Barnes v 10 Fawkner Road Pty Ltd
[2019] VCC 1769
•8 November 2019
f
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-19-01600
| BARNES & ANOR | Plaintiffs |
| v | |
| 10 FAWKNER ROAD PTY LTD | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 1, 2, 22 October 2019 | |
DATE OF JUDGMENT: | 8 November 2019 | |
CASE MAY BE CITED AS: | Barnes v 10 Fawkner Road Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 1769 | |
REASONS FOR JUDGMENT
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Subject: Sale of Land
Catchwords: Whether contract form executed by purchasers was materially altered by Vendor’s agent; whether purchasers estopped from reliance on unauthorised alterations
Cases Cited:Life Insurance Company of Australia Limited v Phillips (1925) 36 CLR 60; Whitlock v Brew (1968) 118 CLR 445; Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269; Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537; Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395; Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86; Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236; JAD International Pty Ltd v International Trucks Australia Ltd (1994) 50 FCR 378; Coastal Estates Pty Ltd v Melevende [1965] VR 433; James v Heim Gallery (London) Ltd (1950) 256 EG 819; VL Finance Pty Ltd v The Commonwealth (unreported Supreme Court of Victoria, 18 December 1987); George Whitechurch Ltd v Cavanagh [1902] AC 117; Trippe Investments Pty Ltd v Henderson Investments Pty Ltd [1992] 106 FLR 214; Official Trustee in Bankruptcy v Tooheys Limited [1993] 29 NSWLR 641; Commonwealth v Verwayen (1990) 170 CLR at 444
Judgment: (1) Within 14 days of this day, the parties must bring in short Minutes
to be give effect to these reasons.
(2)Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L. Magowan | PCL Lawyers |
| For the Defendant | Mr D. Clough | Verduci Lawyers |
HIS HONOUR:
1 Mr Barnes works “in sales” for the energy company, Alinta. (Transcript (“T”) 34, Lines (“L”) 23-24). He and his wife, who are the plaintiffs in this proceeding, resided in Perth until 2018, when Mr Barnes’ employment led him to relocate to Melbourne in Victoria. (T35, L2-8) Mr and Mrs Barnes were both previously married and will celebrate their fifth wedding anniversary in December this year. (T111, L9-13) When Mrs Barnes arrived in Melbourne she was unemployed. (Ibid, L4-5)
2 While still in Perth, Mr and Mrs Barnes had been undertaking online research with a view to selecting a property as their residence in Melbourne. (T35, L28 – T36, L6) They identified a proposed unit development at 10 Fawkner Road, Pascoe Vale and decided:
“the plans were suitable, it was close to the train station and we decided that we would put a holding deposit down in the process of us moving across to Victoria.” (T36, L3-6)
3 The development was proposed to include some 10 townhouses. (Ibid, L11-12)
4 On 6 April 2018 selling agent, Castran Gilbert (Aust) Pty Ltd, (“Castran”) issued a receipt for a holding deposit of $1,000 payable against a purchase price of $845,000 to be payable for proposed Unit 2, 10 Fawkner Road, Pascoe Vale. (CB 36)
5 It would seem that 6 April was the first day on which the selling agent’s representative, Mr Karlis, made the acquaintance of Mr Barnes. (T193-4) In April 2018, the site was a vacant block with a sales office. (T36, L7-10) The 10 units were scheduled for completion in August/September 2019. (Ibid, L16-27) This finishing date seems to have slipped somewhat. Mr Barnes said that, as at 29 September, the building workers were “up to plastering the internal walls”. (T37, L8) The revised completion date and projected date for settlement of the unit sales is December of this year. (T170, L20-24)
6 It seems that Mr Karlis met Mr and Mrs Barnes on 16 April 2018, at which time he discussed with them requests which they made for alterations to the building specification which the developer agreed to. (CB 32) The developer agreed to make these modifications for no additional charge. This message was conveyed to the Barnes by Mr Karlis in an email of 23 April. He made an appointment to meet them at an eatery in the Newmarket Shopping Centre at 9.30am on Friday, 27 April to “go through the contract signing”. (CB 40)
7 Mrs Barnes travelled to Melbourne for that meeting by air from Perth on what she described as a “red eye” flight, landing at approximately 5.30am. (T113, L13-28) According to Mrs Barnes, she was “very tired” and her husband “did a lot more talking than I did”. (T114, L23-24) She said:
“Andrew was very hesitant given our background, second marriage and what happened surrounding those, that we needed to protect ourselves financially should anything happen. It wasn't just about me having a job, anything can happen in life, losing his job.” (Ibid, L2-7)
8 She said, “Andrew … was very adamant that a finance clause was included in the contract” (Ibid, L25-26), that is, that the purchaser’s obligations be made conditional upon their obtaining finance. Therefore, “if there wasn't a finance clause to protect us, that we would not sign the contract”. (Ibid, 29-30)
9 According to Mrs Barnes:
“Mr Karlis was saying it was an off the plan purchase, that there isn't usually a finance clause, but as I said, Andrew was concerned and that Andrew was saying we would not go ahead without a finance clause in. And then Arthur wrote the clause himself.” (T115, L4-9)
10 Three prints of the contract were signed at the meeting. The Court Book includes some or all of the text of these three. The first, pages 45-145, is signed by Mr and Mrs Barnes with the initials appearing on the first three pages which include handwritten particulars which were, it is common ground, inserted by Mr Karlis, the agent. This print of the contract is apparently the one which the Barnes retained following the conclusion of the meeting. At this stage, the vendor defendant, 10 Fawkner Road Pty Ltd (“10 Fawkner Road”), had neither accepted the Barnes’ offer to purchase nor executed the contract.
11 The Particulars of Sale (CB 47) show Mr and Mrs Barnes as the purchasers. Their address is given as 9/55 Pleasant Street, Pascoe Vale, Victoria, 3044. The space under the heading, “Purchaser’s legal practitioner or conveyancer” is blank. At the foot of CB 48, under a sub-heading in a box set to the right, “Special conditions”, handwritten words “Subject of bank pre approval of finance” appear. Mr and Mrs Barnes’ initials appear in the bottom right-hand corner of that page. Further up the page, handwritten particulars show a price of $845,000 and a deposit payable of $84,500, of which $1,000 had been paid with the balance payable on 28 May 2018.
12 The second print of the contract appears at CB 146-49 and includes only the pages with handwritten particulars, signatures and initials, and omits the boilerplate and associated documents. This appears to be an original with blue handwriting.
13 As on the previous print of the contract, the purchasers are shown as having signed on 27 April 2018, and a Ms Vu has signed on behalf of the vendor defendant, 10 Fawkner Road, on 30 April 2018. (CB 146)
14 In the Particulars of Sale (CB 147), the section headed “Purchaser’s legal practitioner or conveyancer”, which remains blank on version 1, has some handwriting which, it is common ground, is Mr Karlis’: “HTH Lawyers Pty Ltd, Level 2, 470 Collins Street, Melbourne, Vic. 3000”, with an email address, a telephone number and a reference to a particular practitioner of that firm. (CB 147)
15 On page 148, under the box set to the right labelled “Special conditions”, the handwritten words appearing in the corresponding place in version 1, have been scored out in blue biro so as to be illegible. Initials of Ms Vu appear immediately below the scored out words, and Mr and Mrs Barnes’ initials appear, as on the previous version, in the right-hand bottom corner. The text is otherwise identical to the first version.
16 A third version of the contract appears at CB 150-184. The signature page (CB 151) is in the same form as the second version, as is the Particulars of Sale page (CB 152). The third page, with the “Special conditions” box, is again in the same form as version 2, save that there are two sets of initials of Mr and Mrs Barnes, as on the previous two versions in the bottom left-hand corner at CB 153. Ms Vu’s initials appear immediately below the scored out words and to the right hand, as in the second version, but above and to the right immediately beside the scored out words are the initials of Mr and Mrs Barnes.
17 At 10.26am on 30 April, that is the Monday after the Friday meeting at the Newmarket eatery, Mr Karlis sent an email to the Barnes stating:
“I hope you had a nice weekend. Can you please let me know if you have received an update from Todd [that is the Barnes’ finance broker] in regards to Finance. I would like to be more clear before I meet up with the vendor as they might be a little confused here also.
I have sent you an email with all your changes that have been accepted you can keep that for your records [this is a reference to the changes to the building specifications].” (CB 187-88)
18 At 10.54am, 28 minutes later, Mrs Barnes responded, stating:
“Todd has said we will not have any issues obtaining finance. That clause can probably be removed about pre approval.
Also can you please let me know the dimensions of the fridge recess ie height width and depth as we need to buy a fridge.” (CB 187)
19 A moment later, at 10.55am, Mr Karlis sent an email to Mrs Barnes stating:
“Yes all good. Andrew called me and we discussed everything. I will be in touch with you shortly in regards to the fridge size.” (CB 186)
20 Mr Barnes’ telephone records show that, at 10:38:56, he made a telephone call to Mr Karlis, which lasted 1 minute and 33 seconds. (CB 34, item 71) Mr Barnes said he told Mr Karlis, “Todd believes we would have no problem getting finance but we still need to keep the finance clause in there for the offer”. (T50, L29-31)
21 Mr Karlis’ version was somewhat different. He said:
“Andrew stated to me that they no longer needed the clause. As I said, I can't remember but there is a strong possibility that that happened.” (T182, L11-14)
22 Mr Karlis said that he was “pretty sure” that he scribbled the words under the “Special conditions box”. (T182, L3-6) This was the form of the contract which Ms Vu signed and initialled on behalf of the vendor.
23 Mr Karlis said that he wrote letters on 3 May 2018 to Mr and Mrs Barnes at “9/55 Pleasant Street, Pascoe Vale, Vic, 3044” and to HTH Lawyers, enclosing copies of “the executed sections of the Contract of Sale”. (CB 192-3)
24 Unit 9, 55 Pleasant Street, Pascoe Vale is the Barnes’ present address which they are leasing under an arrangement commencing 3 May 2018. There were, however, problems with the power connection. According to Mr Barnes, “so we spent possibly the next week fighting with Origin [the power company] to get the power on to the premises. So we moved in about a week later [viz about 10 May]”. (T54, 20-22)
25 The Barnes paid the balance of the 10 per cent deposit in three tranches on 28, 29 and 30 May 2018. (CB 37-9)
26 Mr Barnes denied receipt of the letter from Castran dated 3 May and its enclosures. (T54, L30-1)
27 On 2 May 2018, HTH Lawyers emailed a fee proposal to the Barnes for that firm to act on the off-the-plan purchase of Unit 2. The email began, “Arthur Karlis from Castran has passed on your contact details to me”. (CB 189-192)
28 Mr Barnes acknowledged receiving this email but denied that he had accepted the fee proposal or retained HTH Lawyers in any way. (T53, L4-12)
29 On 20 September 2018, Mrs Barnes sent an email to Mr Karlis stating, “Could you please send us a copy of our contract signed by both parties. I can only find the one signed by us”. (CB 196-197)
30 By this time, Mr Karlis was no longer employed by Castran, having resigned in August. (T187, L15-16)
31 A Ms Kate Morice responded on behalf of Castran in an email later the same day stating as follows:
“Please note we do not hold full Contracts in our office, please find attached signed pages from your Contract.
Please note a full copy of the Contract was posted to yourself and your Solicitor on 03/05/2018.
Full blank Contract to follow.” (CB 194)
32 Mrs Barnes said she took this action because “we started to get organised as in the sense I knew eventually we would need to get organised for finance”. (T134, L13-15)
33 Nevertheless, she did not, at that stage, notice the fate of the words under the box “Special conditions”. She agreed she looked at the pages that were forwarded to her but “Not properly, no, we’re very busy people, we both work full-time, long hours, and sometimes life just gets in the way”. (T134, L19-21)
34 Mrs Barnes also did not follow-up the statements in the email from Ms Morice, which she says were incorrect, namely that she and her husband had received copies of the contract under cover of a letter dated 3 May, and that HTH Lawyers were acting for her. (CB 135-137)
35 In early November 2018, Mr Barnes was passing the development site and observed a number of features in the building which did not accord with the specification changes which had been agreed between the parties before the Barnes signed the contract form. (T87-89, CB 199-200)
36 By late December 2018, according to the Barnes, the discrepancies relative to the special condition in the contract had come to their attention. Mr Barnes said that he first attempted to raise this issue with Castran in a call on 20 December. Without being able to find a person with whom he could raise his concerns, he called again on 4 January and was asked to put his concerns in writing. As a result, he sent an email on the afternoon of 5 January, setting out this history of unsuccessful attempts to raise the issue with Castran. This email stated inter alia:
“We put in an offer to purchase the property [2/10 Fawkner Road, Pascoe Vale] with the special condition being added that the offer was subject to finance approval. On going (sic) to our financier to gain finance they pointed out that the contract has not been executed correctly in that
1 - the contract is not dated on front cover and has the year 2017 and
2 - the special condition, subject to finance approval, has been scribbled out on the copy sent to us.
This change was made to the contract after we signed and initialed both the agreement and special condition.
We believe there is not a correctly executed copy of this contract therefore a new agreement will need to be established including but not limited to a subject to finance approval condition and the inclusion of all approved build changes as per Arthur's email already forwarded to you.
…
We are therefore expecting a new agreement by Friday incorporating the above.” (CB 201-202)
37 Within a few moments, Mr Tim Brown (who described himself as Director and officer in effective control of Castran), replied acknowledging the email, saying:
“… I will look into this upon my return to the office around the 12th Jan. And will resolve
How long did you expect the contract to be subject to finance for[.] Generally its (sic) only for 7-10 days[.]” (CB 201)
38 The following evening at 5.41pm, Mr Barnes emailed Mr Brown thanking him for the response and stating:
“We would need 30 days for finance approval as we have 2 properties with tenants in them that would need valuations completed.” (Ibid)
39 It will be recalled that Mr Brown promised a substantive response “upon his return” (presumably from holidays) on 12 January. The Barnes did not await that return. At 8.45pm on the evening of 10 January, they sent a further email stating:
“Further to our previous email, as our financier said that he could not accept the contract as it is and as your office has had no-one available to resolve this issue we have sought legal clarification and been advised as follows:-
The vendor has not agreed to our condition in the contract, it has been scribbled out without our consent therefore the contract is not legally binding.
At this stage we would like our deposit of $84,500.00 back.” (CB 206)
40 Mr Brown responded a few moments later:
“… I’m happy to look into this upon my return on Monday [viz 14 January]. But with regards to the validity of the contract you will need to deal with the vendors (sic) solicitor via your solicitor we will not be doing anything without their instructions[.]
To our knowledge the contract is valid and binding.” (CB 206)
41 Ms Francine Lastrina of Verduci Lawyers sent an email dated 14 May at 11.59am referring to the email correspondence, and stating:
“I am instructed that a discussion was held regarding the sale being subject to finance however you were advised that the vendor would only accept it if the sale were unconditional and you agreed.
Arthur the selling agent has also confirmed that the condition was crossed out at the time you both signed the contract of sale.” (CB 205)
42 Early the same afternoon, the Barnes replied, stating inter alia:
“You may wish to clarify this as a point of fact and have Arthur check the email he sent on 30th April, (offer signed by us on the 27th April) asking for clarification of the special condition before he saw the vendor, as they may be confused.
I would not have signed the offer without a finance condition.” (CB 204)
This proceeding
43 On 9 April, solicitors acting for the Barnes filed a Writ commencing this proceeding and seeking the following relief:
(a) A direction that the deposit be refunded to the plaintiffs;
(b) $86,329.20;
(c) Damages;
(d) Restitution;
(e) A declaration that no contract had been formed as between the plaintiffs and the defendant;
(f) Costs;
(g) Such further or other order as to this Honourable Court deems meet (sic).
Statement of Claim
44 In their Statement of Claim, the Barnes allege that they made an offer to purchase Unit 2 “on or about 27 April 2018”. Next, they said that “in the mistaken belief that the Offer had been accepted”, they paid $84,500 into Castran’s trust account. It was said that the defendant did not accept their offer, but, rather, made a counter-offer deleting the words “subject of bank pre-approval of finance”. Therefore, there was no “meeting of minds” and no contract was formed.
45 Further, it was said that the defendant had no entitlement to retain the deposit paid. The defendant had refused to refund the deposit despite demands to do so. The defendant, therefore, was indebted to the Barnes in the sum of $84,500, together with interest.
46 Finally, it was said that the deposit “was received at the request of the defendant [10 Fawkner Road] and in the circumstances it would be unconscionable for [10 Fawkner Road] to retain the deposit without making restitution …”
Defence
47 In its Amended Defence, having admitted certain formal matters, the defendant denied that the plaintiffs’ offer to purchase the unit “was subject to an expressed term namely ‘subject of bank pre-approval of finance’.” It said that on 3 May 2018, 10 Fawkner Road, having executed the contract, it was forwarded to the plaintiffs’ legal adviser, HTH Lawyers, and to the plaintiffs’ director. This was described as the “unconditional contract”, which was said not to contain the term “subject of bank pre-approval of finance”.
48 It said, even if such clause were valid and part of the contract, the Barnes had not complied with general condition 14 of the contract, which required, amongst other things, that the Barnes “immediately apply for the loan”. In any event, it was said that the term was “incapable of meaning and was incapable of being acted upon”. It was said that “no issue was raised about the unconditional contract by the [Barnes] or anyone on their behalf until January 2019”.
49 10 Fawkner Road denied that the monies it had received from the Barnes were paid by mistake. It was said the contract dated 30 April 2018 was “binding upon the [Barnes] and 10 Fawkner Road”. It was said that 10 Fawkner Road was entitled to retain the deposit and not under an obligation to refund it.
50 Clauses 14 and 15 of the Defence provided as follows:
“14.As a result of the plaintiffs paying the moneys set out in paragraph 4 of the statement of claim, failing to make any complaint about the delivery of the unconditional contract as set out in paragraph 4.9 of the Defence and failing to make any attempts to apply for finance, the defendant has relied upon the plaintiffs’ actions and the plaintiffs are now estopped from asserting that the contract as alleged by them contained the term.
15.And if the unconditional contract obtained the term as alleged, that term can no longer be relied upon and the fact is that the contract has become and remains unconditional.” (CB 11)
Counterclaim
51 By its Counterclaim, 10 Fawkner Road asserted the parties had entered into an unconditional contract for the sale of Unit 2. By way of Counterclaim, it sought a declaration that this contract was binding upon the parties and that the Barnes specifically perform it. There was also an application for further or other relief and costs.
Reply
52 By way of Reply, the Barnes asserted that the contract form, as signed on behalf of 10 Fawkner Road, constituted a counter-offer by that company which the Barnes had not accepted. It was said that “at no time did [10 Fawkner Road] or its agents make the [Barnes] or their agents aware of the unilateral deletion of the words ‘subject to bank pre-approval of finance’.”
53 As to 10 Fawkner Road’s reliance on clause 14 of the contract form, they said “this was subject to contract formation, there never having been any contract form, the clauses can have no force and effect”.
54 Further, it was said that HTH Lawyers was never the Barnes’ agent, “having never been formally engaged by [the Barnes]”. Alternatively, it was said the covering letters addressed to the Barnes and HTH Lawyers did not point out that 10 Fawkner Road or its agent “had unilaterally sought to delete the special condition”.
55 Finally, it was said that Mr Barnes had, in a telephone conversation with the vendor defendant’s agent, Mr Karlis, stated that “it would be inappropriate not to have a finance clause in the contract and the clause was to remain, although he did not envisage any problems with finance”. This was said to have been acknowledged by Mr Karlis in a subsequent email on the same day.
Defence to Counterclaim
56 In their Defence to Counterclaim, the Barnes denied each of the allegations by way of Counterclaim made by 10 Fawkner Road.
Conclusions
Was a contract formed?
57 Mr Clough, on behalf of the defendant, contended that an analysis of the objective facts would lead to the conclusion that Mr and Mrs Barnes, by their execution of the contract form, made an offer to purchase Unit 2, 10 Fawkner Road, Pascoe Vale; that offer was modified with their authority so as to delete the `subject to finance’ clause; and the offer was accepted by the defendant’s execution of the contract as modified.
58 Mr Clough invited me to reject much of the explanations given by Mr and Mrs Barnes for wishing to have a `subject to finance’ clause in the contract. He said that Mr Barnes explained that he had concerns as to the availability of housing finance in light of the imminence of a Royal Commission into the banking system. Mrs Barnes was concerned because she had, at the time of signing the contract, not obtained employment in Melbourne following her relocation from Western Australia. Mr Clough said:
“There was no objective evidence of the Royal Commission causing a tightening of finance for borrowers in the plaintiffs’ position. There was no objective evidence that the first plaintiff [scil the second plaintiff] would have difficulty finding a job. She found a job within a month of moving to Melbourne.”
59 I must say that I share Mr Clough’s scepticism. Nevertheless, the evidence is clear that, at the time of executing the contract, Mr and Mrs Barnes stipulated to have the `subject to finance’ clause inserted in the contract. Whatever their motivations might be, whether credible or not, the key question which will resolve this issue is whether Mr and Mrs Barnes authorised the deletion of the clause.
60 Mr Clough said that authority to remove the clause was to be found in the email from Mrs Barnes at 10.54am saying, with respect to the `subject to finance’ clause, “Todd has said we will not have any issues obtaining finance. That clause can probably be removed about pre-approval”. It was also to be found, he said, in the telephone call made by Mr Barnes to Mr Karlis at 10.38am, lasting 1.33 minutes, together with the email response to Mrs Barnes by Mr Karlis at 10.55am. (See [18]-[20] above)
61 According to Mr Clough, the denial of authority deriving from the telephone call was “lukewarm”, as described in his cross-examination of Mr Barnes, where Mr Barnes said, “it would be inappropriate not to have the finance clause” as the basis for his not authorising his deletion. (T64, L23-24)
62 Mr Magowan observed that Mr Karlis did not purport to have any recollection of the content of the telephone call. In examination-in-chief Mr Karlis said, “I don’t exactly recall the phone call”. (T181, L23-24) He denied remembering what was said in the phone call. (Ibid, L25-26)
63 Therefore, said Mr Magowan, the account of the call given by Mr Barnes stood uncontradicted. He referred to the following answer given in examination-in-chief by Mr Barnes:
“Do you recall what you actually said to Arthur?---Not the exact words, but the words I spoke to Arthur was the fact that yes, Todd believes we would have no problem getting finance but we still need to keep the finance clause in there for the offer.” (T50, L27-31)
“Arthur” was Mr Karlis.
64 Mr Clough referred to the standard authorities which establish that the formation and enforcement of contracts must be analysed according to an objective analysis of what parties to the alleged contracts said and did, not to their subjective intentions.
65 Mr Magowan made no contention to the contrary. It is therefore unnecessary to traverse this ground which must be taken as well-established by high authority.
66 The situation following the initial execution of the contract as an offer by the plaintiffs on 30 April was that they included the handwritten `subject to finance’ clause. The Barnes can only be regarded as having made an unconditional offer to purchase without their purchase being “subject to finance” if it is distinctly established that Mr Karlis acted with their authority in scoring out the `subject to finance’ clause.
67 Mr Barnes’ evidence was that, in his telephone conversation with Mr Karlis, he did not authorise such deletion but, rather, asserted that it would be inappropriate or imprudent for the contract offer to go forward unconditionally.
68 Whether Mr Barnes’ reasons for doing this were compelling, unconvincing or purely opportunistic is not to the point. An analysis of what he said and did does not indicate that he authorised the deletion.
69 As far as Mrs Barnes is concerned, a statement that the clause could “probably” be removed is not the same as an authorisation for its removal, particularly in circumstances where she was only one of two contracting or offering parties and she had not discussed the matter with her husband.
70 In my view, the objective evidence establishes that the offer was made by the Barnes conditionally on finance being available to them by “pre-approval” – whatever that might mean – and the objective evidence does not establish that they authorised the deletion of the clause which imposed the condition.
71 I am fortified in that conclusion by the fact that the position taken by the defendant, apparently based upon information provided to it by Mr Karlis, has been inconsistent.
72 Mr Clough sought and obtained leave to file and serve an Amended Defence and Counterclaim based upon the assertion that the third print of the Contract of Sale described above, and including an additional set of initials of the Barnes next to the scored-out clause, was indicative of there having been a further meeting between them and Mr Karlis at which they initialled the deletion on at least one print of the contract. When Mr Karlis gave his evidence, he did not purport to remember such a meeting, and Mr Barnes denied that it occurred. This was the position taken by the solicitors for the defendant in their correspondence of 14 May 2019 and quoted above at [41].
Counter-Offer by Defendant
73 In his closing submissions, Mr Clough sought to contend that if he were wrong in his primary contentions as to the objective evidence disclosing that the parties had both agreed to the contract with the finance clause deleted in April/May 2018, the execution by the defendant of the contract with the clause deleted constituted a counter-offer.
74 Mr Magowan objected to his being allowed to put such an argument. According to Mr Magowan, such an argument had neither been opened nor pleaded.
75 Mr Clough referred to his having opened on the point (T32, L20-29). He was constrained, however, to admit that the “defendant’s counter-offer” argument was not pleaded.
76 I upheld Mr Magowan’s objection for reasons which I gave at the time.
Finance clause too vague?
77 Mr Clough contended that, even if the Barnes’ account of what had occurred was accepted and the `subject to finance’ clause was deleted without their authority, the clause was too vague to be of any consequence and could be treated as severed and ignored. He said the clause was too vague because no details of timing were discussed or included; the defendant’s director, Ms Vu, gave evidence that she would only ever agree to a `subject to finance’ clause for two weeks; and a `subject to finance’ clause of this type was, according to Mr Karlis, totally impracticable.
78 I accept Mr Clough’s contention that the `subject to finance’ clause included, as envisaged by Mr Barnes, would be totally impracticable in an off-the-plan sale. He described how he envisaged it operating. (T42-43) I asked:
“So am I understanding right that this condition wouldn't be satisfied as you saw things panning out until about three months before the projected settlement date?” (T43, L17-20)
To which Mr Barnes replied, “Correct”. He agreed that this would be about 12 months after the signature of the contract. (T20-23)
79 In light of Ms Vu’s description of the need to present unconditional contracts to the bank as financier to make funds available for construction, a sale contract which hangs uncertain until almost the end of the project would be of no commercial value, or almost no commercial value, to the developer at all. Indeed, it would be an embarrassment should the developer be able in the meantime to find someone who would commit unconditionally to the purchase.
80 In essence, Mr Clough’s contention for the defendant was that the `subject to finance’ clause was too vague to bear any distinct meaning and should therefore be disregarded as mere surplusage. He conceded that this would require the application of the process of severance and therefore engaged the jurisprudence on that subject.
81 In support of his contentions, he relied on two decisions of the High Court of Australia, Life Insurance Company of Australia Limited v Phillips (1925) 36 CLR 60 and Whitlock v Brew (1968) 118 CLR 445, which cases dealt with the issue of severance.
82 Before reaching that subject, he said the clause should be regarded as too vague to be enforceable. He said:
“Objectively construed it makes no sense, even if it is merely ambiguous and one has regard to ‘the genesis of the transaction, the background, the context [and] the market in which the parties are operating’ [citing Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 [49]]. That is so particularly considering:
(i) No details of timing were discussed on 27 April 2018;
(ii) The finance clause that the Plaintiffs later sought was different from the one in question;
(iii) Ms Vu [the director of the defendant] gave evidence that she would only ever agree to a ‘subject to finance’ clause of two weeks;
(iv) Mr Karlis gave evidence that a clause of the kind proposed by the Plaintiffs would be totally impracticable in an off-the-plan purchase.”
83 He said, therefore, that there were no details on timing. This was particularly problematic where clause 16.1 of the contract made time of the essence. He said that the contract form included boxes to insert timelines for `subject to finance’ clauses and they were incomplete. He concluded, “At best, the finance clause might be objectively construed to do no more than activate Cl 14 of the contract.”, viz, the boiler plate `subject to finance’ clause.
84 I agree with some of the critique of the clause made by Mr Clough. A number of his points, however, seem to be only makeweights or beside the point. Ms Vu’s attitude to `subject to finance’ clauses was not shown to have been a matter in the joint contemplation of the parties. It was, therefore, no more than a subjective intention on her part and, as such, irrelevant to the objective approach to the construction and operation of contracts which, all parties agreed, was mandated by the modern law of contract. Again, as I have explained, I understand and accept the contention that a `subject to finance’ clause makes no sense in an off-the-plan purchase. But that consideration might render the clause unreasonable as distinct from rendering it too vague. In the case of ambiguity, of course, in accordance with the well-established rules approved by the High Court, one should steer away from the construction that would lead to a commercially nonsensical outcome. Accepting for the sake of the argument that this clause should be characterised as “too vague”, can it be severed?
85 In the Life Insurance Company case, Mr Phillips had entered into two life insurance policies providing for a payout of £500 on the death of the assured if it occurred before 1939 and to pay that sum to the assured himself if he survived. The assured, Mr Phillips, sought rescission of the policies and a refund of £189 paid by him in premiums. He contended that the policies were void for uncertainty. It included a provision that the policies were taken out under the terms of the company’s “home purchase policies” with the assured being entitled to any time after the policy had been in force for three years to a loan out of available funds of the company on a property to be approved by the directors. Latham KC and Mr Robert Menzies, who represented the assured, Mr Phillips, before the High Court, submitted:
“The contract is ambiguous as to subject matter in the provision for a loan, and that provision cannot be separated from the provision for life insurance. If evidence be not admissible to show the sense in which the parties used the words, the contract is void ab initio for uncertainty. If it is void ab initio, the respondent is entitled to recover the premiums …” (1925) 36 CLR 60, 64
86 The Court held that evidence as to the meaning which the respective parties attached to the contentious part of the policy was not admissible to show that the parties ascribed different meanings to the clause and therefore were not ad idem. Even if the provision were ambiguous, the Court held that the contract was divisible and the validity of the portion dealing with life assurance was not affected by the invalidity of the loan provision. Knox CJ said, even assuming that the provision as to loan moneys was ambiguous and not effective to impose any obligation on the insurance company:
“… it does not necessarily follow that the whole agreement embodied in the policy is void. When a contract contains a number of stipulations, one of which is void for uncertainty, the question whether the whole contract is void depends on the intention of the parties to be gathered from the instrument as a whole. If the contract be divisible, the part which is void may be separated from the rest, and does not affect its validity. In this case I think it is clear that the stipulations contained in the contract are divisible. There is no uncertainty or ambiguity in the promise on the part of the Company that, in consideration of the payment of the annual premiums, it will, on the 15th of February, 1939, or on the death of the respondent if occurring before that date, pay to the respondent or his representatives as the case may be the sum of £500. The obligation imposed on the Company by this provision came into force immediately on the payment by the respondent of the first premium, and if he had died during the twelve months next succeeding that payment this obligation could undoubtedly have been enforced. The provision for a loan would not then have been operative, and it would have been impossible for the Company, having received the premium, and thus treated the contract as valid, to contend successfully that, by reason of the vagueness or uncertainty of the provision for a loan, the whole contract was void, and it was under no obligation to pay the amount assured.” (1925) 36 CLR 60, 72
87 In Whitlock v Brew, the Court reached the opposite conclusion on the subject of severance. There was a contract for the sale of land on which was located a petrol service station. The contract included a covenant on the part of the purchaser that, upon taking possession of the land, he would forthwith grant a lease of a portion of that land used as the petrol station to Shell Company of Australia Ltd to be used by Shell or its sub-tenant or licensee for the sale of petroleum products, with the lease being on such reasonable terms as commonly govern such a lease, with a provision for referral to an arbitrator failing agreement. Upholding the decision of the Full Court of the Supreme Court of Victoria by majority, the High Court held that the clause concerning the grant of the lease was uncertain because it did not prescribe either the term of the lease or the rent, and the provision for referral to arbitration did not authorise the arbitrator to fix either of these things. The majority of the Court concluded that this uncertain provision was a material and inseverable part of the contract and therefore there was no concluded contract between the parties. In a joint judgment, Taylor, Menzies and Owen JJ, after referring to part of the same passage from the judgment of Knox CJ in the Life Insurance Company of Australia case quoted above, continued in a passage relied upon by Mr Clough:
“… it is not to the point to make an independent examination of extrinsic facts, even if they were within the knowledge of both parties, and upon such evidence to conclude that a particular provision was or was not of importance to them or to either of them; the question for determination is the intention of the parties as disclosed by the contract into which they have entered.” (1968) 118 CLR 445, 461
88 Mr Clough said:
“Plainly, the finance clause is divisible and the intention of the parties, ascertained from the instrument itself, may be taken to be that it may be severable without affecting the remainder of the contract.”
89 According to Mr Clough, the court ought to be less likely to find an agreement incomplete if it is partly performed. He referred to Husain v O & S Holdings (Vic) Pty Ltd [2005] VSCA 269 [26], [53]. He noted that the Barnes had paid the deposit, the property had been constructed in accordance with bespoke specifications agreed in April 2018 at the cost of $20,000 to the defendant and the Barnes had a copy of the contract with the finance clause deleted and proceeded to insist that the construction of the property occur in accordance with the contract. Where parties had acted upon the basis of the contract, the court ought to do “its utmost” to uphold the contract.
90 I need not pause to consider whether, in light of more recent authoritative statements of principle on the construction of written contracts by the High Court, the issue of severance and ought to be considered solely by reference to the written contract, that is, within its four corners, rather than by reference to extrinsic facts in the joint contemplation of the parties. Confining oneself to an analysis of the written instrument, it is clear that the `subject to finance’ clause is not divisible or severable from the main subject matter of the contract, as the High Court found relative to the loan clause in the Life Insurance Company case, but rather is inseverable in the same way as the lease-back provision was found to be in Whitlock v Brew. A `subject to finance’ clause, assuming it to be enforceable, would be apt to create either a condition precedent to contract (that is, failing its satisfaction no contract would arise), or a condition precedent to performance by the purchaser (viz, the purchaser would not be obliged to perform his side of the contract unless the condition be satisfied), Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537. Far from being independent or divisible, the two things (the condition precedent and the obligation to purchase) are interdependent. I reject Mr Clough’s contention that the court may disregard and sever the `subject to finance’ clause and proceed to enforce the balance of the contract.
91 For the same reasons, I reject a related but distinct contention by Mr Clough that the `subject to finance’ clause should be regarded as “not an essential term anyway” which can simply be disregarded.
Estoppel
92 Mr Clough contended that:
“Where a person with legal rights against another represents to that other that he or she does not intend to enforce these rights, and the representee acts or ceases to act in reliance on that representation (not necessarily involving detriment), it may be unconscionable for the representor to enforce those rights thereafter.”
He referred to Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd (2006) 149 FCR 395 [114] per Finn and Sundberg JJ. Mr Clough said that the Barnes waived their right to deny the contract by intentional acts in November 2018 to complain that the property was not being constructed in accordance with the contract and thereby represented that they considered the contract to be binding. The defendant relied on that conduct to build the property in accordance with the specifications agreed between the parties and did not seek to resell it. He said that an estoppel by representation must be judged objectively by reference to what it conveys to the representee. He referred to Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd [2008] VSCA 86 [134] – [135] per Dodds-Streeton J.
93 He said the estoppel derived from an agreement by the defendant to construct Unit 2 according to “bespoke specifications” at an additional cost of $20,000 met by the builder. He said that on 3 May 2018, the Barnes and HTH Lawyers were given a copy of the contract signed by the vendor with no `subject to finance’ clause and were given a further copy on 20 September 2018 constituted by the particulars of sale in the execution clause, once again with the finance clause deleted. Then, “Until the end of 2018, the plaintiffs acted as if they were bound.” He said, induced by these matters the vendor suffered detriment by losing the opportunity to sell the property at an earlier time and losing $20,000 paid to the builder for the bespoke specifications. Therefore, said Mr Clough, it would be unconscionable to allow the Barnes “to resile from their representation throughout 2018 that they were bound by the contract.” The parties had proceeded “for almost eight months as if the contract were binding.”
94 On behalf of the plaintiffs, Mr Magowan referred to the often-cited passage from Brennan J, (as he then was) in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428-9, where his Honour said:
“In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed or expected that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.” (Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 428-9)
95 In FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236 [253], the Court of Appeal, Whelan, Niall and Ashley JJA said that this:
“… formulation of the elements of promissory estoppel in … is accepted as encapsulating the current state of the law in Australia.”
96 The application of these principles and of the authorities cited by counsel on both sides in the present case is embarrassed by a factual dispute as to the level of knowledge held by the Barnes at the time of the events referred to by Mr Clough as constituting the alleged waiver or estoppel. Mr Clough invited me to consider that the plaintiffs, Mr and Mrs Barnes, did receive the copy contract said to have been posted to them by Castran Gilbert despite the Barnes’ denial of receipt. He also referred to the receipt of the contract by HTH Lawyers. I was inclined to be sceptical as to the Barnes’ denial of the receipt of the contract at their residential address. In the ordinary course of post, it should have arrived after the commencement of their tenancy there, but at a time when, on their uncontradicted evidence, they had not taken up residence because of the delay in the connection of electrical power. Commonwealth legislation and State and Territorial legislation throughout Australia renders postal service effective under court rules and statute. The premise is that the postal service is generally reliable. Given that there was no one else in occupancy of the Barnes’ current residential address during the delay caused by the problems with power connection, it is not obvious why the copy contract would not have been waiting for them when they took up residence a few days later. Mr Magowan contended that there was no distinct evidence of the posting of the item to the plaintiffs in early May. All that could be said is that the Castran Gilbert file includes a file copy from which the inference might be drawn that the original was dispatched by post in accordance with the usual practice. Moreover, said Mr Magowan, the residence to which the item was apparently addressed was one of a number of Units which, in itself, created the potential for confusion and possible loss of the item. In the circumstances, with some hesitation, I am inclined to proceed on the view that I cannot find as a fact that as at May 2018 the Barnes had a copy of the contract with the clause deleted.
97 Whilst I accept that HTH Lawyers were suggested as acting for the Barnes by Mr Karlis and the Barnes might, even in conversation with Mr Karlis, have agreed that this was the case, there was no evidence that they had actually been retained. Indeed, a notation on the contract form produced on subpoena by that law firm indicated that no action was taken, “pending retainer”, which it would seem never occurred. The more problematic factual issue is the evidence of the Barnes that, despite being possessed of the relevant portion of the contract with the `subject to finance’ clause deleted as at September 2018, it was not until November that they realised what had happened. Whilst Mrs Barnes was challenged on this point in cross-examination, she made no concession. Therefore, upon the evidence, whilst I can find that the plaintiffs had the means of knowing that the `subject to finance’ clause had been deleted, and perhaps ought to have known that, it would be wrong to find as a fact that they did, in fact, know.
98 When pressed on this point, Mr Clough conceded that he could not refer me to authority either as to waiver or estoppel, assuming the two doctrines in the context such as this could be regarded as separate, which would hold someone allegedly engaged in a waiver liable as such, based upon what he or she ought to have known as distinct from what was actually known.
99 In the distinct but related doctrine of election, a party is not to be taken to have elected to affirm a contract unless it has knowledge of the facts which would give rise to a right for rescission. Professor Carter, in his work Carter on Contract, states:
“The question of election does not arise until the plaintiff has acquired knowledge of the facts which give rise to the right of rescission, for example, that a representation was false.” [26-050] 60,097 Service 16
100 The Professor footnotes a reference to JAD International Pty Ltd v International Trucks Australia Ltd (1994) 50 FCR 378, 385-6 per the Full Federal Court. The learned author also refers to a decision of the Full Court of the Supreme Court of Victoria, Coastal Estates Pty Ltd v Melevende [1965] VR 433, stating:
“it is necessary to a binding election to affirm that the defrauded party should have known of the right to rescind as well as of the falsifying fact …” (Ibid, 60,079-8)
101 Here, whilst I accept that at the time of the various matters relied upon as the basis for the alleged estoppel, the Barnes ought to have known of the exclusion of the `subject to finance’ clause from the signed contract, I am not satisfied that they did in fact know of that matter. If the requirement of knowledge on the part of the representor in the case of alleged equitable estoppel or waiver is the same as for the election, the reliance on estoppel or waiver by the defendant must fail.
102 Mr Clough referred to and relied upon an article by Mr Andrew Robertson entitled, “Knowledge and Unconscionability in Unified Estoppel” (1998) 24 Monash University Law Review 115. Having reviewed the authorities, the learned author stated:
“the better view is that the requirement of knowledge applies only in cases of mere acquiescence.” (1998) 24 Monash University Law Review 115, 127
where the author was speaking of equitable estoppel.
103 According to Mr Clough, his formulation of equitable estoppel in the present case entailed positive assertions on the part of the Barnes that there was a contract in force between them and 10 Fawkner Road, such as by demanding to have the building work conform to the agreed special specifications. It is not clear, however, that the knowledge of which Mr Robertson speaks is precisely the knowledge that is in question here. What is in question here is the Barnes’ knowledge that the `subject to finance’ clause had been scored out in the contract before its signature by the vendor. Mr Robertson said:
“In the promissory estoppel cases, the contentious question has not been whether the representor [that is the person in the position of the Barnes in this case] must have knowledge of the representees’ [that is, 10 Fawkner Road’s] reliance, but whether the representor must intend reliance or must intend his or her promise to be binding.” (Ibid, 127-28)
104 This is not the form of knowledge in question in the present dispute. A little later in his article, Mr Robertson continues:
“A significant difference between the promissory estoppel cases and the proprietary estoppel cases, therefore, is that, while the proprietary estoppel cases have been concerned with the representor’s knowledge of the representee’s assumption or acts of reliance, the promissory estoppel cases have tended to focus on the representor’s intention to affect the legal relations between the parties or to induce reliance by the promisee.” (Ibid, 128)
105 Later he referred to a decision of the English Court of Appeal, James v Heim Gallery (London) Ltd (1950) 256 EG 819, 823 per Buckley LJ, where his Lordship said that for the estoppel to be engaged, a promise “must have been made in circumstances in which, to the promisor’s knowledge, the promise would be acted upon by the promisee”, which, again, is a different class of knowledge from the type in question here. The doctrine of equitable estoppel is, as its name indicates, a doctrine of equity. The principles of equity traditionally attach to the conscience of the persons involved. It is difficult to think that a court of equity would regard it as appropriate to bind the party to a contractual-style obligation which the common law did not recognise, based on representations made by the person to be bound in ignorance of the true legal situation between him and the counterparty.
106 In a broad sense, if it appeared, on the balance of probabilities, that the Barnes were aware of the absence of the `subject to finance’ clause and they deliberately, for tactical purposes, held back from advising 10 Fawkner Road that there was no enforceable contract in existence, or asserted contractual rights against that company in the knowledge that there were grounds for contending that no contract was in existence, I agree with Mr Clough that it would be “unconscionable for the [Barnes] to resile from their representation throughout 2018 that they were bound by the contract.” For reasons explained, however, I am unable to make the factual findings which would be necessary to underpin that conclusion.
107 If the requirement of knowledge on the Barnes’ part is not part of the law on estoppel or waiver, then there is a further reason why the defendant’s arguments on this point should be rejected. Speaking of promissory estoppel, Professor Carter states in his work on Contract:
“Consistently with the doctrine’s origins in equity, relief on the basis of promissory estoppel is in the nature of discretionary equitable relief against the operation of the common law. It will be granted in favour of a promisee only if it would be unconscionable for the promisor to go back on the promise. … Relief will not be granted if the promisee is not acting in good conscience.” [07-080] 16,096 Service 43
108 Here, whilst Ms Vu, as the principal of 10 Fawkner Road, was in no way implicated, that company’s selling agent, on the findings I have made, deleted a material clause from the contract as signed without drawing the Barnes’ attention to the deletion which he had made. Such conduct has been found by courts to be unconscientious. (VL Finance Pty Ltd v The Commonwealth (unreported Supreme Court of Victoria, 18 December 1987 per Marks J).
109 Mr Clough made a number of responses denying the validity of this reason. First, he referred to a decision of the House of Lords in George Whitechurch Ltd v Cavanagh [1902] AC 117, 145 where Lord Brampton said:
“[n]o representations can be relied on as estoppels if they have been induced by the concealment of any material fact on the part of those who seek to use them as such; and if the person to whom they are made knows something which, if revealed, would have been calculated to influence the other to hesitate or seek for further information before speaking positively, and that something has been withheld, the representation ought not to be treated as an estoppel.”
110 He referred to a decision of the Court of Appeal of the Northern Territory in Trippe Investments Pty Ltd v Henderson Investments Pty Ltd [1992] 106 FLR 214, 231 and Official Trustee in Bankruptcy v Tooheys Limited [1993] 29 NSWLR 641, where Gleeson CJ, with the concurrence of Meagher JA, said:
“‘If the representation is proved by the representor to have been the result of fraudulent representation, whether in language or by conduct, on the part of the representee, a good answer is established to an estoppel which might otherwise have arisen.’”
111 His Honour was there quoting from Spencer Bower and Turner, The Law Relating to Estoppel by Representation (3rd ed 1977) p137. His Honour said, by reference to the judgment of Deane J in Commonwealth v Verwayen (Verwayen's/Voyager case) ((1990) 170 CLR at 444), that it was not unconscientious for a party to depart from an assumption that had been adopted by the other party on the basis of some conduct even if there was detriment, if the other party procured the assumption by fraud. Mr Clough noted there was a division of authority as to whether fraud was required to be established to rebuff what might otherwise be an estoppel. Mr Clough continued:
“In the present case, the evidence is that Mr Karlis genuinely believed he had been authorised to delete the finance clause. There is no evidence of any fraud or deceit by Mr Karlis and, in any event, such strong allegations were not put to him, either at all or sufficiently clearly considering their gravity.”
112 In any event, he said Mr Karlis’ conduct could not be attributed to 10 Fawkner Road. He said, “The Plaintiffs knew that Mr Karlis was merely the conduit for their offer to the Defendant”. In the circumstances of the present case, it is unnecessary and inappropriate to use the expression “fraud” in connection with Mr Karlis’ role. Nevertheless, it does less than justice to his role in the negotiations to characterise him as a mere conduit. He was the only point through which the Barnes could communicate with 10 Fawkner Road. It was through him that the issue of the special condition was negotiated. The matter of the special condition was within the scope of his authority. It was in his handwriting, it was he who scored it out, he took this action following communications with 10 Fawkner Road and the Barnes. If the Barnes are to be regarded as having engaged in conduct that misled, that conduct took place after Mr Karlis made the unauthorised alteration to the contract form which, upon the evidence, occurred before the contract was submitted to Ms Vu for execution on behalf of 10 Fawkner Road. It is impossible to make an affirmative finding exonerating Mr Karlis from any allegation of unconscientious or unconscionable conduct in circumstances where he admits to making the amendment to the contract form without being able to point to clearly unequivocal authority from the Barnes to have done this.
Disposition
113 I will direct the parties to bring in short Minutes to give effect to these reasons. I have heard no submissions on the question of costs and so I will reserve them.
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