and APN Funds Management Limited(ACN 080 674 479) Acting in its capacity as the responsible entity for the APN Property for Income Fund No 2 (ARSN 113 296 110) v Australian Property Investment Strategic Pty Ltd..

[2013] VSCA 239

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2012 0177
APN FUNDS MANAGEMENT LIMITED (ACN 080 674 479) Acting in its capacity as the responsible entity for the APN Property For Income Fund No 2 (ARSN 113 296 110)	Appellant
v
AUSTRALIAN PROPERTY INVESTMENT STRATEGIC PTY LTD (ACN 009 110 463) (Formerly known as Macarthur Cook Limited)	First Respondent
and
MACARTHUR COOK REAL ESTATE FUNDS LTD (ACN 126 766 167) In its capacity as responsible entity of the Macarthur Cook Office Property Trust (ARSN 114 263 688)	Second Respondent

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JUDGES	NETTLE, REDLICH JJA and HARGRAVE AJA
WHERE HELD	MELBOURNE
DATE OF HEARING	8 August 2013
DATE OF JUDGMENT	26 September 2013
MEDIUM NEUTRAL CITATION	[2013] VSCA 239
JUDGMENT APPEALED FROM	[2012] VSC 262 (Sifris J)

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CONTRACT — Construction — Put option — Completion — Exercise of put option required to be completed within 10 Business Days after date on which put option validly exercised — Put option validly exercised by delivery of Notice of Exercise — Whether time for completion running from actual date of delivery of Notice of Exercise or from later deemed date of delivery — Kudeweh v T&J Kelleher Builders Pty Ltd [1990] VR 701, referred to; Tyco-Fire Security v Norfolk Mechanical [2007] NSWSC 585, distinguished.

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Appearances:	Counsel	Solicitors
For the Appellant	Mr M D Wyles SC with Mr P D Corbett SC	Hall & Wilcox
For the Respondents	Mr P H Solomon SC with Mr T Clarke	Shanahan Tudhope Lawyers

NETTLE JA:

1. This is one of two appeals from a judgment given in the Commercial and Equity Division.  It concerns the construction of the service provisions of a Unit Subscription and Put Option Deed (‘the Deed’) made between the appellant, APN Funds Management Limited (’APN FM’), Macarthur Cook Fund Management Ltd (‘MCFM’), and the second respondent, Macarthur Cook Real Estate Funds Ltd (‘MCL’).  One of the questions which the judge below was required to decide was whether time for completion of an exercise of the option ran from the date of actual receipt by MCL of APN FM’s notice of intention to exercise the option or from a later date of deemed receipt.  The judge held that, upon the proper construction of the Deed, time ran from the date of actual receipt with the result that APN FM was out of time for completion.  This appeal is against that ruling.  A second issue, as to whether MCL was entitled to cancel and extinguish Units which it contended were issued in breach of the Trust constitution, is the subject of the other appeal.

The facts

1. Between 26 May 2005 and 12 October 2008, MCFM was the responsible entity of the Macarthur Cook Office Property Trust (‘The Trust’).  On 12 October 2008, it was replaced in that capacity by Macarthur Cook Real Estate Funds Limited (‘MCREF’).

1. On 9 November 2007, APN FM (in its capacity as the responsible entity for the APN Property for Income Fund No. 2) (‘APN’), MCFM and its holding company, MCL (now known as Australian Property Investment Strategic Pty Ltd), entered into a Unit Subscription and Put Option Deed (‘the Deed’) under which APN FM was issued 5,873,759.26 Wholesale Units in the Trust at a price of $0.87678 per unit.

1. The Deed also contained a Put Option whereby APN FM was entitled to put to MCL the Units it had acquired in the Trust and MCL was obliged to purchase those Units subject to the requirements of the Deed.  APN FM exercised the Put Option in 2010 and it is the exercise of that Put Option that gives rise to the present dispute.

1. The issue before the judge below which is the subject of this appeal is the proper construction of the terms of the Deed relating to the date for completion of the agreement resulting from APN FM’s exercise of the Put Option.  There was also a further issue before the judge below, which is no longer in dispute, as to whether - disp13#disp13APN FM was required to tender unit certificates at completion.  

Relevant provisions of the Deed

1. The grant of the option and the manner in which it was permitted to be exercised were provided for in clause 5 of the Deed, as follows:

5.        Put Option

5.1      Grant of Put Option

In consideration for APN FM subscribing for the Units at the request of MCL, MCL grants a Put Option to APN FM on the terms and conditions set out in this deed.

5.2      Exercise

(a) APN FM may exercise the Put Option at any time during the Exercise Period by delivering an Exercise Notice to MCL.

(b)If the Put Option is not exercised on or before the Expiry Date, the rights of APN FM to put the Units under this deed will immediately cease.

5.3      Sale and purchase of Units

On receipt of the Exercise Notice, MCL agrees to purchase from APN FM and APN FM agrees to sell and transfer to MCL the Units (not otherwise purchased by MCL pursuant to this deed) on the terms and conditions set out in this deed.

5.4      Procedure for exercising the Put Option

To be effective and validly exercised, the Put Option must be exercised by service on MCL of an Exercise Notice duly executed by APN FM….

1. ‘Exercise Notice’, ‘Exercise Period’ and ‘Expiry Date’ were defined in clause 1 of the Deed thus:

Exercise Notice means a notice in a form substantially similar to the notice set out in Annexure A to this deed, used by APN FM to exercise the Put Option.

Exercise Period means the period of 3 months commencing on 1 October 2010 and ending on 31 December 2010 or as otherwise agreed by the parties in writing.

Expiry Date means 31 December 2010 or as otherwise agreed between the parties in writing.

1. Completion was provided for in clause 6:

6        Completion of Exercise

6.1      Completion of sale and purchase of Units

On the date of a valid exercise of the Put Option pursuant to this deed, MCL and APN FM will for all purposes to be deemed to have entered into a binding and enforceable agreement for the sale and purchase of the Units (not otherwise purchased by MCL pursuant to this deed) which must be completed on the Completion Date for Exercise.

6.2      Time and place of Completion of Exercise

Completion of Exercise will take place at the registered office of MCL on the Completion Date for Exercise at 10.00 am or any other time or place agreed in writing by MCL and APN FM.

6.3      Obligations of APN FM at Completion of Exercise

At Completion of Exercise, APN FM must:

(a) deliver to MCL:

(a)       the unit certificates for the Units;

(b) signed instruments of transfer for the Units not otherwise purchased by MCL pursuant to this deed in favour of MCL that are in registrable form;

(c)any other document that MCL requires to obtain good title to the Units and to enable MCL to have the Units registered in MCL’s name; and

(b) do all other acts and execute all documents that are necessary to transfer the Units to MCL and to complete any other transaction contemplated by this deed.  

6.4      Obligations of MCL at Completion of Exercise

At Completion of Exercise, MCL must:

(a)       pay the Exercise Price to APN FM; and

(b)do all other acts and execute all documents that are necessary to transfer the Units from APN FM and to complete any other transaction contemplated by this deed.

6.5      Simultaneous actions at Completion of Exercise

At Completion of Exercise:

(a)the obligations of the parties under this deed are interdependent; and

(b)all actions that must be performed are taken to have occurred simultaneously on the Completion Date for Exercise.  

1. ‘Completion Date for Exercise’ was defined in clause 1:

   Completion Date for Exercise means the date that is 10 Business Days after the date on which the Put Option is validly exercised or any other date that the parties agree in writing.

2. Clause 16 provided for service of communications (notices), as follows:

16       Notices

16.1     General

Unless this deed expressly states otherwise, a notice, consent, approval, waiver or other communication (notice) in connection with this deed must be in writing and signed by the sender or a person authorised by the sender.  A notice may be given by hand delivery, prepaid post, facsimile to the recipient’s current address for service for notices as set out in this deed or as amended by notice from time to time.

16.2     When effective

A notice given under clause 16.1 will be deemed to be received:

(a)       if hand delivered, at the time of delivery;

(b)if sent by pre-paid post, three Business Days after the date of posting or seven Business Days after the date of posting if posted to or from a place outside Australia;

(c)if sent by facsimile, when the sender’s fax machine produces a report confirming the successful transmission of the entire notice including the relevant number of pages and the correct destination fax machine number or name of recipient; or

unless a notice is received after 5.00 pm on a Business Day in the place of receipt or at any time on a non Business Day, in which case, that notice is deemed to have been received at 9.00 am on the next Business Day.

16.3     Addresses for notices

Any notice given in connection with this deed must be given to the registered office of the relevant party or to any other address as that party may notify to the other party.

1. Clause 25 of the Deed provided that:

25       Time of the essence

Time is of the essence of this deed.

Sending the exercise notice

1. APN FM exercised the Put Option by sending an Exercise Notice to MCL by prepaid, registered post on 18 October 2010.  MCL received the Exercise Notice on 19 October 2010 and, on 20 October 2010, MCL sent an email to APN FM confirming that it had received the notice on 19 October 2010.  APN FM took the view that, despite MCL’s actual receipt of the Exercise Notice on 19 October 2010, clause 16 of the Deed deemed the Exercise Notice to have been received three Business Days after it was sent and hence that the Completion Date for Exercise was the date 10 Business Days after the date of deemed receipt, which is to say 5 November 2010.  Consequently, APN FM did not attend for completion until 5 November 2010.  MCL refused to complete.  It contended that clause 16 did not apply; hence, that the Completion Date for Exercise was the day 10 Business Days after actual receipt, namely, 3 November 2010; and that, because clause 25 made time of the essence of the Deed, APN FM was too late to require MCL to complete.

The judge’s reasoning

1. In effect, the judge accepted MCL’s argument.  His Honour reasoned that clause 5.2 provided for the manner in which an Exercise Notice was to be given, namely, ‘delivery’; that ‘service’ was synonymous with ‘delivery’; and thus that the Put Option was validly exercised within the meaning of clause 5.4 when the Exercise Notice was delivered to MCL.  As his Honour put it:

The requirements for exercising the Put Option as set out in cll 5.2(a) and 5.4 of the Deed are clearly articulated.  The Exercise Notice, which was required to be in a form similar to Annex A to the Deed, needed to be delivered to MCL (cl 5.2(a)).  The Put Option would be effective and validly exercised by service on MCL (cl 5.4).  Delivery (cl 5.2(a)) and service (cl 5.4) appear to be used interchangeably.  Whether delivery or service includes receipt in the sense of coming to the knowledge of MCL, a distinction that has caused some concern in many cases,[1] is not relevant in this case.  The Exercise Notice came to the attention of MCL on 19 October 2010.  Consequently, it is clear that delivery or service (and indeed receipt) was completed on the 19 October 2012 at the latest.[2]

[1]Eaglehill Ltd v J. Needham Builders Ltd [1973] AC 992; Curtice v London City and Midland Bank, Ltd [1908] 1 KB 293; Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16361.

[2][2012] VSC 262, [51] (emphasis added).

1. The judge also concluded that clause 16 of the Deed did not apply because, according to its terms, its operation was limited to the service of communications for which the Deed did not otherwise expressly provide, and clause 5 expressly provided for service of the Exercise Notice.  As his Honour expressed that:

The deeming provision in cl 16.2 refers only to ‘a notice given under cl 16.1…’ This indicates cl 16.2 is not to be invoked for notices that are specifically provided for in other clauses of the Deed.  Further, cl 16.2 deals with deemed receipt of a notice under cl 16.1.  Clause 5 deals with a particular notice, namely an Exercise Notice and refers to delivery and service of such notice.

When considering the entire Deed, it is apparent that the procedure for exercising the Put Option under cl 5.4 is specific, self contained and proscriptive.  Other clauses which require notice to be given under the Deed, for example cl 15.2 and 15.3 regarding MCL and APN’s right to terminate before Completion of Subscription, are articulated in broad terms by comparison.  Clauses 15.2 and 15.3 simply require that written notice be given to the other party to the Deed.  In such circumstances, one would need to look to cl 16 for further guidance.  This is the case because the Deed ‘does not expressly state otherwise…’.  In fact, the clause is silent on what is required to be included in the notice and how the notice is to be given.  Clause 16 assists by requiring that that notice be in writing and signed by the sender or a person authorised by the sender, and that the notice may be given by hand delivery, prepaid post or facsimile.  Clause 16.2 then outlines when notices given cl 16 will be deemed to have been received.[3]

[3]Ibid [53] and [54].

The appellant’s contentions

1. APN FM contends that the judge was wrong to hold that clause 16 does not apply to an Exercise Notice served under clause 5.  It submitted that the Deed is to be construed as a whole[4] and that, because clause 5 is silent as to what is meant by ‘delivery’ or ‘service’ of an Exercise Notice, the natural and logical construction of the Deed is to treat clause 16 as intended to lay down the detail of acceptable methods of delivery and the deemed time of receipt according to which of those methods is adopted.

   [4]Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99, 109 (Gibbs J in diss but not on this point); Wilkie v Gordian Runoff Ltd (2005) 221 CLR 522, [16] (Gleeson CJ, McHugh, Gummow and Kirby JJ).

Analysis

1. I accept that submission.  As it appears to me, the verbal noun ‘delivering’ is used in clause 5 in the ordinary sense of: ‘distribut[ing] to the proper person or quarter (letters or goods brought by post, carrier, or messenger) …’.[5]  As I see it, it is also implicit in clause 5.4 that, for the purposes of clause 5, ‘delivering’ is tantamount to ‘service’.  Hence, because clause 5 is silent as to the permissible means of delivery or service, one needs to look to clause 16 to ascertain that service by post (and each of the other means of service therein specified) is a permitted means of delivery.

   [5]Oxford English Dictionary, meaning 8a.

1. It was not suggested that ‘delivery’ in clause 5 is confined to hand delivery.  It was common ground that APN FM’s service of the Exercise Notice by post was valid delivery.  That is consistent with the application of clause 16 of the Deed.  Clause 16 distinguishes between ‘delivery’ and ‘hand delivery’ and, in the absence of contrary indication, it is to be assumed that terms are used consistently throughout the Deed.[6]  

   [6]Walsh v Alexander (1913) 16 CLR 293, 311; Patti v Belfiore (1958) 100 CLR 198, 205.

1. It is also necessary to look to clause 16 to ascertain the address for delivery or service to which an Exercise Notice should be sent.  Clause 16 expressly provides for each party’s address for service and for the means of a party changing its address for service.  Hence, it is to be assumed that the parties intended that an Exercise Notice should be delivered to or served at the current address for service which is provided for in clause 16.3.  The form of Exercise Notice set out in Annexure A to the Deed includes an address for MCL.  But it makes no provision for a change of address.  It is improbable that the parties intended that delivery to an abandoned place of business or registered office should be deemed effective service and receipt. 

1. As the judge observed, clause 16 does not apply where ‘the deed expressly states otherwise’.  As his Honour also said, clause 5 expressly provides for the form of an Exercise Notice and so must be taken to exclude the application to an Exercise Notice of the form of notice specified in the first sentence of clause 16.1.  But there is nothing in clause 5 or otherwise in the Deed which expressly or impliedly provides that the several means of delivery or service of a notice which are provided for in clause 16 do not apply to an Exercise Notice.  Rather, because clause 5 does not specify the acceptable means of delivery of an Exercise Notice, it is implicit that the second sentence of clause 16.1 was intended to apply.

1. The judge reasoned that clause 16.2 of the Deed did not apply to an Exercise Notice because clause 16.2 is in terms confined to notices given ‘under clause 16.1’.  As his Honour conceived of it, an Exercise Notice is not given under clause 16.1 but under clause 5.  But with respect, so to reason is to treat the words ‘under Clause 16.1’ as if they meant ‘authorised or mandated by Clause 16.1’.  That misconceives the meaning of ‘under clause 16.1’ in the context in which it appears.[7] 

   [7]Noscitur a sociis:  Cody v JH Nelson Pty Ltd (1947) 74 CLR 629, 639, 647.

1. Strictly speaking, clause 16.1 does not provide for any notice in the sense of authorising or mandating it.  It provides for the means of giving notices ‘in connection with this deed’, which is to say authorised or mandated by other provisions of the Deed.  So, as the judge recognised, the giving of notices of termination is expressly authorised or mandated by clause 15 but, because of the absence of contrary provision as to their delivery or service, they are to be delivered or served and deemed to be received in accordance with clause 16.  It is the same with Exercise Notices.  They are authorised or mandated by clause 5 and, because of the absence of contrary provision as to their delivery or service, it may be taken they are to be delivered or served and deemed to be received in accordance with clause 16.  In the context in which it appears, the expression ‘under clause 16.1’ evidently means no more than ‘in accordance with Clause 16.1’.[8]

   [8]See and compare R v Clyne; Ex parte Harrap [1941] VLR 200, 201 (O’Bryan J); Lolly Pops (Harbourside) Pty Ltd v Werncog Pty Ltd (1998) 9 BPR 16361, 16378 (Young J).

1. Apparently, the judge was considerably influenced by the decision of McDougall J in Tyco Fire Security v Norfolk Mechanical.[9]  His Honour referred to it as follows:  

   [9][2007] NSWSC 585.

In Tyco Fire and Security v Norfolk Mechanical, the court was required to determine whether a contractual deeming provision dealing with receipt applied to a provision in the same contract dealing with delivery.  The relevant clauses in the Share Sale Agreement provided that a response to a dispute notice was to be delivered to the other party within 10 days of the disputing party having delivered it.  Another clause in the contract provided for the deemed receipt of communications in certain circumstances, that is, by hand delivery, post or facsimile.  Accordingly, these clauses were similar to the relevant clauses in the current proceeding.

After considering the case law on the principles of ‘delivery’ and ‘receipt’ and a careful analysis of the contract as a whole, McDougall J, held that the parties did not intend that ‘delivery’ could be interchangeable with ‘receipt’.  Accordingly, when evidence of delivery, including the date and time of delivery was required, it was open to the party making delivery to adopt a means of delivery that facilitated precise proof.

His Honour held at [87–88] that:

I conclude that when the parties referred to delivery in clause 7.7(b), they meant precisely that; and they did not intend to conflate it with receipt.  It follows, in my view that the facultative or deeming provisions of clause 24.1, relevant to receipt, do not apply to the concept of delivery that is utilised in clause 7.7(b).

In my opinion, cl 16.2 of the Deed is a general provision.  It is not attracted in the specific circumstances of the Exercise Notice and further, the parties did not intend that the deeming provision relating to receipt was to apply to the ‘delivery’ or ‘service’ of an Exercise Notice.  This analysis and construction is not affected by the fact that cl 5 does not provide for a method or manner of service.[10]

[10][2012] VSC 262, [56]-[59] (citations omitted).

1. With respect, however, even if Tyco were correctly decided, it is distinguishable.  Ultimately, as can be seen from McDougall J’s reasoning, Tyco turned on the difference between ‘delivered’ in clause 7.7 of the agreement in question and ‘deemed to be received’ in clause 24.1 of the agreement. 

1. So far as relevant for present purposes, clause 7.7 of the agreement in Tyco provided that:

7.7      Dispute Resolution Procedure

(a)If there is any difference of opinion or dispute between the Vendors and the Purchaser regarding the Completion Balance Sheet or the Completion Net Asset Value calculation, the Vendors or the Purchaser (Disputing Party) may give a notice (Dispute Notice) to the other party setting out:

(i)        details of each of the matters in dispute;

(ii)       a separate Dollar value for each of those matters; and

(iii)reasonable details of the reasons why each of those matters is disputed.

(b)Within 10 Business Days of the Disputing Party having delivered a Dispute Notice to the other party, the other party must deliver to the Disputing Party a response in writing on the disputed matters (Response).  If the other party does not deliver a Response within that time, the Completion Balance Sheet and Completion Net Asset Value will be deemed to be amended as required by the Disputing Party and will be taken to be final.

1. Clause 24.1 was as follows:

24.1     Notice

(a)A notice or other communication given under this agreement including, but not limited to, a request, demand, consent or approval, to or by a party to this Agreement:

(i)        must be in legible writing and in English;

(ii)must be addressed to the addressee at the address or facsimile number set out below or to any other address or facsimile number a party notifies to the others under this clause…

(iii)must be signed by an Officer or under the common seal of a sender which is a company; and

(iv)is deemed to be received by the addressee in accordance with paragraph (b).

(b)Without limiting any other means by which a party may be able to prove that a notice has been received by another party, a notice is deemed to be received:

(i)        if sent by hand, when delivered to the addressee;

(ii)if by post, 3 Business Days from and including the date of postage/on delivery to the addressee; or

(iii)if by facsimile transmission, on receipt by the sender of an acknowledgment or transmission report generated by the machine from which the facsimile was sent,

but if the delivery or receipt is on a day which is not a Business Day or is after 4.00 pm (addressee’s time) it is deemed to be received at 9.00 am on the following Business Day.

(c)A facsimile transmission is regarded as legible unless the addressee telephones the sender within 2 hours after the transmission is received or regarded as received under paragraph (b)(iii) and informs the sender that it is not legible.

(d)In this clause, a reference to an addressee includes a reference to an addressee’s Officers, agents or employees.

1. Hence, McDougall J reasoned that:

… the parties’ apparent deliberate use of the concept of delivery in cl 7.7(b) should be respected.  I do not think that the parties intended that concept to be conflated, or interchangeable, with the concept of receipt.  When the parties in cl 7.7(b) required the recipient of a Dispute Notice, if it wished to continue the dispute, to deliver a Response within the time fixed by that paragraph, they focussed deliberately on the concept of delivery.

I therefore think that the crucial question for the purposes of cl 7.7(b) is to be answered by giving attention to the evidence of delivery of the Response, and asking whether that occurred within 10 Business Days of the delivery of the Dispute Notice.  There is no ambiguity or uncertainty in the concept of delivery in either sense.  The recipient of the Dispute Notice will know when the Dispute Notice was in fact, or physically, delivered.  Likewise, the recipient of the Response will know when the Response was in fact, or physically, delivered.  In each case, assuming that the giver of the relevant document uses a means of delivery that lends itself to precise proof, the giver will know those things as well.  In those circumstances, there would be no doubt as to the commencement of the relevant period of time or as to delivery within that time.[11]

[11][2007] NSWSC 585.

1. In this case it is different.  Here, so far from the parties deliberately focussing on delivery to start time running, they went to considerable lengths to make clear that service and, therefore, ultimately receipt should be the critical event.  Thus, clause 1 of the Deed defines the ‘Completion Date for Exercise’ as ‘the date that is 10 Business Days after the date on which the Put Option is validly exercised’.  Clause 5.4 provides that ‘to be effective and validly exercised, the Put Option must be exercised by service[12] on MCL of an Exercise Notice duly executed by APN FM’.  Service is expressly provided for in clause 16 wherein provision is made for the time of deemed receipt according to which of the permitted methods of service is adopted.  And, critically, clause 5.3 expressly provides that, ‘on receipt[13] of the Exercise Notice, MCL agrees to purchase from APN FM and APN FM agrees to sell and transfer to MCL the Units’.

   [12]Emphasis added.

   [13]Emphasis added.

1. The judge also deemed it unnecessary to consider whether delivery or service includes receipt in the sense of coming to the knowledge of the recipient.[14]  With respect, however, it was relevant and, when considered, it will be seen that it points in favour of the application of clause 16. 

   [14]Because, in this case, the Exercise Notice did in fact come to the attention of MCL on the day following posting.

1. Quaere, for example, what would be the situation if an Exercise Notice were delivered by post but, before it reached a responsible officer of the recipient, it was lost or destroyed?  Should it be concluded in those circumstances that the effect of the Deed was that, because the notice was not in fact received, the time for exercise of the option expired and the recipient of the notice was under no obligation to complete?  Equally, what if an Exercise Notice were in fact received but the sender of the Notice was not sure of its receipt and the recipient refused to confirm receipt until after 10 Business Days after receipt.  Should it be concluded in those circumstances that the effect of the Deed was that the recipient would be entitled to claim that it was then too late for the sender to insist on completion?  Alternatively, what if an Exercise Notice were sent on Day 1 but did not come to the attention of the recipient until Day 11.  In those circumstances, should it really be concluded that the effect of the Deed was to allow a sender keen to get out of the contract to claim that, because the recipient was not ready and willing to complete on Day 10, the contract was at an end?  Or, in each of those cases, is the posited outcome so unreasonable that clause 16 should be taken to apply?  As Lord Morris of Both-y-Gest said in L Schuler AG v Wickman Machine Tool Sales Ltd:[15]

The fact that a particular construction leads to a very unreasonable result must be a relevant consideration.  The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear.

[15][1974] AC 235, 251.

1. Approaching the matter accordingly, by reference to the intentions of such honest and reasonable business people as are supposed to inform the proper construction of the Deed,[16] and bearing in mind that the parties expressly provided that time should be of the essence of the completion of an Exercise Notice, it appears to me that the time of receipt of an Exercise Notice and hence time for completion were intended to be capable of ready, certain and objective ascertainment and consequently that the elaborate provisions for service and deemed receipt laid down in clause 16 should apply to an Exercise Notice given pursuant to clause 5.[17]

   [16]Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, 461-462 [22]; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179 [40].

   [17]Kudeweh v T&J Kelleher Builders Pty Ltd [1990] VR 701, 707-8 (Ormiston J).

Conclusion

1. In the result, I would allow the appeal and set aside paragraphs 2, 4 and 5 of the orders the subject of appeal and the orders as to costs made below.  In lieu thereof, I would declare that, upon the proper construction of the Deed, and in the events which have occurred, the Completion Date for Exercise was 5 November 2010.  I would then hear counsel as to any further or other orders that are to be made.

REDLICH JA:

1. I agree with Nettle JA that as clause 5 of the deed makes no provision for the means by which the notice of intention to exercise the option should be delivered or served, the provisions of clause 16 apply to an exercise of notice given pursuant to clause 5.  The time for completion of the exercise of the option therefore ran from the date of deemed receipt under clause 16.  Accordingly, the appeal should be allowed and the orders made which Nettle JA proposes.

HARGRAVE AJA:

1. I agree.

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