Hadco Constructions v McIntosh - [2003] NSWSC 689

CITATION: Hadco Constructions v McIntosh [2003] NSWSC 689

HEARING DATE(S): 16 July 2003

JUDGMENT DATE:
30 July 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Windeyer J at 1

DECISION: Order for specific performance

CATCHWORDS: VENDOR AND PURCHASER - Agreement for option to purchase property - agreed prior to exchange of agreement that option be granted to purchaser 'or nominee' - agreement as exchanged omitted 'or nominee' - after exchange of agreement 'or nominee' added by agreement - whether addition of words by way of agreed variation or by way of rectification - provision in agreement for extension of six months in certain events - whether new agreement required for extension of term of existing option - whether option for purchase of residential property could be valid if exercised by nominee who did not sign the option agreement

LEGISLATION CITED: Conveyancing Act 1919 s66ZG, s66ZH, s66ZI, s66ZJ, Division 9 Pt 4

PARTIES :
Hadco Constructions Pty Limited (Plaintiff)
Robert James McIntosh (First Defendant)
Kathleen Jane McIntosh (Second Defendant)

FILE NUMBER(S): SC 5514 of 2002

COUNSEL: Mr D Warren (Plaintiff)
Mr G R Waugh (First Defendant)

SOLICITORS: Macquarie Lawyers (Plaintiff)
Sorenson & Brown (First Defendant)
Mikelis Strikis (Second Defendant)

- 10 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

WEDNESDAY 30 JULY 2003

5514/02 HADCO CONSTRUCTIONS PTY LIMITED V ROBERT JAMES MCINTOSH & ANOR

JUDGMENT

1 The question for decision is whether or not an option to purchase property, 281 Mona Vale Road, St Ives (the property) has been validly exercised.

Facts

2 The defendants, Mr and Mrs McIntosh (the grantors) are the registered proprietors of the property which is the land in Folio Identifier 3/19088.

3 By agreement dated 30 March 2001, in consideration of the sum of $9,000 they granted an option to Arthur Haddad (the grantee) to purchase the property for the sum of $900,000. Clauses 4, 5, 6, 9, 11 and 12 of the option agreement are as follows:

4. This option may be exercised by the Grantees by written notice delivered on or before 5 pm on 30th March 2002 to 281 Mona Vale Road, St Ives or to the offices of the Grantors’ solicitors named in the contract or notified before the exercise of the option by the Grantors or any solicitor purporting to act for the Grantors accompanied by:-

(a) A cheque which is $9,000 less than the deposit shown in the contract in favour of the deposit holder named or ascertained under the contract; and

(b) A contract in the form of the contract annexed hereto duly executed by the Grantees as purchasers and with the addition of copies of the following material in the contract:

(i) Computer Folio search 3/19088

(ii) DP 19088;

(iii) Section 149 Certificate for the property, copies of which are annexed hereto.

5. The contract executed by the Grantees shall be dated on the date of delivery to the address stated in Clause 4 or the offices of the Grantors’ solicitor of the documents referred…

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.

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Details

Case: [2003] NSWSC 689
Decision Date: 30 July 2003

CaseChat Overview and Summary

The case involved Hadco Constructions, the purchaser, and McIntosh, the vendor. The dispute centred around an agreement for an option to purchase a property, with the initial agreement stating that the option could be exercised by the purchaser or their nominee. However, the final version of the agreement omitted the term "or nominee," leading to a disagreement over whether the option could still be exercised by a nominee. This disagreement was resolved in a subsequent agreement that added the omitted term. The court had to determine whether the addition of the term was a variation of the original agreement or a rectification, and whether a new agreement was required to extend the term of the existing option. Additionally, the court had to consider whether the option could be validly exercised by a nominee who did not sign the option agreement.

The legal issues in the case revolved around the interpretation of the original agreement and the subsequent agreements. The key questions were whether the addition of the term "or nominee" constituted a variation of the original agreement or a rectification, and whether a new agreement was necessary to extend the term of the existing option. The court also had to determine whether the option could be validly exercised by a nominee who did not sign the option agreement. These issues required careful consideration of the contractual language and the intentions of the parties at the time of the agreements.

The court found that the addition of the term "or nominee" was a rectification rather than a variation of the original agreement. This was because the parties intended for the option to be exercisable by a nominee, but the final agreement omitted this term by mistake. The court held that a new agreement was not required to extend the term of the existing option, as the parties had effectively extended the term through their subsequent agreement. Additionally, the court ruled that the option could be validly exercised by a nominee who did not sign the option agreement, provided that the nominee was properly nominated by the purchaser. This decision was based on the principle that the option agreement was intended to be binding on the parties and their nominees.

The final orders of the court were that the addition of the term "or nominee" was a rectification, not a variation, of the original agreement. The court also found that a new agreement was not required to extend the term of the existing option, and that the option could be validly exercised by a nominee who did not sign the option agreement, provided that the nominee was properly nominated by the purchaser. These orders resolved the dispute between the parties and clarified the terms of the option agreement.

Orders