Streicholz Fabrik Pty Ltd v Taylor [2023] VSC 240

1 This proceeding concerns a dispute in relation to an "initial temporary short form" agreement made between the parties on 19 December 1986 (Heads of Agreement)[1] about, inter alia, the subdivision, ownership, development and management of land situated at 560-570 Church Street, Cremorne in the State of Victoria, being the former site of the Bryant & May match factory (the Bryant & May Property).[2] The dispute concerns whether the first defendant, Mr Taylor, has a right of first refusal to purchase certain land within the Bryant & May Property owned by the first plaintiff (SFPL) as expressly provided for in the Heads of Agreement (First Right Term)[3].

2 The plaintiffs make two key claims in the amended statement of claim:

(a) it is an implied term of the Heads of Agreement that performance of any of the obligations under the Heads of Agreement, alternatively the First Right Term, is conditional upon SFPL and the second defendant (Headland) remaining owners of particular land within the Bryant & May Property (Alleged Term).[4] It is common ground that Headland ceased to be an owner of the particular land on or around 4 April 1996; and

(b) alternatively, the Heads of Agreement has been abandoned as, since at least March 1991 to 16 November 2021, the parties have not attempted to perform it.[5]

3 The defendants deny the Alleged Term and also that the Heads of Agreement has been abandoned.

(a) pursuant to r 23.01 of the Supreme Court (General Civil Procedure Rules) 2015 (the Rules) to strike out paragraphs 8A (in particular 8A(c)(ix)), 9, 10, 11, 12 and 13 and paragraphs A, AA and B of the prayer for relief of the amended statement of claim;

(b) pursuant to r 22.16 of the Rules and/or ss 62 and 63 of the Civil Procedure Act 2010 (Civil Procedure Act) for summary judgment;

(c) pursuant to r 23.02 of the Rules, or alternatively the inherent power of the Court, to strike out paragraphs 8A(c)(ix), 9, 10, 11, 12 and 13 and paragraphs A, AA and B of the prayer for relief of the amended statement of claim; and

(d) for orders concerning discovery, a tender bundle and costs.

5 The hearing of the defendants' applications proceeded on the basis that the Court would first determine the applications described in paragraphs 4(a)-(c) above.

(a) refuse the defendants' application for judgment, pursuant to r 23.01 of the Rules, on the plaintiffs' claims;

(b) refuse the defendants' applications for summary judgment, pursuant to s 63 of the Civil Procedure Act, on the plaintiffs' claims; and

(c) grant the defendants' application to strike out, pursuant to r 23.02 of the Rules, the plaintiffs' claim of abandonment of the Heads of Agreement (paragraphs 11, 12 and 13 and paragraphs AA and B of the prayer for relief (insofar as paragraph B refers to paragraph AA)) in the amended statement of claim with a right to replead.

7 The parties each filed a document that identified the evidence they relied upon in these applications.[7] The evidence relied upon by the parties did not include a substantial amount of the evidence initially referred to in their submissions.

(a) parts of the affidavits of the first defendant, Mr Taylor, sworn 26 April 2022 (First Taylor affidavit)[8] and 26 May 2022 (Second Taylor affidavit)[9];

(b) parts of the affidavit of a Mr Combes, former real estate agent of the plaintiffs, sworn 19 May 2022 (Combes affidavit);[10]

(c) parts of the unsigned witness statement of the second plaintiff, Mr Hamilton (the Hamilton statement),[11] being one of the documents in exhibit 'BAD-3' to an affidavit of Ben Andrew Dodgshun (Mr Dodgshun), the plaintiffs' solicitor, sworn 11 May 2022 (Fourth Dodgshun affidavit).[12] Mr Dodgshun also gave evidence in an affidavit sworn 24 May 2022 (Fifth Dodgshun affidavit) that he has been informed by Mr Hamilton and believes that the facts and matters stated in the Hamilton statement are true and correct;[13] and

(d) submissions filed 13 May 2022 (defendants' submissions) and 2 September 2022 (defendants' further submissions).

(a) parts of exhibit 'GJT-1' to the First Taylor affidavit;[14]

(b) the Fifth Dodgshun affidavit concerning parts of the Hamilton statement;[15]

(c) parts of the Fourth Dodgshun affidavit;[16] and

(d) submissions filed 18 May 2022 (plaintiffs' submissions), 8 September 2022 (plaintiffs' further submissions) and 16 January 2023 (plaintiffs' second further submissions).

10 Counsel for the parties made submissions at the hearing of the applications.

Stay or judgment in proceeding

(1) Where a proceeding generally or any claim in a proceeding -

(a) is scandalous, frivolous or vexatious; or

(b) is an abuse of the process of the Court -

the Court may stay the proceeding generally or in relation to any claim or give judgment in the proceeding generally or in relation to any claim.

12 In Annesley v Westpac,[17] Derham AsJ said:[18]

1. Rule 23.01 of the Rules is appropriate where the summary determination of the proceeding generally or any claim in the proceeding is sought. The ground of application is that the claim is bad in law or is scandalous, frivolous or vexatious or is an abuse of process. In an application by a defendant, the contention will be that by no proper amendment of the pleading can the plaintiff raise a good cause of action because the claim so completely lacks foundation in fact or law that no legitimate pleading amendment could save it. On an application under r 23.01 of the Rules, any party may rely upon evidence given on affidavit or, by leave, orally.
2. The court will not make an order under this rule unless it is clear on the pleadings or from extrinsic evidence that the claim is unsustainable in fact or in law. The burden on this question lies on the party impeaching the claim.

13 In Hoh v Frosthollow,[19] Derham AsJ provided an explanation of 'frivolous or vexatious':[20]

(b) Frivolous or vexatious: These words in combination have traditionally been used to describe a wide variety of circumstances in which a claim is found to be groundless, or lacking a legal basis or merit

14 In Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd,[21] Connock J said:[22]

1. It has been said, in relation to a predecessor of r 23.01(1), that any distinction between whether a proceeding or claim is 'scandalous, frivolous or vexatious' or 'an abuse of process of the Court' is now 'largely irrelevant'. In Karlsson v Griffith University, Wright J explained the overlapping nature of these concepts, in relation to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), as follows:

"Frivolous" in this context includes proceedings that a plaintiff has no reasonable prospects of successfully prosecuting or that are untenable, groundless or faulty: Spencer [(2010) [2010] HCA 28; 241 CLR 118] at [59]. Proceedings which are foredoomed to fail, and "frivolous" in that sense, include proceedings where no reasonable cause of action is disclosed.

"Vexatious", in this and similar contexts, refers to proceedings that are productive of serious and unjustified trouble or harassment: Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; [2002] HCA 10 at [25] (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ).

Further, frivolous or vexatious proceedings can also be instances of proceedings that are an abuse of process: Walton v Gardiner (1993) 177 CLR 378 at 393 (Mason CJ, Deane and Dawson JJ); [1993] HCA 77.

...

1. In Kermani v Westpac Banking Corporation, Robson AJA (Neave and Harper JJA agreeing) outlined the principles relating to stay applications on the grounds of abuse of process. Those principles relevantly included the following:

(1) The court possesses an inherent jurisdiction to stay its proceedings as an abuse of process if the proceedings are unjustifiably oppressive and vexatious or manifestly unfair or otherwise bring the administration of justice into disrepute among right-thinking people: Walton v Gardiner; Rogers v R and PNJ v R; Jeffrey & Katauskas Pty Ltd v SST Consulting Pty Ltd.

(2) The jurisdiction should only be exercised in exceptional cases or sparingly with the utmost caution: Jago v District Court (NSW).

(3) The jurisdiction to stay for abuse of process is not limited to cases where the proceedings have been brought for an improper purpose or where there is no possibility of the court affording the affected party a fair hearing: Walton v Gardiner; Rogers v R.

(4) The circumstances in which abuse of process may arise are extremely varied and the courts have refrained from limiting the circumstances to fixed categories: Hunter v Chief Constable of the West Midlands Police; Rogers v R; Batistatos v Roads and Traffic Authority (NSW).

(5) In considering whether to grant a stay as an abuse of process, the court should undertake a weighing process involving a subjective balancing of a variety factors and considerations: Walton v Gardiner.

...

1. The factors and considerations to be weighed and balanced include the requirements of fairness to the parties, the public interest and the need to maintain public confidence in the administration of justice.

15 In Dey v Victorian Railways Commissioners,[23] Dixon J said:[24]

The application is really made to the inherent jurisdiction of the court to stop the abuse of its process when it is employed for groundless claims. The principles upon which that jurisdiction is exercisable are well settled. A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process.

16 In Spencer v Commonwealth,[25] Hayne, Crennan, Kiefel and Bell JJ said:[26]

1. In Dey, the defendants moved for summary judgment on the grounds that the action was frivolous, vexatious and an abuse of process. In a passage often later cited, Dixon J said that "[a] case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury". What Dixon J meant by "very clear" was identified by his observation that "once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process" (emphasis added). And there would be a "real question" unless the defendant could "show that it was so certain that [the question] must be answered in the [defendant's] favour that it would amount to an abuse of the process of the court to allow the action to go forward for determination according to the appointed modes of procedure" (emphasis added). The test identified by Dixon J in Dey can thus be seen to be a test requiring certain demonstration of the outcome of the litigation, not an assessment of the prospect of its success.

17 Section 62 of the Civil Procedure Act provides that a defendant in a civil proceeding may apply to the court for summary judgment in the proceeding on the ground that a plaintiff's claim, or part of that claim, has no real prospect of success.

18 Section 63(1) of the Civil Procedure Act relevantly provides that, subject to s 64, a court may give summary judgment in any civil proceeding if satisfied that a claim, a defence or a counterclaim, or part of the claim, defence or counterclaim, has no real prospect of success.

19 Section 64 of the Civil Procedure Act provides that a court may order that a civil proceeding proceed to trial if the court is satisfied that, despite there being no real prospect of success, the civil proceeding should not be disposed of summarily because it is not in the interests of justice to do so or the dispute is of such a nature that only a full hearing on the merits is appropriate.

20 Section 65 of the Civil Procedure Act provides that the powers of a court under Part 4.4 (including ss 61-64) are in addition to, and do not derogate from, any powers a court has under the rules of court in relation to summary disposal of any civil proceeding.

21 An application for summary judgment under s 62 must be made in accordance with Part 3 of Order 22 of the Rules.

Application by defendant for judgment

An application under section 62 of the Civil Procedure Act 2010 by a defendant in a civil proceeding for summary judgment in the proceeding shall be made in accordance with this Part of this Order.

Plaintiff to show cause

(1) The plaintiff may show cause against the application by affidavit or otherwise to the satisfaction of the Court.

(2) An affidavit under paragraph (1) may contain a statement of fact based on information and belief if the grounds are set out.

(3) Unless the Court otherwise orders, the plaintiff shall serve a copy of any affidavit and of any exhibit referred to in the affidavit on the defendant not less than three days before the day for hearing named in the summons.

24 In Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd,[27] the Court of Appeal set out the test to be applied when determining whether to give summary judgment in a civil proceeding pursuant to s 63 of the Civil Procedure Act:[28]

35 Upon the present state of authority:

(a) the test for summary judgement under s 63 of the Civil Procedure Act 2010 is whether the respondent to the application for summary judgment has a "real" as opposed to a "fanciful" chance of success;

(b) the test is to be applied by reference to its own language and without paraphrase or comparison with the "hopeless" or "bound to fail test" essayed in General Steel;

(c) it should be understood, however, that the test is to some degree a more liberal test than the "hopeless" or "bound to fail" test essayed in General Steel and, therefore, permits of the possibility that there might be cases, yet to be identified, in which it appears that, although the respondent's case is not hopeless or bound to fail, it does not have a real prospect of success;

(d) at the same time, it must be borne in mind that the power to terminate proceedings summarily should be exercised with caution and thus should not be exercised unless it is clear that there is no real question to be tried; and that is so regardless of whether the application for summary judgment is made on the basis that the pleadings fail to disclose a reasonable cause of action (and the defect cannot be cured by amendment) or on the basis that the action is frivolous or vexatious or an abuse of process or where the application is supported by evidence.

25 The plaintiffs submitted that, except where a case is plainly "untenable", summary judgment is generally inappropriate in a case concerning the construction of an implied term. This misstates the test which is to be applied which is based upon no real prospects of success. The case cited by the plaintiffs in support of their submission does not support it. In CBA v Ruthven,[29] Mukhtar AsJ applied the test of "no real prospects" and no other test.[30] The Associate Justice granted summary judgment observing that the implied term argument was "untenable",[31] but did not state that this was necessary in order to grant summary judgment. In Zhang & Liu Investment Pty Ltd v Nando's Australia,[32] Lyons J said, in the context of an appeal concerning application for summary judgment based upon the proper construction of an agreement:[33]

[15] ... While noting the caution to be exercised in summary judgment applications, the courts have referred to the desirability of resolving even complex legal questions after full legal argument in such applications. I refer to my comments in John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd. As Latham CJ said in Dey v Victorian Railways Commissioners:

If, as a result of argument, the court reaches a clear decision which could not be altered by any evidence which could be adduced at the trial, then it is proper in the interests of both parties to dismiss the action instead of allowing the parties to incur completely useless expense.

[16] Further, I consider it appropriate to exercise the Court's powers to grant summary judgment in cases where the Court has reached a clear view (i.e. a sufficiently high degree of satisfaction) as to the question of law, such as proper construction of a clause, where it is not suggested that view could be altered by any evidence adduced at trial.

[17] This is in a context where summary judgment applications are now determined pursuant to Part 4.4 (ss 60-65) of the CPA. It is of primary importance, in my view, to bear in mind the overarching purpose of the CPA (and the Rules) in relation to civil proceedings, namely, to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute. In such a case, where the legal issue for determination is in respect of undisputed facts (with no other possible relevant facts) and has been fully argued, determination on a summary judgment application gives effect to that purpose.

26 In Stubbings v Jams 2 Pty Ltd (Stubbings),[34] Elliott J considered whether to exercise the Court's discretion under s 64 of the Civil Procedure Act in the context of an appeal in relation to an application for summary judgment where the defendant (at first instance) relied, inter alia, upon unconscionability under s 12CB of the Australian Securities and Investments Commission Act 2001 (Cth). His Honour found that:[35]

1. ... at the very least for the reasons stated by her Honour [Lansdowne AsJ], this is a (presumably quite rare) case where the Court's discretion ought to be exercised under s 64 of the Civil Procedure Act 2010 in requiring a full hearing of the merits ...

27 In Jams 2 Pty Ltd v Stubbings,[36] Lansdowne AsJ found that there were serious questions raised by some aspects of the evidence and then said:[37]

1. When coupled with the nature of the transaction itself, and the absence of financial information provided to the plaintiffs as to the capacity of the defendant or his company to make repayments, I consider that these matters raise real concerns as to the probity of the transaction. In my view, these concerns can only be satisfactorily put to rest by a trial on oral evidence and after interlocutory processes such as discovery and interrogatories if sought have been utilised.
2. For these reasons I conclude that only a full hearing on the merits is appropriate and I will refuse the application pursuant to an exercise of that discretion under paragraph (b) of s 64 of the Civil Procedure Act.

28 Further, in Stubbings, Elliott J said:[38]

1. A final point on the exercise of the Court's discretion. A court ought to act with particular caution when it is required, under the relevant statutory provisions, to consider 'all the circumstances', and where, despite a substantial body of affidavit evidence filed by the Mortgagees, there are serious issues that have remained unexplained, and where the application was made at a time when there had been no discovery in the proceeding.

29 The plaintiffs also relied upon a decision of Byrne J in John Holland Construction & Engineering Pty Ltd v Kvaerner R J Brown Pty Ltd.[39] Byrne J observed, in the passage relied upon by the plaintiffs, inter alia:[40]

... One of the advantages of such a list is that the judge, being familiar with the case, can encourage the parties to identify and formulate issues so that the trial might be conducted in an economical and expeditious a manner as may be consistent with the just disposition of the dispute.

30 His Honour's observations remain compelling. Summary judgment applications are also regularly heard and determined by judges in the Commercial Court.

Striking out pleading

Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading -

(a) does not disclose a cause of action or defence;

(b) is scandalous, frivolous or vexatious;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court -

the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

32 No evidence is admissible on the question of whether a pleading offends against r 23.02 of the Rules.[41]

33 In Annesley v Westpac,[42] Derham AsJ said:[43]

1. Under r 23.02 of the Rules, the objection is to the manner of expression of the pleading. That is, the statement of claim does not disclose the cause of action or its contents are such that it is scandalous, frivolous or vexatious, or may prejudice, embarrass or delay the fair trial of the proceeding, or is otherwise an abuse of process ... The meaning of some of the important terms are:

(a) scandalous: allegations made in a pleading for the purpose only of abusing or injuring the opposite party and allegations which are indecent or offensive are scandalous within the meaning of the rule, and are liable to be struck out;

(b) frivolous or vexatious: these words in combination have traditionally been used to describe a wide variety of circumstances in which a claim is found to be groundless, or lacking a legal basis or merit; and

(c) prejudice, embarrass or delay: in general, a pleading or indorsement is embarrassing when it places the opposite party in the position that he or she does not know what is alleged against him or her. Thus, a pleading is embarrassing where it is unintelligible, or is vague or ambiguous, or is too general.

34 In Meckiff v Simpson,[44] the Full Court of this Court said of a previous rule of the Court that authorised the Court to strike out pleadings:[45]

It is important at the outset to stress that the order appealed against was made on an application under O. XIX, r. 27, which authorizes a judge to strike out any matter in any pleading which may tend to prejudice, embarrass or delay the fair trial of the action. As is shown by numerous authorities on this rule, which takes its place in an order dealing with pleadings generally, matter in a pleading will be struck out under this rule only where there is some defect in the pleading attacked, e.g. where the pleading is unintelligible, ambiguous, vague or too general, so as to embarrass the opposite party who does not know what is alleged against him. The rule is one to ensure compliance with the rules of pleading and nothing else.

35 In Wheelahan & Anor v City of Casey & Ors (No 12) (Wheelahan),[46] John Dixon J relevantly summarised the principles to be applied:[47]

25. ... Relevantly:

...

(b) the function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial;

(c) the cardinal rule is that a pleading must state all the material facts to establish a reasonable cause of action (or defence). The expression 'material facts' is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action;

(d) as a corollary, the pleading must be presented in an intelligible form - it must not be vague or ambiguous or inconsistent. Thus a pleading is 'embarrassing' within the meaning of r 23.02 when it places the opposite party in the position of not knowing what is alleged;

...

(f) pleadings, when well-drawn, serve the overarching purpose of the Civil Procedure Act 2010 (Vic);

...

(h) it is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing;

(i) every pleading must contain in a summary form a statement of all material facts upon which the party relies, but not the evidence by which the facts are to be proved (r 13.02(1)(a));

...

(k) particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement - namely, to fill in the picture of the plaintiff's cause of action (or defendant's defence) with information sufficiently detailed to put the other party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried;

...

(o) the power to strike out a pleading is discretionary. As a rule, the power will be exercised only when there is some substantial objection to the pleading complained of or some real embarrassment is shown;

...

36 In Babcock & Brown DIF III Global Co-Investment Fund, LP & Anor v Babcock & Brown International Pty Limited & Ors (No 2) (Babcock),[48] Hargrave J referred to the principles summarised by John Dixon J in Wheelahan and added the following observation:[49]

1. To this summary, I would add that the Court should consider the pleading under a challenge as a whole and adopt a practical case management approach to pleading objections, rather than accepting technical objections when the true nature of the case to be met is clear from reading the pleading as a whole and there is no embarrassment to filing a responsive pleading. Such an approach accords with the discretionary nature of the power to strike out and with the overarching purpose under the Civil Procedure Act. However, in cases alleging dishonesty or fraud, precise pleadings with full particulars are required.

37 In Babcock, Hargrave J also stated:[50]

1. Before considering these issues, it is necessary to stand back and consider the statement of claim and the third party notice as a whole and, in that light, ask:

Does the plaintiffs' case previously advanced against Ms Talintyre, as adopted and expanded by the RBS defendants in the third party notice, give Ms Talintyre clear notice of the case she needs to meet at trial?

38 In BFJ Capital Pty Ltd v Financial Ombudsman Service Ltd (in liq),[51] Elliott J said:[52]

1. The legal principles that apply to strike out applications are also without controversy.
2. The court may order that the whole or part of a pleading be struck out if, relevantly, a statement of claim: does not disclose a cause of action; is scandalous, frivolous or vexatious; may prejudice, embarrass or delay the fair trial of the proceeding; or is otherwise an abuse of the process of the court. Unlike an application under r 23.01, an application under r 23.02 seeks no more than a striking out or an amendment, rather than judgment ordered summarily.
3. The elements of an adequate pleading are straightforward. A pleading must comprise a coherent narrative of material facts which set out and frame the elements of a cause of action. It must be pleaded with sufficient clarity, must not be unintelligible, ambiguous or vague and must not raise allegations that are offensive. Where particulars are relied upon, they ought not be used to "fill material gaps" or "cure a bad statement of claim". Ultimately, the purpose of a proper pleading is to allow, in the interests of fairness, the opposite party to know what is alleged. Where a pleading is deficient in any of these respects, an application striking out the pleading may be warranted.
4. A strike out application, therefore, is distinct from an application for summary judgment in that it is an objection to the manner of expression of the pleading, as opposed to the prospects of the cause of action or defence itself. Again, care must be exercised when ordering that a pleading be struck out.

39 SFPL was named "Splendidus Pty Ltd" prior to 29 June 1987.[53]

40 Mr Hamilton is a director of SFPL.[54] Mr Hamilton is an experienced business person who, in 1972, took over the family business of selling Porsche vehicles.[55] By about 1985, the business had about 176 employees and operated its retail business from premises on Chapel Street, in South Yarra.[56]

41 Between 1 October 1987 and 22 March 1991, SFPL became the registered proprietor of 11 titles comprising the 'northern part' of the Bryant & May Property at 560 Church Street, Cremorne (Northern Property).[57]

42 Headland was named "Sedice Pty Ltd" prior to 12 July 1996.[58]

43 Mr Taylor is a director of Headland.[59] Mr Taylor gave evidence that he manages syndicates and trusts which have interests in properties or in businesses with interests in properties.[60]

44 Between 19 October 1987 and 29 August 1989, Headland became the registered proprietor of the 'southern part' of the Bryant & May Property at 570 Church Street, Cremorne (Southern Property).[61]

45 Mr Dodgshun gave evidence, based on information from Mr Hamilton, and his belief,[62] as to the following matters in the Hamilton statement concerning the period late 1985 to early 1986:[63]

1. I [Mr Hamilton] recall walking into one of the buildings at the Site and speaking with the representatives of Bryant & May (including one Mr Fred Sawatzky) in relation to purchasing the Site. Mr Sawatzky informed me that Bryant & May had some sort of commitment to sell the Site to the first defendant (Taylor) and a senior executive of Colliers, one Mr Bill McHarg.

46 On 1 October 1986, Bryant & May Pty Ltd (as vendor) and Mr Taylor (as purchaser) entered into an option agreement (Option Agreement) concerning the purchase of the Bryant & May Property.[64] The Option Agreement provided that, in consideration of the payment of an option fee of $25,000, Bryant & May Pty Ltd agreed to grant to Mr Taylor an option to purchase the Bryant & May Property on the terms and conditions set out in the Option Agreement (Option). This included the purchase price of the Bryant & May Property being $5,610,000 with a deposit of $561,000. The Option Agreement also provided that the Option was capable of being exercised up to and including 5:00pm on 28 December 1986.

47 The Option fee of $25,000 had already been paid on 25 August 1986 during negotiations for the Option Agreement.[65]

48 On 19 November 1986, Mr Hamilton sent a letter to Gil Williams and Co Pty Ltd, property agents acting on behalf of Bryant & May Pty Ltd,[66] in which he stated:[67]

We herewith confirm our offer for the freehold purchase of that northern portion of Bryant & May - bordered by centre line Russell Street: Church St: Chestnut St and Adelaide St: viz approximately 100,000 square feet for:

$3,750,000 payable 10% deposit on signing; 40% in 9 months; 50% balance on possession, subject to the ability of this Company to fulfill the intended use of the site.

49 By an agreement made between Mr Taylor (as vendor) and SFPL (as purchaser), Mr Taylor sold his interest in the Option Agreement to SFPL for the sum of $50,000.[68] By a further agreement made between Mr Taylor (as vendor) and SFPL (as purchaser), the parties agreed upon the timing of the payment of the sum of $50,000.[69] These agreements are dated "25 November 1986". Upon the pleadings there is no dispute that these agreements were made on 25 November 1986.[70] Mr Taylor, however, gave evidence concerning the date of execution:[71]

1. Two of the contracts were incorrectly dated 25 November 1986. This date was prior to them even being drafted and certainly prior to the agreements having been made, or capable of being made between the parties. A true copy of these documents appear at GJT-1/ page [58‑59] and [60] (IL 07 and 08). Accordingly, paragraph 16(b) of Mr Hamilton's witness statement is incorrect as the First Plaintiff did not purchase my option on 25 November 1986. It is inconsistent with the exchange of faxes and letters on 2 and 3 December 1986 and the fact that Mr Hamilton advised me that Mr Druce of TDE would be his solicitor in the matter on 3 December 1986 (referred to in paragraphs 19 to 21 above).

50 Also, during the hearing, the defendants made submissions that these agreements must have been made later.[72] Counsel for the defendants did not make an application to withdraw the admission that the agreements were made on 25 November 1986.[73] Mr Dodgshun gave evidence that he is informed by Mr Hamilton and believes that Mr Hamilton does not agree that these two agreements are incorrectly dated.[74] I can see some merit as to why these agreements cannot have been executed until later. For example, I refer later in these Reasons to a letter dated 2 December 1986 from Mr McHarg to Mr Hamilton that refers to "the option" being jointly exercised.[75] This is inconsistent with the Option having already been transferred to SFPL by that time. However, against this, is the fact that the agreements are dated 25 November 1986, the word "December" has been crossed out and replaced by the word "November" on one of the agreements and Mr Taylor has not provided any explanation why they have, in effect, been backdated. The Court cannot determine this dispute on this application.

51 Mr Taylor gave evidence that he gave instructions to Mr McHarg of Colliers, international property consultants acting on his behalf, to have discussions with Mr Hamilton concerning the offer made by Mr Hamilton.[76]

52 On 2 December 1986, Mr McHarg sent a letter to Mr Hamilton.[77] In that letter, Colliers stated, inter alia, that Mr Taylor confirmed the basis upon which he would accept the purchase of the Northern Property by Mr Hamilton. It referred to a purchase price of $4.3 million for the Northern Property. It provided as follows:[78]

December 2, 1986.

...

Dear Alan,

BRYANT & MAY PROPERTIES

NORTH OF RUSSELL STREET, RICHMOND

Following our meeting this morning, I now confirm the basis of a purchase of these properties which would be acceptable to Mr. G. Taylor.

Price: $4.3 million

Deposit: $430,000 payable within 7 days.

Balance: $3,870,000 payable on or before September 30, 1987.

Possession: To be negotiated with the Vendor, Bryant & May, but subject to a lease at $270,000 per annum for 12 months from the settlement date extended for up to a further 6 months at a rental of $27,500 p.c.m.

SPECIAL CONDITIONS

1. The existing building lines fronting Russell Street and the central courtyard are to remain the finite edge of any building in this area, subject to particular carparking layout, landscaping, signage and beautification etc. reciprocal rights of way to be created in favour of the owners of both northern and southern properties.

2. The cost of separating water supply, power supply, sprinkler systems, gas and any services to both properties shall be shared equally by Taylor & Hamilton.

3. Taylor to be granted a first right of refusal over the northern properties if ever offered for sale.

4. The owners of both northern and southern properties will have the mutual right of approval of any proposed alterations or improvements to buildings facing the central right of way.

5. The security and maintenance of the central courtyard to be jointly managed by the owners of both northern and southern properties under a body corporate type structure.

6. Each party is to sign a confidentiality agreement relating to the terms and conditions of the sale, not precluding any rights to disclose details to financiers etc.

7. The sale will be subject to a mechanism being devised whereby Hamilton's will jointly exercise the option to purchase in conjunction with Taylor prior to the week ending December 13, 1987.

The sale is subject to the detailed contract conditions being mutually acceptable.

Taylor's Solicitors are Messrs. McKean & Park, Attention: Mr. Richard Park at 405 Lt. Bourke Street, Melbourne, Telephone: 67-8821.

We are certain that the purchase of this property will prove to be a major turning point for Hamiltons, both as an outstanding real estate investment and as a major staging point for future trading growth; congratulations.

Yours sincerely,

[signed]

H. W. McHARG.

53 On 3 December 1986, Mr Hamilton sent a letter to Mr McHarg in which he stated:[79]

We received your Fax regarding Bryant and May properties north of Russell Street, Richmond and advise that we accept the terms and conditions as set out therein.

Please advise the name of the person or organisation to whom our cheque for four hundred and thirty thousand dollars ($430,000.00) should be made out to.

I assume that our acceptance of these terms and conditions means that our company or its nominee will become the owner of the said property following final settlement.

Our solicitors in the matter will be Tolhurst, Druce and Emmerson, of 389 Lonsdale Street, Melbourne, attention Mr Peter Druce, telephone 67 6681.

When can I open the champers?

1. ... I am informed by Mr Hamilton and believe that his recollection was that Mr Taylor was unable to obtain financing for the entire purchase price for the Site (being $5,610,000) and it was for this reason that the arrangement was reached between Mr Taylor and Mr Hamilton in which each would purchase a portion of the Site.

55 I will refer, for convenience, to the arrangement set out in the letters exchanged on 2 and 3 December 1986 between Mr McHarg and Mr Hamilton as "the Taylor/Hamilton arrangement". There is evidence of various draft agreements based upon, inter alia, the Taylor/Hamilton arrangement.[81]

56 Mr Dodgshun gave evidence, based on information from Mr Hamilton and his belief:[82]

1. In [19]-[21] of the Taylor Affidavit, Mr Taylor makes reference to exchanges between him and Mr Hamilton. I am informed by Mr Hamilton and believe that, as set out in [11] and [12] of the Hamilton Statement, Mr Hamilton had an arrangement with Mr Taylor in which Mr Hamilton would purchase the northern portion of the Site for $4.3m, and that Mr Hamilton's recollection is that the reason why such an arrangement was entered into was because Mr Taylor was unable or unwilling to purchase the entire Site himself at the price identified by Bryant & May (being $5,610,000).

57 On 15 December 1986, Mr Park of McKean and Park, solicitors acting on behalf of Mr Taylor, sent a letter to Weigall & Crowther, solicitors for Bryant & May Pty Ltd. In that letter it is stated, inter alia:[83]

Splendidus Pty. Ltd. will exercise the option after providing you with the usual form of Nomination completed by Gregory J. Taylor and signed by those parties. At the time of exercise we will also provide you with the written direction of Splendidus Pty. Ltd., as to the two separate contracts as agreed which we confirm as follows -

1. Sedice Pty. Ltd. of our office as to Russell Street and the land to the south (as far as the Title boundaries allow and the Purchasers to arrange their own re-alignment) at a price of $1,360,000.00, and

2. Splendidus Pty. Ltd. of our office as the remainder for $4,250,000.00.

58 On 18 December 1986, Weigall & Crowther sent a letter to the solicitors for Headland in which they provided contracts of sale for SFPL and Headland and stated, inter alia:[84]

We await instruction from our client regarding settlement at 12 noon tomorrow.

At settlement we envisage the following taking place:

1. Delivery of signed Vendors Statements to the Purchaser Companies;

2. Notice of Exercise of Option and Option Nomination;

3. Exchange of Contracts of Sale;

4. Bank cheque for $536,000;

1. Authority from G.J. Taylor confirming that the Option fee of $25,000.00 may be applied as part deposit under the Splendidus Contract;

...

59 On 19 December 1986, SFPL exercised the Option by a document titled "Notice of Exercise of Option" in which it is stated:[85]

NOTICE OF EXERCISE OF OPTION

Relating to an option between -

Vendor - BRYANT & MAY PTY . LTD. of 560 Church Street, Richmond, 3121, and -

Purchaser - SPLENDIDUS PTY. LTD. of the office of McKean & Park, Bourke Chambers, 405 Little Bourke Street, Melbourne, 3000 -

Property - 560-570 Church Street, Richmond, 3121

The Purchaser now exercises the Option made the 1st October, 1986 by delivery to the Vendor's Solicitors, Weigall & Crowther of 385 Bourke Street, Melbourne, of -

1. a bank cheque drawn in their favour for $536,000.00 and,

2. Contracts of Sale (in duplicate) to Splendidus Pty. Ltd. and to Sedice Pty. Ltd. (of the same address) respectively, (as requested by the Purchaser and here confirmed in writing) and,

3. the Vendors Statements attached to those Contracts with acknowledgments duly executed as to the receipt by the respective parties of the originals prior to their execution of the Contracts.

...

60 On 19 December 1986, SFPL, Mr Hamilton, Headland and Mr Taylor entered into the Heads of Agreement.[86] The Heads of Agreement provided:

THESE HEADS OF AGREMEENT are made on the 19th day of December, 1986

BETWEEN:-

(1) SEDICE - being SEDICE PTY. LTD. of 36 Howe Crescent, South Melbourne, 3205, and

(2) SPLENDIDUS - being SPLENDIDUS PTY. LTD. of 576 Princes Highway, Noble Park, 3174 and

(3) TAYLOR - being GREGORY JOSEPH TAYLOR of 36 Howe Crescent, South Melbourne, 3205, as manager of Sedice and

(4) HAMILTON - being ALAN DOUGLAS McKINNON HAMILTON of 576 Princes Highway, Noble Park, 3174, as manager of Splendidus -

CONCERNING -

1. The purchase by Sedice and Splendidus from Bryant & May Pty Ltd of the Match Factory at 560-570 Church Street, Richmond, 3121 and the future management of the courtyard and other common areas along Russell Street ("the Courtyard"), as shown on the attached Plan A, for the mutual benefit of the parties, and

B. The desire of both Companies to obtain registration of -

(a) Sedice Pty Ltd as the proprietor of the southern section of the Match Factory up to a line running along the northern alignment of Russell Street, and

(b) Splendidus Pty Ltd as the proprietor of the remainder of the Match Factory north of the northern alignment of Russell Street,

UPON THE FOLLOWING CONDITIONS -

1. The parties will appoint -

1.1. Greenhatch & Partners Pty Ltd as architects for the refurbishment and redevelopment of the existing buildings and other improvements at the Match Factory.

1.2. Nunan van Baer Austin, and Capalino Pty Ltd as surveyors to accurately define the Courtyard and prepare plans for -

(a) sub-division of such titles as are necessary to achieve the common title boundary of both sections of the Match Factory as described above, and

(b) the granting of easements of carriageway as roughly set out on the attached Plan B and/or as may otherwise be necessary for the best use of both sections.

1. No alteration may be made to any building or improvements facing the Courtyard without the approval of all parties and Kevin Greenhatch, Architect will be the arbitrator of any differences amongst the parties in relation to any matter of design or construction at the Match Factory.
2. The parties will share equally in the costs associated with the sub-division and with the separation of services and also with the redevelopment of the Courtyard (as generally shown on Plan A).
3. The Courtyard will contain car parking spaces abutting and within the line of the main southern building for the use of Sedice, (which may protrude into Russell Street). These spaces may be secured by easements or other appropriate title means should any party so require. Further car spaces shall be provided and allocated by agreement.
4. The parties will assist one another as may be reasonably required for the purpose of refurbishing and redeveloping their respective sections particularly in view of Historic Buildings, town planning and other controls, with all refurbishment and redevelopment to compliment the Courtyard, and the Courtyard to service and compliment both sections and their redevelopment.
5. Ongoing maintenance, security and development of the Courtyard will be met equally by Sedice and Splendidus. For this purpose an annual budget will be prepared on the 1st day of February of each year.
6. Each party will abide by such regulations as they may agree to in relation to the use of the Courtyard.
7. Taylor and/or his Nominee/s will have the first right of refusal over the Splendidus section if Splendidus, its shares, or that section are for sale or transfer and no sale or transfer shall be effected without Taylor and/or his Nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee.
8. All matters shall remain confidential save as may otherwise be absolutely necessary to the proper course of the parties business.
9. Each party includes its successors, personal representatives and permitted assigns.
10. Save as otherwise provided in this Agreement, any irreconcilable difference between the parties shall be referred to Robin Clements, Solicitor, of 461 Bourke Street, Melbourne whose decision shall bind the parties and whose fees shall be born equally by Sedice and Splendidus.
11. This is intended only as an initial temporary short form Agreement to be replaced by a formal Agreement setting out more fully the conditions of any final Agreement between the parties.

61 Mr Dodgshun gave evidence, based on information from Mr Hamilton and his belief, as to the following matters in the Hamilton statement:[87]

1. I [Mr Hamilton] do not have a specific recollection of negotiating or executing the Heads of Agreement. I accept that it has my signature on it next to my name...

62 As I have already said in these Reasons, I will refer to the term in clause 8 of the Heads of Agreement as "the First Right Term". Mr Taylor referred to this in his evidence as the "FROR" (i.e. first right of refusal).

63 It is common ground between the parties on these applications that the Heads of Agreement was not replaced by "a formal Agreement setting out more fully the conditions of any final Agreement between the parties".

1. The parties to the HOA included the two companies that would be owners of the respective properties and bound to observe the more operative components of the agreement, as well as the two natural persons, one of whom was me personally receiving a grant of a FROR in my own name... Further the FROR as agreed to by Mr Hamilton in his facsimile and letter of 3 December 1986, by accepting the offer of 2 December 1986, was to me, personally. It was not made conditional on myself or any entity related to me remaining the owner of the southern section. This was never suggested at all.

...

1. Apart from the consistent architectural treatment, which could not be anything different to what it already was on the southern side, and the orderly subdivision of uncertain and unforeseen remnants of former thoroughfares with the separation of services, the benefit of the HOA to the parties was clear. It was all on the northern side that the question of new building appearance was going to be relevant. The success of the working arrangement is evident today by simply looking at the result. It was also due to the extremely hard work of Kevin Greenhatch and his team that the project was so successful. Mr Greenhatch personally, together with his employee Mr Michael Cockcroft, managed both the northern and southern sections, the interaction between the owners and with the consultants And the authorities.

First Right of Refusal

1. I specifically made the FROR a condition of the deal in December 1986. It was accepted by the plaintiffs, and that acceptance was relied upon by me and was documented accordingly and appropriately.
2. The FROR agreed to on 3 December 1986, was extended in the HOA to include the First Plaintiff and the shares in the First Plaintiff, from the original agreement contained in the original offer and acceptance.

65 SFPL acquired ownership of the Northern Property in the period 1 October 1987 to 22 March 1991. It is constituted by numerous titles.

66 Headland acquired ownership of the Southern Property in the period 19 October 1987 to 29 August 1989. It is also constituted by numerous titles. Headland ceased to be the registered proprietor of the Southern Property from on or about 4 April 1996.[89]

(a) southern boundary of the Northern Property (i.e. where it abuts any common area or the Southern Property); and

(b) northern boundary of the Southern Property (i.e. where it abuts any common area or the Northern Property),

was not the subject of evidence. The parties referred to Exhibit 'GJT-1' to the First Taylor affidavit at page 55. This document shows the titles within the Bryant & May Property as at 15 November 1968.

68 Mr Dodgshun gave evidence, based on information from Mr Hamilton and his belief, as to the following matters in the Hamilton statement:[90]

1. There were a series of negotiations that took place with Porsche AG in early 1991, as Porsche AG wished to continue operating from the Property, and we needed to reach agreement with Porsche AG about the transition of the business to it, including how to handle existing customers and unfulfilled orders. At this time, I [Mr Hamilton] also had a large liability to Porsche AG arising out of orders for Porsche vehicles for customers of mine who after I had ordered the vehicles from Porsche AG had subsequently cancelled their orders with me...

69 Mr Taylor gave evidence that on 12 March 1991 he had a telephone conversation with a Mr Andrew Pitney of Clayton Utz, who acted on behalf of the plaintiffs, and made the following notes of that conversation:[91]

*Andrew Pitney ® from Clayton Utz + asked for an urgent favour.

1. - I replied that Clayton Utz aren't my favourite firm-he acknowledged that a lot of people felt that way.

2. Caveat + M'gage

- I can withdraw Cav - he'll fax details

- I'll ® Leon Hickey of J P Metcalf

3. I ® Leon Hickey - he'll fix my problem.

4. I ® Andrew- OK now w' Leon Hickey.

- He sd. sett. delayed bec. prob. getting funds from Germany.

- I sd. I'd want a letter confirming that my Rt of 1st Refusal is not affected by the re-financing

- He'll get back to me.

____________________________________________________________________

Alan Hamiltons sec. ® for apt. for me to see Alan tomorrow morn.

GT's sec. ® + made appt at Richmond at 10.45

70 Mr Taylor gave evidence that he then received facsimile letters from Clayton Utz on 12 March 1991 and on 13 March 1991. The facsimile letter dated 13 March 1991 stated:[92]

As discussed I attach a deed by which Sedice and Mr. Taylor acknowledge that the provisions clause 3.7 of the Call Option Deed take precedence over the provisions of the Heads of Agreement made in December 1986.

The draft has been prepared for the purposes of the discussion with Mr. Taylor. Please let me have your comments.

71 The attached draft deed provided, inter alia:[93]

WHEREAS:

1. The parties hereto (other than Porsche) have executed a heads of agreement in December 1986, a copy of which is attached as Annexure "A" hereto (the "Heads of Agreement").

2. Mr. Hamilton, the Property Company, Porsche, Alan Hamilton Nominees Pty. Ltd., A.C.N. 005 014 844, Fenton Downs Pty. Ltd., A.C.N. 055 800 779 and Sarlat Pty. Ltd., A.C.N. 006 359 557 intend to execute a call option deed in the form or substantially in the form of the document contained in Annexure "B" hereto (the ''Call Option Deed").

THE PARTIES AGREE:

1. The first right of refusal conferred by clause 8 of the Heads of Agreement upon Mr. Taylor and/or his nominees and/or Sedice and/or its nominees shall not apply to any sale, transfer or other dealing with the Richmond Property (or any part thereof) pursuant to clause 3.7 of the Call Option Deed and in that regard the parties agree that in all respects the provisions of the Call Option Deed shall prevail and take precedence over the provisions of the Heads of Agreement.

72 Mr Taylor gave evidence that the draft deed was not subsequently agreed to, or executed by, the parties.[94]

73 Mr Taylor gave evidence that he then met with Mr Hamilton on 13 March 1991:[95]

1. On 13 March 1991, I attended Mr Hamilton in, as I recall, his impressive office. We had a discussion relating to my FROR. Mr Hamiltion [sic] told me that he would purchase the FROR from me for $100,000.00. He said he would pay $50,000.00 payable immediately, and $50,000.00 over time.

74 Mr Dodgshun gave evidence, based on information from Mr Hamilton and his belief, as to the following matters in the Hamilton statement:[96]

1. In [108] of the Taylor Affidavit, Mr Taylor refers to a meeting between Mr Hamilton and Mr Taylor. I am informed by Mr Hamilton and believe that he does not recall such a meeting but accepts that it may have occurred, and otherwise refers to the matters in [30]-[36] of the Hamilton Statement, which describes this period of time, [sic]

75 On 13 March 1991, Mr Taylor sent a letter to Mr Hamilton in which it is stated:[97]

I refer to our discussion this morning and advise that I have considered the situation and am prepared to agree to your request and concede my rights under the option on the payment of $100,000 now together with receipt of an automatic S.4.

Unfortunately as I advised I am committed to important meetings virtually all day. However I will make time available to attend your solicitors if agreement can be reached.

Please advise my secretary who will contact me.

76 On the same date, Mr Hamilton sent a facsimile to Mr Taylor in which it is stated:[98]

Thanks for your fax. Your counter-offer is rejected and as a consequence our offer is withdrawn.

77 On 14 March 1991, Clayton Utz sent a letter to Mr Taylor in which in which it is stated:[99]

We refer to previous discussions and confirm that we act for Streicholz Fabrik Pty. Ltd., the registered proprietor of the land contained in Certificate of Title Volume 9758 Folio 913 and Alan Douglas McKinnon Hamilton.

We note that Caveat No. M654390A lodged by Sedice Pty. Ltd. affects our client's land.

Sedice Pty. Ltd. has no interest in Certificate of Title Volume 9758 Folio 913 and we, therefore, request the immediate withdrawal of Caveat No. M654390A in so far as it affects our client's land. We enclose a Withdrawal of Caveat for immediate signature by you on behalf of Sedice Pty. Ltd. and return to us. Please also complete the company's A.C.N.

Please be advised that the Withdrawal of Caveat is required for a settlement to be effected at 12 noon today involving some $20 million. Should settlement not occur due to the existence of the Caveat over our client's land, our client will look to you for damages. The settlement also involves the ANZ Bank and Porsche AG (Germany). No doubt those corporations would also look to you for damages in that event.

We confirm that Streicholz Fabrik Pty. Ltd. (formerly known as Splendidus Pty. Ltd.) and Alan Douglas McKinnon Hamilton confirm all of the terms and conditions contained in the Heads of Agreement dated 19 December 1986 between Sedice Pty. Ltd., Splendidus Pty. Ltd., Alan Douglas McKinnon Hamilton and yourself.

78 Mr Taylor gave evidence of various conversations on 14 March 1991, including with Mr Pitney, and that his note of this conversation records:[100]

14/3/91 Porsche

(1st refusal)

I handed Withdrawal of Caveat at 11.30 to Andrew Pitney and sd. we'd like the offer $100K back or we'll lodge Caveat.

- He said who have I told

1. In or about April 1997 I contacted Mr Bruce Richards, of Jones Lang Wootton (JLW), the agent for the First Plaintiff, and advised him that I had a FROR.
2. Mr Richards directed me to contact the solicitor for the First Plaintiff, who was Mr Don McCallum [sic] of ME [Minter Ellison]. I contacted Mr McCallum [sic] by phone. I left a message. On or about 24 April 1997 I understood Mr McCallum [sic] contacted me and left a message with my office. A true copy of the message that was taken of that call is at GJT-1/page [292-295](IL49).
3. On 28 April 1997 at approximately 9:30am and again at 4:05pm I spoke with Mr McCallum [sic] and made contemporaneous notes of the conversation. A true copy of the notes of my conversation with Mr McCallum [sic] are at GJT-1/page [289-290] and [292-295] (IL47 and 49). I told Mr McCallum [sic] that I had been overseas and asked if the Property was for sale. I told him that I had a right of first refusal. It was apparent during that conversation that Mr McCallum [sic] was not aware of my FROR. We spoke about the operation of the FROR. He said he would speak to Mr Hamilton about the FROR. I told him that Mr Hamilton will remember the FROR and I told him of the offer from Mr Hamilton to buy the FROR from me for the sum of $100,000.00 and how that offer had been withdrawn.
4. At point "2" of those contemporaneous notes (IL49) the following appears:

Is he aware of my right of 1st refusal? -No.

- We disc. ramifications

• He asked for a copy ... I sd. Whilst I'm a sol. (part time only) I'll be getting someone to act for me i.e Howard Obst of TC + M.

- we talked e. operation of the right i.e I don't have to make an offer. Rather I get the opportunity to say yes or no to the offer they will accept - he agreed.

1. On the page featuring "2" at the top of the page of those contemporaneous notes the following appears:

We closed on:

- I'll look for permits + copy of Agreement

- He'll call Alan Hamilton

I had said Alan will remember + I recounted the Clayton Utz saga, the old caveat + the $100k offer ($50k immed. + $50K over time) + how it had been withdrawn.

...

1. On 2 June 1997 I had further conversation with Don McCallum [sic] of ME. He told me that he could see no reason not to give me the right of refusal, and that it was of no harm to his client. He asked for a copy of the HOA, and I told him that it was not up to me to provide him with a copy of it. Don McCallum [sic] said that I could not caveat a right of first refusal. I said that there were also other issues covered in the HOA. I took contemporaneous notes of this conversations [sic]. A true copy of my file note is at GJT-1/page [296] (IL50).
2. This file note states as follows:

Mon. 2/6/97 Porsche

I ® Don McCallum [sic] at Minter Ellison 9229 2000.

- he has advised Alan Hamilton who hasn't given full instructions yet !

- Don sd. he can see no reas. not to give me rt. of Refusal.

- No harm to Alan.

- I sd. It's not up to me to provide copy of agreement.

- he sd. I can't Caveat for a Rt. Of 1st Refusal

- I sd. there are other issues in the agreement + that

1. I tried calling Mr McCallum [sic] on 26 June 1997 but was told he was away. A true copy of my file note is at GJT-1/page [297] (IL51).
2. Subsequently the Property was not sold.
3. In late 1997 and early 1998 there was a further campaign to lease the Property. A true copy of articles appearing in The Age are at GJT-1 page [298] and [299] (IL52 and 53). I understood that the Property (or parts of it) was ultimately leased.
4. At no stage did Don McCallum [sic], or Bruce Richards, ever communicate that there was any dispute regarding my FROR, or that the HOA did not apply, or that they had received instructions from Mr Hamilton that the HOA or the FROR had been abandoned.

1. In relation to [120]-[130] of the Taylor Affidavit, I am informed by Mr Hamilton and believe that (as set out in [41] of the Hamilton Statement), Mr Hamilton retained Don MacCallum, Partner at MinterEllison, to act for him in relation to the potential sale of the Site. I am informed and believe that Mr Hamilton does not recall Mr MacCallum ever raising with him a phone call of the kind described by Mr Taylor. I further note that in the last of the discussions with Mr MacCallum referenced in [126] of the Taylor Affidavit, Mr MacCallum states that Mr Hamilton 'hasn't given full instructions' and that Mr Taylor stated to Mr MacCallum that 'it's not up to me to provide copy of agreement', which suggests that as at that date, Mr MacCallum did not have a copy of the Heads of Agreement.

81 There is a copy of the Heads of Agreement that contains two facsimile transmission headers that show it has been faxed by, inter alia, Hamilton Nominees Pty Ltd. There is otherwise no evidence about this document.

1. I do not recall being aware at the time however in or about 2006‑2007 TeskaCarson was retained to sell the property as agents for the Plaintiffs, perhaps off market. As mentioned, the Plaintiffs have produced a draft contract and Vendor's Statement from 2006, and a true copy of which is at GJT-1 page [305-817] (IL55). As is evident from the document, ME were again acting for the Plaintiffs.

83 The Vendor Statement referred to and attached the Heads of Agreement.[104] There is no evidence that Mr Taylor was aware of this Vendor Statement at the time (i.e. 2006/2007).

1. In or about April 2008 the Property was again offered to the market. An article appeared in The Age alerted me to the campaign to sell the Property. A true copy of the article is at GJT-1 page [304] (IL54).
2. I discussed and asserted my FROR, with the vendor's agent, Mr David Combes of Alexander Robertson. I remember this well as I was dealing with the agent concerning a property in East Melbourne and had cause to talk with him frequently.

...

1. I obtained the commitment and assurance from Mr Combes that I would be kept totally up to date and notified of any genuine interest. He promised that the Property would not be sold without me being first consulted.

85 Mr Combes gave evidence, inter alia, as follows:[106]

1. In or about 2008 I received instructions from the Plaintiffs to sell a property owned by it located at 560-580 Church Street, Richmond, Victoria (the Property). The Second Plaintiff provided instructions on behalf of the First Plaintiff.
2. As part of the sales campaign, I was in contact with Greg Taylor. In 2008, I had known the Greg Taylor for over 5 years. I was responsible for marketing the Property.
3. When I spoke with Greg Taylor he communicated that the asking price for the Property was unrealistic. That was the general consensus across the market from my interactions with other potential buyers.
4. During that conversation Greg Taylor mentioned that he had a first right of refusal over the Property. I don't believe I was previously aware that Greg Taylor had a first right of refusal over the Property.
5. I communicated to Greg Taylor that I would notify him without delay if there was a party who might have a real interest in the Property, and the terms of the offer.
6. Following the conversation I believe I made contact with Mr Hamilton to relay to him that I had been in contact with Greg Taylor, and that Greg Taylor had asserted that he had a first right of refusal over the Property.

86 On 16 November 2021, the defendants' solicitors sent a letter to SFPL's estate agent in which they stated, inter alia, that Mr Taylor "or his nominee...continues to hold, the first right of refusal to buy the property owned by [SFPL] on the terms offered by any proposed purchaser or transferee which are acceptable to [SFPL]".[107]

87 On 13 December 2021, SFPL executed a deed concerning the sale of the Northern Property to a purchaser named LKPG SPV 13 Pty Ltd.[108] The purchaser did not execute the deed. The deed has, inter alia, the following terms:[109]

Both the Vendor and the Purchaser acknowledge and agree as follows:

1. The Vendor commenced an expressions of interest (EOI) process with regards to the sale of 560 Church Street, Cremorne, Victoria (Property).

2. The Purchaser engaged in the EOI process and was one of the bidders shortlisted in November 2021 to make a bid for the Property, as part of a competitive open market bid process.

3. Also in November 2021 and subsequent to the Vendor shortlisting the bidders, a third party issued correspondence via their legal representative alleging a binding and enforceable right of first refusal to purchase the Property by reason of a document titled a heads of agreement dated 14 December 1986 between Splendidus Pty Ltd (the former name for the Vendor), Sedice Pty Ltd (being the former name for Headland Properties Pty Ltd), Gregory Joseph Taylor and Alan Douglas McKinnon Hamilton (HOA). A copy of the HOA has been provided to the Purchaser.

4. The HOA purports to grant Gregory Joseph Taylor or his nominee (Taylor) the right of an offer of first refusal to purchase the Property upon the same terms as any proposed purchaser.

5. While the Vendor does not accept or agree that the alleged right of first refusal is valid, binding or enforceable, the Vendor will, within one business day of the date of this letter, offer Taylor the right to purchase the Property on the terms of the preferred bid (Taylor Offer).

6. The Purchaser has made an offer to purchase the Property and the Vendor has decided that the Purchaser's offer is the preferred bid under the EOI process on the terms of the attached contract of sale such that the Vendor and the Purchaser would have entered into a binding and enforceable contract of sale for the Property, but for the following conditions:

7. the Purchaser must satisfy itself at the Purchaser's absolute discretion in relation to the Purchaser's due diligence inquiries in respect of the Property and give the Vendor written notice of such during the due diligence period (DD Period) commencing on the date of this letter and expiring on 14 January 2022 (inclusive) (Condition 1); and

b. all of the following have occurred:

1. the Vendor must allow Taylor to accept the Taylor Offer in the period commencing on the date of this letter until 5pm on 7 February 2022 (Acceptance Period) on the terms of the attached contract of sale (redacted so as to remove any reference as to the identity of the Purchaser); and

2. Taylor must waive or fail to accept the Taylor Offer in writing within the Acceptance Period; and

3. if a Taylor Action occurs (as referenced in paragraph 7) such Taylor Action is dismissed or withdrawn by the Sunset Date,

...

88 The deed also has a number of other provisions concerning Mr Taylor, including provisions setting out the rights and obligations of the parties to the deed in the event that Mr Taylor applies for an injunction or lodges a caveat.

89 It is common ground that SFPL remains the owner of the Northern Property.

90 Mr Dodgshun gave evidence on information from Mr Hamilton and belief that the "Heads of Agreement contemplates a number of steps being taken by the 'parties' to it" and then gave evidence as to whether those steps had been taken.[110] This included, but is not limited to, the following:[111]

(a) Mr Hamilton did not have any discussions with Mr Taylor or anyone representing Headland as to the future management of the courtyard and common areas along Russell Street (Recital A of the Heads of Agreement);

(b) Mr Hamilton appointed architects Greenhatch & Partners Pty Ltd separately to Mr Taylor/Headland (clause 1.1 of the Heads of Agreement);

(c) Mr Hamilton undertook extensive alterations to buildings or improvements facing the courtyard, without seeking Mr Taylor's approval (clause 2 of the Heads of Agreement);

(d) Mr Hamilton does not recall sharing the costs of the sub-division (clause 3 of the Heads of Agreement);

(e) the costs of the redevelopment of the courtyard have not been shared (clause 3 of the Heads of Agreement);

(f) ongoing maintenance, security and development of the courtyard have not been shared (clause 6 of the Heads of Agreement);

(g) no annual budgets have been prepared for the ongoing maintenance, security and development of the courtyard (clause 6 of the Heads of Agreement);

(h) no regulations have been agreed in relation to the use of the courtyard (clause 7 of the Heads of Agreement);

(i) Mr Taylor has not kept the Heads of Agreement confidential (clause 9 of the Heads of Agreement); and

(j) the parties did not enter into a formal agreement setting out more fully the conditions of a final agreement between the parties (clause 12 of the Heads of Agreement).

(a) disputing a number of matters as to whether steps had been taken pursuant to the Heads of Agreement;[112] and

(b) concerning various dealings involving, inter alia: Greenhatch & Partners Pty Ltd; the solicitors for Bryant & May Pty Ltd; Noonan van Baer Austin & Capolino Pty Ltd (conveyancers) and the solicitors for a party that held a mortgage over two titles of the Northern Property.[113]

92 The plaintiffs' statement of claim originally contained claims that:

(a) the Heads of Agreement did not give rise to any immediately binding contractual obligations; and

(b) further or alternatively, that the parties, by signing the Heads of Agreement, did not intend for the terms of the Heads of Agreement to have any binding effect of their own.[114]

93 These claims have been abandoned in the amended statement of claim.

94 The plaintiffs allege that the Heads of Agreement contained the following terms:[115]

...

(b) it contained the following terms:

...

(vi) Taylor and/or his Nominees will have the first right of refusal over SFPL's section if SFPL, its shares, or that section are for sale or transfer and no sale or transfer shall be effected without Taylor and/ or his Nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee (paragraph 8) (Alleged First Right);

...

(ix) performance of any of the obligations under entire Heads of Agreement or alternatively the Alleged First Right was conditional upon SFPL and Headland remaining the owners of the Property and the Adjoining Property respectively.

The terms pleaded in paragraphs (i)-(viii) are in writing in the paragraphs identified above.

The term pleaded in paragraph (ixviii) is an express implied term based on a proper construction of the Heads of Agreement or alternatively implied to give business efficacy to the Heads of Agreement.

95 There are, in fact, two alternate terms pleaded in paragraph 8A(c)(ix) of the amended statement of claim. They are:

(a) performance of any of the obligations under the entire Heads of Agreement was conditional upon SFPL and Headland remaining the owners of the Property (i.e. the Northern Property) and the Adjoining Property (i.e. the Southern Property) respectively; or

(b) performance of any of the obligations under the First Right Term was conditional upon SFPL and Headland remaining the owners of the Property (i.e. the Northern Property) and the Adjoining Property (i.e. the Southern Property).

96 This was accepted by both parties.[116] For convenience, I will collectively refer to these terms as the "Alleged Term".

(a) Headland ceased to be an owner of the Southern Property on or about 4 April 1996;[117]

(b) SFPL has been seeking to sell the Northern Property since about October 2021;[118]

(c) Mr Taylor has asserted, by letter dated 16 November 2021 from the defendants' solicitors to SFPL's estate agent, the First Right Term to buy the property on the terms offered by any proposed purchaser or transferee which are acceptable to SFPL;[119] and

(d) by reason of Headland ceasing to be an owner of the Southern Property on about 4 April 1996 and the Alleged Term, SFPL is not required to comply with the First Right Term prior to selling the Northern Property.[120]

98 The plaintiffs further allege that the Heads of Agreement has been abandoned or discharged by agreement between the parties. They allege:[121]

1. Since about December 1986 at least March 1991 until about 16 November 2021, neither Taylor, Headland, SFPL or Hamilton have attempted to perform the Heads of Agreement.

Taylor, Headland, SFPL and Hamilton have not at any time since December 1986 at least March 1991:

(a) had any discussions regarding the future management of the Courtyard for the mutual benefit of the parties as contemplated by paragraph A of the Heads of Agreement;

(b) established the boundary running along the northern alignment of Russell Street as contemplated by paragraph B of the Heads of Agreement;

(c) jointly appointed Greenhatch & Partners, or anyone else, as architect for the refurbishment and redevelopment of the buildings as contemplated by paragraph 1.1 of the Heads of Agreement;

(d) jointly appointed Nunan van Beer Austin and/or Capalino Pty Ltd, or anyone else, as surveyors in respect of the Courtyard as contemplated by paragraph 1.2 of the Heads of Agreement;

(e) obtained from each other approvals for alterations to any building facing the Courtyard as contemplated by paragraph 2 of the Heads of Agreement;

(f) shared costs associated with the sub-division and with the separation of services or the redevelopment of the Courtyard as contemplated by paragraph 3 of the Heads of Agreement;

(g) established carparks abutting and within the line of the main southern building for the use of Headland as contemplated by paragraph 4 of the Heads of Agreement;

(h) prepared annual budgets for, or share in the cost of, maintenance, security and development costs as contemplated by paragraph 6 of the Heads of Agreement;

(i) kept the contents of the Heads of Agreement confidential;

(j) entered into a formal agreement setting out more fully the conditions of the Heads of Agreement, as contemplated by paragraph 12 of the Heads of Agreement; or

(k) with the exception of the assertions made by Taylor since about 16 November 2021 the subject of this proceeding, performed any of their obligations purportedly arising under the Heads of Agreement.

1. By reason of the matters pleaded in paragraph 11 above, if (which is denied) the Heads of Agreement gave rise to immediately binding obligations:

   (a) Taylor, Headland, SFPL and Hamilton have abandoned the Heads of Agreement; or

The plaintiffs refer to the particulars subjoined to paragraph 11 above.

(b) the Heads of Agreement have been discharged by agreement between the parties.

The agreement to discharge the Heads of Agreement may be inferred by the conduct set out in the particulars subjoined to paragraph 11 above.

1. By reason of the matters pleaded in paragraph 12 above, SFPL is not required to comply with the Alleged First Right prior to selling the Property.

99 The claim of abandonment of the Heads of Agreement, alternatively of the First Right Term, is not expressly pleaded as an alternative claim to the claim based upon the Alleged Term. It is, however, plain that this is the case as it is not necessary to consider this claim if the claim on the Alleged Term succeeds. This was also confirmed by counsel for the plaintiffs during the hearing of these applications.[122]

100 SFPL claims the following substantive relief:[123]

1. A declaration that the Heads of Agreement is not a valid and binding contract between the parties, alternatively that the Heads of Agreement is void ab initio or from a date specified by the Court.
2. A declaration that, by reason of the matters pleaded in paragraphs 8 to 10 or otherwise, the Heads of Agreement ceased to bind the parties to it, or alternatively the parties were not required to perform the obligations contained in the Heads of Agreement, on and from about 4 April 1996 or such other date as the Court considers appropriate.
3. Alternatively to A, a declaration that, by reason of the matters pleaded in paragraphs 11 to 13 or otherwise, since on or about March 1991 or such other date as the Court considers appropriate:

(a) the Heads of Agreement has been abandoned; and/or

(b) the Heads of Agreement has been discharged by agreement between the parties.

1. Further or alternatively to A or AA, a declaration that SFPL is not required to comply with paragraph 12 of the Heads of Agreement or the Alleged First Right prior to selling the Property.

101 Mr Hamilton does not seek any relief.[124]

102 The defendants allege a number of background matters prior to the Heads of Agreement and then allege:[125]

(a) clause 8 of the Heads of Agreement (i.e. the First Right Term) confirmed and/or acknowledged and/or novated the first right of refusal (provided by Special Condition 3 of the offer made by Mr Taylor to Mr Hamilton on 2 December 1986) and clarified that the first right of refusal resided with Taylor and/or his nominee;

(b) on 19 December 1986, Mr Hamilton paid the amount of $1,000.00 to Mr Taylor on the signing of the contract of sale of Mr Taylor's interest in the Option and on 30 September 1987, SFPL paid the remaining amount of $49,000.00 to Mr Taylor;

(c) Mr Taylor has at all times since 3 December 1986 had a first right of refusal to buy the Property (i.e. the Northern Property) in the form of Special Condition 3 of the offer made by Mr Taylor to Mr Hamilton on 2 December 1986 and/or clause 8 of the Heads of Agreement; and

(d) at all relevant times since 19 December 1986, Taylor has disclosed and insisted on his right of first refusal when required.

103 The defendants admit that since on about 4 April 1996 Headland has not been the owner of the Southern Property. The defendants, however, deny the Alleged Term.[126] The defendants allege:[127]

(a) they admit that the Heads of Agreement was entered between SFPL, Hamilton, Taylor and Headland;

(b) they admit that paragraph A of the Heads of Agreement stated that it was concerning the purchase by SFPL and Headland from Bryant & May Pty Ltd of the Match Factory at 560‑570 Church Street, Richmond and the future management of the courtyard and other common areas of Russell Street as shown on the attached plan A for the mutual benefit of the parties;

(c) subject to production at the trial of this proceeding, of the Heads of Agreement and reference to its full terms and effect, they admit that the Heads of Agreement contained the terms set out in paragraph c(i) to (viii) thereof; and

(d) they deny that the Heads of Agreement contained a term as set out in paragraph 8I(ix) thereof and say that:

(i) such a term was not necessary to give business efficacy to the Heads of Agreement;

(ii) at the time of entering into the Heads of Agreement, neither SFPL in respect of the northern portion, nor Hedland [sic] in respect of the southern portion were owners of the Property or the Adjoining Property (as defined in the SoC) respectively;

(iii) neither the offer accepted by Hamilton on 3 December 1986 as set out in paragraph 5(f) above nor the Heads of Agreement stated or contained a provision that the right of first refusal was conditional upon SFPL and Headland remaining the owners of the Property and Adjoining Property respectively;

(iv) at all relevant times the rights in the Option rested with Taylor; and

(v) Minter Ellison, solicitors for the plaintiffs, prepared the 2006 Vendor's Statement in July 2006 which contained a copy of the Heads of Agreement, being a date after Headland had ceased owning the Adjoining Property, thereby acknowledging and confirming that the Heads of Agreement and the Second FROR contained therein was binding and operable notwithstanding Headland not owning the Adjoining Property.

104 The defendants also deny that the Heads of Agreement has been abandoned or discharged by agreement between the parties.[128] The defendants allege:[129]

(a) deny each and every allegation contained in paragraph 10 thereof; and

(b) refer to and rely upon paragraphs 5 to 6R above;

(c) say in the circumstances all parties have acted in performance of the Heads of Agreement for the entire period alleged, namely December 1986 to 6 November 2021 and accordingly, there is no substance to the allegation contained in paragraph 11 which is scandalous, frivolous and/or vexatious or an abuse of process and ought be struck out.

Particulars

The defendants refer to and rely upon:

(a) the particulars sub-joined to paragraph 6(b) above; and

(b) the matters set out in paragraphs 6A to 6R above.

(d) without conceding they are obliged or required to plead to particulars, they:

(i) say that at all relevant times, the parties have kept the Heads of Agreement confidential, save as was absolutely necessary for the proper cause of the parties' business which included disclosure to solicitors and estate agents;

(ii) say that Taylor has asserted his right of first refusal, when appropriate and the plaintiffs acknowledged that right throughout the period 1986 to 16 November 2021 as set out in paragraphs 6B, 6C, 6D, 6E, 6F, 6H and 6I above.

1. As to paragraph 11 thereof, they:

(a) deny each and every allegation contained in paragraph 11 thereof; and

(b) refer to and reply upon paragraphs 5 to 6R above.

1. As to paragraph 12 thereof, they:

(a) deny each and every allegation contained in paragraph 12 thereof; and

(b) refer to and rely upon paragraphs 5 to 6R above.

(a) the plaintiffs are estopped by convention and are estopped and/or precluded by conduct from asserting[130], inter alia, that:

(i) SFPL is not required to comply with the Heads of Agreement;

(ii) SFPL is not required to comply with First Right Term prior to selling the Northern Property; and

(iii) the Heads of Agreement has been abandoned or discharged by agreement,

(b) the plaintiffs are barred by laches from claiming the alleged relief or any relief against the defendants, and/or it is inequitable and unjust to grant the plaintiffs the alleged relief or any relief.[131]

106 The defendants also counterclaim and allege that they are entitled to declarations as follows:[132]

1. By reason of the matters in 19 and 20 above, Taylor is entitled to declarations that:

(a) "Taylor and/or his nominee/s have the first right of refusal over the Property if the first plaintiff, its shares, or the Property are for sale or transferred"; and

(b) "no sale or transfer shall be effected without Taylor and/or his nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee".

107 The defendants claim the following substantive relief:[133]

1. An order that the plaintiffs/defendants by counterclaim are estopped from asserting or contending that:

(a) the Heads of Agreement cannot give rise to any immediately binding contractual obligations;

(b) the parties, by signing the Heads of Agreement, did not intend for the terms of the Heads of Agreement to have any binding effect of their own;

(c) that SFPL is not required to comply with the Heads of Agreement;

(d) that SFPL is not required to comply with the right of first refusal prior to selling the Property; and

(e) that the Heads of Agreement has been abandoned or discharged by agreement by the parties.

(a) "Taylor and/or his nominee/s have the first right of refusal over the Property if the first plaintiff, its shares, or the Property are for sale or transferred"; and

(b) "no sale or transfer shall be effected without Taylor and/or his nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee".

108 The defence and counterclaim was filed prior to the amended statement of claim. The defendants submitted that the counterclaim was irrelevant in determining the applications and is "more than likely" irrelevant generally given the plaintiffs abandonment of the claims by the amended statement of claim concerning the binding nature of the Heads of Agreement.[134]

109 The plaintiffs' in their reply and defence to counterclaim:

(a) do not admit that on or about 1 October 1986 Bryant & May Pty Ltd (as vendor) and Mr Taylor (as purchaser) entered into the Option Agreement concerning the purchase of the Bryant & May Property, or that by that time, Mr Taylor had paid the option fee of $25,000.00 to Bryant & May Pty Ltd;[135]

(b) admit that on or about 19 November 1986, Mr Hamilton, on behalf of Norman Hamilton Nominees Pty Ltd communicated an offer to Gil Williams and Co Pty Ltd to purchase the northern portion of the Bryant & May factory for $3,750,000.00;[136]

(c) admit that Mr McHarg of Colliers sent a letter dated 2 December 1986 to Mr Hamilton (as Managing Director of Norman Hamilton & Co Pty Ltd) which stated, among other things "I now confirm the basis of a purchase of these properties which would be acceptable to Mr G Taylor" but otherwise deny that this was an offer from Mr Taylor to Mr Hamilton;[137]

(d) say that as at 2 December 1986, neither Mr Taylor or Headland owned an option to purchase any part of the property;[138]

(e) admit that on 3 December 1986, Mr Hamilton (as Managing Director of Norman Hamilton & Co Pty Ltd) sent a letter to Mr McHarg but deny that that this letter involved the acceptance of any offer capable of giving rise to a binding agreement;[139]

(f) admit that a letter was sent on or about 15 December 1986 from McKean & Park on behalf of Mr Taylor to Weigall & Crowther on behalf of Bryant & May Pty Ltd, but deny, inter alia, that SFPL would exercise the Option after Mr Taylor provided the usual nomination form, or that this letter was sent to give effect to any of the preceding matters, including that the abovementioned letters could give rise to a binding agreement;[140]

(g) admit that Mr Taylor and SFPL entered into agreements titled Option Sale Contract and Contract of Sale dated 25 November 1986 and that SFPL executed a document titled Notice of Exercise of Option dated 19 December 1986, but deny that any steps taken by the parties were pursuant, or to give effect, to any binding agreement;[141]

(h) admit that the parties entered into the Heads of Agreement but otherwise deny, inter alia, the allegation that by the Heads of Agreement, the parties agreed to purchase, by SFPL and Headland, from Bryant & May Pty Ltd the Bryant & May Property, or that the First Right Term confirmed and/or acknowledged and/or novated the first right of refusal and clarified that the first right of refusal resided with Taylor and/or his nominee;[142]

(i) does not admit that on 19 December 1986 Mr Hamilton paid the amount of $1,000.00 to Mr Taylor on the signing of the Contract of Sale of Mr Taylor's interest in the Option or that on 30 September 1987 SFPL paid the remaining amount of $49,000.00 to Mr Taylor;

(j) deny that Mr Taylor has at all times since 3 December 1986 had a first right of refusal to buy the Property in the form of Special Condition 3 of the offer made by Mr Taylor to Mr Hamilton on 2 December 1986 and/or the First Right Term;[143]

(k) deny that at all relevant times since 19 December 1986, Mr Taylor has disclosed and insisted on his right of first refusal when required;[144]

(l) say that on 25 November 1986, SFPL acquired Mr Taylor's interest in the Option for $50,000, and that as at 25 November 1986, SFPL was the owner of an option to purchase the whole of the Bryant & May Property;[145]

(m) admit that certain correspondence occurred as set out in the defence and counterclaim but do not admit that the plaintiffs are estopped and/or precluded by conduct from asserting, inter alia, that: SFPL is not required to comply with the Heads of Agreement; SFPL is not required to comply with First Right Term prior to selling the Northern Property; or the Heads of Agreement has been abandoned or discharged by agreement;[146]

(n) deny that the plaintiffs were guilty of prolonged, inordinate and inexcusable delay in bringing this action or caused or permitted the defendants to believe that the plaintiffs did not intend to make claims against the defendants such that the defendants acted to their prejudice, and are barred by laches from claiming relief against the defendants;[147] and

(o) deny that Mr Taylor is entitled to declarations that: "Taylor and/or his nominee/s have the first right of refusal over the Property if the first plaintiff, its shares, or the Property are for sale or transferred"; and "no sale or transfer shall be effected without Taylor and/or his nominee/s having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee".[148]

110 By their amended summons filed 29 April 2022, the defendants sought the following relief:

1. Pursuant to Rule 23.01 of the Supreme Court (General Civil Procedure Rules) 2015 (Vic) (Rules) that paragraphs 8A and in particular 8AI(ix), 9, 10, 11, 12, 13 and relief A, AA, B of the Plaintiffs' Amended Statement of Claim filed herein and dated 12 April 2022 (ASOC):

(a) is scandalous, frivolous or vexatious; or

(b) is an abuse of the process of the Court -

and that the plaintiffs' claims be stayed, summarily dismissed or struck out.

111 The amended summons specifically abandoned the application to summarily dismiss the plaintiffs' claims. This is because the words "stayed, summarily dismissed" are struck through in the amended summons. The defendants submitted, however, that by the amended summons the defendants seek judgment in the proceeding generally or in relation to the claims in paragraphs 8A(c)(ix), 9, 10, 11, 12, 13 and paragraphs A, AA, B of the prayer for relief in the amended statement of claim.[149] This application proceeded on the basis that the defendants sought judgment pursuant to this application. The plaintiffs did not object to this course.

112 The defendants submitted that the plaintiffs' case amounts to an abuse of process; no proper amendment of the pleading can be made by the plaintiffs to raise a good cause of action as their claims so completely lack foundation in fact or law that no legitimate pleading amendment can save it.[150] The defendants primarily submitted:

(i) is vague and ambiguous as the "obligations" are not identified and "especially when it is linked in a temporal sense to the retention of two ownerships of the two parcels of property";[151]

(ii) as expressed is "problematic" as it contains an "alternative";[152]

(iii) "only occurs after disposal of a parcel of property";[153]

(iv) as a result of the plea in paragraph 11 of the amended statement of claim, that the parties have not attempted to perform the Heads of Agreement from March 1991 [until about 16 November 2021], "the performance of the obligations under the entire [Heads of Agreement] were not subject of the suggested conditional implied term or alternatively, the plaintiffs seek to imply a term which retrospectively seeks to make conditional performance to the [Heads of Agreement] from a lack of disposal of the parcel of property";[154]

(v) it is not clear how the conditional performance ceases after one or both properties are no longer in ownership;[155] and

(vi) refers to "remaining owners of the Property and the Adjoining Property" but SFPL and Headland were not owners as at the date of the Heads of Agreement,[156]

(b) the Alleged Term does not arise from a proper construction of the Heads of Agreement,[157] including having regard to:

(i) there is no ambiguity in the language of the Heads of Agreement;[158]

(ii) the Heads of Agreement is more than a "courtyard agreement" given the First Right Term and clauses 9 and 10 of the Heads of Agreement, including the First Right Term.[159] The Heads of Agreement was "broader based".[160] The First Right Term does not have anything to do with neighbouring landowners.[161] Not all of the land within the Northern Property and the Southern Property "affect the whole of the courtyard or common areas".[162] They also submitted that not all of the properties abut the courtyard;[163]

(iii) Mr Taylor was not an adjoining landowner;[164]

(iv) the term "courtyard agreement" was not used after an initial draft;[165]

(v) the Alleged Term does not just concern the obligations in clauses 1 to 7 of the Heads of Agreement, it concerns the "entire agreement" alternatively the First Right Term;[166]

(vi) the Court can have regard to "neutrally known background circumstances";[167]

(vii) the surrounding circumstances do not assist the plaintiffs. The defendants submitted it is clear, by his letter of 3 December 1986, that Mr Hamilton agreed to grant a first right of refusal to Mr Taylor.[168] The defendants submitted that "[t]he one term which was consistent was a right of first refusal for one man: Mr Taylor."[169] They also submitted that the First Right Term was the subject of a grant that had been previously been made on 1 October 1986 concerning the Option pursuant to the Option Agreement;[170]

(viii) the Alleged Term is inconsistent with the First Right Term;[171]

(ix) the parties did not negotiate or see fit to include a condition in the terms of the Alleged Term;[172]

(x) reasonable businesspeople would have understood the First Right Term to mean exactly what the ordinary meaning of those words say;[173]

(xi) the First Right Term has nothing to do with the Southern Property;[174]

(xii) Mr Taylor did not own any land, including the Southern Property;[175]

(xiii) the First Right Term only concerns SFPL and not Headland.[176] There was no reciprocity (i.e. no right granted to SFPL or Mr Hamilton);[177]

(xiv) there is no obligation in the Heads of Agreement for Headland to remain the owner of the Southern Property;[178] and

(xv) the First Right Term allows Mr Taylor to nominate anybody;[179]

(xvi) Mr Hamilton and SFPL were legally represented as the time of the execution of the Heads of Agreement and the persons who signed on behalf of SFPL were each legal representatives,[180]

(c) the Alleged Term does not satisfy the test set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (BP Refinery)[181] and is not implied into the Heads of Agreement.[182] The defendants submitted that the Alleged Term:

(i) is not reasonable and equitable as Mr Taylor was never the owner of the Southern Property;[183]

(ii) it is not necessary as the First Right Term is workable and effective without the Alleged Term.[184] The First Right Term was the subject of earlier correspondence and, as a result, the Heads of Agreement is more than a "courtyard agreement".[185] The First Right Term is not mutual and does not concern any sale by Headland of the Southern Property.[186] The First Right Term has nothing to do with ownership of the Southern Property.[187] The First Right Term permits a nomination of a third party;[188]

(iii) it is not so obvious that "it goes without saying"; especially in circumstances in which the First Right Term does not confer a right on Headland and the Southern Property as constituted by various titles.[189] The defendants submitted that the Alleged Term would operate, for example, if Headland sold a small parcel of the Southern Property that does not even adjoin Russell Street (i.e. the courtyard);[190]

(iv) it is not capable of clear expression as the "Adjoining Property" (i.e. the Southern Property) is constituted by multiple titles and also it is unclear whether it concerns all of the obligations under the Heads of Agreement or only the First Right Term;[191] and

(v) it contradicts the First Right Term as it changes the circumstances in which the First Right Term could be exercised. There was no condition precedent in the Heads of Agreement,[192]

(d) the Alleged term cannot be implied by business efficacy as the plaintiffs' case is based upon the parties being adjoining landowners and Mr Taylor is not a landowner and the First Right Term and clauses 9 and 10 have nothing to do with ownership of land;[193]

(e) the Alleged Term, insofar as it concerns "any of the obligations", cannot be implied as some of these obligations have nothing to do with SFPL or Headland remaining owners of the Northern Property and Southern Property respectively. For example, clause 9 concerns confidentiality;[194]

(f) the First Right Term expressly provides for Mr Taylor to nominate any other person to exercise the first right in the First Right Term, including a person who has nothing to do with Southern Property (i.e. a person other than Headland);[195]

(g) paragraphs 9 to 10 of the amended statement of claim rely upon the Alleged Term; and

(h) paragraph 10 of the amended statement of claim is obviously defective as paragraph 10(b) refers to paragraph '0'. The defendants submit that this is presumably a reference to the Alleged Term in paragraph 8A(c)(ix) of the amended statement of claim.[196]

(a) the plaintiffs' case is not frivolous, vexatious or an abuse of the process of the Court;[197]

(b) the case is of "limited compass".[198] The plaintiffs rely upon the Heads of Agreement itself and no other factual matters;

(c) the words "or otherwise" should be deleted from paragraphs A and AA of the prayer for relief of the amended statement of claim;[199]

(d) the Alleged Term is not vague or ambiguous;[200]

(e) the Alleged Term is not inconsistent with the Heads of Agreement;[201]

(f) the Court need not have regard to anything else other than the terms of the Heads of Agreement in determining the defendants' applications;[202]

(g) the principal case of the plaintiffs in relation to the Alleged Term is based upon a "proper construction" of the Heads of Agreement.[203] The plaintiffs described this as the "essence" of their claim based upon the Alleged Term;[204]

(h) construing the terms of the Heads of Agreement objectively, and by reference to its context and purpose, it is apparent from the text of the Heads of Agreement alone that:[205]

(i) it is a "neighbours' agreement". The recitals make it plain that its primary object is to regulate matters which go to the heart of the parties' expected ownership of properties that are next to each other and have a common road between them.[206] The plaintiffs submitted "...the heads of agreement was a neighbours agreement. It sought to regulate the rights and obligations of neighbours who would have shared interests as adjoining landowners";[207]

(ii) the key substantive conditions of the Heads of Agreement concerned restrictions on the ongoing management and maintenance of the courtyard and the buildings abutting it (i.e. clauses 1 to 7).[208] A number of these conditions are only capable of being performed while the parties are respectively owners and/or in control of the subject property (e.g. clause 4) and a number of other clauses do not make commercial sense to endure beyond ownership (e.g. clauses 2, 5 and 6).[209] The plaintiffs also referred, in this context, to clauses 3 and 7;[210]

(iii) it was intended, as set out in clause 12, as an "initial temporary short form Agreement to be replaced by a formal Agreement setting out more fully the conditions of any final Agreement between the parties...";[211] and

(iv) the plaintiffs submitted that "reinforming the inchoate nature of this agreement is the absence of any party being able to produce a copy of the Heads of Agreement which attaches the document described as "the attached plan A" in recital A",[212]

(i) the Alleged Term is not inconsistent with the First Right Term as "...nowhere will Your Honour find any statement in clause 8 as to the potential expiry of that right...";[213]

(j) it is at least arguable to infer from the language of the Heads of Agreement that the objective intention of the parties was that it was an agreement that would govern the circumstances between them as owners of adjacent land and would cease to bind them when that circumstance changed. The inclusion of a boilerplate clause binding their successors, personal representatives and permitted assigns does nothing to alter the availability of that inference;[214]

(k) the Alleged Term arises by implications contained in the express words of the Heads of Agreement; implications from the nature of the Heads of Agreement itself and business efficacy;[215]

(l) the evidence suggests that the parties only turned their minds to the operation of the Heads of Agreement for the period when they would be neighbours and that it is notable that the defendants have not led any evidence to suggest that their attention did turn to what would happen if Headland ceased to be an owner of the Southern Property;[216]

(m) there is no need for ambiguity for a term to be implied in a contract;[217]

(n) the defendants contend for an absurd situation where an agreement about the maintenance of the "Courtyard" between the properties continues to bind the parties, despite the fact that Headland ceased to have any interest in the Southern Property decades ago;[218]

(o) the defendants failure to articulate any principled (or logical) basis for saying that clauses 1 to 7, or apparently, clauses 9 or 11, no longer have any application to the parties, but clause 8 (i.e. the First Right Term) does, points to their failure to make out their allegation that the case concerning the Alleged Term is frivolous or vexatious or an abuse of process;[219]

(p) the plaintiffs also submitted:[220]

1. It is also important to recall that the Defendants' case is that all of the obligations in the Heads of Agreement remain binding and on foot and that they have all been complied with at all times.[14] This includes the obligations to manage the Courtyard jointly, share in the costs associated with it and to give each other a perpetual right to object to any works undertaken to the buildings that face into the Courtyard. In this regard, it is observed that Mr Taylor refers to such obligations as being no longer "operative"[15] - the textual basis for this conclusion is unknown and is one, given the submissions made about the complete nature of the Heads of Agreement,[16] must be understood as a concession that they are no longer being performed, despite remaining binding.

[14] See Taylor Affidavit at [77]: 'Each of the agreed HOA terms were duly carried out, relied upon, sought to be enforced and given effect to, at the time and over time, as was contemplated by the parties.' (emphasis added)

[15] See Taylor Affidavit at [53]: 'Even if the balance of the provisions of the HOA have ceased to be operative or relevant due to their performance and completion, the same cannot be said of the FROR'

[16] See, eg, defendants' submissions at [84],

(q) it is not necessary for the plaintiffs to dispositively advance their case, as they would at trial, in order to resist the amended summons;[221]

(r) in relation to the Alleged Term based upon "business efficacy" the plaintiffs submitted:[222]

The evidence is the terms of the heads of agreement, and it is directed to a commercial objective arising from the words contained in the heads of agreement, specifically the recitals that speak of the commercial objective of the parties. The plaintiffs submit that the commercial objective of the parties reflected by specifically the recitals but other clauses is directed to limited management of the courtyard and matters between adjoining landowners. As such, those matters, reflecting a commercial objective of the parties, leads to the proper implication of the term.

(s) the "BP Refinery criteria are not to be rigidly applied in this case".[223] The plaintiffs referred to Realestate.com.au Pty Ltd v Hardingham; RP Data Pty Limited v Hardingham (Hardingham)[224] and submitted that:

(i) each of the judgments stresses the importance of not taking a rigid approach to ascertaining the terms of a contract, especially when dealing with a less formal agreement;[225]

(ii) the role of the Court is not to determine each party's actual intention but rather to ascertain, objectively, what a reasonable observer would understand the intention of the parties to be;[226] and

(iii) the Court does not have before it all of the evidence that might be led at trial about these matters, including not only the evidence each party wishes to lead, but the evidence adduced on cross-examination and following discovery,[227]

(t) the Court may be slow to imply a term that general observation carries less weight in the present case, as the Heads of Agreement is an "initial temporary short form" contract that has limited written detail and includes a term that makes clear that it is not a comprehensive statement of the parties' bargain;[228]

(u) the Alleged Term is consistent with the criteria in BP Refinery:

(i) it is reasonable and equitable. It does not materially alter their interests in an unreasonable or inequitable way as at the time of the signing of the Heads of Agreement;[229]

(ii) the plaintiffs submitted as to business efficacy:[230]

... The plain purpose of the Heads of Agreement was to regulate the treatment of the "Russell Street" area, or "Courtyard", at the boundary between what were to be Headland and SFPL's respective properties. Business efficacy required that any obligations arising under the Heads of Agreement would cease to operate when that arrangement ceased. For the Heads of Agreement to operate otherwise would result in precisely the sort of highly ineffective circumstances that have arisen - Mr Taylor purporting to assert the Alleged First Right decades after he or his company last had any interest in the Adjoining Property. It also means that the clauses of the Heads of Agreement which are only capable of being performed while each party is the legal owner of the property (eg, clauses concerning the conferral of easements over title), or obligations which only make sense to be performed while the parties remained neighbours (eg, the obligations to share in the cost of maintaining the Courtyard) make commercial sense. The absence of such a term puts the parties in a position in which they are obliged to perform the Heads of Agreement in a context in which there is no longer any commercial sense for them to do so.

(iii) it should have been obvious at the time the Heads of Agreement was entered into that clauses 1 to 8 concerned the time at which the parties were owners of adjoining properties only;[231]

(iv) it is clearly expressed;[232] and

(v) there is nothing inconsistent between the Alleged Term and the First Right Term. The Alleged Term is "entirely consistent with the genesis of the Heads of Agreement".[233]

(v) the decision of Hobhouse is of no relevance or assistance to the Court.[234] It is also not illustrative or instructive as to the disposition of the present case.[235] The plaintiffs submitted that there are material differences, including that Hobhouse concerned a deed that was detailed and comprehensive;[236]

(w) in any event, the plaintiffs submitted that the defendants' positions that the terms of the Heads of Agreement are clear and unambiguous, and that there is nothing in the construction of the Heads of Agreement which gives rise to an applied term, are incorrect:[237]

(i) the defendants have previously asserted that the First Right Term is subject to an implied condition;[238]

(ii) the Heads of Agreement does not contain any notice provisions;[239] and

(iii) no coherent explanation has been provided by the defendants why clauses in the Heads of Agreement concerning co-management of the Courtyard have ceased to operate but the First Right Term continues in effect,[240]

(x) the fact that the First Right Term directly concerns Mr Taylor and SFPL, and not necessarily the other parties to the Heads of Agreement, does not alter the availability of the Alleged Term;[241]

(y) the circumstances suggest that Mr Taylor's initial intention was to purchase the whole of the Bryant & May Property. He was granted an option to this effect which he then sold to Mr Hamilton. The plaintiffs submitted that it is "entirely consistent with that context that Mr Taylor, while he remained the effective owner of the Adjoining Land [i.e. the Southern Property] via his company, would seek to buy the Property [i.e. the Northern Property] if it came on the market. The underlying logic of that position - that is, the reason for seeking ownership of the Property - ceased once his company no longer owned the Adjoining Property";[242] and

(z) the defendants' submission that the plaintiffs, in reality, seek rectification of the Heads of Agreement is a distraction that does not assist the Court.[243] This is because the plaintiffs do not seek rectification.

114 In Eureka Operations Pty Ltd v Viva Energy Australia Ltd ('Eureka')[244] the Court of Appeal said:[245]

1. ... In the first place, the objective approach to contractual interpretation requires reference to the 'text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose'. It follows that the meaning of a word or clause cannot be determined by reference to its own text alone. As such, resort to the 'ordinary meaning' of the word or clause can be no more than a starting point in a process which in every case requires the reader of the contract to look further to context and purpose. Nor is it necessary that there be ambiguity, however understood, before undertaking that further process. Context (as defined above) and purpose are always relevant, no matter how clear the 'ordinary meaning' is said to be.
2. Secondly, the objective approach calls for the relevant provision to be interpreted as a reasonable businessperson would have understood it, which is revealed by considering the language used in the contract, the circumstances the contract addresses and the commercial purpose or objects to be secured by it, each of which is ordinarily able to be identified by reference to the contract alone. Again, the notion of 'ordinary meaning', while plainly a relevant aspect of this inquiry, cannot serve to foreclose consideration of these other elements. It is always possible that, despite the 'ordinary meaning', reference to context, the circumstances the contract addresses and its commercial purpose or objects will show that a reasonable businessperson would have understood a different meaning to apply. It is inherent in the test of the reasonable businessperson that he or she must be taken to be aware of more than just the text of the provision being construed.
3. Construction in the present case should therefore be approached on the basis that the 'ordinary meaning' of the relevant provisions is only one aspect of the wider inquiry, and that there is no need to establish any ambiguity arising from the text before undertaking that inquiry. It may be that no reason emerges to depart from the ordinary meaning of the words used. But the whole inquiry must be undertaken, whether or not the ordinary meaning can be described as unambiguous when read in isolation. Establishing ambiguity is not a threshold to be met before completing the inquiry.

115 In Lopes v Taranto ('Lopes')[246] the Court of Appeal referred to this passage from Eureka and then said:[247]

1. It is clear, then, that there is a distinction between 'context' (being the entire context of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and 'the circumstances the contract addresses and its commercial purpose or objects'. As to the latter, admissible evidence of mutually known objective background circumstances is always admissible, no matter how clear the 'ordinary meaning' of the words to be construed is said to be.

116 In Lopes the Court of Appeal also said "...that, in every case and whether or not there is ambiguity in the language, the Court should have regard to objective evidence of facts known to both parties as to commercial purpose".[248]

117 In Siemens Gamesa Renewable Energy Pty Ltd v Bulgana Wind Farm Pty Ltd,[249] a decision relied upon by the plaintiffs, Riordan J summarised the relevant principles:[250]

1. To construe the terms of a commercial contract, the Court asks 'what a reasonable businessperson would have understood those terms to mean'. To answer that question, 'the reasonable businessperson [is] placed in the position of the parties', and the Court applies the following principles:

(a) The terms are construed objectively and the subjective intentions of the parties are irrelevant. > > (b) The objective approach requires reference to the text and its ordinary meaning, together with: > > > (i) the context, being the entire text of the contract including matters referred to in the text; and

(ii) the purpose.

These matters will ordinarily be identified by reference to the contract alone, but evidence of mutually known objective background circumstances relevant to the purpose is admissible 'no matter how clear the "ordinary meaning" of the words'. Identification of purpose may allow admission of evidence of the genesis of the transaction, the background, the context and the market in which the parties are operating.

(c) Unless a contrary intention appears in the contract, the court is entitled to approach the task of interpretation on the assumption that the parties intended to produce a commercial result, and should construe it so as to avoid a commercial nonsense. However, the court does not weigh the commerciality of the agreement, and business commonsense is a topic on which reasonable minds may differ.

(d) If, after completion of this process, the language used in the contract 'is ambiguous or susceptible of more than one meaning', then evidence of surrounding circumstances external to the contract ('surrounding circumstances') is admissible to assist with interpretation of the contract ('the ambiguity requirement').

events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating.

(f) However, 'evidence of the parties' statements and actions reflecting their actual intentions and expectations' is inadmissible. Although evidence of prior negotiations is admissible to establish objective background facts known to both parties and the subject matter of the contract, evidence of negotiations reflective of actual intentions and expectations is not receivable.

(g) Post contractual conduct is inadmissible to construe the terms of the contract. However, the parties' subsequent communications may be relevant to determine whether the parties intended to enter into a binding contract.

1. Despite the above rules, evidence of surrounding circumstances may be admissible to establish that:

   (a) an expression has a particular meaning in business custom or usage;

   (b) a particular interpretation was either rejected or accepted by the parties; or

(c) the contract should be rectified.

Further, at common law, a court may supply, omit or correct words to avoid absurdity or inconsistency.

118 In BP Refinery, the Privy Council said:[251]

Their Lordships do not think it necessary to review exhaustively the authorities on the implication of a term in a contract which the parties have not thought fit to express. In their view, for a term to be implied, the following conditions (which may overlap) must be satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.

119 In Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd,[252] the Court of Appeal said:

[140] The conditions in the BP Test are cumulative and import different considerations.

[141] In relation to the condition that an implied term 'must be reasonable and equitable', we note that the High Court has refused to imply a term that would operate in a partisan fashion. The application of the condition will often require consideration of the matrix of facts in which a contract was agreed.

[142] The condition that an implied term 'must be necessary to give business efficacy to the contract' requires consideration of whether the term is necessary for the purposes of 'giving to the transaction such efficacy as both parties must have intended that at all events it should have', making the agreement work or avoiding an unworkable situation. Where the express terms of an agreement are sufficient to give it the business efficacy the parties intended it to have, it will not become necessary to imply additional terms. However, a term may be commercially necessary, in order for the contract to be workable in a business sense, notwithstanding that it can operate without the term. In Commonwealth Bank of Australia v Barker, French CJ, Bell and Keane JJ stated that the requirement that a term implied in fact be necessary 'to give business efficacy' to a contract can be regarded as a 'specific application' of the criterion of necessity which also supports the implication of a term in law. They also said that '[i]mplications which might be thought reasonable are not, on that account only, necessary.'

[143] The condition that an implied term 'must be so obvious that "it goes without saying"' requires consideration of whether, at the time that the parties were making their bargain, the suggestion of insertion of the implied term into the agreement by an 'officious bystander' would have been met 'with a common, "Oh, of course"' from the parties.

[144] In relation to the condition that an implied term 'must be capable of clear expression', it is worth noting the observation of Gibbs J in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth that the 'width and lack of precision' of a term supplied an argument against implying it. Mason J in Codelfa refused to imply a term into a contract on the basis that, had the parties explored the term at the time that they entered into the contract, negotiation about the term 'might have yielded any one of a number of alternative provisions, each being regarded as a reasonable solution'. It has been observed by this court that it is elementary that a contractual party who is to be subjected to an additional obligation by reason of the implication of a term into a contract should be 'left in no doubt of the extent of the obligation' and, accordingly, a term that would leave a party in a 'state of speculation' as to the extent of its obligations would not be implied.

[145] Conflation of the 'reasonable and equitable' and the 'necessity' conditions of the BP Test may lead a court into error. This follows from the statement at [142] above in Barker and also from Mason J's earlier statement in Codelfa that it is not enough that it is reasonable to imply a term, it must also be necessary to do so to give business efficacy to the contract.

(a) I am not satisfied the plaintiffs' claim based upon the Alleged Term has no real prospects of success; and

(b) I will refuse the defendants' application for summary judgment pursuant to s 63 of Civil Procedure Act.

121 As a result, I am also not satisfied that the plaintiffs' claim should be dismissed pursuant to r 23.01 of the Rules on the basis that it is an abuse of process or frivolous or vexatious. As a result, I will refuse the defendants' application for judgment pursuant to r 23.01 on the plaintiffs' claim on the Alleged Term of the Heads of Agreement.

122 The defendants submitted that the plaintiffs' case amounts to an abuse of process; no proper amendment of the pleading can be made by the plaintiffs to raise a good cause of action as their claims so completely lack foundation in fact or law that no legitimate pleading amendment can save it.[253] The defendants primarily submitted:

(a) as to the plea in paragraph 11 of the amended statement of claim:

(i) the use of 'since at least' is a poor pleading;[254]

(ii) the particulars to paragraph 11 are expressed in a negative manner which is unhelpful;[255]

(iii) the particulars contain material facts relevant to the actions of particular parties to the Heads of Agreement.[256] The particulars do not identify the obligation, at what time the obligation was due to be performed, who was to perform it or how it was to be performed;[257]

(iv) the particulars in paragraph (k) of paragraph 11 are a "catch all" and should not be permitted.[258] The word "purportedly" in paragraph (k) is a "difficult concept".[259] The defendants submitted: "It's a bit like saying in a pleading, 'You did bad things to me,' because we need to know when, where, and how, and what those obligations are for the purposes of understanding abandonment".[260] It is also nonsensical and does not give notice of the case against the defendants;[261]

(v) the particulars in paragraph 11 are not cross-referenced to the terms of the alleged Heads of Agreement;[262]

(vi) the particulars in paragraph 11 refer to "jointly" in paragraphs (a) and (b) but this was not a requirement of the Heads of Agreement;

(vii) "March 1991" is an arbitrary date and it is incumbent on the plaintiffs to plead how they allege that the March 1991 was the commencement of the abandonment;[263] and

(viii) it cannot be alleged that since at least March 1991 the parties abandoned the Heads of Agreement given the admissions made in the plaintiffs' reply concerning the events of March 1991,[264]

(b) as to the plea in paragraph 12 of the amended statement of claim:

(i) there is no plea of an agreement or a "consensus" that the Heads of Agreement has been discharged by agreement;[265]

(ii) the plea of abandonment does not accord with the authorities and they referred, in particular, to Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (Paal Wilson & Co),[266] in which Lord Brandon of Oakbrook described one way of establishing abandonment is "by showing that the conduct of each party, as evinced to the other party and acted on by him, leads necessarily to the inference of an implied agreement between them to abandon the contract"[267]

(iii) it assumes that obligations arose during the alleged period;[268]

(iv) there is no cross-referencing of material facts;[269] and

(v) the particulars are assertions;[270]

(c) the defendants relied upon the decision of Fitzgerald v Masters and submitted,[271] inter alia:[272]

(i) it is the same as the present case before the Court;

(ii) the Heads of Agreement has been partly performed by the acquisition of the Northern Property and the Southern Property and by Mr Taylor's "attempts" to perform it; and

(iii) Mr Taylor has an interest, being the rights in the First Right Term, being an interest in land that could not be lost or destroyed by mere inaction on his part,

(i) the Heads of Agreement has been partly performed given the "significant evidence of the performance of those court yard matters";[273]

(ii) there are no particulars that the parties abandoned the First Right Term;[274]

(iii) the First Right Term requires first performance by SFPL and then by Mr Taylor;[275]

(iv) there is no case of abandonment based upon "conduct not done"[276] during a "window of abandonment";[277]

(v) there was some performance between the date of the Heads of Agreement and March 1991.[278] This included work undertaken with respect to easements and other matters.[279] This was not required to be jointly undertaken;

(vi) Mr Hamilton does not recall negotiating or assigning the Heads of Agreement so it is difficult to understand how he can abandon something he cannot recall.[280] Mr Hamilton does not recall the Heads of Agreement so cannot "have consciously intended to create legal relations by abandoning the [Heads of Agreement] or alternatively the [First Right Term]";[281]

(vii) SFPL only acquired the last title of the Northern Property on 22 March 1991.[282] This was after the non-performance alleged in paragraph 11 of the amended statement of claim that is alleged to be since "at least March 1991". As a result, there cannot have been an abandonment in March 1991;[283]

(viii) there is no allegation that Mr Taylor failed to take steps to comply with, or insist on performance of obligations, required by the First Right Term;[284]

(ix) in 1991, Mr Taylor asserted the First Right Term.[285] This is because in 1991, Mr Hamilton confirmed the First Right Term and Mr Hamilton's solicitor confirmed the Heads of Agreement continuing;[286]

(x) in 1997, Mr Taylor asserted the First Right Term;[287]

(xi) in 1998, Mr Hamilton faxed the Heads of Agreement and Tolhurst Druce Emmerson faxed the Heads of Agreement;[288]

(xii) in 2006, the Heads of Agreement was included in a vendor statement;[289]

(xiii) in 2008, Mr Taylor asserted the First Right Term;[290]

(xiv) the plaintiffs concede that the contract has been partly performed as they use the words "Since at least March 1991.." in paragraph 11 of the amended statement of claim;[291]

(xv) on 16 November 2021, Mr Taylor's solicitors sent a letter to SFPL's estate agent in which Mr Taylor asserted Mr Taylor's rights under the First Right Term;[292] and

(xvi) on 13 December 2021, the plaintiffs' solicitors sent a letter to SFPL and a potential purchaser and referred to the Heads of Agreement and the First Right Term.[293]

(a) the plaintiffs' case is not frivolous, vexatious or an abuse of the process of the Court;[294]

(b) the abandonment case "speaks for itself in terms of the factual intensity of the enquiry";[295]

(c) "We're here in a summary judgment case. We're here in the context of 30 years in respect to the dealings of the parties. Your Honour is being invited to consider evidence over that period and we submit that that's of itself an illustration of the undesirability of determining matters on a summary basis without the witnesses in the witness box and cross examination."[296]

(d) during oral submissions the plaintiffs submitted:

(i) paragraph 11 of the amended statement of claim: the words "Since at least" should be replaced with "From [31] March [1991]";[297]

(ii) the particulars to paragraph 11 should be amended so that they read "[Taylor, Headland, SFPL, Hamilton] have not from [31] March 1991", rather than at present "Taylor, Headland, SFPL or Hamilton have not at any time since at least March 1991";[298]

(iii) paragraph (k) of the particulars to paragraph 11 of the amended statement of claim: the word "purportedly" should be deleted;[299]

(iv) in paragraph AA of the prayer for relief of the amended statement of claim the words "or otherwise" and "since on or about" should be deleted and replaced with "from";[300]

(v) paragraph (k) of the particulars to paragraph 11 includes the obligations under the First Right Term (i.e. clause 8 of the Heads of Agreement);[301]

(vi) the plaintiffs submitted that "I would readily accept it [i.e. abandonment] could only be the end of March";[302]

(vii) "...insofar as it [i.e. paragraph AA] says 'such other date'...that is necessary... Your Honour because insofar as Your Honour might determine the abandonment, Your Honour may select a date that is some point after that day. That is to be read, that proof of relief could only be read by reference to paragraph 11, and paragraph 11 makes it self-evident that the period in which it is said that there has been an abandonment is the period from March 1991 - end of March if it's necessary, until about 16 November 2021";[303] and

(viii) finally, the plaintiffs then submitted paragraph AA should be amended, in effect, to read as follows:[304]

Alternatively to A, a declaration that, by reason of matters pleaded in paragraphs 11 to 13: (a) the Heads of Agreement has been abandoned; and/or (b) the Heads of Agreement has been discharged by agreement between the parties.

(e) it is not a requirement that the plaintiffs identify any specific single time that the Heads of Agreement was abandoned.[305] It is necessary for the plaintiffs to identify the period of time that has elapsed without the parties manifesting any intention to perform the contract.[306] The plaintiffs submitted during oral submissions:[307]

Abandonment pleas are by their nature relatively imprecise, they're imprecise because the notion of abandonment requires essentially a judgement as to a - at a point in time, imprecise as it is as to when the parties have conducted themselves if they're not bound by the agreement or that they're positively agreed explicitly if it be the case that the agreement is to be abandoned. Where that is a feature of the case, is that it is to be not explicitly by agreement but rather inferred by their conduct, and that is explicitly the basis upon which we put it, we first can't nominate a specific date because it's over a period of time but it could be at any point during that period of time depending on Your Honour's view of the evidence that is presented to you.

(f) the plaintiffs also submitted:[308]

Well our case is that at any point from March 1991...to November 2021, the heads of agreement was abandoned.

(g) the plaintiffs submitted that, for example, the Heads of Agreement has been abandoned by April 1991;[309]

(h) the plaintiffs also identify the period as being between at least March 1991 until about 16 November 2021 as:

(i) March 1991 was the last occasion on which the parties directly communicated any acknowledgement that the Heads of Agreement bound them. This is a reference to the letter from the plaintiffs' solicitors to Mr Taylor in which they stated, inter alia: "We confirm that Streicholz Fabrik Pty. Ltd. (formerly known as Splendidus Pty. Ltd.) and Alan Douglas McKinnon Hamilton confirm all of the terms and conditions contained in the Heads of Agreement dated 19 December 1986 between Sedice Pty. Ltd., Splendidus Pty. Ltd., Alan Douglas Hamilton and yourself".[310] The plaintiffs submitted that "[p]roperly understood, it was a statement made out of pure pragmatism and has to be understood in the broader context of the persistent failure of the parties to act in a manner which is consistent with them treating the Heads of Agreement as giving rise to ongoing contractual obligations";[311] and

(ii) on 16 November 2021 the defendants asserted that Mr Taylor holds rights under the First Right Term;[312]

(i) the plaintiffs submitted that, in effect, abandonment could have taken place at any time within that period depending upon the evidence at trial;[313]

(j) the key question for the Court involves an objective assessment of the parties' conduct. Mr Taylor's private and self-serving reflections on whether the Heads of Agreement bound him are irrelevant and so are the attempts to rely upon Mr Taylor's so-called assertions of his rights. The evidence must be assessed in context and, in particular, by reference to the lengthy history of no party performing their respective obligations under the Heads of Agreement;[314]

(k) Mr Taylor and SFPL have not acted in accordance with the First Right Term (i.e. clause 8 of the Heads of Agreement).[315] The plaintiffs submitted:

(i) circumstances arose and they did not act in accordance with the First Right Term (i.e. clause 8 of the Heads of Agreement);[316] and

(ii) when pressed on identifying the circumstances of this the plaintiffs submitted:[317]

MR GOUBRAN: I'd rather answer it, Your Honour, by referring to the instances where it's said a right has been asserted.

HIS HONOUR: Yes.

MR GOUBRAN: And describe why that doesn't constitute an act of performance, if I could engage it that way. But I'd like to do that in the context of my broader submissions about the abandonment of the whole agreement, Your Honour.

(l) the plaintiffs made the following submissions concerning clauses 2 and 3 of the Heads of Agreement:[318]

MR GOUBRAN: ... There's further evidence, Your Honour, if Your Honour turns to paragraph 36 of Mr Dodgson's affidavit.

Your Honour will see in sub-paragraph (a), 'I'm informed by Mr Hamilton and believe that in relation to the matters in paragraph 29(e) of the Hamilton statement, he did not at any stage seek Mr Taylor's approval for any development works and believed that Hamilton did not provide his approval for any works undertaken by Mr Taylor'. So the plaintiff's position is that the parties have not conducted themselves in a manner where they consider themselves bound by a clause 2, and that that will be open for Your Honour to rule at trial that the parties have conducted themselves in such a manner that it should be inferred, at least in respect of clause 2 - I propose to do this through a number of these clauses - to reach the conclusion that that clause has not been one which the parties complied with.

Your Honour, similarly if Your Honour turns to clause 3 of the heads of agreement and if Your Honour turns again back to paragraph 29 sub-paragraph (f) of Mr Hamilton's statement. In relation to paragraph (f), 'I do not recall sharing any such costs. I have seen a letter from TD to Taylor dated 25 May 1987, which I understand has been produced by the defendants which encloses an account from surveyors and asking Taylor to pay half'.

(m) the plaintiff submitted that the defendants rely upon three conversations involving Mr Taylor over a 21-year period.[319] As to these matters, the plaintiffs submitted:

(i) one conversation was with Mr Combes. Setting aside any issue of admissibility, there are no notes of this conversation and Mr Taylor refers to the involvement of the Federal Police as opposed to the Victoria Police in relation to any "offence which resulted in [Mr Taylor's] records not being available".[320] The plaintiffs submitted "[n]or is any evidence given that Mr Combes did anything to accept the existence of the Alleged First Right. The evidence, such as it is, is consistent with the plaintiffs being willing to give Mr Taylor an opportunity to purchase the Property if he wished but without there being any contractual obligation for the plaintiffs do [sic] so."[321] There is also no evidence to support Mr Taylor's recollection of events in 2008;[322] and

(ii) two conversations with Mr MacCallum of Minter Ellison. The plaintiffs submitted that "[a]t their highest, they again reveal no more than a unilateral assertion by Mr Taylor of the Alleged First Right, of which Mr MacCallum was apparently unaware...There is also no evidence of SFPL acting in a manner consistent with it accepting that the Alleged First Right existed."[323] The plaintiffs also submitted that "[b]eyond the inconclusive conversation with Mr MacCallum, there is no evidence of any other step that Mr Taylor took in the course of that marketing campaign to assert the Alleged First Right."[324]

(n) the conversations relied upon by the defendants must be assessed against the background of an agreement that remained "largely unperformed"[325] and:

(i) was dominated by terms that only made sense as applying to parties who owned neighbouring properties to each other;

(ii) contained terms requiring particular forms of co-operation between the parties which the evidence suggests never occurred. There is no evidence of discussions between the parties as to how to manage the courtyard by reference to the Heads of Agreement; setting of budgets in relation to the courtyard; setting of regulations in relation to the courtyard; sharing of costs in relation to the courtyard or discussions about entering into a final agreement to formalise the terms of the Heads of Agreement,[326]

(o) the inclusion of the Heads of Agreement in a vendor's statement sent to a purchaser in 2006 does not assist the defendants. This is because it was included as historical evidence of the use of Russell Street in the context of an asserted easement. The plaintiffs submitted that "[t]here is no suggestion that the plaintiffs considered it continued to bind the parties to it.";[327]

(p) document production in the proceeding is not complete.[328] This includes the production of documents by Mr Taylor concerning his disclosure of the Heads of Agreement to third parties;

(q) paragraph 12 of the amended statement of claim is expressed in order to capture the different legal categorisations that have been given to abandonment by different courts. The plaintiffs referred to Woolworths Group Ltd v Gazcorp Pty Ltd (Gazcorp)[329] at [93];[330] and

(r) the pleading has not prevented the defendants marshalling significant evidence and pleading a defence and counterclaim.[331]

124 There was no dispute between the parties as to the applicable law.

125 In Paal Wilson & Co,[332] Lord Diplock said:[333]

Abandonment of a contract ("the former contract") which is still executory, i.e., one in which at least one primary obligation of one or other of the parties remains unperformed, is effected by the parties entering into a new contract ("the contract of abandonment") by which each party promises the other to release that other party from further performance of any primary obligations on his part under the former contract then remaining unperformed, but without such non-performance giving rise to any substituted secondary obligation under the former contract to pay damages.

It is the latter part of the promise by each party, i.e., the release of the other party from all further secondary as well as primary obligations, that distinguishes the legal concept of abandonment of the former contract from the extinction of unperformed primary obligations of both parties under the former contract by fundamental breach of a primary obligation (or breach of condition) by one of them, followed by the election of the party not in breach to put an end to all primary obligations of both parties under the former contract remaining unperformed. Unlike the contract of abandonment this leaves the secondary obligations under the former contract of the party who committed the breach enforceable against him by the other party.

To the formation of the contract of abandonment, the ordinary principles of the English law of contract apply. To create a contract by exchange of promises between two parties where the promise of each party constitutes the consideration for the promise of the other, what is necessary is that the intention of each as it has been communicated to and understood by the other (even though that which has been communicated does not represent the actual state of mind of the communicator) should coincide...

126 In Jafari v 23 Developments Pty Ltd,[334] the Court of Appeal set out the principles concerning abandonment of a contract:[335]

[191] Parties may expressly agree to terminate or abandon a contract. Abandonment can also be inferred from conduct of the parties that makes it 'plain' that neither intends to perform the contract. They are regarded as having conducted themselves in a manner so as to abandon the contract. Abandonment commonly arises from a period of time having elapsed, 'during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned.' By inferring abandonment, the court infers that the arrangement has been discharged as between the parties, with 'each party being entitled to assume from a long-continued ignoring of the contract on both sides that ... "the matter is off altogether"'. Whether the parties have abandoned a contract is a question of fact, inferred from an objective assessment of the conduct of the parties.

[192] While commonly inferred by the lapse of an inordinate period of inactivity as between the parties, this is not always necessarily so. The doctrine rests on the objective intention of the parties to abandon or abrogate the contract, ascertained from their conduct and the surrounding circumstances...

127 In Next Stage Living Moonee Ponds Pty Ltd v Ardmillan Place Nominees Pty Ltd,[336] Button J said:[337]

[249] In the absence of an express second contract (and assuming no estoppel arises), a party contending that the first contract has been discharged by agreement must establish a second contract to be inferred from conduct. It is a question of fact in each case whether the parties, by their conduct, entered into a new contract which merely modifies the first contract or whether their conduct manifests an intention to extinguish the first contract.

[250] Contracts, whatever the subject matter, can be inferred where mutual assent may be inferred from the circumstances; it is not necessary that a clear offer and acceptance be identified. Rather, the critical issue is what a reasonable person would make of communications in the context in which they occurred. That objective assessment must, however, yield a tacit agreement with 'sufficiently clear terms' to which both parties considered themselves bound; it is not enough that the conduct is merely consistent with the terms of the alleged agreement.

128 In Fitzgerald v Masters,[338] Dixon CJ and Fullagar J said:[339]

Is abandonment, then, to be inferred from the long silence and inactivity that followed? In considering this question, we think that the period to be regarded is a period of about sixteen years - from 1932 to 1948. For, although the respondent's solicitors, when they wrote to the deceased in 1948, made no reference to the contract of sale, we agree with McLelland J that their letter should be regarded as an intimation that the respondent intended to assert his rights, whatever they might be.

There can be no doubt that, where what has been called an "inordinate" length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them, it may be inferred that the contract has been abandoned. A good example is to be found in Pearl Mill Co Ltd v Ivy Tannery Co Ltd (1919) 1 KB 78. See also Mathews v Mathews [1941] SAStRp 47; (1941) SASR 250, at p.255 and G .W. Fisher Ltd v Eastwoods Ltd (1936) 1 All ER 421, especially at p.426, per Branson J. What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that (in the words of Rowlatt J.) "the matter is off altogether".

It is impossible, in our opinion, to infer a discharge of the contract in the present case. In each of the cases cited above the contract was an executory contract, under which neither party had acquired any proprietary right or interest. The position was simply that each party had promised to do something, and for a long period no act was done in performance of the contract, and no step was taken to require any act to be done in performance of the contract. Here the contract had been partly performed by the respondent. Before he left the property, he had paid more than half of the purchase price, and he had an equitable interest in the land. He had registered his contract. It is impossible to suppose, nor can the deceased have supposed, that he ever intended simply to allow the deceased to keep both the money and the land, and no suggestion that the money should be repaid to him was ever made. As Taylor J. observed during argument, if he had at any time regarded the contract as at an end, the first thing one would have expected him to do was to demand repayment of his money. The truth is, we think, that the equitable interest in the land, which the respondent had acquired, could not be lost or destroyed by mere inaction on his part. It could only be lost or destroyed by release or express agreement on his part, or if the deceased lawfully rescinded the contract. Any release or agreement could be expected to provide for adjustments taking into account the part of the price already paid, and, in the event of rescission by the deceased, the rules of law and equity would take care of the position.

129 In Gazcorp,[340] the New South Wales Court of Appeal said:[341]

[91] As outlined in Ryder v Frohlich [2004] NSWCA 472 at [135] (Ryder), where it is plain from the conduct of parties to a contract that neither intends that the contract should be further performed, the parties will be regarded as having so conducted themselves as to abandon or abrogate the contract.

[93] As Leeming JA (with whom Bathurst CJ and White JA agreed) pointed out in Técnicas Reunidas SA v Andrew [2018] NSWCA 192 at [51], although it is common to refer to "abandonment" as a distinct doctrine, the preferable view is that the contract has been discharged by inferred agreement.

...

[94] As McColl JA stated in Ryder at [137]:

The underlying premise of the abandonment cases is that a period of time elapses during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned. It is clear that the question whether an 'inordinate length of time has been allowed to elapse' is relative. In DTR Nominees Pty Ltd v Mona Homes Pty Ltd the High Court was prepared to infer abandonment after a period of less than five months had elapsed during which neither party took any steps to perform the contract. In Fitzgerald v Masters it was held that a contract for the sale of land had not been abandoned even though proceedings for its specific performance were not commenced until 26 years after its execution.

[95] Whether there is abandonment or abrogation of a contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties...

[96] In Fazio v Fazio [2012] WASCA 72 at [74], Murphy JA noted that the abandonment of a contract, in the sense of the mutual release of future obligations, does not depend upon the subjective intention of the parties. Rather, it depends upon whether their conduct (both acts and omissions), viewed objectively, manifests an intention to discharge the contract. This observation was cited with approval by this Court in Protector Glass Industries Pty Ltd v Southern Cross Autoglass Pty Ltd.

130 For reasons I express later in these Reasons, I am not satisfied the plaintiffs' claim based upon the alleged abandonment of the Heads of Agreement has no real prospects of success and I will refuse the defendants' application for summary judgment pursuant to s 63 of Civil Procedure Act. As a result, I am also not satisfied that the plaintiffs' claim should be dismissed pursuant to r 23.01 of the Rules on the basis that it is an abuse of process or frivolous or vexatious.

131 As a result, I will refuse the defendants' application for judgment pursuant to r 23.01 on the plaintiffs' claim concerning the abandonment of the Heads of Agreement.

132 The defendants submitted the proceedings were commenced without a proper basis and are an abuse of process.[342] The defendants primarily submitted:[343]

(a) the plaintiffs' case was initially formulated on the basis that the Heads of Agreement was never agreed to be performed by the parties. It is axiomatic from the amended statement of claim that this position has now changed considerably;

(b) the plaintiffs' case is an invented one having regard to the plaintiffs' statement of claim (and prior correspondence) and the events that followed that led to the amended statement of claim;

(c) despite being responsible for prosecuting this matter, the plaintiffs have attempted to limit or have otherwise obstructed the consideration of relevant documents;

(d) the plaintiffs only intend to call Mr Hamilton and do not intend to tender relevant documents including the Heads of Agreement; and

(e) they referred to the matters in their submissions concerning the application pursuant to r 23.01.

133 The plaintiffs informed the Court that they did not intend to address the application as set out in the defendants' submissions at [94].[344]

134 This ground of abuse of process was separate to the grounds concerning the particular claims in the amended statement of claim that I have already addressed in these Reasons. This further ground focused on the conduct of the plaintiffs and the plaintiffs' legal representatives in prosecuting these claims.

135 The jurisdiction to dismiss a proceeding as an abuse of process should only be exercised in an exceptional case and sparingly with the utmost caution. I am not satisfied that this is such a case. This is because of the following matters:

(a) I accept that the plaintiffs' statement of claim initially included a claim that the Heads of Agreement did not give rise to any immediately binding contractual obligations and further, or alternatively, the parties, by signing the Heads of Agreement, did not intend for the terms of the Heads of Agreement to have any binding effect of their own.[345] These claims were then discontinued by the amended statement of claim. I am not satisfied that the discontinuance of these claims supports any claim of abuse of process in the context of the conduct of the plaintiffs, and their legal representatives, identified by the defendants concerning the plaintiffs' failure to properly engage with the Court and the defendants on the amendments. I am not satisfied that any of this conduct constitutes an abuse of process. The impugned conduct is also relatively confined. The statement of claim included the present claims based upon the Alleged Term and abandonment. Further, the events the subject of these proceedings took place over a period of almost 35 years and, in those circumstances, it is not surprising that the plaintiffs have experienced difficulties in initially formulating their claims;[346]

(b) I am not satisfied that the plaintiffs' case is an invented one having regard to the plaintiffs' statement of claim (and prior correspondence) and the events that followed that led to the amended statement of claim:

(i) the defendants rely upon their provision of documents to the plaintiffs on 12 March 2022 and 25 March 2022 that included, inter alia, the letter dated 14 March 1991 from Clayton Utz, on behalf of the plaintiffs, to Mr Taylor.[347] This is the letter that expressly confirmed the Heads of Agreement. The defendants submitted that this resulted in the plaintiffs' amendment of the abandonment claim from "since December 1986"[348] to "at least March 1991"[349] to "circumvent the effect of their prior representation contained in the Clayton Utz letter";[350]

(ii) the defendants did not identify with any precision why this constitutes an abuse of process;

(iii) I am not satisfied that this evidences that the plaintiffs' case is an "invented" one to "circumvent" the facts. I accept that the plaintiffs took steps to amend their claim upon the provision of relevant documents by the defendants to them. I am not satisfied that in doing so they were inventing a case. As I have just said, the events the subject of these proceedings took place over a period of almost 35 years and, in those circumstances, it is not surprising that the plaintiffs have experienced difficulties in initially formulating their claims; and

(iv) this is very serious claim made by the defendants that was not otherwise the subject any further detailed submissions;

(c) I am not satisfied, based upon the evidence relied upon by the parties on these applications, that the plaintiffs have attempted to limit or otherwise obstruct the consideration of relevant documents:

(i) the defendants relied upon a number of matters concerning the process of the production of documents and the tender of documents at trial, concerning: discovery, a notice to produce; the proposed tender list of documents of the plaintiffs and objections by the plaintiffs to subpoenas;

(ii) the defendants did not identify with any precision why any of these matters constitute an abuse either together or separately. This included: the significance of the "photographs" referred in the defendants' submissions at [94(c)(ii)]; the "relevant documents" referred to in the defendants' submissions at [94(c)(iii)] apart from the Heads of Agreement. The Court is also not in a position to determine whether the discovery is inadequate and, if it is, why; matters concerning the defendants' notice to produce and how precisely the plaintiffs have failed to comply with it and finally, why the plaintiffs' objections to subpoenas issued to various persons support a claim of abuse of process;

(iii) the defendants did not identify with any precision why any of this conduct constitutes an abuse of process; and

(iv) again, this very serious claim made by the defendants was not the subject of any further detailed submissions;

(d) I am not satisfied that the plaintiffs only intend to call Mr Hamilton at trial and do not intend to tender the Heads of Agreement at the trial. In any event, even if I am incorrect, and the plaintiffs only intend to call Mr Hamilton at trial, I am not satisfied that this supports any claim of abuse of process. First, the defendants did not identify with any precision why this constitutes an abuse of process. Secondly, Mr Hamilton makes extensive references to the Heads of Agreement in the Hamilton statement.[351] Finally, it will rarely be, if at all, appropriate to dismiss a case for an abuse of process upon the basis of how a party may intend to conduct its case in the future, including at a trial; and

(e) I otherwise refer to my earlier Reasons concerning the defendants' applications pursuant to r 23.01 concerning the plaintiffs' claims based upon the Alleged Term and abandonment.

136 As a result, I am not satisfied that the plaintiffs' claims are an abuse of process.

137 By the amended summons the defendants seek the following relief:

1. Further or in the alternative to paragraph 1 above, pursuant to rule 22.16 of the Rules and/ or section 62 and 63 of the Civil Procedure Act 2010 (Vic) there be summary judgment against the plaintiffs in favour of each of the defendants.the claims in paragraphs 8A, 10, 11 and/ or 12 of the ASOC be permanently stayed, or summarily dismissed, or struck out.

...

As against the second plaintiff:

1. Pursuant to sections 62 and 63 of the Civil Procedure Act 2010 (Vic) and Rule 22.16, there be summary judgment against the second plaintiff in favour of each of the defendants on the ground that he under the ASOC has no real prospect of success against each of the defendants and makes no claim for relief against them.
2. Costs on solicitor and own client or full indemnity basis or, alternatively, costs.

138 The defendants submitted that the plaintiffs' claims have no real prospects of success and relied upon their submissions concerning their application pursuant to r 23.01.[352]

(a) there is authority that summary dismissal may not be appropriate in a judge‑managed list;[353]

(b) as to the case concerning the Alleged Term:

(i) it is at least arguable that an implied term arises in the terms of the Alleged Term;[354]

(ii) the plaintiffs rely upon their submissions concerning the defendants' application pursuant to r 23.01;[355]

(iii) nothing in the defendants' evidence positively undermines the plaintiffs' case.[356] The plaintiffs submitted that "[t]he fact such a condition was not stated in a single letter (dated 3 December 1986) recording proposed terms and conditions is: (a) parole evidence, which the defendants must justify recourse to, and (b) must, if taken into account, be seen in light of the whole of the circumstances...";[357] and

(iv) summary judgment is generally inappropriate in a case concerning construction of an implied term except where the argument is untenable. Regardless of the merits on a summary basis, the prospect of the parties leading extensive evidence points to the need for there to be a full trial of the evidence in order to avoid serious injustice to the plaintiffs,[358]

(c) as to the case concerning abandonment, the plaintiffs rely upon their submissions concerning the defendants' application pursuant to r 23.01. This requires careful consideration of the circumstances over the period during which it is said that it was abandoned;[359] and

(d) the plaintiffs also relied upon s 64 of the Civil Procedure Act as to the plaintiffs' claims on the Alleged Term and abandonment[360].

140 In my view, the question of whether the Alleged Term is a term of the Heads of Agreement is not the kind of question which may be determined on a summary judgment application. This is because it depends upon disputed facts, and there may be other possible relevant facts that arise at a trial, relevant to whether the Alleged Term is a term of the Heads of Agreement.

141 The Alleged Term (as pleaded in paragraph 8A(c)(ix) of the amended statement of claim) is, in fact, constituted by two alternate alleged implied terms. This was accepted by the plaintiffs.[361] This is confusing. They should have been pleaded separately. For convenience, I restate the alternative forms of the Alleged Term (with the differences between the forms underlined) below:

(a) performance of any of the obligations under the entire Heads of Agreement was conditional upon SFPL and Headland remaining the owners of the "Property" (i.e. the Northern Property) and the "Adjoining Property" (i.e. the Southern Property) respectively; and

(b) performance of any of the obligations under the "Alleged First Right" (i.e the First Right Term) was conditional upon SFPL and Headland remaining the owners of the "Property" (i.e. the Northern Property) and the "Adjoining Property" (i.e. the Southern Property) respectively.

142 The defendants made a number of submissions as to the ambiguous wording of the Alleged Term. These are not pleading matters as they concern the term itself. It is for the plaintiffs to establish the Alleged Term in the form in which it is pleaded. The defendants are entitled to assume that the Alleged Term in paragraph 8A(c)(ix) of the amended statement of claim is the term itself apart from the use of defined terms in the Alleged Term that are defined in the amended statement of claim (i.e. "Property" and "Adjacent Property").

143 The particulars state that the Alleged Term is "based upon a proper construction of the Heads of Agreement or alternatively implied by the need to give business efficacy to the Heads of Agreement". The plea does not distinguish between these two alternatives and does not otherwise identify, and put the defendants on notice, how the case is put concerning:

(a) proper construction; and

(b) implication arising from business efficacy. None of the criteria in BP Refinery are addressed in the pleading.

144 In my view, the defendants are now on notice as to how the plaintiffs put their case on each of these matters as a result of the plaintiffs' submissions at the hearing.

145 Paragraph A of the prayer for relief of the amended statement of claim states that a declaration is sought by reason of paragraphs 8 to 10 or "or otherwise". The reference to "or otherwise" is embarrassing as there are no other allegations in the amended statement of claim that support the declaration in paragraph A. The reference to "or otherwise" also does not give any notice to the defendants of any alternate case made against them. At the hearing, the plaintiffs clarified that these words should be deleted.[362] The reference in paragraph A to "or such other date as the Court considers appropriate" is also embarrassing as there are no other allegations in the amended statement of claim that support any other date other than 4 April 1996. The reference to "or such other date as the Court considers appropriate" does not give any notice to the defendants of any alternate case to made against them. Further, the defendants admit that they ceased to be the registered proprietor of the Southern Property on or about 4 April 1996. There is no alternate case. Paragraph A is not otherwise liable to be struck out. The defendants are on notice as to the form of the declaration sought by the plaintiffs. It substantially conforms with the Alleged Term. The question of the precise form of any declaration to be made, in the event that the plaintiffs succeed, may be determined at the trial of the proceeding.[363] The alternate relief in paragraph B (insofar as it concerns the plaintiffs' case on the Alleged Term) is also not liable to be struck out. This is because the alternate form of the Alleged Term concerns the First Right Term which is the subject of paragraph B. Again, it substantially conforms with the Alleged Term and the question of the precise form of any declaration to be made, in the event that the plaintiffs succeed, may be determined at the trial of the proceeding.

146 Finally, paragraph 10(b) has a minor typographical error in relation to an important allegation. It refers to "the matters pleaded in paragraph 0 above". This is meant to be a reference to paragraph 9.

147 The plaintiffs submitted that their primary case was based upon a proper construction of the Heads of Agreement. They also submitted that this was the "essence" of their claim.[364]

148 The plaintiffs addressed the criteria in BP Refinery in their written submissions. The plaintiffs submitted during the hearing that the plaintiffs' case upon proper construction and implication arising from business efficacy are "essentially put on the same basis"[365] but the case based upon implication applying the criteria in BP Refinery "provides flexibility insofar as any purposive interpretation arises from the words".[366] The plaintiffs also submitted that there was no "material difference" between the two cases and "I think ultimately Your Honour, they're - it's almost to the point where they're redundant".[367] These submissions were not otherwise further explained or addressed. In my view, these submissions do not take into account the differences, as a matter of law, between the process of the proper construction of an agreement and the implication of term into an agreement in order to give it business efficacy.

149 The plaintiffs submissions were focused on the Alleged Term concerning the "entire Heads of Agreement" (i.e. the Alleged Term in these Reasons at [141(a)].

150 The plaintiffs also initially submitted, upon this application in their written submissions, that the Alleged Term arises also by other processes of implication, separate to the implication by the need to give business efficacy to the Heads of Agreement, including implications contained in the express words of the Heads of Agreement and implications from the nature of the contract.[368] This submission was set out in the plaintiffs' written submission in a footnote that did not identify the basis for the submission. To the extent that these matters are separate to the proper construction of the Heads of Agreement or implication by the need to give business efficacy to the Heads of Agreement, these matters:

(a) are not pleaded or particularised in the pleading;

(b) were not otherwise developed or addressed during submissions at the hearing by the plaintiffs; and

(c) were abandoned, during the hearing, as the plaintiff based its case only upon the proper construction of the Heads of Agreement and implication arising from the need to apply business efficacy to the Heads of Agreement, being the matters referred to in the amended statement of claim.[369]

151 As a result, these potential alternate bases for the implication of the Alleged Term do not form any part of the plaintiffs' case.

152 In the plaintiffs written submissions, filed before the hearing, the plaintiffs relied upon:

(a) the "history of the circumstances in which Headland and SFPL found themselves and the fact that they each proposed to undertake works that could impact each other";[370] and

(b) the circumstances that "suggest that Mr Taylor's initial intention was to purchase the whole of the Property. He [Mr Taylor] was granted an option to that effect, which he then sold in its entirety to Mr Hamilton."[371]

153 The plaintiffs also submitted:[372]

...Whether or not the term is implied solely by reference to the terms of the Heads of Agreement or the surrounding circumstances, it is apparent that, at trial, both the plaintiffs and the defendants might have recourse to extrinsic evidence going to the circumstances in which the Heads of Agreement were entered into. Regardless of the apparent merits on a summary basis, the prospect of the parties leading extensive evidence points to the need for there to a be a full trial of the evidence in order to avoid serious injustice to the plaintiffs.

154 The plaintiffs then sought, at the hearing of the applications, to confine their case and submitted:[373]

"...the principal case that my client [sic] makes is the case based upon proper construction of the [Heads of Agreement]. It does that via an analysis we submit of fulsome consideration of the contextual provisions, the provisions as they work together.

155 The plaintiffs also submitted at the hearing of the applications:[374]

We submit, for the purposes of today and Your Honour's adjudication of the summons that it does not go beyond the terms of the heads of agreement itself. Your Honour need not have regard to anything else other than the terms of the heads of agreement in determining the application of the implied term as pleaded.

156 The plaintiffs described the case on the Alleged Term as "of limited compass. Limited compass indeed".[375]

157 The plaintiffs' then submitted subsequently to the hearing:[377]

Second, Hardingham confirms the proper role of evidence in ascertaining the terms of a contract. The Court repeatedly explained that the role of a court is not to determine each party's 'actual intention', but rather to ascertain, objectively, what a reasonable observer would understand the intention of the parties to be. Such observations are particularly apposite where, on the defendants' case, resort is had to evidence as to the internal or subjective views of Mr Taylor as to the 'purpose' or 'intention' of the Heads of Agreement, or a selective reliance on some, but not all, of the objective communications between the parties. While the Court can have regard to the objective communications between the parties in ascertaining the terms of an agreement, Hardingham reinforces the importance of having regard to the totality of such (relevant) evidence: see, eg, Gordon J at [51].This reinforces the unsuitability of summary judgment in this case. The Court does not have before it all of the evidence that might be led at trial about these matters, including not only the evidence each party wishes to lead, but the evidence adduced on cross-examination and following discovery.

158 Initially, the defendants relied upon the entirety of the First Taylor affidavit (constituted by 165 paragraphs and over a thousand pages of exhibits and also the Hamilton statement).[378] The defendants subsequently relied upon, inter alia, the following circumstances relevant to the plaintiffs' case based upon the proper construction of, and the need for business efficacy implication to, the Heads of Agreement:[379]

(a) Mr Taylor and Mr Hamilton were experienced business persons;[380]

(b) Mr Taylor was a syndicate manager,[381] also described as a syndicate representative,[382] who was managing various interests for syndicates;[383]

(c) the Option Agreement.[384] Mr Taylor held the Option as a syndicate manager;[385]

(d) the parties were represented by solicitors;[386]

(e) Mr Taylor and/or his nominee "always" had the right of first refusal;[387]

(f) there was no discussion about making the First Right Term conditional upon Mr Taylor or Headland remaining owners of the Southern Property;[388]

(g) the Taylor/Hamilton arrangement;[389]

(h) the Taylor/Hamilton arrangement "in context refer to the first right of refusal. Mr Taylor had an option to buy both parts, including the section himself";[390]

(i) Mr Hamilton had to deal with Mr Taylor as Mr Taylor was the one that held the interest because he had an option from Bryant & May Pty Ltd;[391] and

(j) the Northern Property and the Southern Property are constituted by numerous titles.[392]

159 There is a dispute between the parties and uncertainty about the mutually known objective background circumstances concerning the commercial purpose of the Heads of Agreement and the relevant matrix of facts. These matters are relevant to the legal issue of the proper construction of the Heads of Agreement and the implication of the Alleged Term to give it business efficacy respectively. This case is not an appropriate case for summary judgment.

160 First, I reject the plaintiffs' submission that upon the proper construction of the Heads of Agreement reference should only be made to the Heads of Agreement itself. This does not accord with the principles of construction I have referred to earlier.[393] The Court should have regard to objective evidence of facts known to both parties as to commercial purpose.[394] In addition, this is particularly important in the circumstances of this case. This because the Heads of Agreement is an "initial temporary short form" agreement. This makes it even more important for the Court to consider all of the mutually known objective background circumstances as to commercial purpose.

161 Secondly, there is a significant dispute between the parties on the pleadings, and on the evidence, concerning the mutually known objective background circumstances and relevant matrix of facts. I do not accept that the evidence will not change at trial. At the trial the Court will have the benefit of oral evidence, including by Mr Taylor and the testing of that evidence. This will include evidence concerning, inter alia, the Taylor/Hamilton arrangement, the transfer of the Option by Mr Taylor to SFPL and the capacity in which Mr Taylor was acting in relation to the Heads of Agreement (whether as a syndicate manager or otherwise).

162 The defendants plead, in defence to the plaintiffs' allegations of the Alleged Term, inter alia, that at all relevant times "the rights in the Option rested" with Mr Taylor.[395] This is a reference to the Option the subject of the Option Agreement between Mr Taylor and Bryant & May Pty Ltd.[396] This plea is, however, contradicted by the defendants' further plea that the Option was sold by Mr Taylor to SFPL on 25 November 1986.[397] The plaintiffs, in their reply, allege that as at 25 November 1986 SFPL was the owner of the Option.[398]

163 On the present evidence, Mr Taylor's evidence is that at the time of the Taylor/Hamilton arrangement (i.e. as at 3 December 1986) Mr Taylor held the Option. Mr Hamilton's evidence is that it was sold to him prior to the Taylor/Hamilton arrangement.

164 The defendants relied substantially upon the Taylor/Hamilton arrangement with respect to commercial purpose.[399] They repeatedly described this as the "genesis" of the First Right Term.[400] The defendants initially submitted the date of the sale of the Option by Mr Taylor to Mr Hamilton was irrelevant to the applications.[401] The following exchange, however, between the Court and counsel for the defendants took place:[402]

HIS HONOUR: But you're telling me that Taylor had been granted a first right of refusal previously, and that's as I understand it, an alternate way in which you say that those facts are relevant.

MR NORTH: Yes, and that he was the one that held the interest because he had options that had been supplied by Bryant & May to him. That's why Mr Hamilton had to deal with him, and that's why in the end there was no reciprocity and first right of refusal was directed to one person or his nominee.

165 The defendants repeatedly relied upon the Taylor/Hamilton arrangement as evidencing the purpose of the First Right Term and that, as at the time of the Taylor/Hamilton arrangement, Mr Taylor held the Option. This is a significant dispute between the parties and it is relevant to the proper construction of the purpose of the Heads of Agreement. It cannot be resolved by the Court on this application.

166 Thirdly, in my view, I am not satisfied which of the facts relied upon the parties in their evidence are the mutually known objective background circumstances concerning commercial purpose. For example, there is no evidence that Mr Hamilton knew that Mr Taylor was a manager of syndicates. This may be relevant to the purpose of the Heads of Agreement and whether it was a "neighbours' agreement".

167 Fourthly, I also observe that in relation the plaintiffs' case, based upon an implication of a term by the need to give business efficacy to the Heads of Agreement (i.e. applying the criteria in BP Refinery), the application of the condition that the term must be "reasonable and equitable" will often require consideration of the matrix of facts in which a contract was agreed.[403] I refer to the matters I have just addressed in relation to commercial purpose which apply equally to determining the relevant matrix of facts.

168 Fifthly, the defendants made a number of submissions concerning why the Alleged Term does not arise as a matter of proper construction or by need to give business efficacy to the Heads of Agreement,[404] including, inter alia:

(a) the reference to "entire obligations" in the Alleged Term is vague;

(b) the reference to "Property" and "Adjacent Property" in the Alleged Term is vague. I also note these are defined terms in the pleading and not the Heads of Agreement;

(c) the reference in the Alleged Term to "remaining owners" is vague, and it cannot be implied, as SFPL and Headland were not owners at the time of the Heads of Agreement;

(d) the reference in the Alleged Term to "entire obligations" does not work when some of the obligations appear to concern the parties' capacities prior to ownership;

(e) the Alleged Term is inconsistent with clause 9 concerning confidentiality;

(f) the limitation in the Alleged Term to "SFPL and Headland remaining owners" is inconsistent with clause 10 as "party" is more broadly defined by reason of clause 10 of the Heads of Agreement; and

(g) the Alleged Term is inconsistent with the First Right Term. The First Right Term separately confers a right on Mr Taylor or his nominees. Mr Taylor and his nominees were not owners of the Southern Property.

169 In my view, the Court should not attempt an examination of the plaintiffs' case on the Alleged Term, and consider the matters raised by the defendants, on a summary basis in the absence of the Court first making findings on the relevant facts. This is because making those findings is relevant to:

(a) the commercial purpose of the Heads of Agreement which is central to a proper construction of the Heads of Agreement; and

(b) whether the term is "reasonable and equitable" which is one of the criteria that must be established to imply the Alleged Term as a matter of business efficacy.

170 As I have already said, this is especially important in the circumstances of this case as the agreement is an "initial temporary short form" agreement. In my view, to do so, risks the Court potentially summarily determining the plaintiffs' case without proper regard to all relevant matters.

171 At present, there is dispute and uncertainty about the relevant facts. For the reasons I have given, these matters must be determined at a trial. As a result, I do not have a clear view that the plaintiffs' claim has no real prospects of success in the absence of those facts being determined.

Section 64 of the Civil Procedure Act

172 In the event I am incorrect and the plaintiffs' claim has no real prospects of success, this is a rare case in which I would have exercised my discretion pursuant to s 64 of the Civil Procedure Act and ordered that the plaintiffs' claim based upon the Alleged Term of the Heads of Agreement proceed to trial despite there being no real prospects of success.

173 The plaintiffs did not make any submission expressly based upon s 64 of the Civil Procedure Act in their initial written submissions but did submit:[405]

...Whether or not the term is implied solely by reference to the terms of the Heads of Agreement or the surrounding circumstances, it is apparent that, at trial, both the plaintiffs and the defendants might have recourse to extrinsic evidence going to the circumstances in which the Heads of Agreement were entered into. Regardless of the apparent merits on a summary basis, the prospect of the parties leading extensive evidence points to the need for there to a be a full trial of the evidence in order to avoid serious injustice to the plaintiffs.

174 During the hearing, the plaintiffs submitted, in response to questions from the Court, that it was open to the Court to exercise the discretion under s 64 of the Civil Procedure Act.[406]

175 I also refer to the plaintiffs' submissions that I have earlier addressed concerning the need for the Court to have all regard to the totality of the relevant evidence.[407]

176 The defendants submitted that there is no need for a trial, inter alia, on the basis that the evidence will not change.[408]

177 I would have exercised my discretion and ordered that the plaintiffs' claims based upon the Alleged Term of the Heads of Agreement should proceed to trial and that this claim should not be summarily disposed of as this is a rare case in it is not in the interests of justice to do so and the dispute is of such a nature that only a full hearing on the merits is appropriate. This is because:

(a) there is a factual dispute between the parties in relation to matters concerning the proper construction of the Alleged Term and the implication of the Alleged Term; and

(b) the Court must have regard to all of the relevant facts concerning the mutually known objective background circumstances known to both parties, and the relevant "factual matrix", and this is uncertain at present and can only be determined at a trial.

178 As a result, I will refuse the defendants' application for summary judgment, pursuant to s 63 of the Civil Procedure Act, concerning the plaintiffs' claim on the Alleged Term of the Heads of Agreement (paragraphs 8A(c)(ix), 9, 9A and 10 and paragraphs A and B of the prayer for relief (insofar as paragraph B refers to this claim) of the amended statement of claim).

179 The plaintiffs' plea of abandonment is inadequate.

180 First, the plaintiffs' initially alleged the Heads of Agreement had been abandoned as the parties have not attempted to perform the Heads of Agreement "[s]ince about December 1986 until about 16 November 2021".[409] The plaintiffs then amended this plea to "since at least March 1991 until about 16 November 2021" in the amended statement of claim and then clarified during the hearing that this should be a reference to "from 31 March 1991".[410] This must be clarified in the pleading itself.

181 Secondly, the particulars to paragraph 11 are manifestly inadequate. It is essential for the plaintiffs to identify with precision which obligations arose to be performed, including on the part of both Mr Taylor and Headland, and how it is said that they did not perform them.

182 The particulars in paragraph (e) and (f) do not identify whether any particular obligations arose and, if they did, who did not perform them, and how this manifested an intention to the other party not to perform the Heads of Agreement.

183 The particulars in paragraph (i) do not identify any particulars of the breach of confidence and how this manifested an intention to the other party not to perform the Heads of Agreement.

184 The particulars in paragraph (k) state "[the parties] have not any time since at least March 1991...performed any of their obligations purportedly arising under the Heads of Agreement". The reference to "purportedly" is embarrassing as it is the plaintiffs' case that obligations did arise and were not attempted to be performed. This was accepted by counsel for the plaintiffs. Again, no obligations are identified and who did not perform them, and how this manifested an intention to the other party not to perform the Heads of Agreement. Counsel for the plaintiffs submitted that paragraph (k) was "redrafted to allow for the first right".[411] This is a critical issue in this case. The plaintiffs initially submitted that they are not alleging that SFPL had not performed its obligations under the First Right Term.[412] The following exchange then took place between the Court and counsel for the plaintiffs concerning paragraph (k) and the First Right Term:[413]

HIS HONOUR: All you're saying is they haven't performed their obligations. Are you saying that the circumstances arose where they could have, but they didn't? Or that no circumstance arose anyway so it's - I just don't understand what you are saying. That's all. I'm not following it but - - -

MR GOUBRAN: Yes, Your Honour. Well, it's a number of the ways Your Honour just described it. The circumstances arose, and they didn't. That is certainly the position.

185 The plaintiffs then submitted that they would address the Court's queries by referring to the instances where the defendants submits that "a right has been asserted". Ultimately, the plaintiffs did not identify any circumstance in which SFPL and/or Mr Taylor did not attempt to perform the First Right Term despite circumstances arising where they could have done so. Rather, the plaintiffs made submissions that, inter alia, addressed the probity of the evidence of the events of 1991, 1997 and 2008 which I have addressed earlier in these Reasons. The plaintiffs have not identified any circumstances in which Mr Taylor manifested an intention not to exercise rights under the First Right Term or SFPL manifested an intention not to give Mr Taylor a first right of refusal under the First Right Term. This is manifestly inadequate. It is fundamental that the defendants have adequate notice of the case they must meet at the trial.

186 There is no plea that, as a result of the matters in paragraphs 11, the parties manifested an intention to one another not to be bound by the Heads of Agreement. This is a critical element of the cause of action and the plea.

187 The plea in paragraph 12 purports to set out two alternate formulations of the claim. This is confusing. In the context of this case, "abandonment" and "discharge by agreement" are the same and should not be separately pleaded as it is liable to cause confusion. The plea caused confusion in the present case until it was clarified.[414]

188 Paragraph AA of the prayer for relief seeks a declaration by reason of the matters pleaded in paragraphs 11 to 13 or "otherwise". The reference to "otherwise" is embarrassing as it does not give notice to the defendants of the case they must meet. The reference to "otherwise" was abandoned during the hearing.[415] Unlike the plea in paragraph 11, paragraph AA refers to abandonment "since on or about March 1991 or such further date as the Court considers appropriate". The reference to "since on or about" was abandoned during the hearing and the plaintiffs submitted that this should read "from March 1991".[416] The declaration is not supported by the allegations in the amended statement of claim. No such claim is made. The plaintiffs clarified that their case is "...at any point from March 1991 to November 2021, the heads of agreement was abandoned".[417] The plaintiffs submitted it was "an abandonment between two periods."[418] In Gazcorp Pty Ltd v Woolworths Group Ltd,[419] Gazcorp made a similar allegation as it is alleged that the agreement had been abandoned sometime in the period 1 October 2012 to 3 February 2016.[420]

189 It is fundamental to the administration of justice that the plaintiffs provide an adequate pleading that addresses these deficiencies. They have failed to do so to date. The defendants do not have adequate notice of the case they must meet.

190 I am not satisfied, however, that that the plaintiffs' claim based upon abandonment of the Heads of Agreement does not have real prospects of success. For reasons I have already expressed, however, I am satisfied that the plea of abandonment is inadequate and should be struck out with a right to replead.

191 First, as a result of the manifest inadequacies of the plaintiffs' further amended statement of claim it is not possible to adequately identify with precision the plaintiffs' case on abandonment. This is compounded by the fact that it concerns Heads of Agreement made on 19 December 1986. The plaintiffs submitted that evidence of matters prior to March 1991 was not "probative" in relation to the plaintiffs' claim of abandonment.[421] I do not accept this submission. In my view, it is necessary to examine the whole of the parties' conduct. This is because, any non-performance must be assessed against any performance. This concerns a period of almost 35 years (i.e. 19 December 1986 to 16 November 2021). In the absence of an intelligible pleading, it is not possible to properly consider the relevant conduct of the parties and to assess it and to determine whether it manifests any intention not to perform the Heads of Agreement. In this context I agree with the defendants' submission concerning the abandonment plea:[422]

The suggestion of "discharged by agreement" is not at all pleaded as anything other than relying upon "inference" from conduct which is set out in particulars to paragraph 11. The need for proper and adequate cross referencing of material facts in particulars is obvious. The particulars are no less than assertions...The conduct in paragraph 11 is an absence of conduct without reference to when an obligation arose which was owing by a particular party.

192 Secondly, the parties have filed substantial evidence concerning the claim of abandonment. I do not accept the defendants' submission that the plaintiffs do not wish to lead any evidence on their case of abandonment.[423] There are extensive disputes on the facts. It is not possible to resolve these disputes on this application. For example, I refer to:

(a) the Fourth Dodgshun affidavit, especially at paragraphs [11], [18]-[31] and [33]‑[37], in which he deposes, on information from Mr Hamilton and belief, as to disagreements with Mr Taylor on a substantial number of matters; and

(b) the First Taylor affidavit, especially at [151(a)-(i)], as to disagreements with Mr Taylor on a substantial number of matters.

193 I also observe that much of the evidence is also conclusionary and not even in an admissible form and concerns a very lengthy period of time.

194 In those circumstances, it is not possible to make findings on all of those matters and to determine whether I am satisfied that the plaintiffs' claim has no real prospects of success.

195 Thirdly, the parties are in extensive disputes concerning discovery in relation to the plaintiffs' claim of abandonment. For example, I refer to:

(a) the letter from the plaintiffs' solicitors to the defendants' solicitors' dated 22 April 2022, especially at [8];[424] and

(b) the discovery sought by the defendants set out in Schedule A of their amended summons, especially at [1] (referred to a Notice to Produce, the relevant parts of that being [2(a)-(j)]), [2], [3], [6], [7] and [8(vii)]-[8(xviii)]).

196 Fourthly, I do not accept the defendants' submissions that there cannot be any abandonment as Mr Hamilton cannot recall the Heads of Agreement or its terms.[425] The defendants described this as a "fatal difficulty".[426] The defendants submitted "...he can hardly be said to have consciously intended to create legal relations by abandoning the [Heads of Agreement] or alternatively the [First Tight Term]. How can he create new legal relations if he does not recall the original relations?"[427] I do not accept this submission. The subjective intentions of Mr Hamilton are irrelevant. It is his conduct, as manifested to the other parties to the Heads of Agreement, that is relevant to whether the Heads of Agreement has been abandoned.

197 Fifthly, the defendants relied upon Fitzgerald v Masters.[428] In my view, this authority does not assist the defendants. In Fitzgerald v Masters the High Court considered a case of abandonment over a lengthy period in which a person (the respondent) was seeking to enforce a contract for the purchase of land and who had paid over 50% of the purchase price. Dixon CJ and Fullagar J held that the respondent had an equitable interest in land and this equitable interest could not be lost or destroyed by mere inaction on his part.[429] Dixon CJ and Fullagar J also held that there had been part performance, most importantly, payment of over 50% of the purchase price, and then stated:

...if he [the respondent] had at any time regarded the contract as at an end, the first thing one would have expected him to do was to demand repayment of his money.

198 Dixon CJ and Fullagar J also considered whether the very long delay by the respondent in seeking to enforce his contract (i.e. the equitable interest) was such to induce a court of equity, in the exercise of its discretion, to refuse specific performance. They determined that, in the circumstances of that case, there were no grounds upon which to refuse specific performance.[430]

199 The defendants submitted that Fitzgerald v Masters supports the principle "where a right is acquired and there has been part performance, it is impossible to infer a discharge of the contract by abandonment."[431] The defendants also submitted:[432]

We have an interest of the first right of refusal held by Mr Taylor which required action by the first named plaintiff and Mr Taylor was to respond to that act after he'd been notified of the sale price on the same terms and conditions to effect the transfer.

200 I accept the defendants' submissions that,[433] under the First Right Term, SFPL has an obligation to not effect a sale or transfer without Mr Taylor and or his nominee having the right to purchase or take transfer upon the same terms as each proposed purchaser or transferee. Mr Taylor then has the right to exercise his right of refusal. In my view, however, Mr Taylor's rights under the First Right Term may be lost if all of the parties to the Heads of Agreement, including Mr Taylor, nonetheless manifest an intention not to perform, for example, the obligations in clauses 1 to 7 over a lengthy period of time.[434] It is possible that this may then lead to the inference that the parties have, by their conduct, agreed to discharge the Heads of Agreement, including the First Right Term. This depends upon, however, an examination of all of the relevant circumstances. Those circumstances include the nature and extent of the particular obligations that arose to be performed and the particular conduct. For example, if Mr Taylor regularly asserted that he had rights under the First Right Term when he became aware of SFPL taking steps to sell the Northern Property, and as a result, manifested an intention to hold SFPL bound to the Heads of Agreement, that is a relevant circumstance. It is a circumstance to be taken into account with the other facts potentially over a period of 35 years. The finding of abandonment is a question of fact.

201 The present case may also be distinguished from Fitzgerald v Masters as the present case does not concern an equitable interest in land. The defendants did not submit that Mr Taylor has an equitable interest in the Northern Property. The defendants have not pleaded that Mr Taylor has an equitable interest in the Northern Property under the First Right Term. The defendants plead that the Heads of Agreement gave rise to "contractual obligations".[435] They also seek a declaration of rights that is limited to "contractual obligations".[436]

202 I also do not accept the defendants' submission that where there has been part performance of a contract it cannot be abandoned. For example, a contract may be partly performed and then a period of time may elapse during which the parties to the contract do not manifest any intention to perform the contract, leading to the inference that the contract has been abandoned.

203 Sixthly, I refer to the events in 1991, 1997 and 2008 which I have addressed earlier in these Reasons. The plaintiffs' submitted that the events in 1991, 1997 and 2008 must be assessed against all of the circumstances.[437] I agree. Whether the Heads of Agreement has been abandoned in the period from 31 March 1991 to 16 November 2021 is a question of fact to be determined by the Court. There does not appear to be any dispute between the parties that Mr Taylor manifested an intention to hold SFPL to the First Right Term in March 1991 and on 16 November 2021. This explains why the plaintiffs' case is premised upon an abandonment occurring within that period. The fact that Mr Taylor may have evidenced an intention to SFPL, at some time since 31 March 1991 (e.g. during the events in 1997 and 2008), for it to perform the Heads of Agreement is not necessarily fatal to the plaintiffs' claim of abandonment. For example, it may have been abandoned at sometime after 2008. The Court must examine all of the circumstances and determine whether the Heads of Agreement has, in fact, been abandoned in this period. In Gazcorp Pty Ltd v Woolworths Group Ltd,[438] Gazcorp alleged that the agreement had been abandoned sometime in the period 1 October 2012 to 3 February 2016.[439] Darke J found that it had been abandoned by about January 2014.[440]

204 I refer to the events in March 1991 which I have set out earlier in these Reasons:[441]

(a) the plaintiffs' solicitors, Clayton Utz, expressly informed the defendants in a letter dated 14 March 1991 that they "confirm all of the terms and conditions in the Heads of Agreement";[442]

(b) the plaintiffs submitted that the period "from March 1991" in paragraph 11 of the amended statement of claim has a proper basis as "March 1991 was the last occasion on which the parties directly communicated any acknowledgement that the Heads of Agreement bound them";[443]

(c) the plaintiffs submitted that the statement by Clayton Utz in the letter dated 14 March 1991, properly understood, was a statement out of "pure pragmatism".[444] Even accepting that the statement was made out of "pure pragmatism" this is irrelevant as the subjective intentions of Mr Hamilton (e.g. about why he instructed Clayton Utz to send the letter) are not relevant in assessing whether there has been an abandonment by inference as alleged by the plaintiffs;[445]

(d) as a result, the plaintiffs manifested an intention to the defendants to perform the Heads of Agreement immediately before the period relied upon by the plaintiffs for non-performance of the Heads of Agreement commenced (i.e. from March 1991). This was also accepted by the plaintiffs as this is why they amended their claim to plead abandonment after this time [i.e. now from 31 March 1991]; and

(e) in the context of this case, this is over 30 years ago (i.e. March 1991 to November 2021) and this evidence must be considered in light of all of the relevant circumstances.

205 I refer to the two conversations between Mr Taylor and Mr McCallum in 1997 which I have set out earlier in these Reasons:[446]

(a) the evidence, on this application, establishes that Mr Taylor told Mr MacCallum, SFPL's solicitor, that he had "a right of first refusal". Mr Taylor gave evidence that he made notes of his conversations with Mr MacCallum. I do note, however, that:

(i) the conversations between Mr Taylor and Mr MacCallum took place over 24 years ago. Apart from the notes, Mr Taylor has not produced any other document that supports his evidence. Mr Taylor's evidence of the conversations is very brief;

(ii) Mr Hamilton was not present during these conversations; and

(iii) Mr MacCallum has not given evidence. The plaintiffs did not, however, explain why no evidence was obtained from Mr MacCallum on this application;

(b) the plaintiffs submitted that this reveals no more than a "unilateral assertion" by Mr Taylor of rights under the First Right Term and that there is "no evidence of any common acknowledgment of the existence" of the First Right Term or of "SFPL acting in a manner consistent with it accepting that the Alleged First Right existed".[447] This misconceives the applicable law of abandonment. This is because it is not necessary for SFPL or Mr Hamilton to have accepted Mr Taylor's assertions of his rights under the Heads of Agreement;

(c) I also do not accept the plaintiffs' submissions that Mr Taylor did not take any further step with respect to a further campaign to "sell" the Northern Property in late 1997 and 1998 and that this behaviour is telling.[448] This is because the plaintiffs erroneously made this submission on the basis that these subsequent events concerned a "sale" of the Northern Property. The evidence of Mr Taylor concerned a "lease" and not a sale of the Northern Property.[449] The First Right Term only concerns a sale and not a lease;

(d) I accept that the evidence, on this application, establishes that Mr Taylor told Mr MacCallum, SFPL's solicitor, that he had "a right of first refusal"; and

(e) in the context of this case, this is over 24 years ago (i.e. April 1997 to November 2021) and this evidence must be considered in light of all of the relevant circumstances.

206 I refer to the conversation between Mr Taylor and Mr Combes in 2008 which I have set out earlier in these Reasons:[450]

(a) the evidence, on this application, establishes that Mr Taylor "discussed and asserted" his rights under the First Right Term in a conversation with Mr Combes, an estate agent engaged by SFPL, to sell the Northern Property. I do note, however, that:

(i) Mr Taylor does not say what he actually said. The evidence is in an inadmissible form although no objection was taken to this evidence;

(ii) Mr Taylor gave evidence that he cannot locate his records from 2006 to 2008 and that many of his records were stolen in about 2018 and that the Federal Police apprehended the person and recovered some files. He does not explain why the Federal Police, as opposed to the Victoria Police, were involved;

(iii) Mr Combes also gave evidence that Mr Taylor "mentioned" he had a first right of refusal over the Northern Property but does not give evidence of what Mr Taylor said;

(iv) Mr Hamilton was not present during these conversations; and

(v) Mr Combes gave evidence that he "believed" he spoke to Mr Hamilton but did not give any evidence of what Mr Hamilton said during that conversation;

(b) the plaintiffs submitted that Mr Taylor's evidence of his discussion with Mr Combes is "bare assertion" and that there is no evidence to support Mr Taylor's recollection of events.[451] They referred to there being no notes and him "curiously" referring to the Federal Police and not the Victorian Police.[452] The plaintiffs also submitted that Mr Combes did not do anything to accept the existence of the right under the First Right Term.[453] The plaintiffs made these submissions before Mr Combes made an affidavit in which he,[454] inter alia, gave evidence that Mr Taylor mentioned to him that he had a first right of refusal over the Northern Property and that he told Mr Taylor that he would notify him without delay if there was a party who might have a real interest in the Northern Property and the terms of the offer;[455]

(c) the plaintiffs submitted that the evidence of Mr Taylor "is consistent with the plaintiffs being willing to give Mr Taylor an opportunity to purchase the [Northern Property] if he wished but without there being any contractual obligation for the plaintiffs do [sic] so."[456] Again, this misconceives the applicable law of abandonment. It is not necessary for SFPL or Mr Hamilton to have accepted Mr Taylor's assertions of his rights under the Heads of Agreement;

(d) I accept that the evidence, on this application, establishes that Mr Taylor "discussed and asserted" his rights under the First Right Term in 2008 in his dealings with the estate agent acting on behalf of SFPL; and

(e) again, in the context of this case, this is over 13 years ago (i.e. from 16 November 2021) and must be considered in light of all of the relevant circumstances.

207 I also refer to two other instances relied upon by the defendants.

208 I refer to the facsimile transmissions of the Heads of Agreement in 1998 which I have set out earlier in these Reasons.[457] There is no other evidence concerning this matter, including to whom the facsimile transmissions were sent. The defendants submitted that the "plaintiffs were also aware of the [Heads of Agreement] in 1998".[458] The defendants' reliance upon this evidence misconceives the relevant test of abandonment.[459] The conduct of one party must manifest an intention to the other party.

209 I refer to the inclusion of the Heads of Agreement in a Vendor Statement in 2006/2007 which I have set out earlier in these Reasons. The defendants submitted:[460]

Whilst Mr Hamilton cannot recall why the [Heads of Agreement] was included in the Vendor's Statement, his attempts to justify it by reference to an easement is embarrassing. There was no special condition to say that the [Heads of Agreement] is no longer binding or did not give rose to any binding obligations. A prospective purchaser was entitled to assume that it was valid and binding and that it conferred upon Mr Taylor or his nominees the [First Right Term].

210 Again this misconceives the relevant test of abandonment. The conduct of one party must manifest an intention to the other party. I am not satisfied that the events of 2006/2007 are relevant, based upon the present evidence, to the issue of whether the Heads of Agreement has been abandoned. This is because there is no evidence that Mr Taylor or Headland were aware of the Vendor Statement at the time.

Section 64 of the Civil Procedure Act

211 If I am incorrect and the plaintiffs' claim concerning abandonment has no real prospects success, I would have exercised my discretion pursuant to s 64 of the Civil Procedure Act and ordered that the plaintiffs' claims of abandonment of the Heads of Agreement proceed to trial despite there being no real prospects of success.

(a) document production is not complete as the defendants have refused to provide an explanation as to the basis of the documents produced by the defendants to date;[461]

(b) it is undesirable for the Court to summarily determine this matter without hearing the evidence of witnesses, including cross-examination of witnesses;[462] and

(c) the plaintiffs referred to the "factual intensity of the enquiry" of the plaintiffs' claims based upon abandonment.[463] The plaintiffs submitted that it is inappropriate for the Court to be considering the relevant facts concerning the plaintiffs' claims of abandonment upon an application for summary judgment.

213 The defendants submitted that there is no need for a trial, inter alia, on the basis that the evidence will not change.[464]

214 I would have exercised my discretion and ordered that the plaintiffs' claims of abandonment of the Heads of Agreement should proceed to trial and that this claim should not be summarily disposed of as this is a rare case in which it is not in the interests of justice to do so and the dispute is of such a nature that only a full hearing on the merits is appropriate. This is because:

(a) an assessment of the plaintiffs' claim of abandonment must be based upon all of the relevant circumstances. This concerns a period of over 35 years (i.e. 19 December 1986 to 16 November 2021). This includes the period 19 December 1986 to 31 March 1991 during which there appears to be no dispute that there was some conduct that manifested an intention to be bound by the Heads of Agreement (e.g. the events in March 1991 I have addressed earlier in these Reasons);

(b) there are substantial disputes on the evidence concerning the relevant circumstances;

(c) it is appropriate and just that the parties be given the opportunity to test the evidence by cross-examination. For example:

(i) in relation to the events of 1997, the conversations between Mr Taylor and Mr MacCallum took place over 25 years ago. Apart from the notes Mr Taylor has produced there is no other document that evidences that he asserted a right under the First Right Term. Mr Hamilton was not present during these conversations although the conversations took place with his solicitor (i.e. Mr MacCallum) who did not give evidence on this application; and

(ii) in relation to the events of 2008, the conversation between Mr Taylor and Mr Combes also took place over 13 years ago. It was a single conversation. There are no notes of the conversation. The evidence of Mr Taylor is conclusionary as he says he "discussed and asserted" his rights under the First Right Term and "obtained the commitment and assurance" from Mr Combes. Mr Combes only gives evidence that he "believes" he spoke to Mr Hamilton and the evidence of his conversation with Mr Hamilton is conclusionary as he says he relayed to him that Mr Taylor asserted rights under the First Right Term. Mr Combes does not give evidence of Mr Hamilton's response. Mr Hamilton was not present during this conversation between Mr Taylor and Mr Combes,

(d) the application has been made at a time when there are substantial discovery disputes concerning the plaintiffs' abandonment claim that are not resolved. These matters are raised by both the plaintiffs and the defendants. I refer to the following:

(i) the letter from the plaintiffs' solicitors to the defendants' solicitors dated 22 April 2022, especially at [8];[465] and

(ii) the discovery sought by the defendants set out in Schedule A of their amended summons, especially at [1] (which refers to a Notice to Produce, the relevant parts of that being [2(a)-(j)]), [2], [3], [6], [7] and [8(vii)]-[8(xviii)]).

215 As a result, I will refuse the defendants' application for summary judgment, pursuant to s 63 of the Civil Procedure Act, concerning the plaintiffs' claim of abandonment of the Heads of Agreement (paragraphs 11, 12 and 13 and paragraphs AA and B of the prayer for relief (insofar as paragraph B refers to this claim) of the amended statement of claim).

216 The defendants submitted that Mr Hamilton does not seek any relief and should not be a party.[466] The plaintiffs submitted that it is appropriate that he is a party as he is a party to the Heads of Agreement and the proceeding will resolve its proper construction.[467] The plaintiffs also submitted that it is appropriate that he is a party so that he may be bound by the outcome and so that "all questions in the proceeding are effectually and completely determined and adjudicated upon".[468]

217 In my view, Mr Hamilton's rights or liabilities may be directly affected by the relief sought by SFPL and he is, therefore, a necessary party to the proceeding.[469] Mr Hamilton's presence before the Court is necessary to ensure that all questions in the proceeding are effectually and completely determined and adjudicated upon.[470] This is because, inter alia, upon the plaintiffs' claim of abandonment of the Heads of Agreement, SFPL seeks a declaration that the Heads of Agreement has been abandoned. Such a declaration may affect Mr Hamilton's rights and obligations under the Heads of Agreement. Mr Hamilton is a party to the Heads of Agreement.

218 As a result, I will refuse the defendants' application for summary judgment, pursuant to s 63 of the Civil Procedure Act, concerning Mr Hamilton as a party.

219 By the amended summons, the defendants sought the following relief:

1. Further or in the alternative to paragraphs 1 and 2 above, pursuant to rule 23.02 of the Rules, further or alternatively the inherent power of the Court, that paragraphs 8A(c)(ix), 9, 10, 11, 12, 13 and relief A, AA, B of the ASOC:

(a) do not disclose a cause of action;

(b) is scandalous, frivolous or vexatious;

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) are otherwise an abuse of the process of the Court-

and ought to be struck out.

220 The defendants relied upon their submissions concerning their application pursuant to r 23.01.[471] The defendants also further submitted:

(a) paragraph 11: the reference in paragraph "until 16 November 2021" is a conclusion from unstated facts and is embarrassing. There is no pleading of cumulative events;[472]

(b) paragraph 12: it does not state when the Heads of Agreement was abandoned;[473]

(c) paragraph 13: if paragraphs 11 and 12 are struck out then paragraph 13 must be struck out;[474] and

(d) parts of the prayer for relief are also liable to be struck out.[475] The defendants primarily submitted that the prayer for relief is liable to be struck out as:

(i) Mr Hamilton: he makes no claim for relief despite being a party to the proceeding (i.e. a plaintiff);[476]

(ii) paragraph AA: this is predicated on the abandonment claim. There can be no abandonment of the First Right Term as this is predicated upon SFPL proposing to deal with its "section" by sale or transfer. The obligation rests solely on SFPL to perform, not Mr Taylor (or any other party under the Heads of Agreement) under clause 8. It relates to future performance of SFPL, not lack of performance.[477] The reference to "or such other date as the Court considers appropriate" does not give notice of the case that the defendants have to meet;[478] and

(iii) paragraph B does not identify the paragraphs of the amended statement of claim relied upon. Paragraph B is now restricted to the Alleged Right but seems to rely upon paragraphs 10 and parts of paragraphs 11, 12 and 13 which deal with all parties, not just SFPL and its obligations to Mr Taylor in clause 8 of the Heads of Agreement.[479] Paragraph B suggests a declaration about future matters. A declaration will not be made as to future rights or anticipating events.[480]

221 The plaintiffs' primarily submitted as the case on the Alleged Term:

(a) it is an orthodox pleading of an implied term; and

(b) the typographical error in paragraph 10 should not be subject of a strike out as it has been clarified in open Court.

222 The plaintiffs also primarily submitted concerning their case on the abandonment of the Heads of Agreement:[481]

(a) clear notice is given of the case the defendants must meet at trial;

(b) a period is given in which the abandonment occurred;

(c) the amended statement of claim has not prevented the defendants from marshalling significant evidence about what Mr Taylor says occurred during the alleged period;

(d) the defendants also positively plead a counterclaim in estoppel. This necessarily depends upon the defendants being in a position to identify the nature of the legal rights that are asserted against them in order to invoke relief in equity from the alleged unconscientious attempt by the plaintiffs to enforce those legal rights;

(e) the effect of the evidence and the testing of it is a matter for trial; and

(f) the relief in the amended statement of claim cannot be accurately described as "misconceived".[482] The plaintiffs submitted:

(i) paragraph AA: this relates to the case of abandonment. The plaintiffs submitted that the defendants' submissions are misconceived effectively for the reasons set out in the plaintiffs' submissions at [24]. I refer to the plaintiffs' submissions on paragraph AA that I have already addressed in these Reasons;[483] and

(ii) paragraph B: the relief arises from success of the case concerning the Alleged Term or abandonment.[484] It does not relate to future matters and is a declaration as to the present circumstances that apply to SFPL.[485]

223 I have already addressed the adequacy of the plaintiffs' pleas in these Reasons. As a result, I reject the plaintiffs' submissions that the plaintiffs' claim of abandonment is adequately pleaded and that it gives adequate notice to the defendants of the case they must meet at trial. In addition, as I have already said in these Reasons, although some matters were clarified during the hearing (e.g. the period of alleged non-performance) others were made less clear (e.g. the relevant conduct of non-performance), including on the critical issue of conduct concerning the First Right Term.

224 As a result, I will grant the defendants' application to strike out, pursuant to r 23.02 of the Rules, the plaintiffs' claim of abandonment of the Heads of Agreement (paragraphs 11, 12 and 13 and paragraphs AA and B of the prayer for relief (insofar as paragraph B refers to this claim) of the amended statement of claim).

225 In my view, it is appropriate and just for the plaintiffs to be given a further opportunity to adequately plead their claim of abandonment given the evidence on this application and the clarifications that were made by counsel for the plaintiffs to the pleading during submissions.

226 The plaintiffs must also amend their claim based upon the Alleged Term of the Heads of Agreement to attend to the following matters (consistent with the matters submitted by the Plaintiffs' counsel):

(a) paragraph 10(b): amend "0" to "9"; and

(b) paragraph A of the prayer for relief: delete "or otherwise" and "or such other date as the Court considers appropriate".

227 An issue arises as to whether the plaintiffs should provide a proposed further amended statement of claim to the Court and defendants or whether they should be given leave to file and serve a further amended statement of claim. In my view, the plaintiffs must provide a proposed further amended statement of claim to the Court and the defendants. This is because of the nature and extent of the clarifications made by the plaintiffs to the amended statement of claim during the hearing and that, despite this, it remains manifestly inadequate and deficient.

228 In conclusion, for the reasons I have set out above, I will:

(a) refuse the defendants' application for judgment, pursuant to r 23.01 of the Rules, on the plaintiffs' claims;

(b) refuse the defendants' applications for summary judgment, pursuant to s 63 of the Civil Procedure Act, on the plaintiffs' claims; and

(c) grant the defendants' application to strike out, pursuant to r 23.02 of the Rules, the plaintiffs' claim of abandonment of the Heads of Agreement (paragraphs 11, 12 and 13 and paragraphs AA and B of the prayer for relief (insofar as paragraph B refers to paragraph AA) in the amended statement of claim) with a right to replead.

229 As a result, the following orders are appropriate:

(a) The defendants' application in paragraph 1 of their amended summons for judgment, pursuant to r 23.01 of the Rules, is refused.

(b) The defendants' application in paragraphs 2 and 10 of their amended summons for summary judgment, pursuant to s 63 of the Civil Procedure Act, is refused.

(c) The defendants' application in paragraph 3 of their amended summons to strike out, pursuant to r 23.02 of the Rules, the plaintiffs' claim of abandonment of the Heads of Agreement (paragraphs 11, 12 and 13 and paragraphs AA and B of the prayer for relief (insofar as paragraph B refers to paragraph AA) is granted and those parts of the amended statement of claim are struck out with a right to replead.

230 I will hear from the parties on the precise form of orders, including costs.

231 The parties are requested to confer and provide a draft form of order, or in the absence of agreement, forms of order and submissions (limited to 3 pages), to chambers by 4:00pm on 26 May 2023.

[1] The Heads of Agreement is set out in these Reasons at [60].

[2] Cremorne and Richmond are neighbouring suburbs of Melbourne, with Cremorne being formerly a locality within the broader suburb of Richmond. The address of the Bryant & May Property is described in the evidence as both Cremorne and Richmond.

[3] The First Right Term is set out in clause 8 of the Heads of Agreement.

[4] Amended statement of claim filed 12 April 2022 [8A(c)(ix)] (Amended statement of claim). The precise terms of the Alleged Term is set out in paragraph 8A(c)(ix) of the amended statement of claim.

[6] Amended summons filed 29 April 2022.

[7] See document entitled 'Evidence relied upon by the Plaintiff' filed 23 June 2022 and the document entitled 'Evidence relied upon by the Defendants' filed 23 June 2022. The parties also provided a document to chambers titled "List of Asserted Facts" which, as its title suggests, was not an agreed list of facts. The Court informed the parties at the hearing of the applications that it would not rely upon that document and the matter proceeded on that basis. The defendants' counsel did make reference to it during the course of submissions to conveniently identify a fact upon which they relied.

[8] First Taylor affidavit [5], [13] (first and last sentences), [18], [19] (first and last sentences), [20]-[22], [29]-30], [33]-[36], [39], [43], [47] (excluding second sentence), [49]-[51], [54], [56], [62]-[64], [69]-[71], [75], [81], [83]-[85], [91], [95]-[98], [103]-[107], [108]-[111], [118]-[122], [125]-[131], [133]-[134] (first and second sentences), [136], [143] and [151]; and Exhibit GJT-1 to the First Taylor affidavit, 50 55, 57-64, 68-98, 110-114, 121-129, 132, 157-160 (IL37), 194-197 (in 1997 Vendor's Statement), 289 290 (IL47), 291-295 (IL49), 296 (IL50), 297 (IL51), 305, 503, 531, 533, 534, 560-561, 562 (Clause 2.1(d)), 565, 598, 629-631 (IL55), 818-819, 821 (signed by plaintiffs on p. 826), 826, 884-942, 944-955, 959-989, 994-998, 1000, 1004-1011, 1075.

[9] Second Taylor affidavit [5]-[8] and Exhibit 'GJT-2' to the Second Taylor affidavit, 1131-1134.

[11] Exhibit 'BAD-3' to the Fourth Dodgshun affidavit, 21-24 ('Hamilton statement').

[12] Hamilton statement [4]-[8], [16]-[17], [19] (third sentence).

[14] Exhibit GJT-1 to the First Taylor affidavit 50-52, 53-54, 57, 58-59, 60, 61, 62-64, 68-69 [29], 70-73, 74-94, 97-98, 111, 159-160, 598, 819, 884-937, 938, 940, 941-942, 960 and 946.

[15] Hamilton statement [10]-[11], [16]-[17], [20]-[22], [26], [29], [32] and [35].

[16] Fourth Dodgshun affidavit [4]-[8], [11], [18]-[31], [33]-[35], [36(a)] and [37] (excluding third line). This is, in fact, described as the "Third affidavit", but this was subsequently clarified by Mr Dodgshun as being his fourth affidavit: see Fifth Dodgshun affidavit [2].

[17] Annesley v Westpac Banking Corporation [2016] VSC 323.

[18] Ibid [68]-[69] (Derham AsJ) (citations omitted) (emphasis added).

[19] Hoh and Ors v Frosthollow Pty Ltd and Ors [2014] VSC 77.

[21] [2021] VSC 310.

[22] Ibid [24], [27]-[28] (Connock J) (citations omitted).

[23] (1949) 78 CLR 62.

[24] Ibid 91 (Dixon J) (emphasis added).

[25] Spencer v The Commonwealth of Australia [2010] HCA 28; (2010) 241 CLR 118.

[26] Ibid [54] (Hayne, Crennan, Kiefel and Bell JJ) (citations omitted) (emphasis added).

[27] [2013] VSCA 158; (2013) 42 VR 27.

[28] Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27, [35] (Warren CJ and Nettle JA) (emphasis added) (citations omitted).

[29] CBA v Ruthven [2018] VSC 365.

[32] [2023] VSC 199 (Lyons J) (citations omitted).

[33] Zhang & Liu Investment Pty Ltd v Nando's Australia [2023] VSC 199 (Lyons J), [15]-[17] (emphasis added).

[34] (2017) 53 VR 420 (Elliott J) ('Stubbings').

[35] Ibid 437-438 [44] (Elliott J) (citations omitted).

[36] [2016] VSC 711.

[37] Ibid [111]-[112] (Lansdowne AsJ).

[38] Stubbings [45] (Elliott J) (citations omitted). See also Ormond Supermarket Pty Ltd v Sarar Australia and NZ Pty Ltd & Anor [2022] VSC 278, [117]-[123] (Attiwill J).

[39] (1996) 8 VR 681 (Byrne J).

[42] [2016] VSC 323.

[43] Ibid [70] (Derham AsJ) (citations omitted).

[44] Meckiff v Simpson (Appeal) [1968] VicRp 8; [1968] VR 69.

[45] Ibid 70 (Winneke CJ, Adam and Gowans JJ).

[46] [2013] VSC 316.

[47] Ibid [25] (John Dixon J) (citations omitted). See also The Uniting Church in Australia Property Trust (Vic) v Ian Hartley Architects Pty Ltd & Ors [2022] VSC 233 [39]-[42] (Delany J).

[48] [2017] VSC 556.

[50] Babcock & Brown DIF III Global Co-Investment Fund, LP & Anor v Babcock & Brown International Pty Limited & Ors (No 2) [2017] VSC 556, [17] (Hargrave J).

[51] [2019] VSC 71.

[52] Ibid [32]-[35] (Elliott J) (citations omitted).

[53] Amended statement of claim [1(b)]; defence and counterclaim filed 5 April 2022 [1] (defence and counterclaim).

[54] Amended statement of claim [2(b)]; defence and counterclaim [2].

[57] Amended statement of claim [1(c)]; defence and counterclaim [1].

[58] Amended statement of claim [4(b)]; defence and counterclaim [4].

[59] Amended statement of claim [3(b)]; defence and counterclaim [3].

[61] Amended statement of claim [4(c)]; defence and counterclaim [4].

[64] Exhibit 'GJT-1' to the First Taylor affidavit, 884-888. This was made after correspondence had been exchanged between Gil Williams and Co Pty Ltd, property agents acting on behalf of Bryant & May Pty Ltd, and Mr McHarg, acting on behalf of Mr Taylor. See Exhibit 'GJT-1' to the First Taylor affidavit, 50‑55.

[65] Exhibit 'GJT-1' to the First Taylor affidavit, 50-52.

[67] Exhibit 'GJT-1' to the First Taylor affidavit, 57.

[68] Exhibit 'GJT-1' to the First Taylor affidavit, 60-61.

[70] Defence and counterclaim [5(h)]; reply and defence to counterclaim filed 14 April 2022 (reply and defence to counterclaim).

[72] Transcript of Proceedings, Streicholz Fabrik Pty Ltd v Taylor (Supreme Court of Victoria, S ECI 2022 00619, Attiwill J, 22 June 2022) 50.22-51.07 (Mr North) ('Transcript of Proceedings 22 June 2022').

[73] Transcript of Proceedings 22 June 2022 50.31-52.3 (Mr North QC).

[75] Exhibit 'GJT-1' to the First Taylor affidavit, 62-64, (paragraph 19).

[77] Exhibit 'GJT-1' to the First Taylor affidavit, 62-64.

[79] Exhibit 'GJT-1' to the First Taylor affidavit, 69.

[80] Fourth Dodgshun affidavit [18] (excluding first sentence).

[81] First Taylor affidavit [33]-[36]; Exhibit 'GJT-1' to the First Taylor affidavit, 74-81, 82-83, 88-89.

[83] Exhibit 'GJT-1' to the First Taylor affidavit, 71-73.

[84] Exhibit 'GJT-1' to the First Taylor affidavit, 941.

[86] Exhibit 'GJT-1' to the First Taylor affidavit, 94-95.

[87] Hamilton statement [28] (first two sentences).

[88] First Taylor affidavit [47] (excluding second sentence), [49]-[51], [54].

[89] Amended statement of claim [4(d)], [9]; defence and counterclaim [4], [9].

[90] Hamilton statement [30]-[31], [32] (first two sentences).

[91] First Taylor affidavit [104] (emphasis added).

[92] First Taylor affidavit [105]-[107]; Exhibit 'GJT-2' to the Second Taylor affidavit, 1131.

[93] Exhibit 'GJT-2' to the Second Taylor affidavit, 1132-1134 (emphasis added).

[95] First Taylor affidavit [105]-[108].

[97] Exhibit 'GJT-1' to the First Taylor affidavit, 158.

[99] Exhibit 'GJT-1' to the First Taylor affidavit, 159-160 (emphasis added).

[101] Ibid [118]-[122], [125]-[130].

[102] Fourth Dodgshun affidavit [37].

[104] Exhibit 'GJT-1' to the First Taylor affidavit, 560-565, especially 562 at clause 2.1(d).

[105] First Taylor affidavit [133], [134] (first and second sentences), [136].

[107] Amended statement of claim [9A] (particulars).

[108] Exhibit 'GJT-1' to the First Taylor affidavit, 818-826. This is the letter from the plaintiffs' solicitors to SFPL and the purchaser dated 13 December 2021. The letter also has attachments as referred to in the letter. None of the parties made reference to these documents.

[109] Exhibit 'GJT-1' to the First Taylor affidavit, 818-819.

[111] Ibid. See also Fourth Dodgshun affidavit [19]-[21].

[112] First Taylor affidavit [151] especially at (a), (c), (e), (f), (i), (k). See also at [98].

[113] Ibid [56], [62]-[64], [69], [71], [75], [81], [83]-[85], [91], [95]-[98].

[114] Statement of claim filed 1 March 2022, [6)]-[7], part of [8], part of [10], part of [12], [A], [B] (Statement of claim).

[115] Amended statement of claim [8A].

[116] Transcript of Proceedings, Streicholz Fabrik Pty Ltd v Taylor (Supreme Court of Victoria, S ECI 2022 00619, Attiwill J, 23 May 2022) 17.6-17.9 (Mr Goubran QC) ('Transcript of Proceedings 23 May 2022'); Transcript of Proceedings 22 June 2022 23.11-23.19 (Mr North QC).

[117] Amended statement of claim [9].

[120] Amended statement of claim [9]-[10].

[122] Transcript of Proceedings 22 June 2022 149.21-150.8 (Mr Goubran QC).

[123] Amended statement of claim [A]-[B].

[124] The plaintiffs submitted that he was a necessary party given the relief sought by SFPL concerned the Heads of Agreement to which Mr Hamilton was a party.

[125] Defence and counterclaim [5(j)]-[5(o)].

[126] Defence and counterclaim [8(d)].

[128] Defence and counterclaim [12]-[13].

[130] Defence and counterclaim [6A]-[6M] (convention) and [6N]-[6R] (conduct).

[133] Defence and counterclaim [A], [B].

[134] Transcript of Proceedings 22 June 2022 15.25-16.14 (Mr North QC).

[135] Reply and defence to counterclaim [2(a)].

[137] Ibid [2(c)(i) and (ii)] and [2(d)].

[138] Ibid [2(c)(iii)] (emphasis added).

[141] Reply and defence to counterclaim [2(g)].

[146] Reply and defence to counterclaim [5]-[13].

[149] Defendants' submissions [1(a)], see also [15].

[156] Transcript of Proceedings 23 May 2022 24.1-24.6; Transcript of Proceedings 22 June 2022 23.21-23.29 (Mr North QC).

[157] Defendants' submissions [45]-[61], [70].

[158] Ibid [57]; See also Transcript of Proceedings 22 June 2022 29.29-29.31 (Mr North QC).

[159] Transcript of Proceedings 22 June 2022 30.8-30.13, 45.28-46.1, 46.19-46.22, 53.3-53.5, 53.19-53.21, 134.15‑134.19 (Mr North QC).

[161] Transcript of Proceedings, Streicholz Fabrik Pty Ltd v Taylor (Supreme Court of Victoria, S ECI 2022 00619, Attiwill J, 23 June 2022) 202.10-202.14 (Mr North QC) ('Transcript of Proceedings 23 June 2022').

[162] Transcript of Proceedings 22 June 2022 53.22-53-25; 54.13-54.16 (Mr North QC).

[163] Transcript of Proceedings 23 June 2022 201.29-202.5 (Mr North QC). See also Transcript of Proceedings 23 May 2022 34.28-35.1 (Mr North QC).

[164] Transcript of Proceedings 23 June 2022 203.5-203.7 (Mr North QC).

[165] Ibid 203.8-203.12 (Mr North QC).

[166] Transcript of Proceedings 22 June 2022 55.2-55.7, 62.19-63.25 (Mr North QC).

[167] Ibid 134.27-134.29 (Mr North QC).

[168] Defendants' submissions [58]; Transcript of Proceedings 22 June 2022 53.13-53.15 (Mr North QC).

[169] Transcript of Proceedings 22 June 2022 30.27-30.28 (Mr North QC).

[171] Ibid 26.16-26.18, 54.19-54.23 (Mr North QC).

[174] Transcript of Proceedings 22 June 2022 25.5-25.12 (Mr North QC).

[179] Ibid 27.17-27.18, 53.21-53.22, 64.1-65.4 (Mr North QC).

[180] Defendants' submissions [61]; Transcript of Proceedings 22 June 2022 21.1-21.10, 27.18-27.22 (Mr North QC).

[181] BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1977) 180 CLR 266 ('BP Refinery'). See also Hobhouse v Macarthur-Onslow [2022] NSWCA 158 ('Hobhouse'). The defendants relied upon Hobhouse as illustrating the "high hurdles required to meet each of the BP Refinery tests and the application of those tests". See defendants' further submissions, especially at [11]‑[12].

[182] Defendants' submissions [45]-[47], [62]-[66], [70]; defendants' further submissions [11]-[12].

[183] Defendants' submissions [63(a)]; defendants' further submissions [12(b)].

[184] Defendants' submissions [63(b)]; defendants' further submissions [12(a)]-[12(b)].

[185] Transcript of Proceedings 23 May 2022 14.2-14.15 (Mr North QC).

[188] Transcript of Proceedings 22 June 2022 64.3-65.31 (Mr North QC).

[189] Defendants' submissions [63(c)]; defendants' further submissions [12(c)].

[190] Transcript of Proceedings 23 May 2022 35.30-36.20 (Mr North QC).

[191] Defendants' submissions [12(d)] and [63(d)].

[192] Ibid [63(e)]; see also defendants' further submissions [12(e)].

[193] Transcript of Proceedings 23 June 2022 204.1-204.23 (Mr North QC).

[194] Transcript of Proceedings 23 May 2022 19.1-19.15 (Mr North QC).

[198] Transcript of Proceedings 23 June 2022 189.7-189.9 (Mr Goubran QC).

[199] Ibid 241.17-241.23 (Mr Goubran QC).

[202] Transcript of Proceedings 23 June 2022 132.14-132.17 (Mr Goubran QC).

[203] Transcript of Proceedings 22 June 2022 136.19-136.21 (Mr Goubran QC).

[204] Ibid 138.4-138.18 (Mr Goubran QC).

[207] Transcript of Proceedings 22 June 2022 142.26-142.29 (Mr Goubran QC).

[208] Plaintiffs' submissions [14(c)].

[209] Plaintiffs' submissions [14(d)].

[210] Transcript of Proceedings 22 June 2022 140.1-140.16, 142.15-142.23 (Mr Goubran QC).

[211] Ibid 148.7-148.19 (Mr Goubran QC).

[212] Plaintiffs' submissions [14(f)].

[213] Transcript of Proceedings 22 June 2022 147.17-147.28 (Mr Goubran QC).

[222] Transcript of Proceedings 23 June 2022 193.30-194.9 (Mr Goubran QC).

[224] ('Hardingham') (2022) 406 ALR 678; [2022] HCA 39.

[225] Plaintiffs' second further submissions [4].

[227] Plaintiffs' second further submissions [8].

[230] Ibid [23(b)] (citations omitted).

[231] Plaintiffs' submissions [23(c)].

[234] Plaintiffs' further submissions [3].

[238] Ibid [29(a)]. The plaintiffs incorrectly submitted that this concerns clause 12 of the Heads of Agreement. This is obviously a typographical error and should be a reference to clause 8.

[239] Plaintiffs' submissions [29(b)].

[240] Plaintiffs' submissions [29(c)].

[244] Eureka Operations Pty Ltd v Viva Energy Australia Ltd [2016] VSCA 95 (Santamaria, Ferguson and McLeish JJA) (citations omitted).

[245] Ibid [45]-[47] (Santamaria, Ferguson and McLeish JJA) (citations omitted).

[246] Lopes v Taranto [2018] VSCA 288 (Kyrou, McLeish and Hargrave JJA).

[247] Ibid, [66] (Kyrou, McLeish and Hargrave JJA) (citations omitted).

[248] Lopes v Taranto [2018] VSCA 288, [71] (Kyrou, McLeish and Hargrave JJA).

[249] [2020] VSC 126 (Riordan J).

[250] Ibid [87]-[88] (citations omitted).

[251] BP Refinery 282-283 (Lord Simon of Glaisdale, Viscount Dilhorne, Lord Keith of Kinkel). See also Hardingham [15]-[21] (Kiefel CJ and Gageler J), [43]-[51] (Gordon J), [102]-[123] (Edelman and Steward JJ).

[252] Grocon Constructors (Victoria) Pty Ltd v APN DF2 Project 2 Pty Ltd [2015] VSCA 190 (Santamaria, Kyrou and McLeish JJA) (Grocon), [141]-[145] (citations omitted).

[257] Transcript of Proceedings 23 June 2022 208.15-208.19, 216.19-216.26 (Mr North QC).

[259] Transcript of Proceedings 23 June 2022 207.28-207.31 (Mr North QC).

[260] Transcript of Proceedings 23 June 2022 211.29-212.2 (Mr North QC).

[261] Ibid 213.5-213.10 (Mr North QC).

[262] Defendants' submissions [78], [99].

[265] Transcript of Proceedings 22 June 2022 73.7-73.14 (Mr Goubran QC).

[266] Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854.

[267] Ibid, 914 (Lord Brandon of Oakbrook).

[271] [1956] HCA 53; (1956) 95 CLR 420.

[272] Transcript of Proceedings 23 May 2022 29.16-30.24 (Mr North QC).

[273] Transcript of Proceedings 23 June 2022 222.26-222.30 (Mr North QC).

[274] Transcript of Proceedings 22 June 2022 111.25-112.18 (Mr North QC).

[275] Transcript of Proceedings 22 June 2022 112.27-113.1 (Mr North QC).

[276] Transcript of Proceedings 23 May 2022 28.2-28.12 (Mr North QC).

[278] Transcript of Proceedings 22 June 2022 76.10-76.15 (Mr North QC).

[279] Exhibit 'GJT-1' to the First Taylor affidavit, 97-98, 966-967, 973-975.

[280] Transcript of Proceedings 23 May 2022 32.27-33.11 (Mr North QC).

[281] Defendants' submissions [85], [88(a)].

[282] Transcript of Proceedings 23 May 2022 25.6-25.22, 27.2-27.8(Mr North QC).

[283] Transcript of Proceedings 22 June 2022 72.19-72.25 (Mr North QC).

[284] Defendants' submissions [84]; Transcript of Proceedings 22 June 2022 113.23-113.25 (Mr North QC).

[285] Defendants' submissions [88(b)]. See also First Taylor affidavit [108].

[286] First Taylor affidavit [108], [111]. See also Defendants' submissions [85], [88(b)], [92(a)].

[287] Defendants' submissions [88(b)]. See also First Taylor affidavit [118]-[130].

[288] Defendants' submissions [87], [92(b)].

[293] Exhibit 'GJT-1' to the First Taylor affidavit, 818-826.

[295] Transcript of Proceedings 23 June 2022 189.14-189.22 (Mr Goubran QC).

[296] Transcript of Proceedings 22 June 2022 167.2-167.9 (Mr Goubran QC).

[297] Transcript of Proceedings 23 June 2022 241.11-241.15, 243.12-243.14 (Mr Goubran QC).

[298] Transcript of Proceedings 23 June 2022 243.6-243.21 (Mr Goubran QC).

[299] Ibid 241.17-241.18 (Mr Goubran QC).

[300] Ibid 241.20-241.23 (Mr Goubran QC).

[301] Transcript of Proceedings 22 June 2022 157.14-157.18 (Mr Goubran QC).

[302] Ibid 150.28-150.29 (Mr Goubran QC).

[303] Ibid 150.29-151.11 (Mr Goubran QC).

[304] Transcript of Proceedings 23 June 2022 184.7-185.16 (Mr Goubran QC).

[307] Transcript of Proceedings 22 June 2022 152.5-152.19 (Mr Goubran QC) (emphasis added).

[308] Transcript of Proceedings 22 June 2022 152.23-152.25 (Mr Goubran QC).

[309] Ibid 153.2-153.9 (Mr Goubran QC).

[310] Exhibit 'GJT-1' to the First Taylor affidavit, 159-160.

[311] Plaintiffs' submissions [33(a)].

[312] Plaintiffs' submissions [33(b)].

[313] Transcript of Proceedings 22 June 2022 176.5-176.31 (Mr Goubran QC).

[315] Transcript of Proceedings 22 June 2022 160.2-160.5 (Mr Goubran QC).

[316] Ibid 160.28-160.29 (Mr Goubran QC).

[317] Ibid 164.5-164.11 (Mr Goubran QC).

[318] Transcript of Proceedings 22 June 2022 172.26-173.21 (Mr Goubran QC).

[320] Plaintiffs' submissions [38(a)].

[326] Plaintiffs' submissions [39(b)].

[329] [2022] NSWCA 19.

1. [332] Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854.

[334] [2019] VSCA 201.

[335] Ibid [191]-[192] (Whelan, Niall JJA and Sifris AJA) (citations omitted) (emphasis added).

[336] [2022] VSC 89.

[337] Ibid [249]-[250] (Button J) (citations omitted) (emphasis added).

[338] [1956] HCA 53; (1956) 95 CLR 420.

[339] Ibid, 432-433 (Dixon CJ and Fullagar J).

[340] Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19 (Bathurst CJ, Bell P and Meagher JA). See also Ryder v Frolich [2004] NSWCA 472 [135]-[137] (Hodgson, Ipp and McColl JJA).

[341] Woolworths Group Ltd v Gazcorp Pty Ltd [2022] NSWCA 19 [91]-[96] (Bell P) (citations omitted).

[344] Transcript of Proceedings 23 June 2022 198.19-199.3 (Mr Goubran QC).

[345] Statement of claim [6], [7], [A].

[346] Statement of claim [8(c)(ix)], [9], [10]-[13], [B].

[347] Defendants' submissions [94(b)(i)], [94(b)(ii)].

[348] See statement of claim [11] (particulars).

[349] See amended statement of claim [11] (particulars).

[350] Defendants' submissions [94(b)(iii)].

[351] See, for example, Hamilton statement [2], [28]-[29].

[352] Defendants' submissions [96]-[97].

[360] Transcript of Proceedings 23 June 2022 186.27-189.22, especially at 187.9 and 187.22 (Mr Goubran QC) (alleged term) and 188.29-189.6 (Mr Goubran QC) (abandonment).

[361] Reasons, [95]. See also the plaintiffs' submissions, [19] (second and third sentences), in which the plaintiffs acknowledge that there are two alternate terms that constitute the Alleged Term.

[362] Transcript of Proceedings 23 June 2022 241.20-241.21 (Mr Goubran QC).

[363] This was accepted by the defendants, see Transcript of Proceedings 22 June 2022 71.29‑71.31 (Mr North QC).

[364] Transcript of Proceedings 22 June 2022 138.14-138.18 (Mr Goubran QC).

[365] Transcript of proceedings 23 June 2022, 190.19-20 (Mr Goubran QC).

[367] Transcript of proceedings 22 June 2022, 137.7-9 (Mr Goubran QC).

[368] Plaintiffs' submissions [15] at footnote [9].

[369] Transcript of Proceedings 22 June 2022 136.19-136.27 (Mr Goubran QC).

[370] Plaintiffs' submissions [14(a)].

[373] Transcript of Proceedings 22 June 2022 136.19-136.23 (Mr Goubran QC). See also Transcript of Proceedings 22 June 2022 148.31-149.2 (Mr Goubran QC).

[374] Transcript of Proceedings 22 June 2022 (Mr Goubran QC).

[375] Transcript of Proceedings 23 June 2022 189.7-198.9 (Mr Goubran QC).

[377] Plaintiffs' further submissions filed 16 January 2023, [8] (footnotes omitted).

[379] Transcript of Proceedings 23 May 2022 11.30-12.3 (Mr North QC). See for example further in relation to proper construction, Transcript of Proceedings 22 June 2023 33.12-34.30. See for example further in relation to business efficacy, Transcript of Proceedings 23 May 2022 13.21-14.15; 55.11‑55.14 (Mr North QC).

[380] Transcript of Proceedings 22 June 2022 20.6-20.12 (Mr North QC).

[381] Transcript of Proceedings 23 May 2022 35.10-35.11 and 35.17-35.19 (Mr North QC).

[382] Transcript of Proceedings 22 June 2022 34.10-34.11 (Mr North QC).

[383] Transcript of Proceedings 23 May 2022 35.17-35.21; 51.26-51.29 (Mr North QC).

[384] Transcript of Proceedings 22 June 2022 47.26-48.14 (Mr North QC). See also First Taylor affidavit [13].

[387] Transcript of Proceedings 22 June 2022 33.29-34.1 (Mr North QC).

[389] Transcript of Proceedings 22 June 2022 30.23-30.27 and 2022 40.22-42.29 (Mr North QC).

[392] Transcript of Proceedings 22 June 2022 42.30-43.20 (Mr North QC).

[395] Defence and counterclaim [8(d)(iv)].

[398] Reply and defence to counterclaim [2(k)(ii)].

[399] For example, see Transcript of Proceedings 23 May 2022 13.21-14.11 (Mr North QC).

[400] Ibid 12.8-13.2, 47.24-47.27 (Mr North QC).

[401] Transcript of Proceedings 22 June 2022 50.10-52.13 (Mr North QC).

[402] Ibid 52.14-52.23 and 53.13-53.19 (emphasis added) (Mr North QC). See also Transcript of Proceedings 23 May 2022 50.19-51.5 (Mr North QC).

[404] I have set them out earlier in these Reasons, [112].

[405] Plaintiffs' submissions, [58].

[406] Transcript of proceedings 23 June 2022, 186.27-187.10 and 189.9-14 (Mr Goubran QC).

[408] Transcript of proceedings 23 May 2022, 32.24-27 and 43.18-22. See also: Transcript of proceedings 22 June 2022, 37.13-26.

[411] Transcript of Proceedings 22 June 2022 157.14-157.18, 158.18-158.24 (Mr Goubran QC).

[412] Ibid 157.29-158.4 (Mr Goubran QC)

[413] Ibid 160.21-160.29 (Mr Goubran QC) (emphasis added).

[414] For example, see the defendants' submissions, [102].

[415] Transcript of Proceedings 23 June 2022 241.21--22 (Mr Goubran QC).

[416] Transcript of Proceedings 22 June 2022 81.19-81.20 (Mr Goubran QC).

[417] Ibid 152.23-152.25 (Mr Goubran QC) (emphasis added).

[418] Transcript of Proceedings 22 June 2022 79.11.79.12 (Mr Goubran QC)

[419] Gazcorp Pty Ltd v Woolworths Group Ltd [2021] NSWSC 308 (Darke J).

[421] Transcript of Proceedings 22 June 2022 173.22-173.30, 175.9-175.14 (Mr Goubran QC).

[423] Transcript of Proceedings 23 May 2022 43.18-43.28 (Mr North QC).

[424] Exhibit 'BAD-3' to the Fourth Dodgshun affidavit, 19-20.

[425] Transcript of Proceedings 23 May 2022 33.3-33.11 (Mr North QC).

[428] [1956] HCA 53; (1956) 95 CLR 420.

[431] Defendants' submissions [90] (emphasis added).

[432] Transcript of Proceedings 23 May 2022, 30.4-9 (Mr North QC).

[434] I do not accept the defendants' submissions to the contrary, see Transcript of Proceedings 23 June 2022 112.2-112.11; 113.18-113.25 (Mr North QC).

[435] Defence and counterclaim, e.g. [6], [6M] and [6R].

[436] Defence and counterclaim, prayer for relief A(a).

[437] Plaintiffs' submissions [35], [39].

[438] Gazcorp Pty Ltd v Woolworths Group Ltd [2021] NSWSC 308 (Darke J).

[439] Gazcorp Pty Ltd v Woolworths Group Ltd [2021] NSWSC 308 [203] (Darke J).

[442] Exhibit 'GJT-1' to the First Taylor affidavit, 159-160.

[443] Plaintiffs' submissions [33(a)].

[447] Plaintiffs' submissions [38(b)].

[448] Plaintiffs' submissions [38(c)].

[454] The plaintiffs' submissions are dated 18 May 2022 and the Combes affidavit was made on 19 May 2022.

[456] Plaintiffs' submissions [38(a)].

[458] Defendants' submissions [92(b)].

[461] Plaintiffs' submissions [42]. See also Transcript of Proceedings 22 June 2022 167.10‑167.12 (Mr Goubran QC).

[462] Transcript of Proceedings 22 June 2022 167.5-167.9 (Mr Goubran QC).

[463] Transcript of Proceedings 23 June 2022 189.20-189.22 (Mr Goubran QC).

[465] Exhibit 'BAD-3' to the Fourth Dodgshun affidavit, 19-20.

[468] Plaintiffs' submissions, [78].

[469] See for example: Chickabo Pty Ltd & Ors v Zphere Pty Ltd & Ors (No 2) [2019] VSC 580, [44]‑[68], especially at [44] and [114] (first sentence).

[470] I refer to r 9.06(b)(i) of the Rules.

[471] Defendants' submissions [98(b)]-[98(d)].

[476] Ibid [28]; Transcript of Proceedings 22 June 2022 69.5-70.3 (Mr North QC).

[478] Transcript of Proceedings 22 June 2022 72.11-72.18 (Mr North QC).

[484] Plaintiffs' submissions [47]; Transcript of Proceedings 22 June 2022 154.16-154.25, 156.20‑157.9 (Mr Goubran QC).