the solicitors for the receivers with Mr Richard Loraway from the bank and others and Mr Pollock. At that meeting Mr Pollock was informed, he says, that the bank and the receivers had reached the main agreement for the realisation of the leasehold interests held by Westgroup and Whitewood over land located at the Perth International Airport and that the main agreement would be submitted for approval and variation to the Whitewood deed of company arrangement. Mr Francis made the point that at no time during this discussion or at any time since had Mr Pollock or the plaintiff mentioned the alleged sub-lease with the defendant to him.

84 From the receivers' perspective, they maintained that Westgroup and Whitewood are bound to complete the transaction. An essential ingredient to it is surrender by the defendant of the sub-lease. The receivers and the bank throughout have relied upon the defendant's entitlement to deal with the sub-lease and provide a surrender in the course of carrying out the lengthy and expensive sale processes for the Westgroup leases over the last 18 months.

85 Had the receivers not believed that the defendant was able to provide the surrender, it would have taken steps to ascertain the various competing rights in relation to the entirety of the Airport land by commencing proceedings seeking appropriate declaratory relief at the same time that the other priority proceedings were heard and determined by this Court.

86 The plaintiff argues that the defendant had no right to dispose of its sub-lease. I will deal with the receivers' response to that submission shortly. It is important, I think, to identify how far the receivers and others have reached in putting together an agreement that is binding or otherwise.

87 The main agreement is "subject to contract". Is it binding as the receivers and the defendant assert?

88 The mere fact that parties have expressly stipulated (or otherwise indicated) that there shall afterwards be a formal agreement prepared, embodying the terms to be subsequently signed by the parties, does not necessarily show that they continue to be in negotiation: Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 at 361.

89 Where parties who have been in negotiation reach assignment agreement upon terms of a contractual nature and also agree that the subject matter of their negotiation is to be dealt with by a formal contract, the case may belong to any of at least three classes; Masters v Cameron (supra) at 360, where it was said:

"It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.

In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document; and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution. Of these two cases the first is the more common. Throughout the decisions on this branch of the law the proposition is insisted upon which Lord Blackburn expressed in Rossiter v Miller (1878) 3 App Cas 1124 when he said that the mere fact that the parties have expressly stipulated that there shall afterwards be a formal agreement prepared, embodying the terms, which shall be signed by the parties does not, by itself, show that they continue merely in negotiation. His Lordship proceeded: ' ... as soon as the fact is established of the final mutual assent of the parties so that those who draw up the formal agreement have not the power to vary the terms already settled, I think the contract is completed' (1878) 3 App Cas, at p 1151: see also Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310, at p 317. A case of the second class came before this Court in Niesmann v Collingridge [1921] HCA 19; (1921) 29 CLR 177 where all the essential terms of a contract had been agreed upon, and the only reference to the execution of a further document was in the term as to price, which stipulated that payment should be made 'on the signing of the contract'. Rich and Starke JJ observed (1921) 29 CLR, at pp 184, 185 that this did not make the signing of a contract a condition of agreement, but made it a condition of the obligation to pay, and carried a necessary implication that each party would sign a contract in accordance with the terms of agreement. Their Honours, agreeing with Knox CJ, held that there was no difficulty in decreeing specific performance of the agreement, 'and so compelling the performance of a stipulation of the agreement necessary to its carrying out and due completion' (1921) 29 CLR, at p 185; see also O'Brien v Dawson [1942] HCA 8; (1942) 66 CLR 18, at p 31.

Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own."

90 According to some more recent decisions, starting in recent times, at least, with Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 at 494 - 495, rather than illustrating the second category, cases in which the formal agreement may contain further terms may comprise a fourth category. In Anaconda Nickel Ltd v Tarmoola Australia Pty Ltd [2000] WASCA 27; (2000) 22 WAR 101 at 110 per Ipp J (Pidgeon J agreeing), Ipp J said:

"Whether parties intend to enter into a contract binding at law is a question to be determined objectively. The respondent asserts that the Letter agreement falls within the third class of case referred to in Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353 at 360, namely, a case 'in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract' (per Dixon CJ, McTiernan and Kitto JJ). The appellant argues, on the other hand, that the case falls within what McLelland J (in Baulkham Hills Private Hospital Pty Ltd v G R Securities Pty Ltd (1986) ANZ Conv Rep 681 at 686) described as the 'fourth class of case additional to the three mentioned in Masters v Cameron'. His Honour observed that such a fourth class of case was recognised by Knox CJ, Rich and Dixon JJ in Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 317 as being one in which 'the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms'.

An example of a contract falling within such a class was discussed in Tern Minerals NL v Kalbara Mining NL (1990) 3 WAR 486 at 494-495.

It is well recognised that parties may enter into a valid contract containing a limited number of terms comprising those terms essential to the bargain that they wish to conclude, in the expectation that at a later date a further contract will be arrived at containing additional terms that would facilitate and clarify the initial contract. That is to say, a binding contract may be arrived at even though it leaves unresolved many matters which might arise in future. As Kennedy J said in Terrex Resources NL v Magnet Petroleum Pty Ltd (1988)] 1 WAR 144 at 159:

'An agreement does not have to be worked out in meticulous detail. A bargain can be made containing certain terms, regarded as essentials, whilst the parties recognise that a formal document will eventually be drawn up in the full expectation that a number of additional terms will, by consent, be included in that document.'

'Finally, in determining whether contracts are void for uncertainty "courts should be astute to adopt a construction which will preserve the validity of the contract" (per Mason J in Meehan v Jones) and "courts should be the upholders of bargains and not their destroyers": Geebung Investments Pty Ltd v Varga Group Investments No. 8 Pty Ltd (per Kirby P at 14570). A striking example of this approach is Ampol Ltd v Caltex Oil (Australia) Pty Ltd [1986] HCA 2; (1986) 60 ALJR 225, where parties entered into an agreement described as an "agreement in principle". The instrument in question recorded:

"For various reasons ... some time may elapse before a formal document can be prepared. Accordingly, it is requested that you kindly review the following statement of broad principles, and, if in agreement, sign and return a copy of this letter which will then become the basis for drafting of the final document."

Among the clauses in the letter was one which provided that products 'will be exchanged barrel for barrel or ton for ton, as shall be mutually agreed'. Another clause stated that exchange 'of non-like product, if any, shall be separately negotiated'. The High Court concluded that the letter had contractual effect even though a formal document was not agreed. Mason, Brennan and Dawson JJ said (at 227):

'Because the agreement reflected an understanding which was described as an "agreement in principle" it is couched in vague and general terms. Indeed the nature of the obligation cast on each party to supply is by no means clearly spelled out. However, as we read the provisions they impose an obligation on each refiner to supply refinery products, by way of exchange of like products which are surplus to its own requirements, to the other party at its request.'

91 It may be seen that both the Trentwood agreement and the main agreement are described as being "in principle agreements". That is the same expression that was used in the letter agreement in Ampol Ltd v Caltex Oil (Australia) Pty Ltd [1986] HCA 2; (1986) 60 ALJR 225. In my view, neither the expression nor the terms cited in the letter between the parties in that case are more certain or more indicative of an intention to be bound than the terminology in the Trentwood agreement and the main agreement.

92 It follows for present purposes that each of those agreements is arguably binding.

Arguments raised against extension of the injunction

93 The defendant and receivers contend that extending the injunction should not be permitted in circumstances where:

(a) none of the three conditions for the granting of an interlocutory injunction has been satisfied;

(b) to do so would significantly prejudice the position and interest of third parties who without notice of the claims by the plaintiff have entered into the main agreement and the Trentwood agreement involving the sale and acquisition of, inter alia, the land;

(c) the interests of the defendant in the land the subject of the injunction are subordinate to those of the bank, such that the defendant could not in any event give effect to any assignment agreement between the plaintiff and the defendant in relation to the development of the land;

(d) the plaintiff had notice the matters the subject of the injunction well prior to the issue of these proceedings but delayed the institution of the proceedings without adequate explanation;

(e) if the claims made by the defendant can be made out at trial the damages are an adequate remedy; and

(f) the undertaking as to damages is unsecured and there is a reasonable basis for the questioning of the ability of the plaintiff to discharge its obligations under the undertaking.

94 It is necessary first to consider how it is that the plaintiff formulates its arguable case. The plaintiff says that it has an entitlement to specific performance of an oral assignment agreement entered into between the parties whereby the plaintiff would acquire a half interest in the sub-lease in return for carrying out works including "fill, labour and machinery" on the land. It says that the oral assignment agreement has been the subject of "part performance" by the plaintiff by virtue of the works which were carried out on the defendant's land and completion of that agreement may therefore be specifically performed notwithstanding that the agreement for the disposition of an interest in land was not in writing.

95 The act of conducting the works was, the plaintiff says, an act unequivocally and of its own nature referrable to some contract of the general nature of that alleged by the plaintiff (Regent v Millett [1976] HCA 40; (1976) 133 CLR 679 at 682, following Maddison v Alderson (1883) 8 App Cas 467). The plaintiff asserts that the doctrine of part performance will overcome the provisions of s 34(1)(a) of the Property Law Act 1969 as indeed it will, by virtue of s 36 of the Property Law Act 1969. There is nothing, it is said, in an order for specific performance that would require the court to supervise its execution (see Meagher, Gummow and Lehane, 4th ed, [20-080], Wolverhampton Corporation v Emmons [1901] 1 KB 515 per Romer LJ at 524 - 525 and Hewett v Court [1983] HCA 7; (1983) 149 CLR 639 per Deane J at 658).

96 The plaintiff says that the assignment agreement to assign an interest in the lease is specifically enforceable in that on the plaintiff's case the parties are identified, the property the subject of the assignment agreement is identified, the duration of the lease and the rent payable is identified by the sub-lease itself and there has been part performance.

97 The defendant contended that the plaintiff had failed on the test of Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (supra) to establish a serious question to be tried as to the specific relief sought in that the only evidence of the assignment agreement was in the conclusionary statements in Mr Pollock's affidavit. It was said that on that evidence in any event there would be no right to an assignment until all the works referred to and required to be carried out by the plaintiff had been completed, which had not yet occurred. Further it was impossible for a breach by the defendant to have occurred at this stage which would give rise to a decree for specific performance.

98 I consider that the scope of an order for specific performance can be more flexible than these submissions would suggest. If the facts that are contended for the plaintiff are found to be true then the plaintiff has only ceased carrying out the final 10 per cent of the work after reaching an agreement with the defendant that the work to be carried out by the plaintiff be stayed pending the defendant's negotiations with others concerning disputes over the defendant's entitlement to the land. (I do note and have not overlooked that an earlier letter appears to put the percentage in value terms considerably lower than this and I will deal with that in due course.)

99 Although generally specific performance will not be ordered unless and until a breach of contract has actually occurred, there may be exceptions. In the Privy Council's judgment in Hasham v Zenab [1960] AC 316, it was held that the plaintiff was entitled to an order for specific performance of a contract even though the writ had been issued before the stipulated date for completion since the defendant had by that time indicated a refusal to perform at the stipulated date. Accordingly, there was " ... no consideration of the question whether or not the writ was properly issued as respects the specific performance claim".

100 In Katz v Jones [1967] NZLR 861 it was held that a condition in a contract for the sale and purchase of land making the sale subject to the purchaser arranging mortgage moneys suitable to him within 28 days of the acceptance of the offer does not require that he should have legal binding contracts for the mortgage moneys within that time. It was sufficient if he had made arrangements suitable to him and so notified the vendor within that time. Where the vendor repudiated the contract the purchaser was entitled to sue for specific performance before the time for completion of the agreement had arrived.

101 In Austral Standard Cables Pty Ltd V Walker Nominees Pty Ltd (1992) 26 NSWLR 524, pursuant to a contract for the sale of land, the vendor gave notice to complete within fourteen days. The purchaser advised that it would not be settling as required by the notice. On the morning of the day appointed to complete, the purchaser indicated that it would settle. At the time appointed for settlement the vendor was unable to give vacant possession and the purchaser purported to rescind. In refusing the vendor specific performance, the trial judge found that in not having been in a position to furnish vacant possession, the vendor was in breach of an essential term of the contract. On appeal, it was held that where a vendor elects to keep a contract on foot, of which time is of the essence, despite the purchaser's intimation that it will not complete at the appointed time and that performance by the vendor will be nugatory, then although the vendor remains bound to perform its obligations under the contract, it will not, if it has acted upon the intimation to its detriment, be bound to perform those obligations at the appointed time. Foran v Wight [1989] HCA 51; (1989) 168 CLR 385 was followed and Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd [1954] HCA 25; (1954) 90 CLR 235, to which I refer below, was also considered.

102 In Mahoney v Lindsay (1980) 55 ALJR 118, purchasers sought specific performance of two contracts for the sale of land, each of which contained a term providing for completion no later than 29 June 1979. Before that date the vendor repudiated his obligations under the contracts. A notice making time of the essence was served, but the vendor failed to attend for settlement. His defence to the claim for specific performance was that the purchase money had not been tendered. However, the failure of the purchasers to tender the purchase money was excused by the vendor's repudiation and the purchasers were entitled to specific performance, on the basis that the vendor's repudiation of obligation absolved the purchasers from their obligation to tender even though the repudiation had not been accepted as an anticipatory breach.

103 There has been no suggestion that the works have not been performed satisfactorily or other than in accordance with the manner agreed. (The only question has been what the true agreement was.) It seems to me therefore that if the plaintiff were able to establish all other elements of its case, then providing it could satisfy a court that it was ready willing and able by a specified date to perform the balance of the works (10 per cent) in the same manner as the 90 per cent had been performed, it would be open for a court to grant a decree requiring the assignment of 50 per cent of the sub-lease at a date to follow that completion date. No element of "constant supervision" would arise on those facts.

104 While I do accept the defendant's submission that the nature of the evidence in support of the oral assignment agreement is conclusionary - a factor I will take into account in considering the strength of the plaintiff's case - for present purposes I consider that a decree for specific performance could be shaped and fashioned to overcome the objection the defendant makes to the effect that the work had not been fully completed. Likewise therefore the submission that the defendant could not yet be in breach.

105 The defendant also submits that the terms of the agreement that remain executory are too vague to be the subject of an order for specific performance.

106 This and certain other written submissions were prepared before a significant amendment was made to the plaintiff's indorsement on the writ of summons. After that amendment the force of the submissions fell away to some extent.

107 The agreement that the plaintiff would seek to have specifically performed is not a joint venture agreement to develop the land as originally described but rather the agreement to assign 50 per cent of the sub-lease.

108 I accept the plaintiff's submission that the terms of that sub-lease are sufficiently certain to be specifically performed. As may be evident from my analysis of the alleged part performance below, my main concern was whether there was enough evidence to support, at an arguable level, a case that there had been part performance of the oral contract.

Soiland Pty Ltd v Ridgepoint Corporation Pty Ltd [2005] WASC 124

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (273 paragraphs)

Soiland Pty Ltd v Ridgepoint Corporation Pty Ltd [2005] WASC 124 (10 June 2005)

Parties

Legislation Cited (1)

Cases Cited (28)