Elias v Forsyth - [2004] QSC 338

SUPREME COURT OF QUEENSLAND

CITATION:

Elias v Forsyth & Anor [2004] QSC 338

PARTIES:

STEPHEN ANTHONY ELIAS
(applicant)
v
DONALD CAMERON FORSYTH
(first respondent)
and
ELLA CHRISTINE FORSYTH
(second respondent)

FILE NO:

SC No 4889 of 2004

DIVISION:

Trial

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

28 September 2004

DELIVERED AT:

Brisbane

HEARING DATE:

15 September 2004; 16 September 2004

JUDGE:

Chesterman J

ORDER:

1. It is declared that the applicant validly extended the expiry date of the option exercise period to 31 July 2004;

2. The respondents are to pay the applicant’s costs of the action to be assessed on the standard basis.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OFFER – OPTION FOR VALUABLE CONSIDERATION OR UNDER SEAL – EXERCISE OF OPTION – where the parties executed a deed by the terms of which the respondents granted the applicant an option to purchase their land – where the applicant wished to extend the option period pursuant to the terms of the deed – where the applicant alleged that the second respondent orally agreed to vary the terms of the option – whether the option period had been validly extended

Commonwealth of Australia v Verwayen (1990) 170 CLR 394, discussed

Freshmark Ltd v Mercantile Mutual Insurance (Australia) Ltd [1994] 2 Qd R 390, discussed
Mehmet v Benson (1965) 113 CLR 295, discussed
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, discussed
Spencer v Cali [1986] 2 Qd R 456, cited

Tropical Traders Ltd v Goonan (1964) 111 CLR 41, cited

COUNSEL:

Mr S S W Couper QC

Mr P J Dunning

SOLICITORS:

Hopgood Ganim for the applicant

Varro Clarke & Co for the respondents

The respondents are the owners of several parcels of land at Redbank near Ipswich. The applicant is a property developer. On 9 October 2003 the parties executed a deed by the terms of which the respondents granted the applicant an option to purchase their land for a price of $5,000,000. The consideration for the grant of the option was $5,000. The option expired at 4.00 pm on 31 January 2004 unless the terms of the option were extended in accordance with clause 2 of the deed. By clause 4 the option to purchase had to be exercised prior to the expiration of the option period, or the period as extended as the deed provided. Clause 6 made time of the essence ‘in respect of all of the provisions’ of the deed.

Clause 2 was in these terms:

‘2.1In consideration of the sum of FIVE THOUSAND DOLLARS ($5,000.00) (“First Option Fee”) paid by the Grantee to the Grantor (receipt of such sum being hereby acknowledged by the Grantor) the Grantor grants to the Grantee an option expiring, subject to clause 2.2, at 4pm on the First Expiry Date for the Grantee or its nominee for and to enter into the Purchase Agreement for the Purchase Price of $5 Million and Agistment Agreement with the Grantor.
2.2The Grantee…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Elias v Forsyth

Details

AGLC: Elias v Forsyth [2004] QSC 338
Case: [2004] QSC 338
Decision Date: 28 September 2004

CaseChat Overview and Summary

The case of Elias v Forsyth involved a dispute between the applicant, Elias, and the respondents, Forsyth, concerning the extension of an option to purchase land. The applicant sought to extend the expiry date of the option to purchase land from the respondents, which was originally granted under a deed. The High Court of Australia was tasked with determining whether the applicant had validly extended the option period based on an alleged oral agreement with one of the respondents.

The central legal issue before the Court was whether the applicant had validly exercised an option to extend the period within which he could exercise his right to purchase the land. This required an analysis of the terms of the original deed and whether there was a binding agreement to vary those terms. The Court had to consider the nature of the option, whether it was an option for valuable consideration or one under seal, and whether any oral agreement could validly alter the written terms of the deed.

In its decision, the Court found that the applicant had indeed validly extended the option period. The Court determined that the original option was for valuable consideration, not under seal, and therefore could be varied by an oral agreement. The Court held that there was sufficient evidence of an oral agreement between the applicant and one of the respondents to extend the option period. The Court also found that this oral agreement was binding and that the applicant had acted within the terms of this agreement when extending the option period.

The Court declared that the applicant had validly extended the expiry date of the option exercise period to 31 July 2004. Additionally, the Court ordered the respondents to pay the applicant’s costs of the action, to be assessed on the standard basis. This decision underscores the importance of clear communication and written agreements in property transactions, while also highlighting the potential for oral agreements to be binding under certain circumstances.

Orders

Orders of the court

1. It is declared that the applicant validly extended the expiry date of the option exercise period to 31 July 2004;

2. The respondents are to pay the applicant’s costs of the action to be assessed on the standard basis.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Elias v Forsyth & Anor [2004] QSC 338
PARTIES:	STEPHEN ANTHONY ELIAS (applicant) v DONALD CAMERON FORSYTH (first respondent) and ELLA CHRISTINE FORSYTH (second respondent)
FILE NO:	SC No 4889 of 2004
DIVISION:	Trial
PROCEEDING:	Trial
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	28 September 2004
DELIVERED AT:	Brisbane
HEARING DATE:	15 September 2004; 16 September 2004
JUDGE:	Chesterman J
ORDER:	1. It is declared that the applicant validly extended the expiry date of the option exercise period to 31 July 2004; 2. The respondents are to pay the applicant’s costs of the action to be assessed on the standard basis.
CATCHWORDS:	CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – OFFER – OPTION FOR VALUABLE CONSIDERATION OR UNDER SEAL – EXERCISE OF OPTION – where the parties executed a deed by the terms of which the respondents granted the applicant an option to purchase their land – where the applicant wished to extend the option period pursuant to the terms of the deed – where the applicant alleged that the second respondent orally agreed to vary the terms of the option – whether the option period had been validly extended Commonwealth of Australia v Verwayen (1990) 170 CLR 394, discussed Freshmark Ltd v Mercantile Mutual Insurance (Australia) Ltd [1994] 2 Qd R 390, discussed Mehmet v Benson (1965) 113 CLR 295, discussed Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537, discussed Spencer v Cali [1986] 2 Qd R 456, cited Tropical Traders Ltd v Goonan (1964) 111 CLR 41, cited
COUNSEL:	Mr S S W Couper QC Mr P J Dunning
SOLICITORS:	Hopgood Ganim for the applicant Varro Clarke & Co for the respondents