Jet Development Pty Ltd v Denning

[2006] QSC 357

SUPREME COURT OF QUEENSLAND

CITATION:

Jet Development Pty Ltd & Anor v Denning [2006] QSC 357

PARTIES:

JET DEVELOPMENT PTY LTD ACN 107 913 762
(first plaintiff)
and
FERNVALE PROJECT PTY LTD ACN 119 408 767
(second plaintiff)
v
ROYALIN MARGARET DENNING
(defendant)

FILE NO:

BS4879 of 2006

DIVISION:

Trial

PROCEEDING:

Trial

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

5 December 2006

DELIVERED AT:

Brisbane

HEARING DATE:

29 November 2006

JUDGE:

Chesterman J

ORDER:

1.   A declaration that the put and call option agreement between the first plaintiff and the defendant dated 24 June 2005 is binding on the parties.

2.   The defendant must specifically perform the contract of sale which followed in exercise of the option on 27 April 2006.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION FOR NON-PERFORMANCE – ELECTION AND RESCISSION – LOSS OR WAIVER OF RIGHT TO RESCIND – alleged breaches of agreement – whether defendant subsequently affirmed agreement

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – OTHER MATTERS – variation of agreement by correspondence – whether binding – notices clause – whether simultaneous delivery of notices satisfied term requiring sequential notices

Masters v Cameron (1954) 91 CLR 353, applied

COUNSEL:

J W Peden for the plaintiffs
P J Favell for the defendant

SOLICITORS:

Flower & Hart for the plaintiffs
Morgan Conley for the defendant

1. The defendant owns land in the village of Fernvale.  It has been the site of a sawmill since 1922.  On 24 June 2005 the defendant and the first plaintiff made a written contract to effect the sale of the defendant’s land.  The contract was described as a ‘put and call option’ (‘option agreement’).  By the terms of the option agreement Mrs Denning was designated ‘the Seller’ and the first plaintiff ‘the Buyer’.  For consideration the defendant granted the first plaintiff an option to purchase the land on the terms and conditions contained in the attached contract of sale and which was in the standard form.  By clause 3.1 the first plaintiff could exercise its option within a specified period which expired on 30 April 2006.  The option could be exercised:

‘… only … by delivery to the Seller … of:-

(a)a written notice generally in the form contained in Schedule 2;  and

(b)two copies of the Sale Contract signed by the Buyer or the Nominee.’

It was agreed that the call option would lapse ‘if … not exercised strictly in accordance’ with the preceding requirement.

1. By clause 3.3 it was agreed that:

‘On exercise of the … Option, the Seller and the Buyer are immediately bound to respectively sell and purchase the Property in accordance with the Sale Contract.  The Sale Contract will be taken to have been entered into on the date of exercise of the … Option, regardless of whether the Sale Contract is signed by the buyer [or] the seller.’

1. By clause 4.1 it was agreed that:

‘The Buyer…