Al Maha Pty Ltd v Coplin

Case [2017] NSWCA 318

Court of Appeal


Supreme Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Al Maha Pty Ltd v Coplin [2017] NSWCA 318
Hearing dates:28 July 2017
Decision date: 11 December 2017
Before: Macfarlan JA at [1];
Meagher JA at [2];
Gleeson JA at [67]
Decision:

1. Allow the appeal.
2. Set aside the declarations and orders numbered 1 to 7 made on 16 December 2016 and in lieu thereof order that the Statement of Claim be dismissed with costs.
3. First respondent pay the costs of the appellant and second respondent of the appeal.

Catchwords: CONTRACTS – Unjust contracts – Contracts Review Act 1980 (NSW) – where option agreement entitled property developer to purchase residential property within 18 months and entitled owner to require sale within 6 weeks thereafter – where owner believed agreement entitled him to require sale within 18 months – where owner anticipated delay before exchange sufficient to take legal advice – where amendments to price and non-price terms negotiated by owner and conveyancer on behalf of owner – whether option agreement unjust – whether option agreement should be declared void ab initio
Legislation Cited: Australian Consumer Law, ss 18, 21 and 30
Contracts Review Act 1980 (NSW), ss 4, 7, 9
Cases Cited: Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 301; [2002] FCAFC 4
Canty v PaperlinX Australia Pty Ltd [2014] NSWCA 309
Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41
Provident Capital Ltd v Papa (2013) 84 NSWLR 231; [2013] NSWCA 36
West v AGC (Advances) Ltd (1986) 5 NSWLR 610
Texts Cited: Friedrich Kessler, “Contracts of Adhesion—Some Thoughts About Freedom of Contract” (1943) 43 Colum L Rev 629
Category:Principal judgment
Parties: Al Maha Pty Ltd (Appellant)
Iraklis Gary Coplin (First Respondent)
PropertyFox Pty Ltd (Second Respondent)
Representation:

Counsel:
TM Faulkner SC and M Fernandes (Appellant)
M Green SC and B Oliak (First Respondent)

  Solicitors:
HWL Ebsworth Lawyers (Appellant)
E Berman & Co (First Respondent)
Jemmeson & Fisher (Second Respondent)
File Number(s):2017/12148
 Decision under appeal 
Court or tribunal:
Supreme Court
Jurisdiction:
Equity Division
Citation:
[2016] NSWSC 1745
Date of Decision:
16 December 2016
Before:
Lindsay J
File Number(s):
2015/143602

Headnote

[This headnote is not to be read as part of the decision]

The buying agent for a property developer approached a homeowner with an offer to purchase his property for $2 million after an 18-month settlement. The ensuing negotiations took place in a context where all parties were aware that land including the property could be rezoned to high density residential. The agent indicated that the transaction would be implemented by way of put and call options, which ultimately gave the developer a right to purchase the property within the 18 months after exchange (the call option) and the owner a right to require that sale within the 6 weeks after expiry of the call option (the put option). The owner demanded, and obtained, a $200,000 increase in the price…

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AGLC
Al Maha Pty Ltd v Coplin [2017] NSWCA 318
Case
[2017] NSWCA 318
Decision Date

CaseChat Overview and Summary

Al Maha Pty Ltd (the developer) and Coplin (the owner) were parties to an option agreement concerning a residential property. The owner sought to have the agreement declared unjust and void under the Contracts Review Act 1980 (NSW). The dispute arose from the owner's belief that the agreement allowed him to require the sale of the property within 18 months, whereas the agreement stipulated a six-week period after the 18-month option period expired. The owner also anticipated a delay before exchange that would allow him to obtain legal advice, and had negotiated amendments to the price and non-price terms of the agreement with the assistance of his conveyancer. The case was heard in the Court of Appeal of New South Wales.

The Court of Appeal was required to determine whether the option agreement was unjust within the meaning of the Contracts Review Act 1980 (NSW). This involved considering whether the terms of the agreement, including the timing for requiring a sale, were unfair, and whether the circumstances surrounding its formation and execution contributed to any injustice. The court also had to consider whether, if the contract was found to be unjust, it should be declared void ab initio.

The Court of Appeal allowed the appeal, finding that the option agreement was not unjust. The court reasoned that the owner had the benefit of legal advice from his conveyancer during the negotiation of amendments to the agreement, and that the terms of the agreement, including the option period and the subsequent period for requiring sale, were clear. The court concluded that the owner's misunderstanding of the timing provisions did not render the contract unjust, particularly given the opportunity he had to seek independent legal advice.

Consequently, the Court of Appeal set aside the declarations and orders made by the lower court, dismissing the owner's Statement of Claim with costs. The court also ordered the owner to pay the costs of both the developer and the second respondent for the appeal.

Orders

Orders of the court

1. Allow the appeal.

2. Set aside the declarations and orders numbered 1 to 7 made on 16 December 2016 and in lieu thereof order that the Statement of Claim be dismissed with costs.

3. First respondent pay the costs of the appellant and second respondent of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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