Helsby v Condor Developments Pty Ltd
[2008] WASC 264
•20 NOVEMBER 2008
HELSBY -v- CONDOR DEVELOPMENTS PTY LTD [2008] WASC 264
| Link to Appeal : | [2010] WASCA 16 |
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2008] WASC 264 | |
| Case No: | CIV:1666/2008 | 28 OCTOBER 2008 | |
| Coram: | TEMPLEMAN J | 19/11/08 | |
| 20 | Judgment Part: | 1 of 1 | |
| Result: | Defendant's termination without legal effect | ||
| A | |||
| PDF Version |
| Parties: | ALAN BERNARD HELSBY VANESSA ERIN PROSSER CONDOR DEVELOPMENTS PTY LTD (ACN 105 199 880) |
Catchwords: | Contract Sale of strata units off the plan Vendor developer of project Settlement when project completed Various conditions essential to project Agreed time by which all conditions are due Conditions occur according to timetable of events Automatic termination if some conditions not satisfied on time Termination clause for developer if in developer's opinion the project is not viable Developer to consider viability before last condition due to be satisfied Continuation of project and contract of sale after time for automatic termination Other conditions not capable of being satisfied due to effluxion of time Developer purports to terminate on viability grounds Consistent interpretation of terms throughout the contract Whether waiver of exercise of termination clause |
Legislation: | Strata Titles Act 1985 (WA), s 70 |
Case References: | Badat v DTZ Australia (WA) Pty Ltd [2008] WASCA 83 Bellmere Park Pty Ltd v Benson [2007] QCA 102 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- VANESSA ERIN PROSSER
Plaintiffs
AND
CONDOR DEVELOPMENTS PTY LTD (ACN 105 199 880)
Defendant
Catchwords:
Contract - Sale of strata units off the plan - Vendor developer of project - Settlement when project completed - Various conditions essential to project - Agreed time by which all conditions are due - Conditions occur according to timetable of events - Automatic termination if some conditions not satisfied on time - Termination clause for developer if in developer's opinion the project is not viable - Developer to consider viability before last condition due to be satisfied - Continuation of project and contract of sale after time for automatic termination - Other conditions not capable of being satisfied due to effluxion of time - Developer purports to terminate on viability grounds - Consistent interpretation of terms throughout the contract - Whether waiver of exercise of termination clause
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Legislation:
Strata Titles Act 1985 (WA), s 70
Result:
Defendant's termination without legal effect
Category: A
Representation:
Counsel:
Plaintiffs : Mr P G McGowan
Defendant : Mr S OwenConway QC & Mr D K Barker
Solicitors:
Plaintiffs : Butcher Paull & Calder
Defendant : Chalmers Legal Studio Pty Ltd
Case(s) referred to in judgment(s):
Badat v DTZ Australia (WA) Pty Ltd [2008] WASCA 83
Bellmere Park Pty Ltd v Benson [2007] QCA 102
Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221
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1 TEMPLEMAN J: On 8 March 2005, the plaintiffs entered into a contract (the Agreement) to purchase from the defendant, off the plan, an apartment in a multi-storey development (the Condor Tower) to be constructed by the defendant at 22 St Georges Terrace, Perth.
2 The Agreement was subject to conditions expressed to be for the benefit of the defendant. It is common ground that some conditions were satisfied and that others were not. There is an issue as to whether conditions which were not satisfied have been waived by the defendant.
3 By notice dated 23 June 2007, the defendant purported to terminate the Agreement on the basis that a viability condition had not been satisfied.
4 The plaintiffs contend that on the true construction of the Agreement and in the events which have happened, the defendant was not entitled to terminate because the time for exercising its rights in relation to the viability condition had passed.
5 The plaintiffs therefore claim a declaration that the Agreement remains valid and binding on the defendant; a declaration that the purported notice of termination was of no legal effect and an injunction to restrain the defendant to sell the apartment to anyone other than them.
6 The relevant facts have been agreed between the parties. The outcome of the action therefore depends only on the construction of the Agreement.
7 The same issues arise in relation to other actions involving agreements in relevantly identical terms between the respective plaintiffs and the present defendant for the sale and purchase of other apartments in the Condor Tower.
8 The parties to some of those actions have agreed to be bound by the outcome of this action.
9 Other actions also arise from relevantly identical agreements between those plaintiffs and the present defendant for the sale and purchase of further apartments. However, there are additional factual issues in those actions which do not arise here.
10 It is agreed between the parties to the second group of actions that they will be bound by the outcome of this action if the present plaintiffs
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- succeed: but if the plaintiffs fail, it will be open to them to litigate the outstanding factual issues.
11 By agreement between the parties, each of the plaintiffs in some of the other actions appeared by counsel at the trial of this action, and made such submissions as they considered appropriate. It will be convenient to regard these submissions as having been made on behalf of the present plaintiffs, without attribution. In taking this course, I intend no discourtesy to counsel.
The Agreement
12 The Agreement is a substantial document commencing with a simple offer and acceptance form and incorporating a number of special conditions. The document containing the conditions was prepared by the defendant's solicitors: it contains their claim to copyright. The Agreement includes simplified plans and general specifications for the apartment, a proposed Strata Plan and other documents relating to the development which will be required under the Strata Titles Act 1985 (WA). However, only the part of the document containing the special conditions is relevant to this action.
13 Clause 1 of the conditions is in the nature of an introduction. Clause 1.2 provides that certain words and phrases in the Agreement have special meanings:
Some of these words and phrases are set out in the clause entitled 'Definitions' and will have the meaning appearing next to them unless a contrary intention appears.
Other words and phrases are defined in other clauses of this Agreement in which case they will have those meanings for the purpose of the clause in which they appear and throughout this Agreement. (emphasis added)
14 I pass over cl 1.3 for the present. I shall return to it later in these reasons.
15 Clause 15 contains the definitions referred to in cl 1.2. It provides, in cl 15.4, that headings are for convenience of reference only, and do not affect the construction or interpretation of the Agreement. Clause 15.7 provides that the Agreement is to be 'constructed [sic] and interpreted as a conditional contract'.
16 The relevant conditions are all contained in cl 2. They relate to the amalgamation of the lots on which the development is to be constructed,
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- planning approval for the development, the grant of a building licence, a minimum number of pre-sales and viability. I deal with each condition in turn.
Amalgamation
17 By cl 2.1.1, 'Amalgamation' is defined to mean the amalgamation of the lots comprising the land on which the development is to be constructed, so that they form one lot for the purposes of s 20 of the Town Planning and Development Act 1928 (WA).
18 'Amalgamation Condition' is defined to mean the condition specified in 'this clause', that is, cl 2.1.
19 'Amalgamation Date' is defined to mean the latest date for the satisfaction of the Amalgamation Condition, 'being the first anniversary of the date of this Agreement'. The Amalgamation Date is therefore 8 March 2006.
20 By cl 2.1.2, the Agreement is expressed to be conditional on:
2.1.2.1 an application for Amalgamation being lodged by us at our [the defendant's] cost with WAPC;
2.1.2.2 WAPC granting approval for Amalgamation within 3 months after the date of lodgement of the application;
2.1.2.3 WAPC endorsing approval on the Deposited Plan within 3 months after approval; and
2.1.2.4 the Deposited Plan being in Order for Dealing within 3 months after the date of endorsement of approval.
21 It is not necessary to set out the definitions of 'Deposited Plan' or 'In Order for Dealing': nor cl 2.1.3 or cl 2.1.4. These provisions impose on the defendant an obligation to lodge an application for amalgamation and to endeavour to obtain approval and to prepare and lodge the Deposited Plan.
22 The following clauses are relevant:
2.1.5 If WAPC [the Western Australian Planning Commission] grants approval for Amalgamation subject to a condition with which we in our sole and absolute discretion:
2.1.5.1 are unwilling to comply with; or
2.1.5.2 consider not otherwise acceptable,
- we may within 20 Business Days of being notified of the condition elect, by notice to you to withdraw from and terminate this Agreement.
- 2.1.6 The Amalgamation Condition is for our benefit. Only we may waive the Amalgamation Condition.
2.1.7 We will procure that our conveyancing representative keeps you informed of progress in relation to the satisfaction of the Amalgamation Condition including when the Deposited Plan is in Order for Dealing.
2.1.8 If the Amalgamation Condition is not satisfied by the Amalgamation Date then:
2.1.8.1 this Agreement may be terminated by us by notice to you;
2.1.8.2 whereupon any monies paid by you under this Agreement will be refunded to you together with interest, if any, accrued therein; and
2.1.8.3 subject to any claim which arose prior to termination neither of us will have any claim against the other.
2.1.9 If the Amalgamation Condition has not been satisfied on or prior to the Amalgamation Date we must give notice of that fact to you or your conveyancing representative not later than 10 Business Days after the Amalgamation Date and the preceding clause shall apply.
2.1.10 If the Amalgamation Condition is satisfied or waived by us then this Agreement shall proceed subject to the satisfaction of all other conditions which this Agreement is subject to.
23 In my view, it is important to note that if the three milestones referred to in cl 2.1.2.2 to cl 2.1.2.4 inclusive have not been achieved by the end of the specified periods, and on or before the Amalgamation Date, then, strictly, the Amalgamation Condition can never be satisfied.
24 If the condition has not been satisfied by the Amalgamation Date, the defendant is entitled to terminate the Agreement under cl 2.1.8, provided 10 business days' notice has been given under cl 2.1.9.
25 I repeat, and emphasise, that if the Amalgamation Condition is not satisfied by the Amalgamation Date, it can never be satisfied on its terms. If, therefore, the defendant does not then give notice of non-satisfaction or termination, it loses the right to do so thereafter.
26 That, I think, is the sense in which the word 'waived' is used in cl 2.1.10: if the Amalgamation Condition is not satisfied by the
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- Amalgamation Date, and the defendant does not terminate the Agreement, it must be taken to have waived the condition.
27 This construction is consistent with the Oxford English Dictionary definition of waiver, which is said to mean the unilateral abandonment or renunciation of a right, claim, liability, contention or remedy: see Contract: General Principles - The Laws of Australia [7.6.1360].
28 The result is the same if the defendant does not terminate the Agreement under cl 2.1.5 when Amalgamation approval is given, but subject to a condition which the defendant considers to be unacceptable.
29 In relation to the Amalgamation Condition, the following facts are agreed (the numbers in square brackets refer to the paragraph numbers in the Statement of Agreed Facts):
• The defendant applied to the WAPC for the amalgamation of its lands on 12 January 2005 [9].
• On or about 27 July 2005, the WAPC granted approval to the amalgamation [10]; but
• the approval so granted was subject to various conditions, including the transfer by the defendant to the Crown of a portion of its land fronting Hay Street for the purpose of widening Hay Street by 3.657 metres [11].
• The defendant did not within 20 business days of being notified of that condition elect by notice to the plaintiffs to withdraw from and terminate the Agreement [12].
• The defendant did not within 10 business days after 8 March 2006, or at all, give notice under cl 2.1.9 of the Agreement to the plaintiffs [13].
• On 22 August 2005, the defendant requested the WAPC to reconsider the road widening requirement by requiring the defendant to transfer an isometric lot to the City of Perth [14].
• By letter dated 9 September 2005, the City of Perth informed the WAPC that it was to take a 3.657 metre wide isometric lot (the Colonnade) fronting Hay Street for the purpose of a pedestrian footpath [15].
• On 19 March 2008, the defendant lodged Deposited Plan 58312 [16].
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- • On 8 April 2008, the WAPC endorsed its consent to Deposited Plan 58312 whereby the defendant's land is to be amalgamated with Lot 201, being the Colonnade [17].
• On 9 April 2008, the Deposited Plan was In Order for Dealing [18].
30 In my view, it is clear from those facts that the Amalgamation Condition was not satisfied. That is because:
1. the WAPC did not grant approval within three months of the application, as required by cl 2.1.2.2: the approval was granted some six months after the date of the application;
2. the WAPC did not endorse approval on the Deposited Plan within three months of the (conditional) amalgamation approval: the endorsement was not made until nearly three years later; and in any event
3. the Amalgamation Condition was not satisfied by the Amalgamation Date: 8 March 2006.
31 In my view, therefore, because the defendant did not exercise its rights under cl 2.1.5 or cl 2.1.8, it has waived the Amalgamation Condition.
Planning Approval
32 The condition relating to planning approval is contained in cl 2.2. Clause 2.2.1 defines 'Planning Application' as a formal application for approval to develop the land by the construction of the Condor Tower in the prescribed form, including plans and specifications.
33 'Planning Approval' is defined to mean the approval by the local authority of the Planning Application.
34 'Planning Condition' is defined to mean the condition specified 'in this clause', that is, cl 2.2.
35 'Planning Condition Date' is defined to mean the latest date for the satisfaction of the Planning Condition, being the first anniversary of the date of the Agreement: again, 8 March 2006.
36 By cl 2.2.2, the Agreement is expressed to be conditional on:
2.2.2.1 the Planning Application being lodged by us at our [the defendant's] cost with the Local Authority; and
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- 2.2.2.2 the Local Authority granting Planning Approval within 3 months after the date the Planning Application is lodged by us.
- Clauses 2.2.3 to 2.2.10 are to the same effect, mutatis mutandis, as cl 2.1.3 to cl 2.1.10. However, unlike cl 2.1.8.1, which empowers the defendant to terminate if the Amalgamation Condition is not satisfied by the due date, cl 2.2.8 provides:
2.2.8 If the Planning Condition is not satisfied by the Planning Date then:
2.2.8.1 this Agreement will automatically terminate without notice;
2.2.8.2 any monies paid by you under this Agreement will be refunded to you together with interest accrued thereon; and
2.2.8.3 subject to any claim which arose prior to termination neither of us will have any claim against the other.
37 The scheme of cl 2.2 is therefore the same as that for cl 2.1. In short: if the Planning Condition is not satisfied in accordance with cl 2.2.2.1 and cl 2.2.2.2, and is not satisfied by the first anniversary of the date of the Agreement, it can never be satisfied. If the defendant does not terminate in those circumstances, it must be taken to have waived the condition.
38 In relation to the Planning Condition, the following facts are agreed:
• On 5 December 2003, the defendant made an application to the City of Perth for approval to develop the Condor Tower upon its lands [2].
• On 21 April 2004 the City of Perth granted planning approval for construction of the Condor Tower, which approval was subject to certain conditions including:
1. that the defendant's lands be amalgamated into one lot on one certificate of title prior to the issue of a certificate of classification for the development;
2. that a 3.657 metre wide strip of land across the Hay Street frontage of the site (the Colonnade) be ceded to the City for the purposes of road widening [3].
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- • Application for development approval was varied as a result of the further application made on 17 May 2004 to which approval was granted by the City of Perth on 22 July 2004 [4].
• Such approval was subject to certain conditions [5].
• The defendant did not within 20 Business days from notification of such conditions elect, by notice to the plaintiffs, to withdraw from and terminate the Contract [6].
• The defendant did not within 10 Business days after 8 March 2006 or at all give notice under cl 2.2.9 of the Contract to the plaintiffs [7].
• By letter dated 17 June 2004, the City of Perth advised the defendant, inter alia, that:
1. the City has been pursuing the widening of this section of Hay Street for the purpose of improving the pedestrian environment along the street, rather than for the purpose of widening the vehicle carriageway. This enables colonnading to occur, whereby the City acquires the land for road widening, however, an isometric lot is created which preserves the development rights above the height of the Colonnade;
2. this arrangement would not affect the future strata titling of the development in respect of the balconies above the Colonnade, as the balconies would overhang a lot held in fee simple by the City, rather than encroaching over a dedicated road reserve [8].
If at the date of this Agreement all the conditions contained in the next clause entitled 'Conditional Acceptance' are satisfied or waived those conditions shall not apply.
40 As appears from the agreed facts, at the date of the Agreement, the Planning Condition had not been satisfied, and could never be satisfied. That is because planning approval (conditional) was not given until more than three months after the date of the application. The defendant must therefore be taken to have waived the condition when it entered into the Agreement.
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41 Alternatively, the defendant must be taken to have waived the condition at the latest by 8 March 2006, because it did not then exercise its right to terminate the Agreement under cl 2.2.8 and cl 2.2.9.
Building Licence
42 Clause 2.3 contains similar provisions to cl 2.1 and cl 2.2 in relation to the application for and grant of a building licence. Clause 2.3.1 provides:
2.3.1 In this clause and throughout this Agreement:
'Building Licence' means a building licence granted by the Local Authority;
'Building Licence Application' means formal applications for a building licence to build Condor Tower in accordance with the Planning Approval including full working drawings;
'Building Licence Condition' means the condition specified in this clause;
'Building Licence Date' means the date within twenty four (24) months of the satisfaction of the Planning Condition.
This Agreement is conditional on:
2.3.2.1 the Building Licence Application being lodged by us at our [the defendant's] cost with the Local Authority and WAPC within eighteen (18) months after Planning Approval.
2.3.2.2 the Local Authority and WAPC granting the Building Licence within 3 months after the date the Building Licence [Application] is lodged by us.
- I have inserted the word 'Application' in cl 2.3.2.2 in order to cure an obvious omission.
44 Clause 2.3.7 provides for automatic termination of the Agreement, without notice, if the Building Licence Condition is not satisfied by the Building Licence Date. There is no requirement in cl 2.3 for a notice to be served which triggers the automatic termination. This may be the result of an inadvertent omission. I note that cl 2.3.7.3 is incomplete. And it is followed by cl 2.3.9. There is no cl 2.3.8.
45 It is agreed that the defendant made application to the City of Perth for the grant of a building licence for the Condor Tower on 22 March
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- 2005 [19] and that the licence was issued on 15 November 2005 [20]: that is, nearly eight months after the application was lodged. However, for the condition to have been satisfied, the licence should have been granted within three months of the application. It follows that the Building Licence Condition was not satisfied. Nor could it ever be satisfied, either by the Building Licence Date or at all. Indeed, in my view, there could never be a Building Licence Date, because it is determined by reference to the satisfaction of the Planning Condition, which, for the reasons given above, was not satisfied.
46 Despite this, the parties appear to have proceeded on the basis that because a building licence was granted (albeit after the time stipulated by the Building Licence Condition), the condition was satisfied. The defendant does not allege non-satisfaction of the condition in its defence: and counsel for the plaintiffs referred to the condition having been satisfied, apparently on that basis (ts 22). The better view, I think, is that by continuing with the development, notwithstanding the automatic termination of the Agreement on 8 March 2007, the defendant must be taken to have waived the Building Licence Condition.
The Pre-Sales Condition
47 Clause 2.4 contained a condition which, in substance, required the defendant to have pre-sold lots in the Condor Tower with a minimum aggregate sale price of $55,000,000 by the date 12 months after the date of the Agreement.
48 It is agreed that this condition was satisfied within 12 months of 8 March 2005 [23].
The Viability Condition
49 The viability condition is contained in cl 2.5, which provides as follows:
2.5.1 In this clause and throughout this Agreement:
'Viability' means that in our sole opinion the development of Condor Tower is viable having regard to all commercial, legal and financial matters including but not limited to the conditions of approval in respect of:
2.5.1.1 the Amalgamation;
2.5.1.2 the Subdivision;
- 2.5.1.3 the Planning Approval; and
2.5.1.4 the Building Licence;
'Viability Condition' means the condition in this clause;
'Viability Satisfaction Date' means the latest date for satisfaction of the Viability Condition namely the date after the last to occur of the satisfaction of the Amalgamation Condition, the Subdivision Condition, the Planning Approval Condition, the Building Licence Condition and the Pre-Sale Condition.
- 2.5.2 This Agreement is conditional upon the satisfaction of the Viability Condition by the Viability Satisfaction Date.
2.5.3 After the satisfaction of all other conditions in this Agreement we will consider whether or not Condor Tower is Viable. If we do not consider Condor Tower to be Viable then the Viability Condition will not have been satisfied. If we do consider that Condor Tower is Viable then the Viability Condition is satisfied.
2.5.4 The Viability Condition is for our benefit. Only we may waive the Viability Condition.
2.5.5 If the Viability Condition is not satisfied by the Viability Date then:
2.5.5.1 this Agreement may be terminated by us by notice to you;
2.5.5.2 whereupon any monies paid by you under this Agreement will be refunded to you together with interest, if any, accrued therein; and
2.5.5.3 subject to any claim which arose prior to termination neither of us will have any claim against the other.
2.5.6 If the Viability Condition has not been satisfied on or prior to the Viability Date we must give notice of that fact to you or your conveyancing representative not later than 10 Business Days after the Viability Date and the preceding clause shall apply.
2.5.7 If the Viability Condition is satisfied or waived by us then this Agreement shall proceed subject to the satisfaction of all other conditions which this Agreement is subject to.
- (I take the references to Viability Date to mean Viability Satisfaction Date.)
50 In my view, the purpose of cl 2.5 is to provide the defendant with a further opportunity to consider the viability of the Condor Tower development, once outstanding conditions have been satisfied. I say 'a
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- further opportunity', because, as has been seen, the defendant has that opportunity if any other condition in cl 2 is not satisfied. The defendant may then terminate or waive the relevant condition.
51 It may be assumed that the defendant would waive a condition only if confident that the development was viable, notwithstanding the non-satisfaction of that condition.
52 As I have noted above, each of the Amalgamation, Planning Approval, Building Licence and Pre-Sales conditions requires for its satisfaction that an event or events will occur in accordance with a specified timetable. That being so, the conditions can never be satisfied after the relevant times have expired. (I ignore the reference to the Subdivision Condition in the definition of Viability Satisfaction Date. For reasons to which I will refer below, I consider that there is no such condition in the Agreement.)
53 Ultimately, of course, there must be an amalgamation of the titles; planning approval must be granted and a building licence must be obtained. Without the necessary approvals, the Condor Tower could not be constructed; a strata plan could not be prepared nor strata titles issued. However, the happening of those events, outside the times specified in the relevant conditions, does not result in those conditions being satisfied in accordance with their terms.
54 I therefore construe the term Viability Satisfaction Date to mean the date after the last to occur of the satisfaction of the other cl 2 conditions which are capable of being satisfied. Similarly, I construe cl 2.5.3 such that the reference to 'the satisfaction of all other conditions in this Agreement' is to all conditions which are capable of being satisfied: that is, conditions which have not been waived, or in respect of which, the time for their satisfaction has not expired.
55 That, in essence, is the construction for which the plaintiffs contend. Alternatively, they submit that the Viability Satisfaction Date and cl 2.5.3 should have added to them the words 'or waiver', so that they read:
'Viability Satisfaction Date' means the latest date for satisfaction of the Viability Condition namely the date after the last to occur of the satisfaction or waiver of the Amalgamation Condition, the Subdivision Condition, the Planning Approval Condition, the Building Licence Condition and the Pre-Sale Condition.
- …
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- 2.5.3 After the satisfaction or waiver of all other conditions in this Agreement we will consider whether or not Condor Tower is Viable. If we do not consider Condor Tower to be Viable then the Viability Condition will not have been satisfied. If we do consider that Condor Tower is Viable then the Viability Condition is satisfied.
- That approach would, I think, be equally appropriate.
56 The defendant accepts that once the time had passed within which it was entitled to serve a notice of termination of the Agreement (because a condition had not been satisfied) then it lost the right to do so subsequently. However, the defendant does not accept that its failure to serve a notice amounts to a waiver of the relevant condition. It contends that it is entitled to wait until all of the conditions contained in cl 2 have actually been satisfied before considering whether or not the Condor Tower is viable. However, at the risk of labouring the point, I repeat my view that once the time has passed by which a condition must be satisfied, it can never be satisfied thereafter.
57 The defendant's construction, I think, requires the references in the Viability Satisfaction Date to the dates of satisfaction of the other conditions to mean the dates on which amalgamation and subdivision are actually approved and the building licence granted. However, in my view, that construction is precluded by cl 1.2. As I have noted above, that clause requires all defined words and phrases to have the same meaning throughout the Agreement.
58 Leading counsel for the defendant submits that support for his construction can be found in the judgment of McLure JA in Badat v DTZ Australia (WA) Pty Ltd [2008] WASCA 83. At [52] her Honour acknowledged the existence of 'an independent doctrine of waiver':
This court's considered position is that a majority of the High Court (Brennan, Toohey, Gaudron & McHugh JJ) in Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 accept that there is an independent doctrine of waiver: Wiltrading (WA) Pty Ltd v Lumley General Insurance Ltd [2005] WASCA 106; (2005) 30 WAR 290 [48] (Steytler P). That remains my understanding of the majority position in Verwayen [52].
59 Then, in a passage on which counsel places particular reliance, McLure JA wrote:
The first significant point is that waiver is temporary in the sense that, unlike variation, it does not alter the terms and conditions of the contract but only prevents the enforcement of the relevant contractual right. Thus,
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- a party may dispense with the performance of a condition of a contract but leave the original contract unaffected so that the party could at a later time insist on compliance in the future with the contractual obligation: Phillips v Ellinson Bros Pty Ltd (1941) 65 CLR 221, 243 - 244 (Williams J). Waiver involves unilateral action by one party to the contract [54]. (emphasis added)
60 In Phillips v Ellinson Brothers Pty Ltd (1941) 65 CLR 221, the plaintiff had been employed under a contract which required him to devote 160 hours to the management of the defendant's business in every period of four weeks.
61 During the currency of the employment contract, the plaintiff obtained a concession from the defendant's managing director to the effect that in the final six months of the contract he would not be required to devote more than 15 hours per week to the defendant's business. The plaintiff nevertheless sued for the remuneration to which he would have been entitled under the original agreement.
62 Referring to this concession, Williams J wrote:
Admittedly the plaintiff did not perform the agreement for the last six months according to its tenor, but he claimed that after January there had been a mere voluntary forbearance on the part of the defendant to insist upon the performance of the condition as to hours according to its strict terms, leaving the original contract unaffected, so that the defendant could at any time have insisted upon the plaintiff in the future devoting the full 160 hours to the business (243). (emphasis added)
- The words which have been italicised in this passage, appear to be the source of the proposition in the italicised part of the judgment of McLure JA set out above. However, as I understand it, Williams J was only setting out the plaintiff's contention: not his Honour's view of the law.
63 The point of the case was that because the contract was required to be in writing, a subsequent parol arrangement could be effective only if it related to 'the mode and manner of the performance of an existing obligation and is not intended to substitute one agreement for another' (244).
64 Williams J was of the view that the concession granted to the plaintiff resulted in a variation of the contract. But because the contract had not been performed according to its written terms, the plaintiff failed in this aspect of his claim (246).
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65 I do not, therefore, regard Phillips v Ellinson as authority for the proposition that waiver is temporary. Indeed, in Commonwealth of Australia v Verwayen (1990) 170 CLR 394, Toohey J (474) and Gaudron J (487) held that in the circumstances of that case, the waiver by the Commonwealth of a limitation defence was irrevocable.
66 In any event, in my view, it is not possible to waive, temporarily, the benefit of a condition which, if not satisfied by the stipulated date, results in the automatic termination of a contract: as for example, the Building Licence Condition in the present case.
67 For these reasons, I do not accept that the defendant's construction of the Agreement is correct. Indeed, I accept the plaintiffs' submission that the defendant's construction would lead to the result that the defendant could wait until after the completion of the apartment - perhaps until the eve of settlement - before considering whether the Condor Tower was viable. This on the basis that the Amalgamation Condition had only then been satisfied. I do not think the parties could be taken to have intended this result.
The purported termination
68 On 1 June 2007, the defendant's solicitors wrote to the plaintiffs about the Agreement. In their letter, the solicitors said:
The contract is subject to a number of conditions which must all be satisfied before Condor is obliged to complete the contract with you.
One of those conditions is that Condor must receive approval for the amalgamation of the lots which will comprise the parcel upon which Condor Tower will be constructed. This is called the amalgamation condition.
Condor has made all the necessary applications to the relevant authorities for amalgamation approval. However, the approvals Condor has received are subject to conditions which are not yet satisfied. By reason of the terms of one of the conditions Condor will not be able to satisfy the amalgamation condition until after Condor Tower has nearly reached the stage of practical completion.
69 The solicitors went on to refer to the Viability Condition and to inform the plaintiffs that 'there are now commercial and financial reasons why [the defendant] considers that Condor Tower is not viable'. The solicitors foreshadowed termination of the Agreement if the plaintiffs did not agree to a variation whereby the price of the apartment would be increased.
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70 In my view, the proposition that the various conditions of the Agreement 'must all be satisfied before [the defendant] is obliged to complete the contract with you' is incorrect. It was not necessary for the conditions to be satisfied. They could be waived, as was the Amalgamation Condition. Although it was necessary to obtain amalgamation approval, approval outside the time specified in the Amalgamation Condition does not equate to satisfaction of the condition.
71 The plaintiffs did not agree to a variation of the Agreement. The defendant's solicitors therefore served on them a Notice of Termination dated 28 June 2007. The ground for termination was that the defendant was of the opinion that the Condor Tower was not viable, so that the Viability Condition had not been satisfied.
72 On the view I take of the agreed facts, only one condition was actually satisfied: the Pre-Sales Condition. The actual date of satisfaction is not known: the agreement is only that it was satisfied by 8 March 2006. However, by that date, it should have been apparent to the defendant that the Amalgamation, Planning Approval and Building Licence conditions had not been, and could not be, satisfied. It follows that if the defendant was to terminate for non-satisfaction of the Viability Condition it should have done so by serving a notice under cl 2.5.6 within 10 business days after a date (presently unknown) which must have been on or before 8 March 2006.
73 I therefore consider that the purported termination on 27 June 2007 was ineffective, with the result that the Agreement continues in existence.
There is no Subdivision Condition
74 As I have noted above, the definition of 'Viability Satisfaction Date' includes a reference to the Subdivision Condition. All the other Conditions referred to in that definition are to be found in cl 2.1 to cl 2.4. However, there is no reference in cl 2 to a Subdivision Condition. That term is not defined in the Agreement.
75 Clause 5 contains provisions relating to the preparation and registration of the Strata Plan. Clause 5.1 imposes on the defendant an obligation to prepare the Strata Plan on completion of the construction of the Condor Tower. Clause 5.2.1 provides the Strata Plan will 'subdivide Condor Tower into strata title lots and common property …'
(Page 19)
76 Clause 5.5 provides:
5.5.1 Each of us agree in accordance with Section 70(4) of the Strata Titles Act 1985 that the Strata Plan may be registered at any [time] forty eight (48) months after the date we accept your offer.
5.5.2 If the Strata Plan is not registered within that period either of us may before the Strata Plan is registered terminate this Agreement by giving notice in writing advising that this Agreement is terminated whereupon we will authorise the deposit holder to repay you the deposit and all other moneys (if any) paid by you and there shall be no further claim under this Agreement by either party against the other at law or in equity or pursuant to statute whether state, federal or otherwise.
- I have added the word 'time' in cl 5.5.1 in order to cure an obvious omission.
77 It is submitted on behalf of the plaintiffs that, having regard to s 70(4), s 70A and s 70B of the Strata Titles Act, it was not open to the parties to make an agreement in terms of cl 5.5.2.
78 Section 70 of the Strata Titles Act is contained in pt V of the Act. It is designed to protect the purchaser of a strata lot which is not in existence as at the date of the contract. Section 70(4) provides:
If the strata/survey-strata plan is not registered -
(a) within such period after the date of the contract as is agreed in writing by the purchaser and the vendor; or
(b) in the absence of any such agreement, within 6 months after that date,
the purchaser may avoid the sale at any time before the plan is registered.
- It is to be noted that this provision does not provide any protection for the vendor. And s 70B provides, so far as relevant, that except as provided by s 70(4), pt V of the Act (which is entitled 'Protection of purchasers') does not 'empower any party to avoid the contract'. Further, by s 70A of the Act, a contract or arrangement is of no effect to the extent that it purports to exclude or restrict the operation of pt V.
79 Leading counsel for the defendant submits that cl 5.5.2 constitutes an agreement which takes effect outside the operation of s 70(4). However, in my view, cl 5.5.2 is so closely linked to cl 5.5.1 that it should be regarded as an impermissible attempt by the defendant to obtain an advantage which s 70(4) does not permit.
(Page 20)
80 If I am wrong in that view, then cl 5.5.2 does make the Agreement conditional on registration of the Strata Plan 48 months after the date of the Agreement. However, it is not a condition of the kind set out in cl 2. Those conditions have a bearing on the viability of the development, assuming, without deciding, that viability involves commercial considerations: see Bellmere Park Pty Ltd v Benson [2007] QCA 102. However, in my view, the registration of the Strata Plan is a purely administrative matter, which must await construction of the Condor Tower. In my view, it is reasonable to assume that the parties contemplated, when they entered into the Agreement, that the defendant might wish to consider the viability of the development if any of the cl 2 conditions were not satisfied. However, I think it unlikely that they would have contemplated such a review once construction of the Condor Tower had been completed.
81 I therefore conclude that the reference to the Subdivision Condition in the definition of Viability Satisfaction Date is not a reference to cl 5. It follows that the Agreement does not contain a Subdivision Condition, so that those words in the definition referred to above are superfluous.
Conclusion
82 For the reasons given above, I consider that the plaintiffs are entitled to the relief they seek. I will invite counsel to bring in a minute of order.
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