Coshott v Principal Strategic Options Pty Limited

The dispute in *Coshott v Principal Strategic Options Pty Limited* concerned the validity of the exercise of a put option. The parties were Coshott (the option holder) and Principal Strategic Options Pty Limited (the company granting the option). The matter came before the Court of Appeal of New South Wales.

The central legal issue was whether the put option had been validly exercised. This depended on whether the option had been exercised on or after the "option date," which was defined by reference to an "operative date." The operative date was, in turn, contingent upon the company allotting and registering 100 ordinary shares to Coshott. The critical question was whether the shares had been registered by the operative date, thereby making the option exercisable.

By majority, the Court of Appeal held that the option had not been validly exercised. Mason P, dissenting, found that the company was estopped from denying that the shares had been registered by the operative date. However, Powell and Giles JJA reasoned that the shares were not registered to Coshott until a date after the option was exercised, meaning the option was exercised prematurely and thus invalidly.

Consequently, the appeal was allowed, and the orders made by Hunter J were set aside. In their place, the summons was dismissed, and Coshott was ordered to pay the costs of the trial and the appeal, with a certificate under the Suitors Fund Act available if Coshott qualified.