Black v Australand Holdings Pty Ltd [No 2]
Case
•
[2000] NSWCA 324
•23 November 2000
No judgment structure available for this case.
CITATION: Black & Ors v Australand Holdings Pty Ltd [No 2] [2000] NSWCA 324 revised - 26/04/2007 FILE NUMBER(S): CA 40803/98 HEARING DATE(S): Decided on written submissions JUDGMENT DATE:
23 November 2000PARTIES :
Richard Black, Sciara Holdings Pty Limited, Johneen De Groot-Black (Nee Brazier) (Appellants) v Australand Holdings Pty Ltd (Respondent)JUDGMENT OF: Mason P at 1; Priestley JA at 3; Fitzgerald JA at 88
LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT
FILE NUMBER(S) :ED 2045/98 LOWER COURT
JUDICIAL OFFICER :Einstein J
COUNSEL: P.E. King / M.J. Watts (Appellant
P. Greenwood SC / A. Ridley (RespondentSOLICITORS: Forshaws Neill (Appellant
Colin Biggers & Paisley (Respondent)CATCHWORDS: Application to reopen appeal - contract - right of first refusal to purchase units in proposed new building - no binding contractual agreement made for option variation - appellants submit that it was not open to Court of Appeal to decide case on basis that it did - issue on which reopening sought not one of common ground between parties - appellants’ letters to respondent not an effective nomination of units as contemplated by contract - no estoppel or waiver of contractual rights binding on the respondent - within power of Court to entertain argument on which case decided - discussion of Court’s power to allow new ground of appeal to be added which had not been argued at first instance - leave refused to reopen hearing of the appeal on common ground point - leave refused to reopen appeal on basis of additional evidence relating to Trade Practices case on basis that court misapprehended what was in issue - leave refused to reopen appeal to reconsider rejection of Trade Practices case on basis of defective discovery - refusal of appeal about costs - appeal dismissed with costs - (ND). - LEGISLATION CITED: Supreme Court Rules
Trade Practices Act 1974 (Cwlth)CASES CITED: Autodesk Inc v Dyason [No 2] (1993) 176 CLR 300
Banque Commerciale SA en Liquidation v Akhil Holdings Pty Ltd (1990) 169 CLR 279
Coulton v Holcombe (1986) 162 CLR 1
National Australia Bank Ltd v KDS Construction Services Pty Ltd (in liq) (1987) 163 CLR 668
O'Brien v Komesaroff (1982) 150 CLR 310
University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481
Waltons Stores (Interstate) Ltd v Maher (1986) 5 NSWLR 407
Water Board v Moustakas (1988) 180 CLR 491
Wentworth v Woollahra Municipal Council (1982) 149 CLR 672DECISION: Application to reopen the appeal dismissed with costs.
THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40803/98
MASON P
PRIESTLEY JA
FITZGERALD JAThursday, 23 November 2000
BLACK v AUSTRALAND [NO 2]2 I would add this. I am not entirely convinced that it was common ground at trial that the respondent was not taking what Priestley JA describes as the Special Condition 24(d) point. But even if it was common ground, this would not have established a relevant cause of action. The appellants would still have had to assert and prove matters based upon estoppel (cf Waltons Stores (Interstate) Ltd v Maher (1986) 5 NSWLR 407 at 420) that would have given rise to a contractually-based claim stemming from events occurring after 7 days from service of the price list. Mere proof that the respondent served counterpart forms of contract on 27 February 1998 was never enough. Yet nothing further was asserted or established at trial that might have generated the right which the appellants now seek to claim. 3 PRIESTLEY JA: Judgment dismissing the appeal in this case was delivered on 24 February 2000. Before the court’s orders were entered the unsuccessful appellants moved the court for leave “to reopen the appeal”. They also asked for an oral hearing of their motion. The court directed that they put their submissions in writing. 4 A succession of written submissions followed in which the application to reopen was enlarged. In the end the appellants were asking for leave to reopen on all matters argued at the hearing of the appeal. For present purposes I will label these matters under the three heads, the contract point, the Trade Practices Act point and the new trial points. 5 The ground for reopening the contract point was that it had been decided against the appellants on a basis on which the appellants had not been heard and the respondent would not have been able to raise. The ground for reopening the other two points was that the respondent had not discovered documents which should have been discovered before the trial at first instance, and which if they had been available to the appellants would have been relevant to factual issues on which they lost. 6 In considering whether the appellants’ application has any merit I have found it useful to set out, in a form as summary as possible consistent with intelligibility, how the disputes between the parties arose and how they were dealt with at first instance and on appeal. 7 The appellants had been the owners of units in a strata title building on land at 11 Gerrale Street, Cronulla. The respondent bought the appellants’ units and all other units in the building with the intention of demolishing the building and then building a larger block of residential strata title units on the land at 11 Gerrale Street and on adjoining land. Special Condition 24 of the contracts by which the appellants sold their units to the respondent (which were entered into on 17 January 1997) gave them right of first refusal to buy units in the proposed new building. 8 The terms of Special Condition 24 were as follows:
1 MASON P: Subject to the following I agree with Priestley JA and Fitzgerald JA.9 The first appellant was Mr Black, a solicitor, who was also the solicitor for the other appellants in matters connected with their contracts of sale to the respondent. Later a firm called Forshaws Neill became the solicitors for the appellants including Mr Black. The appellants were sometimes referred to in correspondence as Vendors. The solicitors for the respondent were Messrs Colin Biggers and Paisley. Mr de Souza of that firm was in charge of the respondent’s conveyancing connected with the proposed development. 10 In April and May of 1997 Mr Black began to negotiate with Mr Kalaf, a Sales Manager for the respondent and with Mr de Souza for an amendment to Special Condition 24 to provide that the right of first refusal would be exercised by entering into an option to buy a unit instead of a contract to buy a unit. There were further discussions in August 1997 about the option amendment. In the later litigation, the appellants’ first claim, denied by the respondent, was that the negotiations to amend Special Condition 24 had reached the stage where a binding agreement had been made between the appellants and the respondent to amend the special condition in the manner asserted by Mr Black in his evidence at trial. 11 The date for settlement of the 17 January 1997 contracts was always contemplated as being 30 September 1997. Before then various differences occurred between the appellants and the respondent, with which the trial judge later dealt in his reasons, but which are not now, for the most part, relevant. One matter that is relevant, however, is that by letter dated 5 September 1997, Colin Biggers and Paisley wrote to Mr Black, referring to some of the contentious matters that had arisen but saying
“ right of first refusal
24. (a) The parties hereto acknowledge that it is proposed that the Purchaser will construct on the development site a 56 unit development (‘the proposed development’).
(b) The Purchaser is to give to the Vendor a right of first refusal to purchase a unit in the proposed development contemporaneously providing a similar right of first refusal to each of the other Vendors of a lot in the strata plan of which the property is comprised.
(c) The Purchaser shall serve on the Vendor a price list together with approximate details to the size, location, layout and finishes of the units in the proposed development.
(d) The Vendor or its nominee shall, within seven days, in conjunction with the other Vendors of units in the current strata plan or their nominees (‘the other Vendors’), be exclusively entitled to nominate a unit in the proposed development which the Vendor or its nominee intends to purchase (‘the nominated unit’).
(e) If the nominated unit has previously been nominated by one of the other Vendors, the Vendor shall have a further 2 business days of being notified of such other nomination to make a further nomination. If such further nomination has also been previously nominated by one of the other Vendors, the Vendor shall have a further 2 business days in which to make another nomination.
(f) The Purchaser shall serve a Contract for such unit on the Vendor.
(g) Should the Vendor not exchange Contracts with the Purchaser within seven days of service of such Contract, the Vendors right of first refusal shall lapse and the Purchaser shall be entitled to sell the nominated unit to another person. ”
12 The letter then went on to deal with the question of the option variation to Special Condition 24. On this the letter said:
“ As it appears that this matter is moving to an amicable resolution we do not propose, at this stage, to deal with any of the allegations made in your said letters, save to state that should the matter not move to an amicable resolution our client reserves the right to deal with all those allegations and that for the record none of the allegations made are admitted. ”
13 Another matter of some relevance is that by letter dated 9 September 1997 from the respondent to Mr Black (signed by Mr Kalaf as the respondent’s State Sales Manager - Medium Density), Mr Black was told that the preliminary price ranges for the units in the projected new building, which were said to be indicative ranges only, to be finalised just before the project’s release, were for a one bedroom unit $220-250,000, a two bedroom unit mid $300-early 400,000 and for a three bedroom unit mid $500-675,000. 14 The appellants completed the sales of their units to the respondent on 30 September 1997. Mr Black had not before that date responded to the invitation in Colin Biggers and Paisley’s letter of 5 September 1997 to submit a draft call option for their client’s consideration. Nor had he submitted any such draft before 13 January 1998, which is the next presently relevant date. 15 By letter dated 13 January 1998 Colin Biggers and Paisley wrote to Mr Black enclosing copies of a draft strata plan and a price list. The letter ended:
“ In regard to your client’s request to vary clause 24 of the Contract to provide for an Option instead of a Contract, our client has in principle agreed to such a variation. You might draft the Call Option and forward same to us for our client’s approval. At this stage the only firm instruction we hold is that the Option Fee will be 10% of the estimated purchase price of the unit and that the Option Fee will be non refundable. Once we have received from our client an indication of the purchase price of the new units we shall revert to you.
We await the draft Call Option in due course. ”
16 Amongst the prices in the price list were prices for four three bedroom units on level 6, unit 31, $639,000, unit 32, $624,500, unit 33 $337,950 and unit 34, $675,500. It was obvious, from the price list itself and more so in light of Mr Kalaf’s letter of 9 September 1997, that there was some mistake about unit 33. 17 Colin Biggers and Paisley faxed a letter dated 14 January 1998 (at about 3.19 pm on that day) to Mr Black saying that that changes had been made to the draft strata plan and price list served the previous day and that the amended documents would be forwarded to him next day. 18 The letter ended by saying:
“ Please take notice that service of these documents is to enable the Vendors to exercise their right of first refusal over the properties in the Development.
Would you please let us know whether your clients will be exercising such right within the time limitations allowed under their respective Contracts for Sale .”
19 There was a telephone conversation between Mr Black and Mr de Souza on 14 January 1998. At the trial they gave different accounts of what was said. 20 By hand written letter dated 14 January 1998, and headed “Re: Australand Holdings Pty Limited, 11 Gerrale Street. Right of First Refusal”, received by Colin Biggers and Paisley on 15 January 1998, Mr Black referred to their letter of 13 January 1998 and continued:
“ We look forward to your early advices as to whether any of your clients wish to take up their right of first refusal as referred to under the terms of the respective contracts. ”
21 On 15 January 1998 Colin Biggers and Paisley sent an amended page 3 of the draft strata plan and an amended price list to Mr Black. The price shown for unit 33 was $637,950. Argumentative correspondence followed in which (inter alia) a dispute emerged between Mr Black and the respondent about whether Mr Black’s letter was sent before or after he was told by the respondent of the mistake, and about whether Mr Black was entitled to a contract at the lower price. 22 Mr Black, by his letter dated 14 January 1998 was seeking to exercise the right of first refusal under Special Condition 24 in its unvaried form. If, as was later contended in the litigation, a binding agreement had been made between the appellants and the respondent before 14 January 1998 to vary the right of first refusal to purchase to a right of first refusal to obtain an option, then his letter was ineffective; alternatively, the way in which he sought to exercise his right could be taken as quite powerful evidence that he did not understand, at that stage, that a contractually binding variation to Special Condition 24 had been effected. The possible difficulty was recognised in a letter dated 19 January 1998 from Forshaws Neill to Colin Biggers and Paisley, in which, in the course of dealing with a number of matters, it was said “Our client has made his election”, which I take to be an assertion that Mr Black had had a right to elect between nominating the unit pursuant to a purchase right and nominating one pursuant to an option right and had elected for the former course. 23 Next, Mr Black on behalf of the appellants wrote letters, all dated 20 January 1998, to Colin Biggers and Paisley, identical except for the numbers and prices of the units, of which I reproduce the one referring to unit 29.
“ I advise that I select home unit 33 at the advertised price for the right of 1st Refusal on my home unit No 7/11 Gerrale St Cronulla.
Please issue a contract accordingly. ”
24 Argumentative correspondence continued, in which Mr Black’s claims about unit 33 were maintained as were the claims of all the appellants that they were entitled to options, and Colin Biggers and Paisley denied both sets of claims. 25 In one of these argumentative letters, from Forshaws Neill to Colin Biggers and Paisley, dated 17 February 1998, there was the following passage:
“ Be advised that I accept, on behalf of the former proprietor or his nominee, your offer served on 13.1.1998 with Price List and proposed new Strata Plan, pursuant to the Right of First Refusal contained in the Contract referred to above. Acceptance is upon the terms of the Right of First Refusal. The right of First Refusal was varied by agreement between Richard Black (for and on behalf of each proprietor) and Mr Peter Kalaf, for and on behalf of Australand Holdings Pty Limited.
The Variation relates to an Option Agreement on the following terms:
(a) Non refundable option fee of 10% of the purchase price of the new unit selected pursuant to the Right of First Refusal;
(b) to be credited against the purchase price and forming the deposit of 10% on exchange of contracts;
(c) the option to be assignable;
(d) the option fee to be deposited in an interest bearing account in the names of both parties, the interest to be divided equally between the parties on completion.
(e) The option to be exercised by the end of February, 1999.
Would you please provide an Option Agreement with the Contract attached.
In December, 1996 in order to faciliate (sic) the sale of No 11 Gerrale St, Cronulla to Australand Holdings Pty Limited, Mr Peter Kalaf generously offered a discount of 5% off the List Price, to Richard Black, who accepted for and on behalf of the relevant proprietors of the former SP578. You will be advised shortly, under separate cover, to which units the 5% discount should be credited. Mr Peter Kalaf’s offer is in writing and is for valuable consideration and cannot be withdrawn.
I confirm that pursuant to the Right of First Refusal, both parties are now bound by this Agreement.
The Unit selected is: 29.
The Price is: $409,950-00 ”
According to par 19 of the final form of the statement of claim in the later litigation, there were letters relating to 11 units in all, including unit 33.
26 On 27 February 1998 Colin Biggers and Paisley wrote a number of letters. One, to Forshaws Neill, principally concerned Mr Black’s claim to unit 33. It also contained the statement that neither Mr Black nor any other of the vendors of the units at 11 Gerrale Street had acquired from the respondent an option to acquire any of the units in the building to be constructed. This letter also said that Colin Biggers and Paisley had forwarded directly by way of service to Mr Black and to the other vendors “a Contract for Sale of Land prepared in accordance with Special Condition 24 of the Contracts for Sale of Land in terms of which our client acquired all the Strata Title units”. The Contracts of Sale forms there referred to were forwarded under cover of the other letters of 27 February 1998. These were separate letters to each of Mr Black and the other vendors, all in the following terms:
“ ... Our client [Mr Black] and all other proprietors have the right to options on the terms particularized in previous correspondence. This right to options was agreed to by Peter Kalaf on behalf of your client during conversations with our client in 1996 and 1997. It is also supported by consideration which was our client’s service in helping him put this deal together and later, in persuading Mr Day to withdraw the termination of his contract, as particularised above. Enclosed is copy of your firm’s letter dated 5.9.1997 which is self evident. If your client continues to resile from this agreement, our client instructs action will be taken to enforce this valuable right. Our client views your client’s refusal to now honour this agreement as being motivated by spite due to the separate dispute that has arisen over the price of unit 33.
... Enclosed is draft Option, as agreed. When the contracts are served in due course please ensure that they are attached to options ... ”
27 After 28 February 1998, Mr Black continued to maintain his entitlement to unit 33 at the price of $337,950 and the other vendors their rights to obtain options from the respondent, and the respondent continued to deny those claimed entitlements. This led to the appellants commencing proceedings by summons in the Equity Division, in April 1998, which later in an expanded form, went to trial before Einstein J. 28 The expert conveyancing evidence in the case, some of the argument before Einstein J, and the judge’s reasons, all demonstrate that the drafting of contracts for sale of strata title units before the strata title building is built can be beset with difficulties, even more so when it is proposed to exchange such contracts when the units are units in a strata plan still at the draft or proposed stage. Because of these difficulties it may well have been open to the appellants to argue when they received the 13 January 1998 letter with its draft strata plan and price list that it was too soon for the procedure of Special Condition 24 to be brought into operation. However, such a possibility was never raised by the appellants. So far as the first appellant was concerned, if such an argument were to be raised and to succeed, then he would have to forego his claim concerning unit 33. 29 At all events, the overall strategy adopted when the proceedings began in April involved assertions by the appellants: (1), that the service of the draft strata plan and the price list effectively (by way of Special Condition 24(c)) set the procedure under Special Condition 24 in motion; (2), that the appellants had thereafter effectively complied with Special Condition 24(d); (3), (i) in the case of the first appellant he had become entitled to receive a contract for unit 33, and (ii) all appellants had become entitled to receive options to enter into contracts for all units nominated; (4), that the respondent was in breach of its obligations under Special Condition 24(f); and (5), (in the case eventually asserted) that such breach was repudiatory. 30 In the summons as filed in April 1998 all appellants claimed specific performance of their alleged options to purchase units, including unit 33, and Mr Black, the first appellant also claimed specific performance of his alleged contract to purchase unit 33. 31 In their first statement of claim the case of the appellants (including Mr Black) based on Special Condition 24 was confined to one alleging that that condition had been varied in a contractually enforceable way to change their rights under it from rights of first refusal to purchase units in the proposed development to rights to acquire options to purchase units in the proposed development. However, Mr Black also additionally and separately alleged that he had duly nominated unit 33 in the proposed development, which he intended to purchase pursuant to his right of first refusal under clause 24; he was thus claiming to be entitled to specific performance of an option and also a contract. 32 The trial before Einstein J began on 23 July 1998. On 7 July 1998 the appellants filed an amended summons claiming (for the first time so far as I can see), alternatively to the option claim, an order that the respondent “specifically perform and carry into effect the contracts as required by Special Condition 24 of the various Contracts for the Sale of Land entered into between” the appellants and the respondent “on or about 17 January 1997”. 33 Then, on 23 July 1998, the first day of the hearing, the appellants were granted leave to amend their statement of claim by adding an alternative claim to their option claims. Put simply, this claim was that if the option case failed then the appellants had done what was necessary under the (on this hypothesis) unvaried Special Condition 24 for them to have validly exercised their rights of first refusal to purchase. (It was not pleaded as simply as this in the amended statement of claim.) 34 The hearing before Einstein J extended over eight days. In thorough and extensive reasons the trial judge first stated the issues litigated before him. These were (1) the option case, (2) an estoppel case - that the respondent made representations to the appellants that Special Condition 24 would be amended and was thus estopped from denying the existence of a contract on the terms set out in Colin Biggers and Paisley’s letter dated 5 September 1997; the representations relied upon were allegedly made in conversations in May and August 1997 - (3) a Trade Practices case - based on the respondent’s alleged representation that it would vary Special Condition 24 to provide for an option agreement in substitution for a contract - (4) Mr Black’s unit 33 claim, (5) an alternative case to that relied on for issue (1) to the general effect that if the appellants failed on their option claim they had nevertheless done all that was necessary to succeed on the claim under Special Condition 24 in its form in the contracts of 17 January 1997 and (6) a repudiation case, based on a contention that the draft contracts served on 27 February 1998 were in a form demonstrating that their service was a breach of contract. 35 The trial judge found against the appellants on all six issues. Not all of them were again argued in the appeal, but as they are in some ways inter-related, I will briefly note what the trial judge said in regard to each of them. 36 On the option claim, the trial judge concluded that no binding contractual agreement had ever been made. There were a number of distinct grounds for this conclusion. One depended upon his acceptance of Mr de Souza’s and Mr Kalaf’s evidence in preference to that of Mr Black in regard to the conversations Mr Black was relying on as having made the contractual variation to Special Condition 24. Quite apart from that, and leaving what was said between the parties out of account, the written materials were also, in the trial judge’s opinion, quite sufficient to show that no contractual arrangement for an option had ever been reached. In this I agree with him. There was no stronger support for the appellants’ claim than Colin Biggers and Paisley’s letter of 5 September 1997. I agree with the trial judge’s analysis of this letter as not being evidence of a concluded contractual variation. It was an indication that the respondent would consider the terms of a draft option to be submitted by Mr Black, and that if it found them suitable would agree to them. This meant that the appellants must fail on the first issue. The same finding also meant that both the estoppel and Trade Practices cases must fail. 37 As to issue (4), Mr Black’s unit 33 case, the trial judge found that before any contract was entered into, the mistake in the price list was identified and brought to the attention of Mr Black. The trial judge did not accept Mr Black’s evidence about the timing of the mistake being brought to his attention. 38 One aspect of Mr Black’s evidence which may well have influenced the trial judge in not accepting it in regard to his unit 33 claim appears in the following extract from his cross-examination:
“ We refer to the Contract for Sale of Land dated 17 January 1997 in terms of which our client, Australand Holdings Limited purchased from you unit 7 at 11 Gerrale Street, Cronulla (the ‘Contract’). In terms of clause 24 of the Contract a right of first refusal was granted to you to purchase a unit in the proposed development at 11 Gerrale Street, Cronulla.
In terms of the said clause 24 we enclose by way of service a Contract prepared in terms of the said clause 24, which Contract reflects our client as the vendor and yourself as purchaser. You may delete your name and address as purchaser and insert the name and address of your nominee as purchaser in your place.
We are instructed to draw your attention to the provisions of sub-paragraph (g) of clause 24 which provides that if you fail to exchange Contracts within 7 days of date of service of the Contract your right of first refusal shall lapse and our client will be entitled to sell the unit to another person.
You might therefore ensure that should you wish to proceed to exchange of Contracts and acquire the strata title unit in the proposed strata plan, Contracts are exchanged within the time limitation period provided for. ”
39 Although the subject matter of this cross-examination was not directly connected with the main issue in Mr Black’s case, and so could not be conclusive of it, it is easy to understand that the impression made by Mr Black’s answers could have deeply affected the trial judge’s assessment of Mr Black’s reliability. 40 The appellants failed on issues 5 and 6 for reasons I will describe when outlining the course of the argument in this court in the appellants’ appeal against Einstein J’s judgment against them. 41 On opening the appeal, counsel for the appellants first handed up some typed notes to help the court follow his oral submissions. The notes said the appeal raised three issues;
“ Q. As you examined this price list and the draft strata plan it became apparent to you, did it not, that unit 33 just stood out as being exceptionally cheap compared to the other units in the block?
A. They are your words. They are not mine.
Q. I am asking you wasn’t that the case, Mr Black, that you as you looked at this document - it was apparent to you that unit 33 was exceptionally cheap compared to the other units in the block?
A. I would call it advantageously priced - attractively priced.
Q. Would you say it was obvious to you it was the pick of the bunch?
A. Yes.
Q. Because it was the same size both in terms of square meterage and in terms of number of bedrooms as other units on the same level but some $300,000 cheaper?
A. Yes, I noticed that.
Q. And you could see nothing on the plan to suggest why it would be $300,000 cheaper than the other units on the same floor, could you?
A. Just that it was a north west aspect, which would indicate it might be cheaper.
HIS HONOUR: Q. Was there actually a view on that level or not?
A. Yes.
Q. What of?
A. I think it looks towards the west and towards the north, so towards the City towards the west.
Q. It was obvious to you that it had a north-west aspect, notwithstanding the notation in the price list of ‘north/north’ aspects?
A. Yes, I checked the strata plan. And I had a unit myself in the same location previously, so to me it was a north-west aspect.
Q. And the north-west aspect, you knew at the time was a more desirable aspect that the south-west aspect?
A. No I don’t know that. South-west, you would look back over the bay.
Q. Well you nevertheless would have looked at the other prices and seen that in every instance on the 8th floor, the 7th floor and the 5th floor, that north-west was more expensive than south-west?
A. No I didn’t notice that.
Q. You didn’t notice?
A. No.
Q. Well apart from the north-west aspect that you just referred to, was there anything else at all that you thought might explain why this unit would be so much cheaper than all the other units on that floor; or indeed, on the floor below?
A. No.
Q. Must have raised some questions in your mind, did it?
A. What sort of questions do you mean?
Q. Did it raise any questions in your mind?
A. Yes. This is an attractively priced unit.
Q. Did it occur to you perhaps that may be an error -
OBJECTION. QUESTION ALLOWED.
A. Do you mean a mistake?
Q. Yes an error. Mistake?
A. I don’t - when it comes to real estate, I don’t deal in mistakes, I deal with certainties, I deal in facts, I deal in sure things. Otherwise I speculate on the Stock Exchange. To me this was an offer.
Q. On 14 January, as you have stated Mr Black, did it occur to you that it might be a mistake?
A. A. No, because it’s not like we’re talking that there’s a nought missing and we’re talking 37,900 and 50, we’re still talking a six digit figure. It’s attractively priced, I concede that, but the other units are irradically priced. If you look at the difference between number 1 and number 4, number 1 is a one bedroom unit, number 4 is a two bedroom unit, and they are - there is only $1700 difference between them.
HIS HONOUR: Q. There was some $300,000 here between units on the same floor?
A. Yes. That’s correct.
GREENWOOD: Q. Do you honestly say to this Court that on 14 January it did not occur to you that this might be a mistake?
A. No. As I said, I deal in certainties, I don’t deal in guesses or hunches, or speculation, or intuition when it comes to things like this.
*Q. I want to be very careful that your answer is properly recorded: I asked you, you do you say honestly to this Court that it did not occur to you on 14 January that this might be a mistake?
A. Well I would suggest to you, when you do have a client who has a criminal charge, do you ever ask him is he guilty; there are certain questions you don’t ask.
*Q. What do you mean by that Mr Black?
A. This is an offer, and it’s an offer open for seven days.
HIS HONOUR: You asked about 14 January, did you mean 13 or 14?
GREENWOOD: No, 14. The document arrived on the -
HIS HONOUR: I see
QUESTIONS ABOVE MARKED WITH AN * TOGETHER WITH THEIR ANSWERS READ BACK TO THE COURT.
GREENWOOD: Q. So do you say Mr Black that it did not occur to you that this might be a mistake, or do you say you just didn’t ask any questions about it?
A. No, I’m no, it ... Yes it’s quite possible.
Q. It’s quite possible that you thought it was a mistake is it not?
OBJECTION. QUESTION ALLOWED.
Q. That is what you are saying is it Mr Black, it’s quite possible?
A. No it’s quite possible that I - that that thought went through my mind. ”42 Counsel then explained that in light of the trial judge’s factual findings, this court would not be asked to say that his dismissals of the unit 33 and option claims were wrong. In regard to those claims, the appellants were seeking a new trial on the basis that an incomplete discovery by the respondent had prevented their having access to relevant materials. If the appellants could not get a new trial on that basis, it was agreed that the dismissals of the unit 33 and option claims must stand. 43 The main part of the argument was then directed to the question whether the judge had been wrong in holding against the appellants on their alternative claim of entitlement to purchase rights under Special Condition 24. In understanding what issues were raised when the pleadings concerning the alternative claims were complete, it is helpful first to see how the trial judge understood the matter. In his reasons he said:
“ (i) Whether the Respondent by its conduct on or after 27 2 98 repudiated the contract between the parties, entitling the Appellants in the events which have happened to damages;
(ii) whether, on the findings made by learned Trial Judge the Appellants are entitled to damages for contravention of the TPA section 52;
(iii) alternatively to (i) and (ii), whether there should be a new trial. ”
44 Some of the allegations necessary for the statement of this new cause of action were already in the statement of claim at the time of the amendment. These were the allegations of the terms of Special Condition 24 (part of clause 14) and the allegation in paragraph 18 that by the respondent’s solicitors’ letter of 13 January 1998 the appellants were served with a price list pursuant to Special Condition 24. Paragraph 21 then pleaded the respondent’s solicitors’ letters of 27 February 1998 which were sent to the appellants and which enclosed contracts for the sale of land (par 26 above). 45 The next relevant paragraph in the amended statement of claim was the first of the amending paragraphs specifically making the alternative claim that the appellants were entitled to receive Contracts to purchase units. This was par 24A. It said:
“ On the first day of the final hearing the plaintiffs were granted leave to further amend the Amended Statement of Claim to assert that upon its proper construction, special condition 24(f) obliged the defendant, once the procedures stipulated in subclauses (c), (d) and (e) had been completed, [1] and importantly, once the strata plan for the new development had been registered, to serve upon such of the plaintiffs as had exercised their subclause (d) rights of nomination, a contract for the sale of land,
(a) containing usual terms, and
(b) containing terms which were fair and reasonable within the Sydney Real Estate market for residential strata units in 1997 and 1998.
The new cause of action claimed that the defendant had breached special condition 24:
(i) by serving the contract upon the plaintiffs prematurely;
(ii) by demanding that the plaintiffs exchange the contracts when the plaintiffs were not obliged to do so;
(iii) by serving the contract in a form which was inconsistent with the requirements of clause 24 in that it contained unusual terms or terms not fair and reasonable in the Sydney Real Estate Market for residential strata units in 1997 and 1998. ”
46 Paragraph 24AA and its particulars were in large part a restatement in different terms of paragraph 24A and its particulars. An allegation that the respondent served the draft contracts prematurely was added. 47 In its defence, in answer to paragraph 14, the respondent admitted that Special Condition 24 contained rights of first refusal, sought leave to refer to that special condition as if it were set out in the defence, and otherwise denied the paragraph. 48 In answer to paragraph 18, the respondent admitted the service of various documents by way of the letter dated 13 January 1998, said that what was provided was provided pursuant to Special Condition 24, and otherwise denied the paragraph. 49 In answer to paragraph 24A the respondent admitted that it denied that each appellant had any interest in any of the lots in the proposed development, denied that it had breached Special Condition 24 and otherwise did not admit paragraph 24A. 50 In answer to paragraph 24AA, the respondent denied the paragraph. 51 The appellants’ allegation in paragraph 24A that the respondent had denied that each appellant had a right to receive a contract pursuant to Special condition 24 necessarily involved the prior but unstated allegation that each appellant had done what was necessary pursuant to Special Condition 24 to bring into existence the right to receive a contract pursuant to that condition. The trial judge had assumed that such an allegation would be specifically pleaded. The pleading was defective without it, unless it be treated as necessarily implicit in paragraph 24A (which I think is the best way of treating it: cf Supreme Court Rules Pt 15 r 11). The respondent’s non admission of paragraph 24A in its further amended defence left the onus on the appellants to prove they had done what was necessary to bring their alleged rights to receive contracts into existence. 52 On the view taken by this court in the appeal, the appellants could not discharge this onus. This was because the letters written to the respondent’s solicitors on 20 January 1998 (see par 23 above) did not “nominate a unit in the proposed development which the Vendor intends to purchase”(the words of Special Condition 24(d)), or, in the terms used by the trial judge when granting the leave to amend referred to in par 43 above, the procedure stipulated in paragraph (d) of Special Condition 24 had not been completed. Once seven days had passed from receipt of the price list without nomination pursuant to paragraph (d), the appellants’ right of first refusal lapsed. It no longer existed. It had been a right to nominate etc in the seven days following service of the par (c) price list. A seven day right.
“ Alternatively, in breach of Special Condition 24 of the Sale Contracts, the Defendant has denied that each plaintiff has a right to receive a Contract for the Sale of Land pursuant to the provisions of Special Condition 24(f) and has denied that each Plaintiff has an interest in any of the lots in the proposed development. ”
Particulars of par 24A were given. These asserted: (a), the respondent was in breach of contract in requiring the appellants, if they wished to implement their exercise of their rights of first refusal, to exchange contracts in the precise form and terms of the draft contracts served by the respondent on the appellants on or about 27 February 1998; this was said to evince an intention not to be bound by the contract and to deny the appellants’ rights under clause 24; (b) that the terms of the draft contracts served were unusual or not fair and reasonable and likewise evinced an intention not to be bound by the contract and to assert rights inconsistent with it.
53 The trial judge noticed this non carrying out by the appellants of paragraph (d), which meant that they had not discharged their onus to show that they had done what they needed to do to bring their first rights of refusal into operation. He said that the forms of contract for sale submitted by the respondent on 27 February 1998 to the appellants “amounted in effect to an offer made by the defendant, which offer it seems to me, the defendant was not at that point in time obliged to make”. By that time, the trial judge continued, “the defendant was under no legal obligation imposed by Special Condition 24(f) to serve such contracts. The plaintiff had failed to comply with Special Conditions 24(d) and (e)”. 54 In this court’s decision on the appeal, Fitzgerald JA reached the same conclusion as that noted by the trial judge. In the appellants’ written submissions in this reopening application, arguments were put forward against the correctness of this conclusion. I do not agree with those arguments. I agreed, and still agree, with the opinions of Einstein J and Fitzgerald JA on the point. However, it is here that the appellants’ first ground for seeking to reopen the hearing of the appeal takes its start. The trial judge, after stating the opinion set out in par 53, did not proceed to decide the case on that basis, for he immediately continued:55 The trial judge then went on to consider the arguments for and against the appellants’ claim that the sale contracts served upon them on 27 February 1998 were not contracts that complied with Special Condition 24(f). In his view the appellants did not succeed in making out any of the grounds upon which they contended that the contracts served on them did not comply with that special condition. They therefore failed in their proceedings, even without the point being taken against them that they had not done what they had needed to do under Special Condition 24. 56 Naturally enough, in the oral hearing of the appeal in this court counsel for the appellants sought to show that the trial judge had been wrong in rejecting all of the arguments claiming non compliance by the respondent with Special Condition 24. In his submissions in this court he assumed that the respondent would not take the point that the appellants themselves had not complied with Special Condition 24 and had never acquired any rights under it. That point, however, was raised in the course of the respondent’s argument. The relevant passage from the transcript, (reproduced in its raw form), of argument is as follows:
“ The defendant concedes that the correct analysis of the events which happened is to be regarded as a waiver by the defendant of the proper compliance by the plaintiffs with special conditions 24(d) and (e). The defendant conceded that by its conduct in serving contracts on 27 February, it signified that it was prepared to act upon the basis that the handwritten nominations, for all their patent defects, would be taken by the defendant as satisfying the plaintiffs’ obligations to nominate pursuant to special conditions 24(e) and (f).
In those circumstances the only remaining issue concerns the plaintiffs’ claim that the defendant’s obligation upon the proper construction of the Sale Contracts was to serve upon such of the plaintiffs as had exercised their subclause (d) Rights of Nomination, a Contract for the Sale of Land:
(a) Containing usual terms; and
(b) Containing terms which were fair and reasonable within the Sydney Real Estate Market for residential strata units in 1997 and 1998. ”
57 I mention here that in my view this part of the respondent’s submissions, although not crystal clear, should have put the appellants on notice that the court could consider that the proposition the appellants were thinking was not in issue in the appeal, was indeed in issue. Nevertheless, nothing was said about it by the appellants in their reply. 58 However, as earlier mentioned, promptly after delivery of the court’s reasons, the appellants moved the court for a reopening of the hearing of the appeal, so that they could submit first that it was not open to the court to decide the case on the basis that it did or, alternatively so that they could be heard in regard to the proposition upon which the court decided the case. 59 In their written submissions it was asserted that both the trial and appeal were conducted on the basis that the appellants had validly nominated units in the proposed development and were therefore entitled to receive contracts for sale pursuant to Special Condition 24(f). 60 In regard to the appeal, in support of this assertion, the submissions referred to counsel’s statement early in his argument in the appeal that there was no question before the trial judge and none in the appeal that the nomination referred to in Special Condition 24(d) occurred and that that was not in issue. At that stage in his submissions, counsel had referred the court to the passage from the trial judge’s reasons set out at par 54 above. The written submissions also referred the court to remarks made by members of the court at that stage of the appeal hearing to the effect that the court understood it to be common ground that the appellants had exercised whatever right they had and had become entitled to contracts of sale and purchase. The written submissions also referred the court to the following passage in the oral submissions by counsel for the respondent, that
“ MASON P: If for any reason the contract that you proffered was non conforming, do you accept that the consequences would be that the right of first refusal did not lapse, 24G.
GREENWOOD: I’m just troubled by the notion and that there was no obligation to serve the contracts, but it was treated as being an election within 24 at the time as to whether or not that could mean that now the respondent could say why we chose to treat it at the time that way. And hitherto forthwith we’ve taken that view but we’re not bound to maintain that position at all.
Because you were purporting to insist upon a right of first refusal to an option, the right of first refusal was never properly exercised and so no obligation arises on the respondent at all.
MASON P: On that basis they nominated a unit but whether because of the vendor’s breach or the purchaser’s failure to exchange the contracts, the right of first refusal was not exercised, at least then.
GREENWOOD: Not because of the vendor’s breach but because of the absence of electing a unit to purchase pursuant to a contract, rather than pursuant to an option. The nominations that were submitted were submitted on the basis that they enter into an option.
MASON P: Yes you’re right, even the nomination was a very contingent nomination.
GREENWOOD: Yes.
MASON P: Well what follows from all of that?
GREENWOOD: Well that there was no obligation to serve a contract at all, any contract.
MASON P: And what follows from that? There was no breach that could be converted into any remedy now.
GREENWOOD: Yes now. What is recorded by his Honour was the approach that was taken at the hearing of saying that what happened was that that nomination was nevertheless accepted as being a nomination for the purposes of 24 and so contracts could issue but in the scenario that your Honour’s putting to me and that is we wind back the clock and start again, there’s no need for that concession then to be made and so that would be --
MASON P: What page were you reading from?
GREENWOOD: At 96. At the top of the page it starts ‘The defendant is not obliged to make the offer’. ”
61 This statement by the respondent’s counsel was, however, made before the exchange between the bench and respondent’s counsel set out at par 56 above. Further, it does not by any means unequivocally indicate that the respondent had bound itself not to take the point that the appellants had never complied with Special Condition 24(d). 62 Although I can understand that until the exchange set out at par 56 occurred, the appellants’ counsel had ground for thinking no argument was going to be put against his clients concerning their exercise of the right to nominate pursuant to Special Condition 24(d), I am also of opinion that the exchange referred to was quite sufficient to alert the appellants to the possibility that the court might treat the matter as one which it could consider, notwithstanding the previous attitude of the parties. 63 In regard to the trial, the appellants, in seeking to show that the issue had indeed there been common ground, first referred to a letter of the respondent’s solicitors dated 5 February 1998. This letter said, (paragraph numbers added for easy reference):
“ the position that was adopted by the respondent was that to the extent that an election had been made or nomination had been made in accordance with the right of first refusal, even though it wasn’t done properly it was accepted by the respondent that it would nevertheless treat the nomination as being in accordance with the right of first refusal and so serve the contracts pursuant to 24(f). ”
64 The appellants rely on the sentence in paragraph 4 which starts “The only rights ...”. This is the only part of the letter relevant to the matter presently being considered. The reference to the price in paragraph 5 makes it quite clear that that paragraph is dealing with the first appellant’s claim to be entitled to a contract to purchase unit 33. No doubt it suited the respondent to get an early binding contract to sell unit 33 at its own price. 65 The only other particular matter referred to from the trial at first instance, in support of the appellants’ “common ground” submission was evidence of Mr De Souza, described as a concession in the submissions, in cross-examination, “that he treated the nominations as effective”. 66 Mr de Souza’s cross-examination took place on 4 August 1998, the sixth day of the hearing. The following passages from the transcript are relevant to the point under consideration:
“ 1. We refer to your letter 19 January 1998.
2. We are instructed that the statement made in the first paragraph of your said letter of reply regarding Mr de Souza is not correct. The mistake in the price list was brought to your client’s attention prior to your client nominating unit 33 in terms of clause 24 of the Contract for Sale of Land between Richard Black and our client.
3. Your client has no basis on which to lodge a caveat and has no interest in unit 33. Any action taken by your client to lodge a caveat will be dealt with in the appropriate fashion and an order for damages will be sought against your client at the conclusion of proceedings brought to remove the caveat.
4. Neither your client nor any other vendor of the units at 11 Gerrale Street has any right to an option to acquire any units in the building to be constructed on 11 Gerrale Street by our client. The only rights which exist are the rights of first refusal as contained in clause 24 of the various Contracts for Sale of Land in terms of which our client acquired all the strata units situated at 11 Gerrale Street, Cronulla..
5. Our client will in due course serve a Contract as provided for in clause 24 of the said Contract, in terms of which our client acquired the unit from your client. The purchase price contained in the said Contract will be the correct price, namely $637,950 less the agreed discount of 2½%. Your client will then have seven days after service of the Contract to exchange Contracts. Should your client fail to exchange Contracts the remaining provisions of sub-paragraph (g) of clause 24 will be relied on by our client.
6. In regard to the matters contained in the ultimate paragraph of your letter under reply we would refer you to your client’s letter to our firm date dated 22 January 1998. ”
67 The cross-examination then moved on to the facts concerning the alleged option agreement and then to the contents of the draft contracts which were served which the appellants were seeking to show did not fall within Special Condition 24. 68 As I see the appellants’ basic submission in its present motion, it falls into three parts. These are that: (i) this court could not depart from what the appellants claimed was common ground at the trial and at the hearing of the appeal; (ii) alternatively the respondent should not be allowed to depart from that claimed common ground; and (iii) in any event, the appellants should be heard on parts (i) and (ii) of the submission. 69 Before dealing with the foregoing arguments of the appellants, I need to consider just what it was that was common ground at the trial. The appellants’ contention in this respect must be either that they had exercised their rights of first refusal to purchase pursuant to Special Condition 24 or, if they had not exercised them, the respondent had in some way irrevocably bound itself not to say that the appellants had not exercised rights pursuant to the special condition. For reasons I have indicated earlier, I do not think that either of these positions was conceded on the pleadings. Nor can I see where either of them came about in the course of the trial. No attention seems to have been paid to the matter until, apparently, it was raised by the trial judge in the course of submissions. This is illustrated by the inconsistency in the answers given by Mr de Souza in the cross-examination reproduced in par 66 above. In the fourth answer reproduced, he seems to be pointing out, although it is not particularly clear, that the appellants’ nominating letters of 20 January 1998 were not in accordance with Special Condition 24(d). Later when asked about why the respondent was acting speedily in serving draft contracts on 27 February 1998, his answers can be read as indicating he was of opinion that the respondent was fulfilling an obligation under Special Condition 24 or as indicating no more than that the respondent wanted to put the units upon the market and wanted to have any question of first refusal rights out of the way. From a practical point of view the respondent wanted to start selling its units off the plan; if it ignored the claims by the appellants then litigation might result; if any of the appellants was prepared to go ahead and buy at the prices listed, then it would be more convenient and quicker to sell to those buyers than to treat their rights as lapsed and wait for other buyers to take up the units. Counsel for the appellants, rightly as I see it, showed by a question he asked that he understood the answers on which I base the above comments to be referring to “the commercial imperative”. 70 A little later, if I read the cross-examination correctly, Mr de Souza said he did not treat “the letters of 20 January ... as an effective nomination of units in the proposed development as it then stood as contemplated by the clause ...”. A little later again, Mr de Souza agreed that he “treated those nominations as being effective...”. 71 It seems to me that it must have been this last statement that the respondent’s counsel was referring to when, as noted by the trial judge, he conceded that the correct analysis of the events was to be regarded as a waiver by the defendant of the proper compliance by the plaintiffs with Special Conditions 24(d) and (e) and further conceded that by its conduct in serving the draft contracts on 27 February signified it was prepared to act on the basis that the handwritten nominations for all their patent defects would be taken by the respondent as satisfying the plaintiffs’ obligations to nominate pursuant to Special Conditions 24(d) and (f). 72 The critical matter underlying this situation was that what I have earlier called the seven day right no longer existed at the time of the conduct relied upon by the appellants in supporting its common ground submission. That meant that anything done by the respondent after the seven day right had come to an end constituted a new step by it, either by way of offer or representation. That offer or representation was that it was prepared to treat the nominations of 20 January 1998 as if they had been made properly pursuant to Special Condition 24(d). If viewed as an offer, it was rejected by the appellants at all times by their explicit conduct at least until the amendment of their summons on 7 July 1998. Similarly, if looked at as a representation by the respondent, the appellants’ conduct shows that it was not relied upon, until possibly the amendment to the summons on 7 July 1998. The statement of claim itself was not amended until the beginning of the trial, sixteen days later, and still, the first point taken was that the appellants were entitled to options not contracts. Any reliance by the appellants on the previously rejected representation was conditional only. 73 In these circumstances it seems to me that what became common ground at the trial was that the respondent was not taking the point that the appellants had not complied with Special Condition 24(d). It was content to argue the case on the footing that it had made lawfully acceptable offers to the appellants which the appellants were wrong in saying did not comply with the obligations that the respondent had had if the machinery of Special Condition 24 had been effectively put into motion by the appellants. 74 The distinction between what in my view became common ground during the trial and what the respondent asserts was the common ground, is important. On the basis of what the appellants said was the common ground, they submitted the respondent could not or should not be allowed to depart from it, because they might have conducted the case differently at trial had they known the respondent was not bound to what position. When invited by the court to say in what way the case would have been conducted differently it was said that evidence and cross-examination would have been directed to establishing equitable estoppel and waiver as well as matters of reliance, prejudice and other considerations. The only particular matter asserted, in addition to those generalities was that
“ Q. ... Do you recall on 20 January, some seven days after the date of your letter of 13 January, you received that correspondence from Mr Black?
A. That is correct.
Q. You understood this to be nominations contemplated by clause 24(d), didn’t you?
A. In part.
Q. When you say in part, you mean because there are nine nominations there which related to nine unitholders. Is that what you meant?
A. No, what I meant was clause (d) says is that the vendors or its nominees shall be exclusively entitled to nominate a unit in the proposed development which the vendor proposed to purchase. It does that and it goes on to say other things. ”
(Mr De Souza was then asked some questions about his preparation of the contracts.)
“ Q. You sent them out on 27 February 1998, didn’t you?
A. I gave the contract to Mr Suchar. I actually completed the particulars of each of the vendors and Mr Suchar sent them to Mr Black.
Q. You gave him directions to send them out on 21 February?
A. I gave him directions to send them out as soon as possible.
Q. What was the rush?
A. Under the terms of special condition 24 vendors have a time period in which to exchange contracts.
Q.. Pausing there --
HIS HONOUR: You have to allow the witness to finish his answer
WITNESS: Special condition 24(g) gave the vendors seven days after service of the contract, after which the right of first refusal would lapse. Australand wanted the property put to the market as quickly as possible. This procedure had to be gone through first.
KING: Q. Did you give consideration at that time to how clause 24 was to operate unamended by any discussion you had or Mr Kalaf had with Mr Black?
A. Yes.
Q. Is it clause 24(g) you say that is the critical clause that determined when those contracts should be sent out?
A. No.
Q. What was it in clause 24 do you say that required you to act with the haste that you have just mentioned?
OBJECTION. DISALLOWED.
Q. Was there anything in clause 24 that required you to act quickly, do you say?
A. Clause 24 allowed the vendors a right to buy units in the proposed development before they could be offered to anyone else, being a right of first refusal. We wanted to be able to offer the units, Australand, to the public.
HIS HONOUR: Q. You are being asked a different question: Not what you wanted to do, what your client wanted to do, whether in your opinion there was anything in clause 24 that required the vendor to act with haste?
A. No.
Q. The answer is no, is it?
A. No.
KING: Q. In sending out the contracts on 27 February you were having regard to what your instructions were as to the commercial imperative which you have just identified. Is that right?
A. Yes.
Q. Is it correct then that it was your understanding that the documents that were sent out on 27 February, the contracts for sale - and they have been tendered in this Court and if you want to have a look at them please ask - was the compliance by the defendant with the requirement that he give a contract to the unitholders?
A. Yes.
Q. Would that be clause 24(f)?
A. Yes.
Q. That imposes an obligation, does it not?
A. Yes.
Q. Is it not fair to say therefore you treated the letters of 20 January sent by the solicitor for the plaintiff to Mr Black as an effective nomination of units in a proposed development as it then stood as contemplated by the clause?
A. Would you repeat the question?
QUESTION READ BY COURT REPORTER
A. No.
Q. Why would you serve contracts if there had been no nomination?
A. because Mr Black purported to nominate units. He did nominate units but, in terms of the variation.
Q. I want to understand that last answer. You say he did nominate units?
A. Yes he did.
Q. First you said he nominated them in part?
A. No, I said in part of the document he has purported to nominate a unit. Then he goes on to say the right of first refusal has been varied. The best interpretation of the document is a variation and if you take a variation I was serving contracts on Mr Black taking into account that interpretation of what had been served on us.
Q. That was the interpretation you adopted, was it not?
A. No, the interpretation I was assuming Mr Black had adopted and I was taking account of the fact if that was his interpretation of what he had done we were happy to proceed on this basis.
Q. You were doing this out of the goodness of your heart, were you?
A. No.
Q. You were doing it because you thought, and you had advised your client to this effect, that your client had an obligation to serve those contracts?
OBJECTION. DISALLOWED.
Q. I want to suggest to you not only did you appreciate --
QUESTION REJECTED.
Q. Firstly you appreciated that Mr Black on behalf of the plaintiffs was nominating units in a proposed development as contemplated by clause 24?
A. He was proposing to do that.
Q. And you treated those nominations as being effective, did you not?
A. Yes.
Q. That is why you got instructions from your client to send off contracts?
A. Yes.
Q. And you sent those off on 27 February?
A. Yes. ”75 There may have been some force in this submission if there had been any possibility of establishing equitable estoppel or a relevant waiver; but on the basis of what I see as having become common ground in the course of the trial, namely that the respondent was not going to take the Special Condition 24(d) point, I cannot see any basis for any estoppel that would help the appellants nor of any waiver binding upon the respondent. I do not think any estoppel claim could get off the ground unless there was some evidence upon which it could be found that the respondent had represented to the appellants that it considered that the letters of 20 January 1998 validly complied with Special Condition 24(d) and that the appellants had relied on that representation. None of the evidence of what happened before the trial could in my opinion justify a finding of any such representation, nor (if it is relevant) did what became common ground at the trial amount to or admit any such representation. 76 I therefore do not think that the respondent had legally bound itself not to take the Special Condition 24(d) point at trial nor that any evidence could have changed the position. Had the respondent sought to take the point at some stage during the trial after letting the trial proceed until then on the footing that it did, it would at best have been, from the appellants’ point of view, a matter for the trial judge’s discretion, which if he had exercised it in favour of the respondent, would no doubt have made it necessary for him to consider whether some costs order should be made in the appellants’ favour as a consequence. 77 Having reached this point, I return to the first of the three parts of the appellants’ submission mentioned in par 68. In my view there was power in the trial court, had the respondent applied to argue the Special Condition 24(d) point, to grant the application. This court has the same power on the appeal, pursuant to s 75A of the Supreme Court Act 1970 (and see Coulton v Holcombe (1986) 162 CLR 1 at 6-7). In my opinion it was within the power of this court to entertain the argument on which the case was decided. 78 As to the second part of the submission, Coulton v Holcombe again needs to be consulted. In that case the High Court decided that this court had had the power to allow a new ground of appeal to be added which had not been argued at first instance, but had been wrong in exercising discretion to permit the amendment. In joint reasons, Gibbs CJ and Wilson, Brennan and Dawson JJ stated the general position as follows:
“ It would have been appropriate to prove from Mr Black, the nature of his belief and the reasonableness of it at the relevant times, that the respondent had reported to him and the other [appellants] that it was treating the Right of First Refusal as remaining valid and effective notwithstanding the allegedly defective nomination and that he Mr Black relied upon the representation made to him to the detriment of the [appellants]. ”
79 Immediately following that passage however, the four judges cited (at 8) a passage from reasons of Mason J in O’Brien v Komesaroff (1982) 150 CLR 310 at 319 as follows:
“ To say that an appeal is by way of rehearing does n to mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this Court has firmly maintained the principle that the point cannot be taken afterwards. ” (at 7-8)
80 They also referred (again at 8) to what had been said in University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481 at 483:
“ In some cases where a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided ... However, this is not such a case. The facts are not admitted nor are they beyond controversy.
The consequence is that the appellants’ case fails at the threshold. They cannot argue this point on appeal; it was not pleaded by them nor was it made an issue by the conduct of the parties at the trial. ”
81 The question raised by the second part of the appellants’ main submission is, should this court have acted on the Special Condition 24(d) point? It seems to me to follow from reasons I have earlier given that the case did not fall within the general rule stated in Coulton because in my opinion had the point been taken in the court below no evidence could have been given which by any possibility could have prevented the point from succeeding. Once the appellants had failed to make their nomination to purchase in terms of Special Condition 24(d) and the time within which those nominations could have been made had passed, the seven day right was at an end; neither by estoppel nor waiver could it ever afterwards be said to have been exercised; only by agreement or by the kind of estoppel earlier mentioned, for which there was no basis here, could it have been relied on. 82 There is still the question of fairness to be considered in respect of the second part of the submission. Although, in my view, the court had the power to entertain the argument and although again in my view, I do not see any possibility of any evidence overcoming the ending of the appellants’ first refusal right when its seven day time span was up, I think the appellants’ submission that in any event it was unfair for the court to decide that part of the appeal on that point deserves consideration. 83 My answer to this is affected by the fact that the third part of the submissions (see par 68) has now been met by the appellants having been given the opportunity of putting full argument on the matter (of which they have availed themselves in full) although in writing and not orally which they would have preferred. Since, having taken the appellants’ submissions on the point into account, I am of opinion that the point was a good one and had been so since no later than 22 January 1998, I do not regard it as unfair in the circumstances for this part of the appeal to have been decided on the point. 84 I would therefore not grant the appellants leave to reopen the hearing of the appeal on the “common ground” point. 85 I would also refuse leave to reopen the hearing of the appeal on the other basis on which it is sought, the allegedly defective discovery. Fitzgerald JA has dealt with this in some detail. I will not add to what he says beyond noting that the appellants’ submission is that documents of which the appellants have become aware since the trial, which were not discovered before the trial and which the appellants say should have been, were relevant to issues decided in favour of the respondent on the basis of the judge’s fact finding in which he preferred the evidence of Messrs de Souza and Kalaf to that of Mr Black. The submission does not go further than saying that the documents, and further documents to which the discovered documents might lead, might have produced different findings from the judge on the facts of conversations and, in regard to the Trade Practices Act claims, the intention of the respondent. But none of these factual matters could affect the construction of Colin Biggers and Paisley’s letter of 5 September 1997, which puts an end to the Trade Practices Act claims and the option claims for the reasons given by the trial judge. Nor do I see any realistic possibility of any of the documents having any significant bearing on the judge’s factual findings concerning what happened and what was said between Mr Black and Mr de Souza on 14 January 1998. 86 Finally, I agree with what Fitzgerald JA says in not accepting the appellants’ submissions about costs. 87 In my opinion, therefore, the appellants’ motion should be dismissed with costs.
“ It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so. ”
88 FITZGERALD JA: The appellants failed in their action against the respondent in the Equity Division. An appeal to this Court was dismissed on 24 February this year. The order dismissing the appeal has not been entered. The appellants have requested the Court to “reopen the appeal”. The Court has received and considered extensive additional written submissions. The application to reopen the appeal has altered and expanded as the submissions have progressed.
89 In late 1996 or early 1997, the respondent purchased all the units in a building at 11 Gerrale Street, Cronulla (the “old building”) by contracts in identical terms. The appellants were vendors of some of the units in the old building. The respondent subsequently demolished the old building and erected a new block of residential units (the “new building”) on a site comprising 7, 9 and 11 Gerrale Street. 90 Each contract for the sale of a unit in the old building to the respondent contained the following clause 24:91 The appellants’ claims in the Equity Division were based upon (i) contracts in relation to units in the new building which were alleged to have resulted from the implementation of clause 24 of the contracts for the sale of units in the old building and (ii) the Trade Practices Act 1974 (Cwlth). The appellants sought (i) specific performance of the contracts in relation to units in the new building which they alleged had arisen from the implementation of clause 24 of the contracts for the sale of units in the old building and associated injunctive and declaratory relief; (ii) relief akin to specific performance under s 87 of the Trade Practices Act; and (iii) damages. 92 The appellants’ Supplementary Notice of Appeal was filed after the respondent had sold the units in the new building to which the appellants’ claims related to third parties. The appellants continued to seek the orders specified in the Amended Summons. However, at the hearing of the appeal, they limited their claim to damages for breach of contract and/or breach of s 52 of the Trade Practices Act. The Court was requested to remit the proceedings to the Equity Division to assess the appellant’s damages. An alternative request for a new trial was based upon a contention that evidence obtained after judgment in the Equity Division established that the respondent did not make full discovery and that parts of the evidence given at trial by the respondent’s solicitor were incorrect.
“RIGHT OF FIRST REFUSAL(a) The parties hereto acknowledge that it is proposed that the [respondent] will construct on the development site a 56 unit development (“the proposed development”).
(b) The [respondent] is to give to the Vendor a right of first refusal to purchase a unit in the proposed development contemporaneously providing a similar right of first refusal to each of the other Vendors of a lot in the strata plan of which the property is comprised.
(c) The [respondent] shall serve on the Vendor a price list together with approximate details of the size, location, layout and finishes of the units in the proposed development.
(d) The Vendor or its nominee shall, within seven days, in conjunction with the other Vendors of units in the current strata plan or their nominees (‘the other Vendors”), be exclusively entitled to nominate a unit in the proposed development which the Vendor or its nominee intends to purchase (“the nominated unit”).
(e) If the nominated unit has previously been nominated by one of the other Vendors, the Vendor shall have a further 2 business days of being notified of such other nomination to make a further nomination. If such further nomination has also been previously nominated by one of the other Vendors, the Vendor shall have a further 2 business days in which to make another nomination.
(f) The [respondent] shall serve a Contract for such unit on the Vendor.
(g) Should the Vendor not exchange Contracts with the [respondent] within seven days of service of such Contract, the Vendors right of first refusal shall lapse and the [respondent] shall be entitled to sell the nominated unit to another person.”93 Initially, the appellants’ primary case in the Equity Division (the “option case”) was that the parties subsequently varied clause 24 of the contracts for the sale of units in the old building and that, as vendors of some of the units in the old building and assignees of the rights of other vendors of units in that building, [2] the appellants became entitled in the events which occurred to options to purchase specified units in the new building. 94 The appellants’ did not pursue their option case in this Court [3] after it was rejected by the trial judge, who did not accept evidence upon which it depended. 95 The specified units in the new building to which the option case related included unit 33. “In addition or in the alternative”, the first appellant claimed in the Equity Division that he was entitled to purchase unit 33 at an undervalue (the “unit 33 case”). The first appellant did not pursue his unit 33 case in this Court after it was rejected by the trial judge [4]. 96 Prior to the trial in the Equity Division the appellants amended their Summons and Statement of Claim to allege an alternative contract case (the “original clause 24 case”), which was also rejected by the trial judge. The appeal to this Court against the trial judge’s rejection of the appellant’s claim to damages for breach of contract was confined to the original clause 24 case [5]. 97 Contrary to the appellants’ option case, their original clause 24 case was founded on the unpleaded premise that clause 24 of the contracts of sale of units in the old building had not been varied but had been implemented in its original form. Although the option case and the original clause 24 case could be pleaded in the alternative, deficiencies in the appellants’ Further Amended Statement of Claim disguised the evidentiary difficulties associated with the original clause 24 case. At the times when material events occurred, the appellants were insistent that clause 24 of the contracts for the sale of units in the old building was not applicable in its original form (the original clause 24 case) because it had subsequently been varied (the option case), and that they were entitled to options, not contracts of sale. Their conduct in that period was consistent with their options case but inconsistent with their original clause 24 case. 98 Paras. 14, 17, 18 and 19 of the appellants' Further Amended Statement of Claim alleged:
Breach of Contract
“14. … Pursuant to Special Condition 24 of the Sale Contracts, the units in the [new building] … were to be offered to each of the [appellants] at a price contained in a Price List, which was to be served on each of them. The [appellants] were granted seven (7) days to select and exercise their Right of First Refusal before the home units were offered to the public and other parties for sale.
…
17. On or prior to 5 September 1997 the [respondent] entered into an agreement with the [appellants] to amend Special Condition 24 of the Sale Contracts to provide that the Right of First Refusal would be exercised by entering into an option instead of a contract, and in consideration thereof each of the [appellants] agreed to refrain from rescinding any Sale Contracts. The terms of the option were as follows:
99 Paragraphs 20 and 22 to 24 of the appellants’ Further Amended Statement of Claim contained allegations relating to their option case, culminating in an allegation in para. 24 that the respondent had refused to execute option agreements to which the appellants claimed to be entitled. As stated, that case was not pressed in this Court. 100 Paragraphs 21, 24A and 24AA of the appellants’ Further Amended Statement of Claim alleged:
a) option fee of 10% of the purchase price of the unit with the option fee to be non-refundable;
b) the First [appellant] to draft the call-option and forward same in due course to Colin Biggers & Paisley for their client’s approval.
Particulars:
On or about 1 May 1997 Mr. De Souza representing the [respondent], and the First [appellant] representing the [appellants] entered into an oral agreement to vary Special Condition 24 of the Sale Contracts to provide for an option in substitution for a sale contract. A further oral agreement to the same effect was entered into on or about for the 30 August 1997 between Mr. Kalaf representing the [respondent], and the First [appellant] representing the [appellants]. The terms of the agreement of 1 May 1997 and of 30 August 1997 were set out in the letter dated 5 September 1997 sent to the First [appellant] by Colin Biggers & Paisley representing the [respondent].
18. By way of letter dated 13 January 1998 from Colin Biggers & Paisley to the First [appellant], pursuant to [clause 24 of the contracts for the sale of units in the old building], the [appellants] were served with a Price List.
19. Pursuant to the agreement referred to in paragraph 17, the First [appellant], by his letter dated 20 January 1998, [6] sought to exercise, on behalf of the First, Second and Third [appellants] the Rights of First Refusal to acquire options [7] on the terms as set out in the letter from Colin Biggers & Paisley dated 5 September 1997.
Particulars:
….”
(The first appellant, Mr Black, is a solicitor. Colin Biggers & Paisley are the respondent’s solicitors and Mr De Souza is a partner in that firm. Mr Kalaf was employed by the respondent).
101 The paragraphs in the respondent’s Further Amended Defence corresponding to paras 14, 17, 18, 19, 21, 24A and 24AA of the appellants’ Further Amended Statement of Claim provided that the respondent:
“21. By way of letter dated 27 February 1998 [8] the [respondent], … served Contracts for the Sale of land on the [appellants].
…
24A. … in breach of Special Condition 24 of the Sale Contracts, the [respondent] has denied that each [appellant] has a right to receive a Contract for the Sale of Land pursuant to the provisions of Special Condition 24(f) [9] and has denied that each [appellant] has an interest in any of the lots in the proposed development.
Particulars
(a) … on or about 27 February 1998 and on or about 2 March 1998 the [respondent] contended that if the draft contract for sale prepared by its solicitors and served on the [appellants] on 27 February 1998 was not exchanged in the precise form and terms served by the [respondent’s] solicitors on the First [appellant], the rights of the [appellants] pursuant to the contract for sale and the interest arising therefrom in the nominated units were forfeited absolutely, which contention evinced an intention on the part of the [respondent] not to be bound by the contract and to deny the [appellants’] rights under Clause 24.
(b) On or about 27 February 1997 [10] the [respondent] by its solicitors served a draft contract for sale in purported performance of Clause 24 of the agreement dated 17 January 1997 at a time prior to the [respondent’s] right to serve the contract and in a form contrary to Clause 24, in that the terms were unusual or were terms not fair and reasonable within the Sydney Real Estate market for residential strata units in 1997 and 1988 (sic) whereby it evinced an intention to not be bound by the contract and to assert rights inconsistent with it.
24AA. Further, in breach of Clause 24 the [respondent] by its servants or agents asserted a right under Clause 24 of the contract for sale dated 17 January 1997 which did not exist in contravention of the contract.”
102 By their Reply, the appellants joined issue with those paragraphs in the respondent’s Further Amended Defence. 103 The only estoppels pleaded by the appellants in their Further Amended Statement of Claim [11] or their Reply [12] were related to their option case, which was not pursued in this Court. No reference was made to waiver in the appellants’ pleadings. 104 The appellants’ original clause 24 case which was the subject of appeal involved the following essential propositions:
“14. Admits that the first [appellant] forwarded a letter to Mr Kalaf on behalf of the [respondent] dated 29 April 1997 but denies that the effect of the letter is as set out in paragraph 14. The [respondent] further admits that special condition 24 contained rights of first refusal. The [respondent] seeks leave to refer to special condition 24 as if it were set out herein. The [respondent] otherwise denies paragraph 14.
…
17. Denies paragraph 17 and says there was no agreement to amend special condition 24 as described in paragraph 17 or at all. The [respondent] denies that there was ever any oral agreement between Mr Kalaf and the first [appellant] to amend clause 24 and denies that the letter of 5 Sepetember 1997 from Colin Biggers & Paisley to the first [appellant] sets out the terms of any agreement to amend that special condition. The [respondent] seeks leave to refer to the third last paragraph of the said letter as if the same were set out herein and further says that at no stage prior to the settlement of the purchase of the units in Strata Plan 578 on 30 September 1997 had the first [appellant] submitted a draft option agreement for the [respondent’s] consideration.
18. Admits that by letter dated 13 January 1998 from Colin Biggers & Paisley to the first [appellant] the [respondent] served copies of a draft strata plan and price list on the first [appellant] as solicitor for the vendors of the various lots in Strata Plan 578 and further advised that a schedule of inclusions would be served when available. The defendant further says that on 14 January 1998 under cover of letter from Colin Biggers & Paisley, the [respondent] enclosed a schedule of finishes, amendments to the strata plan and an amended price list. The [respondent] says that the material provided under cover of the letters dated 13 January 1998 and 14 January 1998 was pursuant to special condition 24 of the sale contracts, but otherwise denies paragraph 18.
19. Admits that the first [appellant] sent facsimiles dated 20 January 1998 to Colin Biggers & Paisley and seeks leave to refer to the precise terms of the facsimiles dated 20 January 1998. The [respondent] denies that the facsimiles exercised rights pursuant to the agreement alleged in paragraph 17. The [respondent] otherwise does not admit paragraph 19.
…
21. Admitted.
…
24A. The [respondent] admits that it denies that each [appellant] has any interest in any of the [units in the new building], denies that it has breached special condition 24 and otherwise does not admit paragraph 24A.
24AA. Denies paragraph 24AA.”
105 The appellants did not plead or prove their original clause 24 case. In particular, it was neither pleaded nor proved that they nominated units in the new building which they “intend[ed] to purchase”. Paragraph 19 of the Further Amended Statement of Claim correctly recognised that the first appellants’ letter of 20 January 1998 did not nominate units in the new building which they intended to purchase but units for which they claimed to be entitled to options. As the appellants’ submissions in support of their application to open the appeal stated, if they had nominated units in the new building which they “intend[ed] to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building, the respondent “could have elected to treat the assertion of a variation [i.e., the appellants’ demand for options] as a repudiation..”. However, no question of repudiation (or other breach) of contract by either party could arise unless there was a contract. The alleged contract upon which the appellants’ original clause 24 case was founded never arose because they did not take a step which was essential, namely, the nomination of units in the new building which they “intend[ed] to purchase”. 106 Unsurprisingly, the respondent, which is a developer, was willing to sell the appellants the units over which they claimed options at the prices for those units stated in the respondent’s price list [16] on the terms on which it was willing to contract [17]. As the appellants pleaded in para. 21 and in each “particular” to para. 24A of their Further Amended Statement of Claim the respondent forwarded contracts of sale of the specified units in the new building to the appellants under cover of its solicitors’ letter of 27 February 1998. That was more than a month after the time within which the appellants had been entitled to nominate units in the new building which they intended to purchase had expired. Just as it was not prepared to give the appellants options to purchase those units, the respondent was only prepared to sell the units to the appellants on the terms which it offered. The respondent’s solicitors’ letter of 27 February 1998 made it plain that the respondent required the appellants to sign and return the contracts forwarded under cover of that letter within 7 days if they wished to purchase the specified units in the new building. 107 In his evidence, the respondent’s solicitor said that, in offering the appellants contracts of sale of the units in the new building for which they claimed options by his letter of 27 February 1998, he treated them as having nominated those units and was “happy to proceed on [that] basis.”[18]. Even if the respondent’s solicitor’s state of mind after the period in which the appellants were entitled to nominate units in the new building which they “intend[ed] to purchase” under clause 24(d) of the contracts for the sale of units in the old building is material, it is important not to permit excessive literalism to distort the substance of what occurred. Plainly, the contracts of sale offered to the appellants under cover of the respondent’s solicitors’ letter of 27 February 1998 were all that was offered and all that were intended to be offered. That was the basis on which the respondent was “happy to proceed.” 108 According to the appellants’ original clause 24 case, the position adopted by the respondent in its solicitors’ letter of 27 February 1998 (and subsequently confirmed by it) breached the appellants’ rights under clause 24(f) of the contracts of sale of the units in the old building in its original form [19]. However, since the appellant had not nominated units in the new building which they “intend[ed] to purchase” under clause 24(d), they had no rights to contracts of sale for units in the new building under clause 24(f). The respondent obviously could not breach rights which the appellants did not have. 109 Para 10 of the judgment which dismissed the appeal (the “appeal judgment”) stated:
(a) contrary to the appellants’ option case, clause 24 of the contracts for the sale of units in the old building was not varied but continued to operate according to its original terms;
(b) the respondent served a price list under clause 24(c) on 13 January 1998; [13]
(c) clause 24(d) entitled the appellants to nominate specified units in the new building which they “intend[ed] to purchase” within 7 days of that date;
(d) the appellants nominated specified units in the new building which they “intend[ed] to purchase” in accordance with clause 24(d) by the first appellant’s letter of 20 January 1998; [14]
(e) by reason of those nominations of units in the new building under clause 24(d), clause 24(f) entitled the appellants to contracts for the sale of the specified units in the new building from the respondent; and
(f) “… in breach of [clause] 24 …, the [respondent] … denied that each [appellant] has a right to receive a [contract for the sale of specified units in the new building] pursuant to [clause] 24(f)..” [15] . “Further , in breach of Clause 24 the [respondent] …. asserted a right under Clause 24 …. which did not exist in contravention of the contract.”
110 Although, the trial judge held that the appellants “.. did not at any time serve Forms of Nomination of the types contemplated by special conditions 24(d) and (e)..”,[21] he did not dismiss the appellants’ original clause 24 case on that basis because of a concession made by the respondent’s counsel. His Honour said: [22]
“… Because units in the new building were not nominated for purchase, the respondent did not come under an obligation under clause 24(f) to offer contracts for the purchase of units in the new building. The question whether the contracts which it offered would have satisfied its obligation under clause 24(f) if it had had such an obligation does not arise." [20]
111 The respondent departed from its concession in this Court. The transcript reveals the following:
“The [respondent] concedes that the correct analysis of the events which happened is to be regarded as a waiver by the [respondent] of the proper compliance by the [appellants] with special conditions 24(d) and (e). The [respondent] conceded that by its conduct in serving contracts on 27 February, it signified that it was prepared to act upon the basis that the handwritten nominations, for all their patent defects, would be taken by the [respondent] as satisfying the [appellants’] obligations to nominate pursuant to special conditions 24(e) and (f).”
112 Although the respondent had not given a notice of contention concerning the issue which it had conceded in its closing address at trial, the appellants did not raise any objection to the submission in which that concession was withdrawn, or challenge it in any way their submissions in reply. 113 As the appellants submitted, the respondent should have given a notice of contention in relation to the issue which it had conceded in its closing address at trial, namely, that by its solicitors’ letter of 27 February 1998 it “waived” the appellants’ failure to nominate the units in the new building which they “intend[ed] to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building. It is pointless to speculate on whether, if the appellants had objected, the respondent might not have been permitted to argue that point or might only have been permitted to do so on terms. The appellants’ original clause 24 case was wholly dependent on the meaning and legal effect of two letters, the appellants’ letter to the respondent’s solicitors dated 20 January 1998 and the respondent’s solicitors’ letter of 27 February 1998, and could not succeed unless at least one of those letters had the effect which the appellants contended. The respondent’s argument to the contrary was within the pleadings and was argued in this Court without objection from the appellants. It accordingly provided an appropriate basis for the Court’s decision [23] on the appellants’ original clause 24 case if it revealed an insuperable obstacle to the appellants’ success. 114 If the appellants’ failure to reply on the critical issue at the appeal resulted from misunderstanding or oversight, their present application to reopen the appeal has provided them with an opportunity to argue that:
“Mason P: If for any reason the contract that you proffered was non conforming, do you accept that the consequence would be that the right of first refusal did not lapse, 24(g).
Greenwood: I’m just troubled by the notion … that there was no obligation to serve the contracts, but it was treated as being an election within 24 at the time as to whether or not that could mean that now the respondent could say why we chose to treat it at the time that way. And hitherto forthwith we’ve taken that view but we’re not bound to maintain that position at all.
Because you were purporting to insist upon a right of first refusal to an option, the right of first refusal was never properly exercised and so no obligation arises on the respondent at all.
Mason P: On that basis they nominated a unit but whether because of the vendor’s breach or the purchaser’s failure to exchange the contracts, the right of first refusal was not exercised, at least then.
Greenwood: Not because of the vendor’s breach but because of the absence of electing a unit to purchase pursuant to a contract, rather than pursuant to an option. The nominations that were submitted were submitted on that basis that they enter into an option.
Mason P: Yes you’re right, even the nomination was a very contingent nomination.
Greenwood: Yes.
Mason P: Well what follows from all of that?
Greenwood: Well that there was no obligation to serve a contract at all, any contract.
Mason P: And what follows from that? There was no breach that could be converted into any remedy now.
Greenwood: Yes now. What is recorded by his Honour was the approach that was taken at the hearing of saying that what happened was that that nomination was nevertheless accepted as being a nomination for the purposes of 24 and so contracts could issue but in the scenario that your Honour’s putting to me and that is we wind back the clock and start again, there’s no need for that concession then to be made and so that would be--
Mason P: What page were you reading from?
Greenwood: At 96. At the top of the page it starts ‘the defendant is not obliged to make the offer’.”
(Counsel for the respondent then moved to another topic).
115 The appellants’ submission that they nominated units in the new building which they “intend[ed] to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building must be rejected for the reasons which I have previously given. The appellants did not nominate units in the new building which they “intend[ed] to purchase” but units in the new building for which they claimed to be entitled to options. The trial judge correctly decided this issue adversely to the appellants. 116 The appellants’ “waiver” argument is based upon a misunderstanding of the legal significance of their failure to nominate units in the new building which they “intend[ed[ to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building. That failure was not, as the appellants submitted, a breach by the appellants of clause 24. They simply failed to exercise a right which -ex hypothesi- they had under clause 24(d). As a result, they did not acquire a right under clause 24(f) to contracts of sale for units in the new building, and clause 24(f) did not oblige the respondent to offer them contracts of sale. The respondent was free to offer them contracts of sale or not as it chose and to indicate the terms on which it was prepared to contract. That is what it did. The appellants were, in turn, free to accept the contracts of sale offered by the respondent or, as they did, to reject them. 117 The same result would follow from a conclusion that there was a “waiver” by the respondent provided that the limited nature of that “waiver” was recognized. Any “waiver” was limited to the contracts of sale offered to the appellants to the respondent. Whether or not the respondent’s letter of 27 February 1998 gave the appellants a legal right to what was then offered, it did not give them any other right. 118 The appellants’ submission in support of their application to reopen the appeal raised an additional argument based on the first appellant’s nomination of unit 33 on 14 January 1998. The letter [24] which the first appellant sent to the respondent’s solicitors that day said that he had selected unit 33 “at the advertised price”, i.e., the mistakenly low price stated in the respondent’s 13 January price list, and requested a contract of sale. That nomination was the basis of the first appellant’s unit 33 case, [25] which was not pressed in this court. Subsequently, on 20 January 1998, the first appellant nominated unit 33 as one of the units for which he required an option, and that was the entitlement which he then continued to assert. The later nomination of 20 January 1998, which specified units - including unit 33 - for which the appellants required options was the basis for their original clause 24 case, [26] which was the only contract case which was the subject of their appeal. 119 However, the appellants submitted that the appeal should be reopened because it was “common ground’ between the parties at trial that the appellants had nominated units in the new building which they “intend[ed] to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building and were entitled to contracts for the sale of units in the new building pursuant to clause 24(f), and, but for that “common ground” between the parties, “the trial would have taken a very different course”. The appellant’s submissions continued: “For example, the evidence and cross-examination would have been directed to establishing the elements of, inter alia, equitable estoppel and waiver. Matters of reliance, prejudice and other considerations would then have been relevant to the evidence led and to cross-examination.” Although the appellants were given an opportunity to elaborate in written submissions the only detail given was the following passage in their “Closing Submission”:
(b) the respondent’s solicitors’ letter of 27 February 1998 waived the appellants’ non-compliance with clause 24(d).
(a) the first appellant’s letter dated 20 January 1998 to the respondent’s solicitors was a nomination of units in the new building which the appellants “intend[ed] to purchase” in accordance with clause 24(d) of the contracts for the sale of units in the old building; or
120 When the respondent offered contracts of sale of the specified units in the new building by its solicitors’ letter of 27 February 1998, the time for the appellants to nominate units in the new building which they “intend[ed] to purchase” had elapsed. They were unconcerned with the terms of the contracts of sale offered at that time, because of their insistence that they were entitled to options, not contracts of sale. The material sections of the pleadings have earlier been summarised. The appellants’ entitlement to contracts of sale of units in the new building under clause 24(f) of the contracts for the sale of units in the old building was plainly in issue on the pleadings. Indeed, the appellants’ own Further Amended Statement of Claim alleged in para. 24A that the respondent “… denied that each appellant [had] a right to receive..” those contracts. The respondent’s Further Amended Defence did not admit that the appellants had acted in accordance with clause 24(d) of the contracts for the sale of units in the old building or otherwise restrict the grounds on which the respondent based its denial of the appellants’ right to contracts of sale of units in the new building under clause 24(f). If the appellants had wished to limit the matters available to the respondent on the basis of estoppel or waiver or “… reliance, prejudice [or] other considerations…”, they should have pleaded those issues in their Reply, but did not do so. Their original clause 24 case did not even plead that they had nominated units which they “intend[ed] to purchase” in accordance with clause 24(d) [27]. 121 The respondent’s solicitors’ letters of 5 February and 27 February 1998, both written after the period within which the appellants were entitled to nominate units in the new building which they “intend[ed] to purchase” under clause 24(d) of the contracts of sale of units in the old building had expired, and the respondent’s solicitor’s evidence of his state of mind, again after that period had expired, which was given after the appellants’ case at trial had concluded, does not support the appellants’ assertions. Nor are the appellants’ assertions supported by the respondent’s counsel’s concession on a legal issue in his final address at trial. 122 The appeal should not be reopened on the first basis put forward by the appellants.
“As to estoppel, it would have been appropriate to prove from Mr Black, the nature of his belief and the reasonableness of it at the relevant times, that the respondent had reported to him and the other [appellants] that it was treating the Right of First Refusal as remaining valid and effective notwithstanding the allegedly defective nomination and that he Mr Black relied upon the representation made to him to the detriment of the [appellants]”.
123 The second basis for the appellants’ application to reopen the appeal is quite different. An unsuccessful party is not permitted to reargue an issue which the Court has decided after hearing full argument from the parties [28]. The appellants go further. They seek to raise a new, inconsistent argument which the Court was not asked to consider on the appeal and, for that purpose, to rely on additional evidence which was not before the Court at that time. 124 When the appeal was argued, the appellants’ request for a new trial was based on additional evidence which they said was relevant to their option case [29] and should have been, but was not, discovered by the respondent. More particularly, the appellants then submitted that that additional evidence was relevant to the trial judge’s findings in the appellants’ options case with respect to the first appellant’s credit and his Honour’s preference for Mr De Souza’s evidence concerning communications between the first appellant and Mr De Souza when their evidence conflicted. There was no suggestion that additional evidence might be relevant to the appellants’ claim for damages for the respondent’s alleged breach of s 52 of the Trade Practices Act (the “Trade Practicescase”). 125 The use which the appellants sought to make of the additional evidence on which they relied at the appeal was explained in para. 7 of their written submissions dated 21 January 2000. That paragraph was in the following terms:
NEW TRIAL126 The nature of the oral argument in relation to fresh evidence presented at the appeal appears sufficiently from the appellants’ counsel’s opening statements on this issue. Those statements were later explained in more detail, but were never extended to include the appellants’ Trade Practices case. The material passage in the in oral argument was as follows:
“ FRESH EVIDENCE
As indicated in the affidavit of Mr Carr sworn 6 January 2000 and for the reasons set out therein the Appellants will seek to lead fresh evidence in relation to the findings of credit with respect to the First Appellant. Those findings affect the whole of the case of the Appellants regarding the case for a variation and regarding the mistake on unit 33. [30] If the Court should hold that a new trial is warranted then it will be unnecessary to consider the above submissions in relation to the variation point nor the mistake point. Further, consideration of the question of a new trial will only be necessary in the event that the Court rejects the case on construction put forward in the first three numbered paragraphs in these submissions [31] . If the Court accepts the case on the construction and breach points then it is submitted that the matter should be referred to the Equity Division for assessment of damages in lieu of specific performance as the Respondent has put it out of its power to complete by selling off the various nominated units.”
127 The appellants’ application for a new trial in relation to their option case was rejected by the Court [32]. Broadly, the Court held that the trial judge’s preference for the evidence of Mr De Souza over the evidence of the first appellant where there was conflict was not vital to his Honour’s conclusion that the parties had not intended to be contractually bound at the stage which they had reached in their negotiations for option agreements [33]. 128 The appellants’ Trade Practices Act case had earlier been rejected for quite different reasons [34]. 129 The nature of the appellants’ Trade Practices case and the essential reason for its rejection were explained in the appeal judgment in the following terms:
“KING: Your Honour, the final point concerns the fresh evidence issue, and this we acknowledge that if we are to have any prospect on the fall back case, the alternative case that was put to his Honour relating to an agreement, or for an option, that the matter must be reviewed, you Honour, and that would require a new trial, and we accept that unless we can convince your Honours of the appropriateness of a new trial, in circumstances which are unusual, that is in circumstances in which the evidence goes to the competing credibility of two witnesses, then we can’t succeed in putting forward a case to challenge the findings of fact that his Honour made with respect to the credibility of the relevant witnesses, and whether or not that had any relevance to findings of fact with respect to a variation…”
130 The appellants’ request to reopen the appeal on the basis of additional evidence relates to their Trade Practices case, not (as on the appeal) their option case. Those two cases are totally inconsistent. The appellants’ option case alleges that the respondent agreed to grant them options. Their Trade Practices case alleges that the respondent not only did not grant them options, it never intended to do so. 131 In their initial submission “Regarding Reopening of the Appeal”, the appellants complained that, in reaching the conclusion that the appellants did not prove that the contents of the respondent’s solicitors’ letter of 5 September 1997 “did not accurately represent the respondent’s then intention”, the Court “did not take into consideration the evidence that the Respondent failed to discover further relevant material and in particular a second letter of 5 September 1997”. The “second letter” alleged to was a letter dated 5 September 1997 from the respondent’s solicitors to the respondent which was referred to in item 17 in the respondent’s bill of costs. The appellants submitted that the “second letter was clearly relevant to the issue of the intention of the Respondent as at 5 September 1997” and “because of its date and its clear relationship to the other letter of the same date, was and is critical to the proper determination of the appellants’ Trade Practices Act case.” The unstated assumption is that there is or at least might be some inconsistency between the respondent’s solicitors’ letters of 5 September 1997 to the appellants and their client. 132 Subsequently, the basis of the appellants’ application to reopen the appeal was expanded to include “.. certain file notes” of Mr De Souza. According to the appellants’ submissions, evidence given by Mr De Souza and Mr Kalef at trial “indicates certain file notes which could reasonably be expected to have been created in the normal course of the conduct of a matter and which concerned the letters of 5 September 1997…”. As is discussed below, the appellants’ later submissions acknowledge that the “second letter” was also referred to in evidence at the trial. 133 Neither the “clear” relevance nor the “critical” importance of the “second letter” (or the “file notes”) to the appellants’ Trade Practices case seems to have occurred to them prior to the dismissal of their appeal. 134 The “file notes” were not relied on when the appellants applied for a new trial at the appeal. Item 17 in the respondent’s bill of costs was referred to, but only in support of propositions that:
“Trade Practices Act.
11. The appellants’ claim to damages for breach of section 52 of the Trade Practices Act, as presented to this Court, was based upon the letter from the respondent’s solicitors dated 5 September 1997 which is referred to in paragraph 17 of the Amended Statement of Claim. That letter provided:“In regard to your client’s request to vary clause 24 of the contract to provide for an option instead of a contract, our client has in principle agreed to such a variation. You might draft the call option and forward same to us for our client’s approval. At this stage the only firm instruction we hold is that the option fee will be non-refundable. Once we have received from our client an indication of the purchase price of the new units we shall revert to you.
We await the draft call option in due course…”
12 The appellants’ Amended Statement of Claim alleged that, by that letter, the respondent “represented that it had or would agree to an amendment of [clause] 24 so as to allow the [appellants] to acquire options in respect of units” in the new building “without having reasonable grounds for the making of those representations”, that “at the time it made the representations … [the respondent] did not intend to provide options at any time to the [appellants]”, and that, by the conduct of the respondent, the appellants suffered unspecified loss and damage. In this Court, the appellants’ loss was described as the loss of an opportunity to obtain options.”
13. … The appellants did not prove that the contents of [the respondent’s solicitors’] letter of 5 September 1997 did not accurately represent the respondent’s then intention … .”135 The appellants’ submission that the Court should have considered the “second letter” and the “file notes” to determine whether they might have affected its conclusion that “[t]he appellants did not prove that the contents of [the respondent’s solicitors’] letter of 5 September 1997 [to the appellants] did not accurately represent the respondent’s then intention” is rejected. The argument presented to the Court on the appeal made no attempt to relate either the “second letter” or the “file notes” to the respondent’s intention at 5 September 1997 and the Court was not asked to consider those documents for that purpose. There is no suggestion anywhere in the appellants’ written or oral submissions on the appeal or in the affidavits then used in support of their request for a new trial that the “second letter” or the “file notes” were or might be relevant to the respondent’s intention at 5 September 1997 or even to the appellants’ Trade Practices case. 136 There is no foundation for the appellants’ application to reopen the appeal in relation to their Trade Practices case on the basis that the Court misapprehended what was in issue. 137 Another approach by the appellants to their request for the appeal to be reopened and a new trial ordered on the basis that the respondent did not make proper discovery emerged in later submissions [35] lodged some months later. The appellants claim that they have now ascertained that there are “further material documents which should have been discovered” and that the respondent’s “failure to discover the documents … has a number of implications”. 138 When the appeal was heard and decided, the appellants’ request for a new trial was based on items in the respondent’s bill of costs which had been prepared after the judgment in its favour in the Equity Division. The respondent attempted to explain the alleged discrepancies between the documents which it had discovered and what its bill of costs stated in a very late affidavit which was not served until the eve of the appeal hearing. The appellants protested, saying that they were in a “quandary.” Their counsel continued:
(b) Had the Bill of Costs … or its contents been known to the Appellants during the trial…, the Appellants would have been in a position to contradict Mr De Souza. The Appellants also contend that important areas for cross-examination would have been traversed with Mr de Souza and in particular, matters such as the reasonableness of the contracts tendered by the Respondent under Special Condition 24(f), whether the Respondent was proceeding on the basis that Special Condition 24(f) had been varied and issues of credit generally as between Mr de Souza and the First Appellant would properly and more effectively have been opened for cross-examination.”
(a) “[t]he text of the Bill of Costs indicates that certain answers given by Mr De Souza in his testimony in the trial are open to the criticism that those answers were untrustful and that, as a consequence, those parts of his evidence where in conflicted with the evidence of the First Appellant, should not have been accepted, contrary to the determination of the learned Trial Judge”.
139 Almost immediately after those statements were made on the appellants’ behalf, the Court adjourned for lunch. During the adjournment or perhaps earlier that morning, the respondent served the appellants with another affidavit, which had been sworn by another partner in Colin Biggers & Paisley, Mr Sidney Suchard. After the adjournment, counsel for the appellants told the Court that he had said all that he wished to say in relation to the request for a new trial, and that he had been informed by the respondent’s counsel that “he doesn’t prepose to now seek to proceed to lodge any evidence.” 140 The appellants’ current submissions in support of their application to reopen the appeal:
“KING: The quandary is that it now can’t be said that there was no answer. If we object to the affidavit, there is going to be some impression that there is an answer, and the trouble is, our concern is that when we read the affidavit and some work was done on it late last night, there are several inaccuracies from the point of view of the material that we have in our possession, or the limited material we’ve been able to get.”
141 Mr Suchard’s affidavit exhibited his and Mr De Souza’s daily time sheets for 5 September 1997 and an extract from Colin Biggers & Paisley “Time Ledger for A.H.L Australand Properties development site at Cronulla for the period 28.08.1997 to 10.10.1997”. According to the appellants’ submissions, these documents demonstrate that the respondent’s discovery was deficient in the following reports:
(a) attempt to rely on the respondent’s failure to explain the alleged deficiencies in its discovery;
(b) object to affidavits from Mr De Souza, Mr Suchard, Ms Christine Simpson (an employee of the respondent) and Ms Peta Solomon (a costs assessor); and
(c) despite their objection to Mr Suchard’s affidavit, base their current application to reopen the appeal on exhibits to his affidavit.
142 In contrast to their counsel’s description of his “quandary” when the respondent served affidavits for use on the appeal, the appellants’ submissions in support of their application to reopen the appeal rely on the “… complete silence of the Respondent as to the reasons for its failure to discover the documents..” and submit that it is too late for “… affidavits from persons who could have filed such affidavits on the hearing of the appeal…” and that the respondent” could have and should have [produced the evidence ] at the hearing of the appeal…”. Other statements of the grounds on which the appellants oppose the respondent’s use of its affidavits include that “.. the evidence .. was available at the hearing of the Appeal and .. could have been sought to have been admitted as evidence in the Appeal..” and that “[t]hrough these affidavits the … Respondent seeks to indirectly prove that a second document of 5 September 1997 never existed”. Seemingly unfamiliar with their own case, the appellants attempted to bolster that objection with a submission that “[t]he only issue before the Court is whether, having regard to the evidence before the Court at the time of the hearing of the Appeal, [36] there can be said to be, in the context of the application for leave to reopen the Appeal, a misapprehension as to the facts or some other basis supporting the application to re-open.” 143 The appellants’ other objections to the respondent’s affidavits can be summarised as follows:
“(i) 29.8.1997: DDS attendance
Faxes to M Lindfield (not discovered)
(ii) 1.9.1997: DDS Code 02
Telephone attendance Peter Kalaf
DDS Code 02 Telephone attendance Peter Kalaf
(only one of the above file notes was discovered)
(iii) 2.9.1997 DDS Code 04
Conference with SSS (no file note discovered)
(iv) 3.9.1997 DDS Code 02
Telephone attendance Peter Kalaf (no file note discovered)
3.9.1997 DDS Code 02
Telephone attendance Mike Lindfield (no file note discovered)
(v) 5.9.1997 SSS Code 01
Attendance DDS (no file note discovered).”
144 The appellants submit the “implication” to be derived from the daily time sheets and extract from the Time Ledger exhibited by Mr Suchard is that Mike Lindfield, the respondent’s State Manager, Medium Density Developments at 5 September 1997, was not called by the respondents to give evidence at the trial, although he was a material witness because “… it is clear … that he was communicating with Dunstan De Souza in relation to the critical matters concerning his issue of the letter dated 5 September 1997 to the First [appellant].” [37] According to the appellants’ submissions, the respondent’s “failure to discover the documents … was part of a strategy designed to conceal from the Court key documents, relevant to a critical time frame and most importantly, to conceal the role of Mike Lindfield and to protect him from cross-examination”[38] and “materially prejudiced the [appellants’] ability to properly and fairly conduct their case on the Trade Practices Act claim and the other claims as pleaded.”[39] 145 The appellants’ current argument is elaborated upon in paras. 28, 30, 32, 35 and 36 of their written submissions dated 7 July 2000, which state:
(a) Mr De Souza’s evidence cannot be accepted. The first reason given appears to be an assertion that para. 15 of the Court’s judgment on the appeal indicates that “… there [was] already unanswered evidence before [the] Court showing that he was untrustful at the trial.” That assertion is not justified by the appeal judgment. Secondly, it is submitted that Mr De Souza’s evidence, said to be “.. to the effect that because he cannot locate the second letter of 5 September 1997 on a file, it does not exist”, is inconsistent with evidence given at the trial by Mr Kalaf which is referred to below and item 17 in the respondent’s Bill of Costs. The appellants also submit that it is significant that Mr De Souza “does not say that he has made any further searches or inquiries with a view to locating the second letter.”(b) Mr Suchard’s evidence is misleading because it “seeks to lead [the] Court to conclude that the Time Ledger is a comprehensive list of all attendances between the dates 28.08.97 to 9.10.1997” whereas, prior to trial, the respondent disclosed to the first appellant the existence of a fax dated 1 September 1997 from “DDS/CBP to AHL/Petra de Castro”. There is no suggestion that that fax has any present relevance except as an indication that the “Time Ledger” is not comprehensive.
(c) Ms Simpson’s affidavit is also misleading when she states that she has caused a search to be made for the “second letter” and no such letter has been found. The basis for the allegation against Ms Simpson is evidence which Mr Kalef gave at the trial which is referred to below.
(d) Ms Solomon’s affidavit does not adequately explain why the reference to the “second letter” in the bill of costs which she prepared was an error or how an error occurred.
146 Reference has been made to the appellants’ assertions that the “file notes” were referred to in evidence given at the trial by both Mr De Souza and Mr Kalef. Similarly, the appellants’ submissions assert that Mr Kalef’s evidence at the trial referred to the “second letter”. Indeed, the appellants’ submissions state that Mr Kalef’s evidence explained both the nature of the “second letter” and why it is no longer available. According to the appellants’ submissions, Mr Kalef “gave evidence that he received two [2] letters relating to the Colin Biggers & Paisley letter dated 5 September 1997 to the First [appellant]. Peter Kalef’s evidence was: ‘A draft of this letter would have been sent to me which would have been with this letter’… further his evidence was: ‘I got sent a draft from Colin Biggers & Paisley, I looked at it. I went to Dunstan de Souza. I said : “‘Dunstan, that is acceptable.’” Later, the appellants state that Mr Kalef also said that the draft “probably ended up in the bin… because he knew that there would have been the original copy of the actual.” 147 Although the appellants’ submissions also draw attention to “… the cross-examination evidence of Dunstan De Souza [in which] he made reference to conversations or correspondence with Mike Lindfield about instructions to serve the contracts sent on 27 February 1998…”, they assert that there was no reference in the respondent’s evidence to Mr Lindfield’s “involvement” in connection with the respondent’s solicitors’ letter (or letters) of 5 September 1997. 148 In summary, the appellants’ current request to reopen the appeal to reconsider the rejection of their Trade Practices case on the basis that the respondent did not discover documents is based upon documents of which the appellants were aware at the trial together with “Faxes to M Lindfield” on “29.8.1997”, i.e. a week prior to the critical letter from the respondent’s solicitors to the appellant on 5 September 1997, a diary note of a conversation between Mr Lindfield and Mr De Souza on 3 September 1997 and, possibly, diary notes of other conversations involving Mr De Souza, Mr Suchard, and/or Mr Kalaf between 1 and 5 September 1997. 149 Those documents (if they exist or existed) were discoverable in relation to the appellants’ Trade Practices case if, but only if, they related (or referred) to either:
“28. It is apparent from the totality of Dunstan de Souza’s affidavit evidence found in the Blue Appeal Books Volume 2 that he makes no reference to any conversations or correspondence with Mike Lindfield about the sending of the letter dated 5 September 1997 to the First Applicant. In the cross-examination evidence of Dunstan de Souza, he made reference to conversations or correspondence with Mike Lindfield about instructions to serve the contracts sent on 27 February 1998 Black Book Vol 2 page 223 O-Q. There is no suggestion in Dunstan de Souza’s evidence that he was involved in communication with any of the other Opponent/Respondent’s employees other than Peter Kalaf about the letter dated 5 September 1997 during the critical time period form 28 August 1997 to 5 September 1997.
…
30. If the existence of the [daily time sheets and Time Ledger extract] and the second letter of 5 September 1997 was known to the [appellants] at trial, it would have enabled the [appellants] to cross examine both Peter Kalaf and Dunstan de Souza about a crucial factual matrix directly relevant, inter alia, to the … Respondent’s intention in sending the letter dated 5 September 1997 to the First [appellant].
…
32. If, at the time of the trial, the [appellants] had known of Mike Lindfield’s communications with Dunstan de Souza and his involvement generally, the … Respondent’s failure to call Mike Lindfield would have entitled the [appellants] to the benefit of two inferences in the [appellants’] favour, namely that:
(i) Mike Lindfield’s evidence could not have assisted the Respondent’s case. The Court is referred to the rule in Jones v Dunkel (1959) 107 CLR 298; and
(ii) The trial strategy of the concealment of Mike Lindfield’s role in the critical events would have required the further inference that his evidence would have damaged the … Respondent’s case.
…
35. Having regard to what has been said in the previous paragraphs, it is now apparent that there is a sound factual basis for concluding that there is a real possibility that an opposite result could have been obtained at trial on the Trade Practices Act issue.
36. Further, it is respectfully submitted that the Court should take into account the general considerations relating to the administration of justice, the degree of culpability of the … Respondent and its solicitor in determining it’s trial strategy which was designed to conceal significant and highly relevant material from the Court and the fact that the concealment involved the contravention of the Court’s orders, which is a separate reason for supporting the ordering of a re-trial: see Coulton v Holcombe (1987) 162 CLR 1.”
150 In the appeal judgment, the Court said that there was “reason to doubt” whether the respondent’s solicitors had fully discharged their “duty to ensure scrupulous care and accuracy in discovery”, but expressly refrained from reaching any conclusion on that issue [41]. As earlier noted, the respondent’s affidavits at that time had not been read because of the appellants’ objection. Likewise, the appellants have objected to the respondent’s affidavits filed in opposition of the appellants’ application to reopen the appeal. 151 That objection seems to be devoid of merit, especially since:
(ii) “… negotiations leading up to.. [that] letter..” [40] .
(i) “.. the Colin Biggers & Paisley letter to the First [appellant] of 5 September 1997…”, or
152 I have considered whether the Court should call for the disputed documents to determine whether they were discoverable and might have advanced the appellants’ Trade Practices case, but have concluded that it should not do so. The appellants’ material leaves me unpersuaded that there is a sufficient possibility that the disputed documents were discoverable to justify reopening the appeal or warrant the further prolongation of these proceedings.
(b) the appellants’ submissions refer to some parts of the respondent’s affidavits.
(a) the application to reopen the appeal is based on an entirely new ground and relies on additional affidavits filed on behalf of the appellants; and
153 The appellants submitted that nonetheless the order that they should pay the costs of the appeal should be set aside or varied because the respondent did not give a notice of contention in relation to the issue on which the appellants lost their original clause 24 case. However, the appeal was heard in 1 day and there is nothing to indicate that the respondent’s conduct unnecessarily increased the costs of the appeal.
Costs154 The appellants’ application to reopen the appeal should be refused, with costs.
Conclusion
END NOTES
[1] (emphasis added).
REVISION REASONS
[2] The trial judge noted in his judgment that this claim was not pressed in submissions and it was not mentioned in oral argument in this Court.
[3] The appellants’ request for a new trial at the appeal related to their option case. This is discussed later.
[4] The appellants’ request for a new trial at the appeal also related to their unit 33 case. This is discussed later.
[5] According to the appellants, their original clause 24 case was their principal case at trial. Presumably, the value of units in the new building was then known by them, and contracts for the sale of those units were as valuable to the appellants as options.
[6] The terms of the first appellant’s letter dated 20 January 1998 and further letters which he wrote on 21 and 22 January are set out in the trial judge’s reasons for judgment : Red Book, pages 52-54.
[7] There was no underlining in the Further Amended Statement of Claim.
[8] The terms of the respondents’ letter dated 27 February 1998 are set out in the trial judge’s reasons for judgment: Red Book, p.59.
[9] There was no underlining in the Further Amended Statement of Claim.
[10] This should be 27 February 1998.
[11] Paras. 28 to 30.
[12] Para. 2.
[13] Further Amended Statement of Claim, para. 18.
[14] cf Further Amended Statement of Claim, para. 19.
[15] Further Amended Statement of Claim, para. 24A.
[16] The mistake in the price stated for unit 33 in the price list is of no present significance.
[17] See paras. 21 of the appellants’ Further Amended Statement of Claim and the respondent’s Further Amended Defence.
[18] See also the reference to “rights” in para. 4 of the respondent’s solicitors’ letter of 5 February 1998.
[19] See paras. 24A and 24AA of the appellants’ Further Amended Statement of Claim.
[20] The same point was made by t he trial judge: Red Book, 95 Q-T, 96 E-H.
[21] Red Book, p.95 S-T.
[22] Red Book, p.76 H-M.
[23] See s 75A of the Supreme Court Act 1970 and, for example, Coulton v Holcombe (1986) 162 CLR 1, 6-8. National Australia Bank Ltd v KDS Construction Services Pty Ltd (in liq) (1987) 163 CLR 668; Water Board v Moustakas (1988) 180 CLR 491; Banque Commerciale SA en Liquidation v Akhil Holdings Pty Ltd (1990) 169 CLR 279, 286-287.
[24] The letter is set out in the trial judge’s judgment. Red Book, p 51.]
[25] Further Amended Statement of Claim, paras. 24B to 27.
[26] Further Amended Statement of Claim, para. 19.
[27] cf Para. 19 of the Further Amended Statement of Claim.
[28] Wentworth v Woollahra Municipal Council (1982) 149 CLR 672, 685; Autodesk Inc. v Dyason [No.2] (1993) 176 CLR 300, 302.
[29] The appellants’ unit 33 case is no longer pressed.
[30] The underlining did not appear in the submissions.
[31] The Trade Practices case was not the subject of any of “the first three numbered paragraphs” in the appellants’ written submissions on the appeal. It was the subject of para. 5 in those submissions.
[32] Judgment, paras. 15 ff.
[33] Judgment, para. 22.
[34] Judgment, paras. 11 ff.
[35] Submissions dated 7 July 2000, which were not signed by counsel but by the appellants’ solicitor.
[36] The underlining does not appear in the sumbissions.
[37] Appellants’ submissions dated 7 July 2000, para. 27.
[38] Appellants’ submissions dated 7 July 2000, para. 31. The only justification offered for those tendentious assertions consists in the alleged deficiencies in the respondent’s discovery and the appellants’ solicitors’ experience.
[39] Appellants’ submissions dated 7 July 2000, para. 27. Apart from the passing reference to “other claims as pleaded” in this paragraph, their current attempt to reopen the appeal on the basis of documents not discovered by the respondent is confined to their Trade Practices case.
[40] Paras. (b) and (c) of Short Minutes of the order for discovery on 7 July 1998: Annexure “C” to the affidavit of Malcolm Douglas Carr sworn on 6 January 2000 and read in the appeal.
[41] Appeal judgment para. 15.
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Suttor v Gundowda Pty Ltd
[1950] HCA 35
Water Board v Moustakas
[1988] HCA 12