Immer (No 145) Pty Limited v Uniting Church in Australia Property Trust (NSW)

[1992] HCATrans 180

~ ~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S57 of 1992

B e t w e e n -

IMMER (NO 145) PTY LIMITED

Appellant

and

UNITING CHURCH IN AUSTRALIA

PROPERTY TRUST (NSW)

Respondent

BRENNAN J
DEANE J
TOOHEY J
GAUDRON J

MCHUGH J

Immer(3) 1 22/6/92

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON MONDAY, 22 JUNE 1992, AT 2.15 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR D.P. ROBINSON, for the

appellant. (instructed by Baker & McKenzie)

MR F.M. DOUGLAS:  May it please the Court, I appear with my

learned friend, MR K.P. SMARK, for the respondent.

(instructed by Clayton Utz)

MR JACKSON:  Your Honours, may I hand to the Court copies of

our outline of submissions.

BRENNAN J: Yes, Mr Jackson.

MR JACKSON:  Thank you, Your Honour. Your Honours, as the

Court will have seen, the appeal is concerned with two broad issues, the first whether there was an

election by the appellant not to rely upon the

terms of clause 7 of the agreement and, secondly,

if what occurred would otherwise have been an

election, the situation is affected by the fact

that the party, or both parties, were under a

mistake on the question of whether the approval of

the Council to the transfer of air space had or had

not in fact been given.

Your Honours, may I go immediately to the

basic facts, and they may be stated shortly and by
reference to three matters: first, the nature of
the property being sold; secondly, the several
provisions of the agreement which are material for

present purposes; and thirdly, the events which

occurred. Your Honours, could I deal with each of

those briefly before proceeding to develop our

submissions.

. If I could turn to the nature of the rights

involved. The respondent owned premises in Pitt

Street, Sydney, which were known as Pilgrim House.

Pilgrim House was an historic building and thus had

a surplus of air space rights, or an excess of
floor space ratio.	Your Honours, the nature of the

rights contemplated may be seen in two passages in

the reasons for judgment in the courts below.

First, Mr Justice Young, at page 319, lines 9 to 24

and, Your Honours, the core of the matter really

appears at about line 14 on page 319, going through

to the end of that passage at line 24.

BRENNAN J: Where do we find the relevant statutory

provisions?

MR JACKSON:  Your Honour will not find them, with respect.

What one finds - and I can indicate to Your Honour

the passages in the appeal book which show the way

in which the concept is administered but, Your

Honour, one will not really find any statutory

Immer(3) 22/6/92

provision which deals in any way exactly with the notion. We take no point about that, I hasten to say. What it seems to be, in essence, is what is described in His Honour's reasons for judgment at

that passage.

Your Honour, there is a rather fuller

explanation, perhaps, given by Mr Justice Meagher

in the Court of Appeal at page 339, lines 15 to 30,
and Your Honour will note particularly, at about

line 26 on page 339, His Honour refers to the fact

that:

There is, apparently, no statutory

basis •.... but it arises from a Council's power

to grant development applications.

Your Honour, the nature of the policy and its

administration is dealt with in some passages in

the material before the primary judge. May I give

Your Honour a reference at some point before the

appeal concludes in relation to the summaries of
the policy that was set out there.

Your Honours, the appellant wished to develop

nearby land and to acquire additional air space
rights. That appears at page 340, line 31, going

through to page 341, line 6. As Your Honours will
see on page 341, lines 4 to 6, there was an

agreement to sell those rights for $2.306 million.

Your Honours, may I turn then to the terms of

the agreement which are material for present

purposes. The agreement was dated 14 October 1988.

It commences at page 178, which is in volume II.

May I give Your Honours the numbers of the clauses

,which are material first and then take Your Honours

to the provisions of them. The clauses which are

material are clauses l(a), l(d), 3, 5, 7 and 9.

They appear at pages 180 through to 183.

If I could go then to those provisions.

Clause l(a), which is at page 180, says that:

The Purchaser shall ..... make application to

the Council for the transfer of the surplus

bonus. Clause l(d) says that:

The Vendor -

the present respondent -

shall comply with all conditions attaching to

the approval of the application if and when

granted by the Council.

Immer(3) 22/6/92

Clause 3 is the provision fixing the time for completion:

Completion shall take place within seven (7)

days of notice ..... that the Council has

granted the application.

And Your Honours will see the requirements as to

satisfaction of the Council's requirements at the

top of page 181.

TOOHEY J:  Mr Jackson, is "surplus bonus" just a term that

the parties concocted for the purpose of the

agreement?

MR JACKSON:  Yes, Your Honour, it is. Your Honour will see

it used as a term which is defined at page 178

about line 28.

Your Honours, if I could go from that to

clause 5 at page 181, Your Honours will see that it

required the vendor to - at line 11:

do any such further things as may be

reasonably necessary to comply with the

requirements of the Council for the approval

to the transfer of the surplus bonus required

by the Purchaser -

et cetera. Then one comes to clause 7, at

page 182, which says that:

In the event that approval is not granted to the application within ninety (90) days from the date of completion of the restoration work

on Pilgrim House then the Vendor may at any

time thereafter and if "approval0 is not

granted by 1.4.89 then the Purchaser may at

any time thereafter rescind this Deed by

notice in writing to the other whereupon the

provisions of clause 9 hereof shall apply.

Your Honours, if one goes to clause 9 then, at

page 183, it in effect provides that the parties

are restored to their original positions, the

rescission being ab initio.

BRENNAN J:	Mr Jackson, looking at the definition of "surplus bonus" at page 178, do we have the
Council's development control and floor space ratio
code?
MR JACKSON:	Your Honour, I think the answer is yes to that

and it is contained, and I may be corrected if I am

wrong on this, as I recall it, amongst the

documents which are various annexures to the

affidavit of Reverend Denham, which commences at

Immer(3) 22/6/92

page 65, with those annexures being at page 68 and

following. If I could go to page 65 first,

Reverend Denham, at about line 25, says he believes

he has the Council's guidelines. Then he indicates

the documents which are annexed, and they commence

at page 68. Your Honour, I have to say I do not

know whether the document bearing the precise name
referred to at page 178 is amongst those documents

but - - -

GAUDRON J: Annexure G, referred to in paragraph 4, I think,

Mr Jackson.

MR JACKSON:  Yes, thank you, Your Honour, that is the

document. Your Honours, if I might move then to

the third preliminary aspect dealing with the
events which happened. A convenient summary of the

initial events may be seen in the reasons for

judgment of Mr Justice Meagher at page 342,

commencing at line 1 and going through to page 343,

about line 43. His Honour summarized what was

required, in effect, and said, at the top of the

page:

The intervention of the Council seems to

be necessary at three points: to recognize

the existence of "air space" rights in the

donor, to accord the status of transferability

to those rights and to sanction the actual
transfer of those rights from the donor to the
recipient.

He referred, Your Honours, to the first of those points - this is at page 342, about line 6 - having

been reached on 7 June 1988. That, of course, was

before the contract was entered into.

Your Honours will see then, at page 342, about

line 20, he refers to the second point. One notes

immediately that was after the contract was entered

into. The third point, Your Honours will see at

page 343, about line 23, was not reached until

shortly before 25 September 1990. Your Honours,

that was a time more than a year after our side had

rescinded or, as the other side would say purported

to rescind, the agreement.

As is apparent from His Honour's remarks, that

date, the date of 25 September 1990, was a very

long time, of course, after the date 1 April 1989,

which appeared in clause 7. In the period prior to

September 1990 there had been correspondence from

the Council which caused the adoption of the view

that approval had been given by the Council and,

Your Honours, that correspondence is the letter of

29 March 1989 which appears at page 222.

Immer(3) 5 22/6/92

Your Honours will see from the top of the

document that it is a letter from the City

Solicitor to the solicitors for the purchaser and

Your Honours will see, at about line 26 or 27, that

he refers to information which he has given the

Council and he refers in summary to a

recommendation which he is making to the Council

and no more.

Your Honours, notwithstanding the fact that

what he was doing was simply making a

recommendation to the Council or giving advice to

it, the view taken on behalf of the respondent and

the contention made on behalf of the respondent was

that the occasion for completion had arisen and I
will come to that in just a moment, but it was that

insistence which, in the end, led to the present

litigation.

The relevant events may be seen set out first

in the reasons for judgment of Mr Justice Meagher

at page 344, line 33, where His Honour said:

Mrs Dale, the solicitor -

for the respondent -

who had the conduct of the matter on the part

of the -

then -

appellant vendor, took the view that this

letter satisfied the requirements of clause 3

of the Deed.

He-said -

it is clear enough from the terms of the

letter that it did no such thing ..... the

Council had not "granted the application" nor

had it resolved that its requirements had been

satisfied. No suggestion was made by the

appellant before us to the contrary.

However ..... this is the view which Mrs Dale

took •.... She thereupon set about harassing

Mr Dixon-Smith to complete -

and then wrote him the letter of 24 April which

Your Honours will see set out on page 345, and
Your Honours will see amongst other things that in

the several paragraphs of that letter, including in the penultimate paragraph of the letter, there is a reference to the fact that:

Immer(3) 6 22/6/92

We maintain that the City Council has not made

any condition upon the transfer such as the

completion of the refurbishment -

and so on. Then there is a request for an

assignment to be submitted for execution, and so

on.

His Honour refers to the fact, at the bottom

of page 345, that the restoration work was in fact

still far from completion and refers to the fact

that Mrs Dale must have been under the impression

that the City Solicitor's letter had superseded the

Council's requirements.

If one goes from that to page 346 through to

about line 10, there was a communication from

Reverend Denham to Mrs Dale and I should say,

Your Honours, there is a reference to Leda

Holdings. Leda Holdings was a company associated

with the appellant; Dixon-Smith was a member of the

firm of solicitors then acting for the appellant.

There was then a further letter from Mrs Dale

demanding completion - it appears at page 232 - and

was dated 9 June. Your Honours will see the last

paragraph on that page and, in particular, the

references to:

Our client has been informed by your client

that they are ready and willing to complete

but that you have advised them that it is not

in order for the matter to be completed as the

renovations to Pilgrim House have not been

completely finished. Again we reiterate that

as the City Council has not made completion of

Pilgrim House a condition and completion in

the agreement between our clients is not

conditional upon that completion, the matter

must now be finalised.

If one could go back then from that to

Mr Justice Meagher's reasons at page 346,

Your Honours will see that after that letter was

written there then took place the conversation

which appears at page 346, about line 29, and

Mr Dixon-Smith said:

My Local Government Department -

meaning the body within his own firm

agrees with your right to issue a notice to

complete -

and then he said, at the bottom of the page -

Immer(3) 7 22/6/92

I will send these documents to you immediately

and I will get my clients moving to arrange

for money for settlement soon.

Then, Your Honours, the letter which was then sent,

which appears at page 347 - perhaps I should say,

at page 347 at about line 11, Your Honours will see

that that conversation took place on 23 June, that

was a Friday. On the Monday, Mr Dixon-Smith wrote

the letter which appears set out at page 347

between lines 13 and 27 and, Your Honours, it

appears more fully - and I will come to its terms

in just a moment - but it is that letter which is

the election, if there was an election.

The letter is at page 256, and Your Honours

will see that it enclosed two documents, including

the document at page 259. Your Honours will see,

at page 259, that one of the things which the

document said in recital C was that:

Application has been made to the Council of the City of Sydney (the "Council") for the

transfer of floor space bonus -

and then, the last three lines -

and the Council has approved the said transfer
subject to this Deed and a notice pursuant to
this Deed being entered into and served upon

the Council.

Your Honours, in relation to that His Honour

Mr Justice Meagher, in the Court of Appeal, at

page 347, line 24, referred to the enclosure and

said:

It enclosed a Deed of Assignment and a

Notice of Assignment, which on the following day were executed by the appellant -

that is the present respondent.	Recital C of the Deed of
Assignment •.... contained the following words -

which he quoted, and then said -

It is clear enough that the Council had done

no such thing, and it is therefore clear that

Mr Dixon-Smith was acting under a

misapprehension.

Your Honours, I said that letter was sent on the

Monday. On the face of it, it appears to have been

sent by courier. That appears at page 256, line

21. Before the letter was received, the

Immer(3) 22/6/92

respondent, by its solicitor, had become aware that

the Council in fact had not approved the transfer

of air space and was insisting on completion of the

restoration works at Pilgrim House. Your Honours,

could I deal with the matters leading to that

conclusion?

The Council had sent Reverend Denham a letter

to that effect dated 21 June 1989 and that letter

appears at page 236. Your Honours, I should

interpolate that Reverend Denham was the

administrator of the Pitt Street Uniting Church,

but he appears to have been the-person, so far as

the respondent was concerned, who was the one who

dealt with the Council when anyone on behalf of the

respondent dealt with the Council. Could I give

Your Honours an example by referring to page 166

where you will see some correspondence from him.

Your Honours, that letter at page 236 says, at

about line 27:

The draft documents are sent to you on the

limited basis that I have not yet received

instructions from the Council that the

documents are acceptable to it. I note

further that the draft Deed contemplates that

the restoration and refurbishment of Pilgrim

House must be completed prior to any transfer

of transferable floor space -

and so on. That was sent, of course, to

Reverend Denham. It was dated 21 June. He sent it

by fax to Mrs Dale. That that is so, Your Honours,

appears at page 255. Your Honours will see that is

his letter to Mrs Dale; it is sent by fax - at the

top of the page; and the evidence was, and I will

~ome to it in just a moment, that it was faxed

through to her on either Friday the 23rd or early

on Monday the 26th, but that it was waiting for her

when she started work on the 26th.

Your Honours, may I go to the short passages

of evidence dealing with that, which are in

volume I. The first is at page 159 and Your

Honours will see, commencing at line 8:

Q. The next thing that happened was the same

day Mr Denham rang you? A. Yes.

Q. And that is reflected in your next file

note?

Then, Your Honours, if I could go down a couple of

questions -

Q. And he said he had a letter from Odbert? A.

Yes.

Immer(3) 22/6/92

Q. And the letter he was referring to is the

letter at p 79?

That is the letter to which I have been referring.

Your Honours will see, at about line 20 -

Q. It was faxed through that day. A. I am not

sure whether it came through on the Friday or

whether it was through on Monday morning.	I
couldn't swear to that.

And Your Honours will see, line 25 -

Q. May we take it that it was faxed through on Friday 23rd or Monday 26th? A. Or it was there when I got in on Monday.

Q. You certainly saw it on the Monday morning?

A. Definitely.
Q. You were devastated? A. Yes.

Now, the reason for that view appears in the next question and answer and Your Honours will see,

going towards the bottom of the page, that nothing

was done to contact Mr Dixon-Smith and tell him

that news on the Monday. The 29th, of course, was

some three days after that and, in fact, after the

letter of 26 June which is the important one.

Your Honours, at the top of the next page,

about line 5:

Q. So on Monday 26, you got two things,

firstly, the bad news from the council and

secondly, the deed which you had asked

Mr Dixon-Smith to provide, is that right?

A. Correct.

Your Honours will see, in the next question and

answer, that Mrs Dale says she obviously did not

contact him about it and then in the next question

and answer says she did phone him on the 29th.

Your Honours, Mr Dixon-Smith became aware of the Council's position from a letter of 29 June

which was faxed to him. That appears at page 261

in volume II and, Your Honours, the material part

of it, the most material part of it, is at

page 262, lines 5 to 10. If one goes back from

that to the reasons for judgment of Mr Justice

Meagher, what Your Honours will see, at about line

15 on page 348, is that after referring to the

events to which I have referred, His Honour says,

at line 19:

Immer(3) 10 22/6/92

Further communication took place between

the parties which it is unnecessary to recount

in detail, but they culminated in

Mr Dixon-Smith faxing -

a letter of 25 August 1989, which is the letter

enclosing the notice of rescission which is set out

on the top of the next page, and Your Honours will

see that the notice was based on the failure to

obtain the approval by 1 April 1989. If

Your Honours wish to see the notice itself, it

appears at page 278.	Your Honours, those are the
base facts.

Could I move then to the first of the issues raised in the appeal, and that issue is whether the

letter of 26 June amounted to an exercise of the

right given by clause 7 or an election not to

exercise the right given by clause 7.

Your Honours, the issue arises because if one goes

to clause 7 itself - it appears at page 182 - it

provides, relevantly, that if the Council's

approval is not given by 1 April 1989 the appellant

might, at any time thereafter, rescind the deed.

Your Honours, it is clear that approval was

not given by 1 April 1989. it is also clear that

after that date the appellant did purport to

rescind the deed by reason of the fact that

approval had not been given by that date. So,

Your Honours, one needs then to ask what are the

reasons why such a rescission was not effective and

the reason relied on is that the letter of 26 June

had amounted to a binding election not to exercise

the right to rescind referred to in clause 7.

DEANE J:  Mr Jackson, are all the alterations written on

clause 7 alterations in fact made to the agreement?

MR JACKSON:  Your Honour, certainly the date, 1 April 1989, were - could I say that the issue is slightly is. The actual form of it may be seen that there

complicated by the fact that the document I think

used to make up the appeal book is one that has

some writing on it, and I think all the documents

have some writing on them. The agreed form of it,

Your Honour, as I understand it, appears at

page 341, where clause 7 is set out at the bottom

of the page.

DEANE J:  So that means the comma and the opening of a

square bracket is not in it?

MR JACKSON: That is right, Your Honour. It is counsel's

flourish, I think, Your Honour. In our submission,

the letter of 26 June did not amount to an

election, first because it was not sufficiently

Immer(3) 11 22/6/92

unequivocal to do so. Your Honours, in that

regard, it is established, in our submission, that

in order for there to be an election binding on a

party to a contract, the conduct of the person

alleged to be bound must be shown to have been

consistent only with the decision not to exercise

the right, given the right was said to have been

lost.

Your Honours, the need for there to be a

sufficiently unequivocal election is referred to in

a number of cases.	May I give Your Honours three
references.	The first is to a decision of the

House of Lords, The "Kanchenjunga" - that is an

abbreviated version of the name, I am afraid -

column on that page, His Lordship, whose judgment

(1990) 1 Lloyd's Rep 391. In the judgment of

with which the other members of the House of Lords

agreed, said:

But of course an election need not be made in

this way. It can be communicated to the other

party by words or conduct; though, perhaps
because a party who elects not to exercise a

right which has become available to him is

abandoning that right, he will only be held to

have done so if he has so communicated his

election to the other party in clear and

unequivocal terms.

Your Honours, the Court made some observations upon

the issue in two cases. The later is Khoury v

Government Insurance Office (NSW), (1984) 165 CLR

622. Could I refer Your Honours to page 633 in the

reasons for judgment of Justices Mason, Brennan,

Deane and Dawson.	In the paragraph at the bottom
of the page:

Where an election is not shown to have

been consciously made, the words or conduct

relied upon to impute it must unequivocally

evidence "the exercise of one of the two sets
of rights and (be) inconsistent with the
exercise of the other".

There is a reference of course to Sargent v ASL

Developments Ltd, (1974) 131 CLR 634. May I take

Your Honours to two passages in the reasons for judgment in that case, one at page 646 in the

reasons for judgment of Justice Stephen.

Your Honours will see the first new paragraph on

the page where His Honour says:

The words or conduct ordinarily required

to constitute an election must be unequivocal

in the sense that it is consistent only with

Immer(3) 12 22/6/92

the exercise of one of the two sets of rights

and inconsistent with the exercise of the

other -

and His Honour goes on to elaborate upon that

proposition. Your Honours will see at page 656 in

different words in the first new paragraph on that

page, the present Chief Justice says, about half-

way down that paragraph:

An election takes place when the conduct of

the party is such that it would be justifiable

only if an election had been made one way or

the other. So, words or conduct which do not

constitute the exercise of a right conferred

by or under a contract and merely involve a

recognition of the contract may not amount to

an election to affirm the contract.

Your Honours, those of course are statements of general principle. May I turn then to the

application of them to the present case.

The conduct which must, if anything,

constitute the election is to be found in the

sending of the letter of 26 June. May I take

Your Honours to the letter. The letter does not

come, as it were, unaccompanied; the letter comes

accompanied by the documents which are set out in
the pages following through to page 260. One of

the documents enclosed, as I said, was the draft

deed which appears at page 259 and page 260, and
the terms of the draft deed at page 259 in recital C included the specific statement that the Council

has approved the transfer of floor space rights.

Your Honours, if I could pause at that point

·to say two things. We shall submit that the

presence of that expression is an indication that

there was not an unequivocal abandonment, as it

were, of the right conferred by clause 7. The

second thing is that we would also submit that the

way in which that submission was dealt with in the

Court of Appeal was one which, with respect to

Their Honours, slightly missed the point.

The proposition that the letter and

accompanying deed were consistent only with the

decision not to exercise the right, as we would put

it, was not accepted by the Court of Appeal.	The
issue is dealt with by Mr Justice Meagher at

page 350 in the passage commencing at line 7, going
through to about line 27. Your Honours will see
particularly that at about line 16, His Honour

said:

Immer(3) 13 22/6/92

True, he like Mrs Dale failed to appreciate

the significance of these facts: that is made

plain by recital c ..... This being so, I cannot

see any sensible interpretation which could be
placed on his letter of 26 June 1989 other

than that his client elected to abandon the

contractual right of rescission which it

undoubtedly had ..... Nor is this conclusion

affected by the fact that at 1 April 1989 the

parties could not have completed the contract

if they tried -

Your Honours, the fact that he may have

misunderstood the position is not, in our

submission, determinative of the present

submission, because the documents relied on to

establish the election did not just say or did not

only say, "The purchaser elects to proceed".

Rather, what they said was that, "The purchaser" - and I am putting it at the worst for us - "elects

to proceed on the basis that the vendor is now able

to complete". That is the primary purpose of

having recital c.

Your Honours, one is not concerned for present

purposes with the state of the purchaser's mind,
but rather with the sufficiency of the conduct in

question as amounting to an election. If one looks

at the documents said to constitute the election,

one cannot just sever recital C from it. The

presence of recital C gives rise to a situation where what the purchaser is saying is, "We will

proceed, but we proceed in circumstances where the

vendor is able to complete". Your Honours, that

cannot, in our submission, be regarded as an

unqualified election to give up the right

contemplated by clause 7.

Your Honours, if one does turn, however, to

the state of mind of the appellant, we would submit

that it was not established that the appellant had
the requisite knowledge.	We would accept, for the

purposes of the submission, that what is required

is knowledge of the facts rather than knowledge of the underlying accompanying legal situation. That

appears to be the effect of Sargent v ASL

Developments. But, even in those circumstances, it

seems apparent that knowledge of the facts giving

rise to the right is required. I would refer

Your Honours to Khoury v Government Insurance

Office, 165 CLR 633. Your Honours will see at the bottom of page 633, the last two lines:

It would seem however that, at least where the

alternative rights arise under the terms of

the one contract, a party may be held to have

elected to affirm it notwithstanding that he

Immer(3) 14 22/6/92

was unaware of the actual right to avoid it.

Even in such a case however, the party alleged

to have elected to affirm the contract must be

at least aware of the facts giving rise to the

right to avoid the contract.

Your Honours, it is true to say that the core

facts giving rise to the right to avoid the

contract were known in the sense that the date, 1

April 1989, had passed and Council approval had not

been obtained by that day. But if one looks at the

time at which the alleged election is said to have

been made, what was not known at that point was

that the Council was actively asserting that

approval had not yet been given. That, in our

submission, was a matter which was material to the

exercise or non-exercise of the right and, in our

submission, a matter in relation to which it was

not demonstrated that we had sufficient knowledge.

Your Honours, could I turn then to the second

issue which we seek to agitate. That is the

question - - -

BRENNAN J:  Mr Jackson, before you get to that, what were

the vendor's obligations under the contract?

MR JACKSON:  Your Honour, may I put it in two ways: first,

in relation to the obtaining of the approval, the

dealings with the Council were to be, in effect,

carried out by the purchaser. That is clause l(b).

I do not think I took Your Honours to that before.

That is at page 180. Clause l(d) required the vendor to:

comply with all conditions attaching to the

approval of the application if and when

granted by the Council.

I should also go to clause 5 which required the

vendor to do whatever might be necessary to comply

with the requirements of the Council - and I am

putting it very shortly. Your Honours, those are the things really that needed to be done in order

to have something to be transferred. I appreciate

there is an element of laxity in that, but

essentially at completion what had to happen was

what was provided for by clause 3. Clause 3 really

provided for a time for completion, and then the

events leading to - completion fundamentally seems

to have been the payment of the money.

BRENNAN J:	Was the vendor to do anything on completion?
MR JACKSON:	Your Honour, the vendor had to execute

documents, but prior to completion the vendor would

have had to take the steps necessary to arrive at a

Immer(3) 15 22/6/92

situation where the transfer of the space might

take place.

BRENNAN J: That had to be done before completion.

MR JACKSON:  Yes, Your Honour.

BRENNAN J: Completion occurs then when the Council has

approved, is that right?

MR JACKSON:  Yes, Your Honour. In terms of time, it is

within seven days after notice that the Council has

approved, in effect. That is clause 3.

BRENNAN J: What then does election do, assuming against you

that there is an election?

MR JACKSON:	Your Honour, what the election would do would be to put us in a situation where we could not in
effect peremptorily bring the agreement to an end
by reason of the failure to obtain in effect the
Council approval by 1 April.  We should have to
wait for the approval to be obtained or, I suppose,
if there were some gross delay which might be
thought to bring the contract to an end or to
entitle the parties to say the contract had been
frustrated in some way, then that is what we could
do, Your Honour.

BRENNAN J: But if there was never any approval, you would

simply be out of pocket to the extent of the

deposit.

MR JACKSON:  No, Your Honour, because one would think then

that one of two things might have happened. One

would be that the subject-matter of the agreement
is one which had never come into being, as it were,
in the sense of being something capable of being

transferred, and one might well take the view, we

would submit, that the contract was dependent upon

that subject-matter being capable of being

transferred. A difficulty may arise in terms of

the time at which that would happen, and that would

no doubt be a question of fact if those

circumstances had arisen, but subject to that, what

Your Honour put to me seems to be correct. What

the election did, if anything, was to take away our

right under clause 7.

BRENNAN J:  But to take away your right under clause 7,

would that leave you with any other rights?

MR JACKSON:  Your Honour, to leave us in a situation where

we had all the rights under the agreement - and I
would seek to elaborate upon what I mean by that in

a moment - subject to clause 7. A right we had,

for example, was the right - if Your Honour looks

Immer(3) 16 22/6/92

at clause 5, there was an obligation on the vendor

to in effect comply with the Council's

requirements. If it had been that there was not a

compliance with the Council's requirements or a

delay in compliance, then we might have taken the steps appropriate to enforce the contract, and by

that I mean to seek, for example, limited specific

performance, or we might have relied, perhaps after

suitable notice, upon the failure to comply with
those things as entitling us to terminate the
contract by reason of a breach. Your Honour, of

course one also has the possibilities of the

contract coming to an end by virtue of either

frustration or an implied term to the effect that

the subject-matter would have to exist; that is

generally our position.

Your Honours, I was going to deal with the

second basis on which we contend there was not an

election. That issue arises because of the fact

that Mr Dixon-Smith, at the time when he sent the

letter of 26 June, to the knowledge of Mrs Dale was

acting under a misapprehension as to the fact of

the Council's approval. The question is whether

that is Jllaterial.

We have not been able to find cases which deal

in any way specifically with the question of the

effect of mistake in such a context upon the

efficacy of what otherwise would amount to an
election, but we would submit that an analogy is to

be drawn from a number of areas. The first,

Your Honours, is this: it is clear of course - and

I will come to the case in just a moment - that a

contract entered into on the basis of mistake may

be set aside in certain circumstances.

Secondly, it is clear that a contract may be

rescinded on the basis of misrepresentation where

one party, having made a representation of a particular kind to the other, knows that the

representation has become untrue but does not
convey that to the other party.	The third is in

relation to estoppel where we would seek to draw an

analogy from circumstances where the injustice of

permitting departure from an assumed fact is

regarded as a matter of materiality.

Your Honours, may I deal with those in that

order, the point of doing so being to submit that

there is no material difference in principle, in

our submission, between a case where a party is

entitled to set aside a contract on the basis of

mistake of this kind on the one hand, and a case

where, as is the present, a party is compelled to

rely on the terms of the contract in a particular

way by reason of election. Each has a significant

Immer(3) 17 22/6/92

effect upon the rights of the party and there is

not, in our submission, a material difference in

principle.

So far as mistake in relation to the entry into contracts is concerned, may I refer

Your Honours to the joint judgment of the present

Chief Justice and Justices Murphy and Deane in

Taylor v Johnson, (1981) 151 CLR 422, the relevant

passage commencing at page 431.

McHUGH J: Just before you do, does the evidence establish

whether the letter from your client was received by

Mrs Dale before she was notified of the information

by Mr Denham?

MR JACKSON:  Yes, it does, Your Honour. The evidence

establishes - and I would like to come back to it in just a second - in our submission that she had

received the faxed material from Reverend Denham

before she got the letter of the 26th.

McHUGH J:  Is that by inference or is it in express terms?

MR JACKSON:  I think it is express, but it is the only inference one could draw. Your Honour, could I go

back to the passage, which Your Honours will see

appears at page 159. Could I preface it by saying

that the events which have happened have been

these. Reverend Denham had received a letter from
the Council which was dated 21 June - the 21st was

a Monday. That appears at page 236. He faxed that

letter to - it was received by him on the 23rd,

that appears at page 255 - and he faxed it either

on the 23rd or the 26th, Monday the 26th, but in

the sense that Mrs Dale had received it in effect

when she started work on Monday the 26th.

Your Honour, at page 159, the passage commences at

line 8. It goes through to line 36, then

Your Honours will see particularly lines 20 to

about 30 on that page, then the next page,

Q. So on Monday 26, you got two things,

firstly, the bad news from the council and

secondly, the deed which you had asked

Mr Dixon-Smith to provide, is that right? A.

Correct.

page 160, line 5:

Your Honour, his letter of course was only dated

the 26th and it was sent by courier that day. So

what we would submit is the inference that is to be

drawn is that she had the - by looking at her

evidence on those two pages as well, her other
evidence, the inference seems pretty clear that she

had the letter from Reverend Denham, did nothing

about it, received the letter from Mr Dixon-Smith,

Immer(3) 18 22/6/92

and that the first communication she had with him

about it was the 29th. Her reference to being

devastated appears clearly enough in the context to

be a reference to the fact that she was devastated

she had that. She had the phone call on the

Friday, she had the letter from the Council first thing Monday, then she had the letter from

Mr Dixon-Smith.

McHUGH J:  Was this point a point that was run at the trial

or before the Court of Appeal?

MR JACKSON: As I understand it, yes, Your Honour. It is

referred to in fact in a passage to which I will

come in the reasons for judgment in the Court of

Appeal.

I was about to take the Court to Taylor v

Johnson. The relevant passage is at page 431 in

the paragraph commencing at about point 4.

Your Honours will see the passage commences at

about point 4, it goes through that page and over

to the next page, virtually at the bottom of the

page. Could I refer Your Honours particularly to

the following parts: the reference at page 431,

about point 6, the basis being:

the ordinary jurisdiction of equity "to deal

with" any instrument or other transaction "in

which the Court is of opinion that it is

unconscientious for a person to avail himself

of the legal advantage which he has obtained".

There is a reference to the circumstances required.

Then at about point 8 on the same page, the

reference to Solle v Butcher and the example there

given. At page 432, Your Honours will see at about

point 3:

And it matters not that the mistake is, or may

be, due to negligence or want of care on the

part of the party who is mistaken when the

other party has not materially changed his

position and third party rights are not in

question.

The members of the Court summarized their view at about point 7 on the same page:

It is that a party who has entered into a

written contract under a serious mistake about

its contents in relation to a fundamental term

will be entitled in equity to an order

rescinding the contract if the other party is

aware that circumstances exist which indicate

that the first party is entering the contract

under some serious mistake or misapprehension

Immer(3) 19 22/6/92

about either the content or subject matter of

that term and deliberately sets out to ensure

that the first party does not become aware of

the existence of his mistake or

misapprehension.

Your Honours, the doctrine there referred to

clearly applies, of course, to entry into a
contract. The doctrine also has a clear enough

relationship, in our submission, to circumstances

where a party has made a representation, albeit

entirely innocently, to another party in relation

to a contract which the parties are contemplating

entering into. If it be that prior to the

formation of the contract the party who made the

representation has become aware that the

representation is incorrect, then it is a

misrepresentation for that party not to notify the

other party of the change in position which has

occurred.

Your Honours, one reference where that may be

found is in some observations of Chief Justice

Bowen in the Federal Court in Rhone-Poulenc

Agrochimie SA v UIM Chemical Services Pty Ltd,

(1986) 12 FCR 477, at page 489, in a judgment with

which Mr Justice Lockhart agreed. Your Honours

will see at the bottom of page 489 and the top of

page 490, speaking of misrepresentation under the

general law, His Honour said:

Dealing with the question of

misrepresentation constituted by silence,

there are cases which show, for example, that

an omission to mention a qualification, in the
absence of which some absolute statement made

is rendered misleading, is conduct which

should be regarded as misleading. So too is

the omission to mention a subsequent change

which has occurred after some statement which

is correct at the time has been made where the

result of the change is to render the

statement incorrect so that thereafter it

becomes misleading.

Your Honours, those observations were adopted by

the Full Court of the Federal Court in a later

decision, Henjo Investments Pty Ltd v Collins

Marrickville Pty Ltd, (1988) 79 ALR 83 at page 95.

Your Honours will see at page 95, in the first new

paragraph on the page, there is an acceptance of

what had been stated by His Honour in that case.

Commencing at about line 7, Your Honours will see

that Mr Justice Lockhart, speaking for the Full

Court of the Federal Court, adopted what had been

said by Chief Justice Bowen in the case to which I

Immer(3) 20 22/6/92

referred a moment ago, and adopted the particular

passage.

Your Honours, the third area from which we

would seek - perhaps I should say about that - - -

BRENNAN J: What is the point that you are making,

Mr Jackson?

MR JACKSON:  Your Honour, I am sorry. What I was seeking to

say was this: if one had a situation where there

was a contract which had been entered into in

circumstances where a party had made a

representation to the other contracting party and
that representation turned out to be untrue, though

true when made, the contract would be capable of

being set aside on the basis of misrepresentation.

Your Honour, all I am seeking to do is to say that

that is a situation which is analogous to the

present.

I do not say it is exactly the same, of course, but it is analogous in this sense, that if

one has a party who is said to have been bound by

an election but the election takes place in

circumstances where the other party, albeit

perfectly innocently, made a certain statement to

the person who is said to have elected but that

party knows that the statement is no longer true,

then those are circumstances where the party said

to have elected should not be held to be bound by
the election based upon such a statement,

Your Honour.

McHUGH J:  Does anything turn on whether or not your

client's solicitor had sent the letter before

Mrs Dale became aware of the correction?

MR JACKSON:  Your Honour, in our submission, not. If one

were looking at a case involving the postal rule as

such I suppose one would have to look at that

been communicating in a number of different ways:	question. But, in fact, the parties seem to have
by fax, by telephone, by courier, in the particular case, so that no particular inference could be
drawn one way or the other about an agreed, in
effect, method of communication. What one does
see, however, from the material is that the letter
was one that was written on the 26th and delivered
at some stage during that day presumably, but prior to the events of that day and the sending of the
letter, the information was available to the client
because it had been received by the client the week
before, and the solicitor, as soon as the
solicitor, in effect, started work on the Monday at
the latest, had the material. So, Your Honour, it
would seem very likely, we would submit, that the

Immer(3) 21 22/6/92

letter of the 26th must have been sent in any event

after the fax had been received by Mrs Dale.

Your Honour, the third area from which we

would seek to draw the analogy is in relation to

estoppel where the question of the injustice of

permitting departure from the assumed fact is, of

course, material. If one goes back to the two

passages in the early cases on estoppel in Thompson

v Palmer and Grundt v Great Boulder, one sees

references which, in our submission, are material

and I will come after that to Verwayen.
Your Honours, in Thompson v Palmer,
(1933) 49 CLR 507, may I refer just to the passage

at page 547 at about point 3, where Justice Dixon

said:

Whether a departure by a party from the

assumption should be considered unjust and

inadmissible depends on the part taken by him

in occasioning its adoption by the other

party.

Now, Your Honours, if the part taken by the person

said to be estopped in occasioning its adoption by

the other party consists of conduct engaged in in

consequence of conduct of the kind by the other

party to which I have referred, that, in our

submission, should militate against there being a

prohibition upon departure from the common

assumption. I do not think I put that very

clearly. What I am seeking to say is this: if one

looks at the particular passage, one of the tests

is whether the departure should be considered

unjust depends on the part taken by that party "in

occasioning its adoption by the other party". So

~oo, we would submit, it is material in considering

that question to take account of the part the other

party has played in creating the assumption.

Your Honours, could I refer also to Grundt v

Great Boulder Pty Gold Mines Ltd,

(1937) 59 CLR 641, in the passage at page 675 at

about point 7, where it is said:

Fulfilment of the condition which so far

I have discussed is not enough to make it just

to preclude a party from setting up a state of

facts. The justice of an estoppel is not

established by the fact in itself that a state

of affairs has been assumed as the basis of
action or inaction and that a departure from
the assumption would turn the action or

inaction into a detrimental change of

position. It depends also on the manner in

which the assumption has been occasioned or

induced.

Immer(3) 22 22/6/92

And, Your Honours, a similar notion, we would

submit, may be seen in the observations of

Commonwealth v
Your Honour Justice Deane in page 440 at the bottom of the page where
Your Honour, under the heading "Unconscientious

Conduct", says:

The doctrine of estoppel by conduct is

founded upon good conscience.

Then a few lines further down:

The notion of unconscionability is better

described than defined.

Then in a passage that goes on to the top of the

next page, Your Honour says at about point 2 on the

page:

The most that can be said is that

"unconscionable" should be understood in the

sense of referring to what one party "ought

not, in conscience, as between (the parties),

to be allowed" to do. In this as in other

areas of equity-related doctrine, conduct

which is "unconscionable" will commonly

involve the use of or insistence upon legal

entitlement to take advantage of another's

special vulnerability -

that is not relevant here, of course -

or misadventure in a way that is unreasonable

and oppressive to an extent that affronts

ordinary minimum standards of fair dealing.

And then at page 444 could I refer to paragraph 3

in Your Honour's summary, where Your Honour said

amongst other things:  Since an estoppel will not arise unless

the party claiming the benefit of it has

adopted the assumption as the basis of action

or inaction and thereby placed himself in a

position of significant disadvantage if

departure from the assumption be permitted,

the resolution of an issue of estoppel by

conduct will involve an examination of the

relevant belief, actions and position of that

party.

And, Your Honours, could I refer also to the last few lines on that page and over to the top of the

next page to about the end of the tenth line, where

one of the matters referred to was -

Immer(3) 23 22/6/92

the reasonableness of the conduct of the other

party in acting upon the assumption -

et cetera.

Now, Your Honours, the approach taken in the

Court of Appeal on this issue was to say that

because Mr Dixon-Smith had not given evidence it

was impossible to be satisfied that his

misapprehension was induced by Mrs Dale.

Your Honours, that appears at page 352, the last

paragraph towards the bottom of the page, going

through to page 353 about line 16.

His Honour, I should say, had said at page 347

line 30:

It is clear enough •.•.. that Mr Dixon-Smith was

acting under a misapprehension.

But the approach taken by the Court of Appeal, we

would submit, at pages 352 and 353 was not to the point. Mrs Dale knew what his state of mind was.

She knew that he was acting under a mistake,

however it was induced, but she did not tell him of
the change which had occurred, and in those

circumstances, we would submit, a party should not

be allowed to rely upon an election brought about

in such circumstances.

Your Honours, those are the submissions we

wish to make. If we are successful in the appeal

the orders which we would seek are those at

page 363.

BRENNAN J:  Mr Jackson, you do not raise an argument which

says simply the question was when the Council gave

. its approval, and at that time a liability to pay

arose, and the fact that there was a mistake as to

whether it had arisen - that time had arrived or

not, does not affect the occurrence of the

liability?

MR JACKSON: Well, Your Honour, so far as - I do not think I

quite heard the end of what Your Honour said to me

then.

BRENNAN J: That if, under the original contract, completion

was to take place once the Council had approved,

but it seems that all that had to happen was that

the money had to be paid, the balance of the

purchase price. If one regards the contract in

that way, then there was nothing for the vendor to

do except to await the approval by the Council.

The fact that both parties at one time thought the

time had arrived for payment to be made does not

affect the question of whether payments have, in

Immer(3) 24 22/6/92

fact, become due. The fact that mistake had taken

place does not alter the question of whether or not
the payment is, in fact, due by the purchaser to

the vendor.

MR JACKSON:	Your Honour, the difficulty with that from our point of view is, of course, that what we did was
to purport to rescind the contract, and we
purported to do so on the basis of clause 7. If it
be that prior to our doing that we had, in fact,
elected not to rely upon clause 7, then we would
simply seem to be in a position where at the time
when we purport to bring the contract to an end, we
have no special right to do so.

BRENNAN J: Yes.

TOOHEY J: But there were things that the vendor had to do

in order to bring about the approval of the

Council?

MR JACKSON:  Yes, Your Honour. I had assumed that

His Honour the presiding Judge was asking me about

at the moment of settlement what had to happen.

BRENNAN J: As to the nature of the right, we derive that as

far as we can from the Code.	Is that the
situation?

MR JACKSON:  Yes, Your Honour.

BRENNAN J: Thank you.

TOOHEY J:  Does the Code speak of transfer of rights, or is

it only concerned with floor ratios?

MR JACKSON:  Your Honour, the transferability of rights, in

effect, is, in a sense, a misnomer, and that is one

of the things that perhaps brought about the
difference of view between the primary judge and

was transferable because, fundamentally, what one	the Court of Appeal on whether the right as such	has is that in respect of an area where someone
with a non-heritage building wants to carry out a
development, the extent to which there will be a
permitted density of development is dependent on
whether that person has had a dealing with someone
who has a heritage building; and in relation to
the earlier site, the non-heritage building, if
moneys are made available, in effect, for the
heritage work to be carried out, and if the heritage work is carried out, then for the
non-heritage building more relaxed requirements are
made available.

TOOHEY J: But quite obviously the vendor's rights extend

only to the building or the space with which the

Immer(3) 25 22/6/92

vendor is concerned. The purchaser's rights, if

that is the correct term, extend only to the area

of land with which the purchaser is concerned, but

through various mechanisms the purchaser is allowed

to draw on floor ratios that were originally

available to the vendor.

MR JACKSON:  Your Honour, could I just say this. A kind of

comparison would be this: in relation to the

development of land for housing estates, what is

commonly done, of course, is to require developers

to make provision first by way of land as parks in

the development. The second thing is that there

may be required contributions of various kinds -

depending on the legislation of the particular

local authority - made available for community

facilities.

Now, the density of development permitted in a

particular area may be dependent upon the extent to

which some contribution has been made for other

purposes, not perhaps in the immediate site, as it

were. Your Honour, this, in a sense, is a

different way of doing the same thing, achieving

one aim, namely, the conservation of historic

buildings by permitting developers to obtain larger

density on other sites.

BRENNAN J:  Mr Jackson, just one further question before you

are allowed to resume your seat. The problem is

not so much election, I suppose, as whether or not

your attempt to rescind is effective, and you are

met with the argument that you cannot rescind

because you are bound by an election not to

rescind. That equates an election not to rely on

clause 7 with an absence of a right to rescind.	Is
that a proposition that you, in the circumstances
of the case, accept?

MR JACKSON: Yes, Your Honour, because our attempt to

rescind was based on clause 7, the contractual

right under clause 7, and as I recall it that was

the basis relied on in the proceedings.

TOOHEY J:  You are really saddled with that, are you not,

given the terms of the notice of rescission and

indeed, the terms of the relief which is sought

through the notice of appeal? It is all couched in

terms of clause 7.

MR JACKSON:  Your Honour, at an early point in my

submissions I was seeking to make the point that I
think Your Honour was making to me a moment ago,

and that is, we say we exercised the right under

clause 7. The other side said, "You no longer have

a right under clause 7 to exercise", so the onus

Immer(3) 26 22/6/92

then went to the other side to demonstrate that we

had lost the right.

TOOHEY J:  I do not know whether it matters, but the term

"rescission", at least in terms of the contract,

may not be a particularly apt one, but it could only matter if the learning about rescission to

which you have referred us somehow proved to be

inappropriate for what took place here. But I am
not suggesting there is any reason to reach that

conclusion.

MR JACKSON:  No, Your Honour. I used the term "rescission"

in relation to what was done really because clause

9 of the agreement picks up that - that is the term

used to describe the contractual right, and I

suppose the rescission ab initio is a concept which

has recognizable results, but it is the term that

is used.

TOOHEY J: Yes, but under ordinary circumstances it may well

be that a failure to meet the requirements of

clause 7 would just simply lead to determination of

the contract.

MR JACKSON:  Your Honour, that is what it is. It is a - - -

TOOHEY J: Yes, but a determination that may give rise to

other consequences such as damages, but presumably
clause 9 caters for that by ensuring that the

parties are restored to their original position.

MR JACKSON:  And it specifically says, Your Honour that

neither party shall have a right to claim damages.

GAUDRON J:  Mr Jackson, I might interrupt you as well. I

realize that it said in Sargent v ASL that

detriment is not an aspect of election, but do you

put it that election is an aspect of ordinary

principles of estoppel, or is it some other

discrete principle?

MR JACKSON:  Your Honour, we would put it that it is a

notion separate from estoppel, although sometimes

elements will be somewhat similar.

GAUDRON J: Yes, because it seemed to me if you put it that

it was something that was really akin to ordinary

principles of estoppel your argument would be that

you should not be held to it in the circumstances

of this case.

MR JACKSON:	Yes, Your Honour.
GAUDRON J:	Is that the way you put it, or did I

misunderstand you?

Immer(3) 27 22/6/92

MR JACKSON:	Your Honour, what I was seeking to say in relation to estoppel was this: if I can put it
this way, if one takes the analogy of estoppel in
the first place, the analogy of estoppel would
indicate, we would submit, that we would not be
held to the election, as it were, the reason for
that being that one would have to take into account
th~  ·conscionability of holding us to it in the
lig,,  .c the events which had happened.

GAUDRON J: The point is, is it not, that it is not a real

election in this case, is it? It is an election

which is presumed or inferred.

MR JACKSON:  Yes, Your Honour, that is so. It is presumed

or inferred by our sending the letter. But the

point we seek to make is this: if it be that the

election is one that otherwise would be presumed,

the circumstances are such that the Court should

adopt the view that notwithstanding such a presumed

election, such an election may be held to be

ineffective if it is one which comes about in

circumstances such as the present, and they are
circumstances such that if a contract had been

entered into in similar circumstances, the contract

itself would be liable to be set aside on a ground

of, for example, mistake or innocent

misrepresentat,ion; or, if one were relying on

estoppel, the circumstances would be such that the

injustice of being held to the estoppel would be

made out. Your Honour, I use those things by way of

analogy.

DEANE J:  Mr Jackson, can I ask you one question, and that

is, you have constantly referred to "mistake". Was

there any mistake here, or was it simply that the

parties acted on the assumption that when the City

Solicitor said he would recommend something it was

just a formality in this sort of thing for the

Council to formally adopt that recommendation, and they then proceeded on that assumption?

MR JACKSON: Well, it goes a little beyond that,

Your Honour, because the - - -

DEANE J:  I would not assume that what I am putting is

against you because the deed then insists that the

assumption be well founded.

MR JACKSON:  Yes, Your Honour, but whether one puts it on

the lesser basis, as it were, that the view of the

solicitors was that the advice of the City

Solicitor would be likely to be accepted, or

whether one puts it on the basis that they were of
the view that the advice constituted or represented

an actual approval, the situation would yet remain that if one took the first basis, the advice would

Immer(3) 28 22/6/92

be followed through, one could still see that the

purported election was one which was conditional in

the sense that it was based on a particular

assumption. The second thing would be if one took

it on the stronger basis, and that is that there

was a belief that the fact had occurred, then one

can still see that the document, the sending of

which is said to constitute the election, is

something which contains within it an assumption as

to a present fact which deprives it of the capacity

to be relevantly unequivocal. So that,

Your Honour, whichever way one puts it, we would

submit it does not satisfy the first argument that

I was putting forward, that is, that it has to be

an election in the sense of being a sufficiently

unequivocal one.

DEANE J: Well, on your submission, is it that there was a

mistake?

MR JACKSON:  Yes, Your Honour.

DEANE J: They believed that the letter saying the solicitor

would advise the Council meant that the Council had

resolved?

MR JACKSON:  Yes, Your Honour. That was the view, I might

say just in passing, taken in the Court of

Appeal -

DEANE J:	Did Mrs Dale give evidence
MR JACKSON:	Yes, Your Honour.
DEANE J:	- - - that that was her mistake?
MR JACKSON:	Your Honour, I think the answer to that is yes.

May I just check that. Your Honour, at page 152,

lines 35 to 40, she said:

My understanding of that letter was that all

the conditions had been fulfilled.

DEANE J: But that does not really mean any more than if

somebody gets a letter from the solicitor for the

City Council on this type of technical matter

saying he is going to advise the Council, they

assume, well, that people accept their solicitor's

advice in relation to these matters.	It does not
indicate a mistake to me.

MR JACKSON:  Your Honour, I should say, at page 153 about

line 10, she said she thought the -

letter indicated what had been happening.

And then between lines 15 and 20:

Immer(3) 29 22/6/92

I thought that that was evidence that the

transfer had been approved.

She goes on a little throughout the page, and then

between lines 30 and 35 she said -

they must have dispensed with that requirement

and the transfer would proceed; that was my

firm belief.

DEANE J: Thank you.

McHUGH J: Could I just ask you about Mrs Dale's file note

which appears at page 64 which would appear to

indicate that the Solicitor was prepared to keep

the contract on foot even though he became aware of

what had happened - line 10 on page 64:

He will not tell his client for the moment as

we think we might settle next week.

MR JACKSON:  Your Honour, the context in which that appears

was that - and I will endeavour to give Your Honour

the reference in a moment - some efforts were being made on behalf of the respondent to seek to get the

Council to change its mind. There was some

discussion going on, and it was thought apparently

likely that they might change their mind in the

very near future. I wonder if I could give

Your Honour the reference to that a little later

perhaps, but that is the context in which it

appears. Your Honours, those are our submissions.

BRENNAN J: Thank you, Mr Jackson. Yes, Mr Douglas.

MR DOUGLAS:  If the Court pleases, could I hand up three

documents to the Court.	One is our outline of
submissions.	The other one is just a summary of

our notes on the operation of the Code and the

policy of the Council which may be of some

assistance to the Court in understanding the way in
which that operates.	And thirdly, could I hand up
a chronology.

BRENNAN J: Yes, Mr Douglas.

MR DOUGLAS:  In light of some of the submissions which are

being made to the Court relating to "mistake", I

feel it is important to go to the pleadings in this

case which commence at page 1 of the appeal book.

We see that the proceedings were commenced by my

client as plaintiff seeking certain declarations in

relation to the agreement and certain directions,

it effectively being a summons for specific

performance of the agreement. A statement of claim

was being filed which appears at page 4, and then

Your Honours will see that there is a defence which

Immer(3) 30 22/6/92

effectively, in paragraph 4 appearing on page 8,

alleges rescission operating "ab initio in

accordance with the terms of the Deed", and

therefore effectively an allegation of the exercise

of rights under clause 7.

Then there was a cross claim appended to the

defence effectively seeking a return of a deposit,

and there was a defence to that cross claim filed

in which, amongst other things at page 12, my

client alleged election and gave particulars about

election, including amongst those particulars a

letter dated 26 June 1989 from Mallesons to

Hunt & Hunt submitting the deed for finalization of

the transaction. That appears at page 13.

Then there was a reply to that pleading in

which Your Honours will see in paragraph 6 and

following that there was an express representation

made by Mrs Dale on page 18 -

that the cross-defendant was entitled to an

exemption from the usual conditions imposed by

Council in relation to transfer of surplus

bonus floor space.

And there is an alleged telephone conversation on

or about 19 June 1989. Then it is alleged that

that representation was incorrect, and that -

the cross-defendant was not entitled to such

an exemption -

and then particulars of that are given. Then it is

alleged that -

in reliance upon and on the faith of the

cross-defendant's representation ..... the

cross-claimant took certain steps in relation

to the contract constituted by the Deed. Then particulars are given of the telephone

conversation of 23 June 1989. Then particulars are given of a letter dated 26 June, and of a telephone conversation of 29 June which Your Honour

Mr Justice McHugh drew my learned friend's

attention to just before he sat down.

Then the allegation is made that -

(iv) had it not been for the representation

referred to in (i) above, the cross-claimant

would not have taken the steps referred to in

(iii) above.

(v) if, which is denied, the matters

particularised by the cross-defendant at

Immer(3) 31 22/6/92

paragraphs 9, 10 and 11 of the defence to

cross-claim would amount in whole or in part

to an election, waiver or estoppal as alleged

by the cross-defendant, then the

cross-claimant says that the matters referred

to in (iii) above were to the detriment of the

cross-claimant.

Now, by virtue of those matters we are estopped

from asserting the matters pleaded.	So effectively
the appellant came to court on that pleading.	I

should say there is a further amended defence and

cross claim, but that is not really relevant

because the only purpose of that appears in

paragraph SA at page 24 seeking to raise the

question of whether you can get an order for

specific performance of transferable floor space

ratio rights. That is a matter which is not

pursued in this Court.

So effectively this appellant came to court

ready to argue apparently that as a result of

certain express representations made to it by the

solicitor for my client, it elected, on one view of

the matter, to affirm the contract and that,

because those representations had been made
pursuant to the doctrine of equitable estoppel,

they were entitled to be relieved from that

election. No evidence was given by Mr Dixon-Smith

or by the client to suggest that they in any way

relied upon anything which was said by Mrs Dale.

In those circumstances it was obviously quite impossible for them to rely upon the allegation of

equitable estoppel made in a pleading. There was

never any suggestion, as I understand it, of

mistake within the meaning of Taylor v Johnson made

at the trial and, of course, even on the expressed

findings of Taylor v Johnson - and I appreciate

that the doctrine could go further - one would need

conduct of my client inducing the state of mind

that Mr Dixon-Smith laboured under. Mr Dixon-Smith

did not venture into the witness box to say that he

laboured under any misapprehension at all. He

only in relation to contract formation but in

stayed in the well of the court, as did his client.

relation to a doctrine of election is concerned, it

is not an allegation made on the pleadings. It was
not a matter litigated before Mr Justice Hunt, and
it was not a matter raised in the Court of Appeal.

The way in which Mr Jackson seeks to put the case before this Court today is not a case of

express representation. He seeks to put the case

on the basis of Thompson v Palmer and Grundt v

Great Boulder Mines. He seeks to say that Mrs Dale

Immer(3) 32 22/6/92

lay by and allowed Mr Dixon-Smith to make a mistake

on 26 June, having received from the

Reverend Denham the letter of 21 June and not

communicated to him the contents of that letter.

At the trial that very question was sought to

be put, and that is at page 160 at point 15 to

which Your Honours have been taken. If

Your Honours look at the answers:

Q. So on Monday 26, you got two things, firstly, the bad news from the council and

secondly, the deed which you had asked

Mr Dixon-Smith to provide, is that right?

Q. Did you not ring him up and say "Look,

there is a real problem now with the council"?

A. Well, my diary doesn't say that I did, so I

obviously didn't, but I might have been
engaged on other things, who knows.

Q. Didn't you think it would be the

appropriate thing to do, to phone him and tell

him the position was diametrically opposed to

what you had told him the previous week?

A. Well, I did phone him on the 29th.

Q. Didn't you feel it incumbent upon you to

correct the effect of what you had been

telling him for the previous few days?

Objection. Disallowed.

And obviously that question was not relevant on the pleadings as framed because there was no suggestion

at this trial of the way in which the case is now

sou·ght to be put before this Court.

Whilst I am on that page, the evidence does

not reveal whether she, in fact, received the

letter from the Council before, in fact, she

received the deed. It is apparent that she did, in

fact, receive them on the same day, but you would

not necessarily infer from that answer that she, in

fact, got one before the other even though the
questioner has used the words "firstly" and
"secondly", because those words are not necessarily

used in a time sequence, but rather in the way of

points. And we would say that you could not draw

the inference from that that the letter of 26 June
couriered by Mr Dixon-Smith, in fact, arrived

before or after she read the fax.

Secondly, a real question does arise on which

there is no evidence as to when in fact

Mr Dixon-Smith sent the letter of 26 June, because

that could relevantly affect the nature of the duty

Immer(3) 33 22/6/92

which my client owed and, thirdly, as

Mr Justice McHugh has pointed out, the diary note

which appears at page 64 and which was also the

subject of their affidavit evidence shows quite

clearly that even on 29 June, having received a

somewhat similar letter from the Council,

Mr Dixon-Smith was continuing to contemplate

settlement.

Now, we do not know why he may have wished to

continue contemplating settlement in June because
he has chosen not to give evidence, but it may very
well have been, for example - and we can only

conjecture - that in the middle of June 1989 the

property market in Sydney was still booming along,

and notwithstanding that the purchaser may have had

certain rights under clause 7 of the deed, it may

have preferred to keep in tact the possibility of

acquiring this transferable floor space ratio

rights. It may be, and we do not know because the

evidence does not tell us, that at that particular

time in 1989 transferable floor space ratio rights

were rather difficult to obtain, and

notwithstanding the fact that approval had not been
obtained by 1 April 1989 this purchaser, at that

stage, was content to allow the contract to remain

on foot.

These are all questions which Mr Dixon-Smith

could have answered if he had ventured into the

witness box, and could have thrown some light upon

the question of whether or not there was an

election in this case. But in the absence of

evidence from him you could not possibly form any

view as to his state of mind at the relevant time.

Now, in the Court of Appeal

.Mr Justice Meagher, who otherwise found every other

factual circumstance in our favour and was prepared

to infer that the misapprehension under which

Mr Dixon-Smith laboured was a misapprehension which	had been cast upon him, if I could put it that way,	by his local government department when he sought
their advice or by his client, found that he was in
fact operating under a misapprehension because of the provisions of recital C to the deed which accompanied the letter of 26 June.
Now, that is just not right for this reason: the deed which accompanied the letter of 26 June
speaks as at completion. If one looks at the other
provisions of the deed it is quite clear that it is
a deed which has been formulated to be executed on
the day when money is paid for these transferable
floor space ratio rights, so it speaks as at that time. So, it is just as consistent in its terms
with an understanding on the part of Mr Dixon-Smith

Immer(3) 22/6/92

that by the time they got to completion approval

would have been obtained as it is with the idea or

conjecture that he may have had a state of mind at

the time of writing the letter of 26 June that

approval had been obtained. We just do not know.

So, there is simply, so far as this so-called

case of mistake is borne out, no evidential basis for it; no pleadings; it has really been raised

in this Court for the first time. The way in which

the case was put below appears in the judgment of

Mr Justice Meagher when he summarizes the submissions made by Mr Conti, commencing at the

foot of page 352, the first submission being that the right of rescission could be exercised at any time, and that is a matter on which we dwell at

some length in our written submissions and which we

will come to:

The second was that the letter of 26 June 1989 was not unequivocal, being based on a

misapprehension that Council had granted the

necessary "approval".

That is a recital C argument, as we would see it.

Now, thirdly:

was that Mr Dixon-Smith's misapprehension was

induced by Mrs Dale.

Now, that argument I suppose could be construed in some way as being similar to the argument which is

being sought to be run here, but I do have the

transcript of the Court of Appeal argument and it

can be seen that it was largely a case of active

misrepresentation rather than one of silent

misrepresentation, or representation by silence.

But, in any event, Their Honours were quick to

point out, even in the argument before that court,

that it had never been a subject of pleading; that

he had not got into the witness box to suggest that

he had been induced by anything which Mrs Dale did;

that he did not give evidence; and we also, in our

reply, relied upon those matters as prohibiting

them from raising it in that court or in this

Court. And so, for all of those reasons, we would

say that the Court should not entertain this

argument of mistake.

We, for our part, have no difficulty with the

idea that the doctrine of mistake can operate, not
only on contract formation but in these
circumstances, as could promissory estoppel and
other related doctrines, but one needs to plead it

below and lay a satisfactory factual foundation for

it, and that has not been done in this case.

Immer(3) 35 22/6/92

So, leaving those matters, if I could then

proceed to our outline of submissions. The

submissions which are put in the first two

paragraphs were formulated, having in mind those

matters which appear to be concerning the Court on

the application for special leave. There are also

some of the matters which have been put by the

Court to my learned friend, Mr Jackson. As I

understand the concession which he has made, that

is that the rescission which his client sought to

effect was under one clause 7 of the deed, we would

apprehend that it is not necessary for us to

develop at any length the matters which are set

forth in paragraphs 1 and 2 of our submissions

because they relate to termination of the contract
because of unreasonable delay on our part in

failing to get the approval once an election has

been made to affirm the contract. But the

authorities there are of some assistance in this

regard: they assist the Court in determining the

meaning of the words "at any time thereafter" as

they are used in clause 7 of the deed.

I am not sure if Mr Jackson still persists in

that submission which was made in the Court of
Appeal, but clearly it would be difficult to

construe those words as meaning that a party in the

position of the appellant in this case could elect
to affirm a contract and then, at any time

thereafter, seek to disaffirm it, so that it would

have a right to approbate and reprobate this

contract at will.

GAUDRON J: There is a difficulty of language, is there not,

in this case, Mr Douglas? You talk about affirming

the contract. Really, what you need in the

circumstances of this case to amount to an election

is not an affirmation of the contract so much as an

unequivocal abandonment of rights?

MR DOUGLAS:

Yes, but how more unequivocal can you get than

sending the letter of 26 June?

GAUDRON J:  I mean that may be an unequivocal affirmation.

The next question is: is it an unequivocal

abandonment of what would otherwise be continuing

rights?

MR DOUGLAS:  In other words, is it an abandonment of a right

which, for example, you have under clause 7 of the

deed so that, in effect, this contract, on that

interpretation, would allow one to send a letter

saying, "We are going to settle" which,

effectively, is what that letter does.

GAUDRON J: Yes, affirmation of a contract is a concept that

is applicable in certain circumstances where there

Irnrner(3) 36 22/6/92

is, for example, a once and immediate right to act

one way or the other, and they are mutually

exclusive.

MR DOUGLAS:  But is that not the situation here,

Your Honour, because - - -?

GAUDRON J: That is what I am asking you. I would have

thought that in the context of clause 7 you went

beyond - to establish an election, you must go
beyond mere affirmation to a point of abandonment.

It is an idea that comes from what was said by

Mr Justice Stephen in Sargent v ASL, where he

pointed out that there are some cases where mere

affirmation is not really what you are talking

about.

MR DOUGLAS:  Yes, but even in Sargent v ASL the words of a

contract were, as I recall them, "at any time prior

to completion" .

GAUDRON J: Yes.

MR DOUGLAS:  Now, that may not be the exact words but it is

the sense of the words which is to appear in
clause 16 of the standard contract for sale of land

in New South Wales. Now, those words could be given a meaning which Your Honour suggests the

words in clause 7 could bear in this case, but we
would say that they would not be. It does not give

a continuing right to rescind, nor do they require,

effectively, what amounts to an abandonment of

rights in order to amount to an - - -

GAUDRON J:  Do you accept clause 7 gives a continuing right

to rescind - election aside, it is a continuing

right to rescind?

MR DOUGLAS:  It continues for so long as you do not elect to

rescind.

GAUDRON J:  So long as you - yes, but we then come to this:

what do you mean by the words "don't elect to

rescind" because it is a continuing right, it must

be - - -

MR DOUGLAS:  It is continuing. I mean, it does not say,

"You must exercise your rights by 14 April or

forever after be still". What it says is,

effectively, "If you have not got the approval by

1 April you can rescind at any time thereafter",

but what is implicit in that is that you cannot

elect to affirm prior to rescission, because to do

that would enable a party like this to go through

the motions of carrying out the conveyance by

several steps along the way and then disaffirm the

contract at some later stage. And, likewise, if

Immer(3) 37 22/6/92

the contract which was considered in Sargent, at

any time prior to completion, you could go on

making requisitions, performing other acts under

the contract, and then at a time when it suited you
you could elect to disaffirm. Now, obviously,
questions of estoppal and the like may intrude in
those circumstances. But the way this contract
operates is no different from the way in which the

standard contract for sale of land, which was

considered by this Court in Sargent and in Turner,
operates because you are there considering

contracts which give that continuing right so long

as you do not take a contrary course.

Now, to say that in a particular context of

this case -

GAUDRON J: It was a somewhat different contract, was it not

though? The subject-matter of the sale was in

existence and its transfer ability was not issue?

MR DOUGLAS:  Why should that affect this case? For example,

in Aberfoyle v Ching they had not got in all of the

leasehold. If I contract with Turner or Durer for

a painting and he has not got it ready, surely I

can still elect to keep the contract on foot until

it is actually brought into existence. Why should

the fact that the property is not yet transferable,
which I think is the appropriate analysis in this

case, effect in any way the question of election?

That is, with respect, confusing questions of time

and title because what clause 7 gave them was the

right to get out of this contract by 1 April if in

fact the property had not become transferable at

that time.

GAUDRON J: Really, it is only a question of what is

involved in election in this case?

MR DOUGLAS: It probably, ultimately, does come down to

would not require in the particular circumstances	distinguishable from any other, and you certainly that, yes. But we would say this case is not
of this case for contract to be unequivocal,
something which amounts effectively to an
abandonment of all other rights under the contract.

Could I, by analogy, take Your Honour to that

case of Larking, 64 CLR 221, which is not a case of

election but rather a contractual case as to

conditions. That was a case of:

A licence was granted by the appellant to the

respondent to remove sand and gravel from the

bed of a river where the bed formed portion of

or adjoined the appellant's land. The grant

Immer(3) 38 22/6/92

was made upon the conditions that royalty

should be paid quarterly -

et cetera. Now, if you read down the headnote:

The respondent commenced operations -

there was a covenant which required it to

erect and maintain and repair certain fences

and a gate, and that if default in the

performance of any of the conditions were made
by the respondent and it continued for thirty

days after any quarter day the appellant could

determine the licence.

Now, that requirement was not complied with and the

question was whether the failure to erect the

fences within a reasonable time of commencement -

whether there had been a waiver of a right to

determine a licence on account of that breach.

Now, the relevant passage I wish to read is at

page 236 in a judgment of Mr Justice Dixon, where

it says:

Upon these facts, the first question for

consideration is whether the covenants
contained in clauses 12 and 15 operated to

impose a continuing duty upon the respondent

company so that a failure to fence involved

new breaches for every day of default, thus

including the period after 31st October 1939.

If a covenanter undertakes that he will do a

definite act and omits to do it within the

time allowed for the purpose, he has broken
his covenant finally and his continued failure

to do the act is nothing but a failure to

remedy his past breach and not the commission

of any further breach of his covenant. His

duty is not considered as persisting and, so

to speak, being for ever renewed until he
actually does that which he promised.	On the

other hand, if his covenant is to maintain a

state or condition of affairs, as, for

instance, maintaining a building in repair, keeping the insurance of a life on foot, or affording a particular kind of lateral or

vertical support to a tenement, then a further
breach arises in every successive moment of

time during which the state or condition is

not as promised, during which, to pursue the

examples, the building is out of repair, the

life uninsured, or the particular support

unprovided.

Immer(3) 39 22/6/92

So, what we say here is, and putting it in the context of this particular case, the requirement to

obtain approval was, effectively - it is a definite

act and it is a once and for all act. It is

something which has got to be done by 1 April 1989.

Be it any time thereafter operates in relation to

the right of the purchaser to elect whether or not

to confirm the contract, notwithstanding that the

consent of the Council has not been obtained by

that definite date. And if in fact prior to trying

to exercise his right, pursuant to clause 7, his

conduct is such that it is an election to affirm

the contract it is imputed to him, well then he

cannot exercise his rights of rescission under

clause 7, and in that respect it is no different

from the cases such as Sargent and Turner.

The relevant provisions of the clause which

was

BRENNAN J:  Mr Douglas, what do you say - let it be assumed

in your favour that there was an election to waive

whatever entitlement there was under clause 7 to

rescind.

MR DOUGLAS:  Yes, Your Honour.

BRENNAN J: And let us assume that there was a requirement

to refurbish Pilgrim House and it was going to take

years to do it and the purchaser could not wait

that long. What rights, if any, would the

purchaser then have to rescind?

MR DOUGLAS:  Your Honour, that question is addressed in

paragraph 2 of our written submissions, but

effectively what we say is that in the particular

circumstances of this case once that election had

taken place and as part of a contract indeed, the

term would be implied that approval should take

place within a reasonable time or the election to
proceed.

Now, that is similar in Sandra Investments

v Booth, if I could take the Court to that

case - - -

BRENNAN J: There is no need to because there is no point

taken against you on this. It is put by

Mr Jackson, as I understand it, it is clause 7 and

clause 7 alone, so you are saying that all we are

concerned with, I take it, is whether there was

waiving of clause 7?

MR DOUGLAS: Yes, Your Honour. But certainly if in fact we

had	been guilty of unreasonable delay, if in all
the	circumstances a reasonable time had elapsed,
and	the contingent condition had not then been

Immer(3) 40 22/6/92

fulfilled, that is, approval had not been obtained
because completion was obviously conditioned upon

approval, then they would have been entitled to rescind. Now, depending upon what analysis you make of Perri's case, whether you say that the

promissory obligations had to be exhausted first,

that is, the obligation to refurbish Pilgrim House

and notice had to be given in that regard, or

whether you say clause 7 is a length of clause 3

gives rise to a contingency, that is, the

requirement of approval before completion, if a

reasonable time has elapsed and that contingency has not yet eventuated then they are entitled to rescind. And, obviously, if they had wished to

they could have led evidence in relation to
reasonableness and so on and pleaded it at the
hearing and sought to rely upon a termination of

the contract as distinct from rescission pursuant

to clause 7. Now, that has not been done.

But it is important, in this respect, that

analysis as we see it, because it shows that our

interpretation of clause 7 is a correct one, that

this particular clause should not be interpreted as

a clause which, effectively, gives a purchaser a

right to approbate and reprobate.

Also, I did refer to the wording of the clause

considered in Sargent. I think the Court will find

the wording of that clause in Turner, where it was

contrasted with the words used in Turner, (1974)

131 CLR 660. You will see at the foot of page 669

reference is made to Sargent and that:

Clause 17 of the 1972 edition of the contract

is not in terms identical with cl 16 of the

earlier edition. Three differences are to be

noted:

(1) Clause 17 confers a right of rescission on

the purchaser only, whereas cl 16 conferred a

right of rescission on the vendor as well;

(2) The opening words of cl 17 -

and that is what was considered in Turner, and then

clause 16 is what was considered in Sargent:

"Should it be established prior to completion

that at the date of this agreement the

property was affected by .•. ".

Now, on one reading of those words, they could have

been interpreted as saying that you have got a

continuing right up to completion to rescind the
contract. But, obviously, that is not the correct

interpretation of them. And that is the way the

Immer(3) 41 22/6/92

matter was approached by Mr Justice Young in Zucker

v Straightlace, which is the case which is referred

to in our submissions, and he says, effectively, at

page 91G that a clause of this nature should not be

interpreted in such a way as to deprive a party in

our position of the right to insist upon the

operation of the doctrine of election.

Now, there is not much reasoning in his

judgment there, so I do not think it is really

necessary for me to go to it, but we would say that having regard to the analysis which we make in this case in paragraphs 1 and 2, this purchaser was not

without remedy in the event that it elects not to

rescind the contract by reason of the

non-fulfilment of the provisions of clause 7.

Let me say this: it is important to bear in

mind, as the Court said in Sandra, that this

contract was obviously intended to operate in

circumstances where the appellant may decide to exercise its rights under clause 7. So, if the

contract does contemplate either that it could

waive a benefit of for provisions of clause 7,

because it is obviously a condition which was

inserted into the contract solely for its benefit.

Or, secondly, it may elect to keep the contract on

foot notwithstanding that approval may not have

been obtained by 1 April 1989.

BRENNAN J: And has there been no question as to whether

under any general right to rescind - to terminate -

the purchaser has done so.

MR DOUGLAS: It has never been suggested in this case.

BRENNAN J: And for that reason the decree of specific

performance has been made?

MR DOUGLAS:  Yes, Your Honour. I mean, there has never been

a suggestion that an unreasonable period of time

case.

elapsed in the particular circumstances of this

BRENNAN J:  It has never been argued that the purported

rescission was intended to have continuing

operation?

MR DOUGLAS:  Not that I am aware, Your Honour, not in that

sense, or that it was intended to operate as a termination of the contract as distinct from a

rescission under clause 7, and I understood ground.

BRENNAN J:  Or on your approach is it right to say all that

is necessary to show is that 1 April had passed

Immer(3) 42 22/6/92

without approval; that there was no approval at

this time and that the election was made to

continue.

MR DOUGLAS:	Yes, Your Honour, and there was knowledge of those facts as Mr Justice Meagher says in his
judgment.

Now, Your Honour, in the balance of our

submissions we go through the relevant cases on

election Sargent and Khoury, and we say in

paragraph 5 that the relevant degree of knowledge

should be inferred here, because the appellant knew

of the letter of 29 March and knew of the terms of

a deed and had responsibility for pursuing the

application, and the other matters set out in that

paragraph. We do disagree, as we have indicated in

our earlier submissions, that there was any

misapprehension on the part of the solicitor in the

particular circumstances of this case.

I think all of the rest of what we put in our

submission is largely uncontroversial once the
fundamental steps in the reasoning which I have
just been through with Mr Justice Brennan have been
achieved, so we then put the balance of our
submission in paragraph 6 and paragraph 7 that the

conduct was unequivocal. Recital C would not take

away from the unequivocal nature of a letter of

26 June. Mr Jackson sought to make something

something of that but, of course, recital C speaks

as at completion, so it must be seen as an

unequivocal election to affirm the contract

requiring us as at completion, not necessarily as at 26 June, to have executed the deed and to have

obtained the approval of Council at that point of

time. It is not a deed which, as at 26 June,

·reflects or implies that approval has in fact been

obtained. We say that there is adversity here;

there is no requirement of detriment; that

election is, effectively, as Mr Justice Jackson has

said, a discrete doctrine all of the time which

does not require detriment. That leaves only one

thing and that is that in the court below, that is

in the Court of Appeal, the orders which were made

did not include an order for damages for delay

between the time from when completion should have

taken place and the time when the order for

specific performance was made.

We have sought to put on a cross appeal in relation to that matter. We would need leave to do

so. The matter has been before the New South Wales

Court of Appeal where we have sought the

application of the slip rule in that court.

Bearing in mind that that application was

returnable this morning, it was thought more

Immer(3) 43 22/6/92

appropriate that we should raise the matter by way
of an application for special leave here this
afternoon, and in that regard I hand up a number of

copies of an application for special leave together

with an affidavit from my instructing solicitors.

Now, I think Mr Jackson has a certain attitude

in relation to that, it is probably best I left it

to - - -

BRENNAN J: Yes, no doubt we will come to that in a moment

or two I should think. There seems to be only one

copy of the affidavit here, Mr Douglas?

MR DOUGLAS:	I thought there were more, Your Honour.
BRENNAN J:	No doubt they can be photocopied, in any event.

We might hear what Mr Jackson has to say about your

application, Mr Douglas.

MR DOUGLAS:  I have got them. Can I hand them up?

BRENNAN J:  I think I have an original affidavit here,

Mr Douglas, you might like to have that back into your custody. Yes, Mr Jackson?

MR JACKSON:  Your Honour, the issue is one which has not

been dealt with by a court below. If our appeal

succeeds it becomes irrelevant. If our appeal

fails there seems to be no obstacle to going back

to the Court of Appeal to deal with the matter. We

would, I think, wish to raise some matters if the

matter were to be dealt with either by the Court or

by the Court of Appeal. Your Honour, I have an

affidavit to that effect to which I will refer in

just a moment but, essentially, it deals with two

things.

One really has to work on the assumption that

our appeal would fail.	Making that assumption, the
situation which would then obtain is that it is a

matter on which we would say that if it had been in

issue at an earlier point in the proceedings then

we would have sought to adduce evidence that two

things might have been done.	One was to finish the
work more quickly on Pilgrim House:	the other was

to institute proceedings against us at a much

earlier point than the the year afterwards or so

that it took to do them, in order to have the

question of the correctness of our stand determined
or not determined which may have had the result

that there would be no damages payable at all, and that is an issue which we have been prevented from

dealing with because of the way in which the matter

proceeded. But, Your Honour, the first point we

would take, really, is that it is a matter that the

Court should not trouble itself with, the issue

Immer(3) 44 22/6/92

should go to the Court of Appeal if it goes any

where.

BRENNAN J:  Mr Douglas, do you have anything to say in reply

to what Mr Jackson has just put?

MR DOUGLAS:	Your Honour, just this, that so far as the matters which he refers to, they are matters which
could be raised before the Master assessing
damages, they are not matters which he is precluded from raising.
TOOHEY J:	How could it go back to the Court of Appeal at this stage on that point?
MR DOUGLAS:	Under the slip rule, Your Honour.

TOOHEY J: Yes, I know that.

MR DOUGLAS:  That is the only way it could go.

TOOHEY J: That was the incantation but what is the - I

should not be asking you the question, I suppose I
should be asking Mr Jackson.

MR DOUGLAS:  No, I think you should be asking me,

Your Honour, because I was in the Court of Appeal.

TOOHEY J: Yes.

MR DOUGLAS: But, effectively, there was no discussion - the

original summons sought damages. Mr Justice Young

dismissed the summons for specific performance.

There was no discussion as to consequential orders in the Court of Appeal and the Court of Appeal made its orders without calling on the parties, and at a

subsequent time we realized those orders did not

include an order for damages to be assessed in

relation to the period, that is the closed period,

which had elapsed not in relation to the future,

and there is just a fear that if we do not get a

specific order in relation to that closed period we

may not be able to get them when we seek to raise the issue of damages generally in relation to the case.

BRENNAN J:  It is curious notion that this Court should give

a judgment which ought to have been given by the

court below if only the slip rule had been drawn to

its attention.

MR DOUGLAS:  The slip rule has been drawn to the Court of

Appeal's attention, but bearing in mind that both cases were for hearing on the same day it was

thought more appropriate that the matter should be

dealt with here rather than we should be down

before the Court of Appeal.

Immer(3) 45 22/6/92

BRENNAN J:  Was any application made to the Court of Appeal

before the Court of Appeal's order was taken out?

MR DOUGLAS:  No, but that does not affect the situation much

under the present Supreme Court Rules in New South

Wales. The distinction between orders which have

been entered and which have not been entered is
now - I think it is dealt with in Shaddock's case.

Yes, it is apparently dealt with in Shaddock's case

and that difference is no longer as significant as

it was when Mr Justice Deane was practising some

time ago.

BRENNAN J:	Have you concluded your arguments, Mr Douglas?
MR DOUGLAS:	I have, Your Honour, yes.
MR JACKSON:	Your Honour, may I deal first with

recital - - -

BRENNAN J: Mr Jackson, before you commence your reply, we

should deal with Mr Douglas's application for

special leave to cross appeal. This is not a case
in which the Court thinks it is appropriate to

grant special leave to cross appeal since it seems

to be common ground that the matter can be dealt

with by the Court of Appeal if need be. Special

leave will therefore be refused.

MR JACKSON:  Your Honours, may I deal first with our learned

friend's submissions concerning recital c. The

fundamental aspect of them seeming to be that all

they are speaking of is the position as at

completion. Your Honours, could I say two things:

the first is that if one looks at the document

itself, at page 256, what Your Honours will see is

in.the first sentence of the letter Mr Dixon-Smith

is speaking of a deed which he is submitting:

for finalization of our respective clients'

transaction -

and he concludes by saying -

I am awaiting instructions as to the final

date for completion.

Now, Your Honours, what that refers to is to

clause 3 at page 180, which contemplates completion

taking:

place within seven (7) days of notice by one

of the parties to the other that the Council

has granted the application.

So he is speaking of completion in a very short

period of time, and in those circumstances if one

Immer(3) 46 22/6/92

goes back to page 259 to look to see that part of

the document, what one sees is that he is saying:

the Council has approved the said transfer -

and the -

notice pursuant to this deed being entered

into -

and so on.

Now, Your Honours, the reference to an

approval of the transfer, ori the worst construction

for us, it might be a reference to there being

approval by the time of completion, but it is

plainly in the contemplation of Mr Dixon-Smith in

the terms of the documents that there is an

approval now or in the immediate future. And,

Your Honours, it seems quite unrelated to the

position which was the actual situation and it is

impossible to say, we would submit, that one can
leave out of account that part of recital C as

being something which is simply to be complied with

upon the time of completion. What was being spoken

of was an election, as it were, not to rely on

clause 7 in circumstances where the approval had

been obtained or would imminently be obtained.

Your Honours, the second thing we would wish

to say is that much was made of the fact that

Mr Dixon-Smith did not give evidence but one has a

large amount of evidence concerning what he did and

what he said and so on, and in the end one really

must take the evidence as one finds it.

The third thing, Your Honours, is that it was

said the issue as to mistake was not raised and I

suppose, Your Honours, if one looks at the

pleadings exactly it is right to say that the

question of mistake was not raised directly in

relation to the question of election, but if one

goes to the pleadings it is plain enough, we would

submit, that the area covered by the submissions

which we have made is an area that was the subject

of the pleadings. Could I, in that regard, take

Your Honours to the defence to the cross claim

which commences at page 11, where Your Honours will

see at page 13, under the heading "particulars of

waiver" in paragraph 11 there is an allegation that
we were "estopped and precluded from exercising

that right".

Then, Your Honours, at page 14, under the

heading "particulars of estoppel", paragraph (b),

it is alleged that our conduct:

Immer(3) 47 22/6/92

created, contributed to and/or fostered that

assumption by the Cross-Defendant -

and then, Your Honours, paragraph (c), an

allegation of "reliance upon" the "assumption", and

paragraph (d):

In the premises it would be unconscionable for

the Cross-Claimant to be permitted to resile

from -

et cetera. Now, Your Honours, that meant certainly

that the issues which underlie the submission were

issues which were live issues at the trial.

Now, Your Honours, if I could go from that to

the appeal. It is apparent from the passages to

which I have already referred that counsel then

appearing for the present appellant sought to raise

the argument concerning the question of mistake.

Your Honours, those are our submissions.

BRENNAN J:  Thank you, Mr Jackson. The Court will consider

its judgment in this matter.

AT 4.43 PM THE MATTER WAS ADJOURNED SINE DIE

Immer(3) 48 22/6/92