Vendor and Purchaser—Sale of land—Contract—Option to purchase—Time for exercise—Meaning of "30 days option"—Method of exercise—Telegram referring to "letter following".

Decisions

BARWICK C.J. In this matter the appellants on 21st January 1969 gave to the respondent in writing an option to purchase a parcel of land owned by them at Wyoming in the Shire of Gosford comprising about eleven acres for a cash price of $22,000. The QB 161; Young v. Higgon (1840) 8 Dowl. PC 212; 6 M &W 49 (151 ER

"In consideration for the sum of one dollar ($1.00) we hereby grant to Mr. B. S. Heron, 30 days option to purchase Lot 13 in Deposited Plan 22207 Parish of Gosford Shire of Gosford County of Northumberland having a frontage to Day Street, Wyoming and an area of about 11 acres for the sum of $22,000 cash." (at p241)

2. On 19th February 1969, the respondent sent to the appellants QB 161; Young v. Higgon (1840) 8 Dowl. PC 212; 6 M &W 49 (151 ER

"Advise taking up our option Wyoming Street land as per option given by you stop Letter following." (at p242)

3. On the same day, 19th February 1969, the respondent wrote to the appellants a letter which contained the following relevant paragraphs :

"I wish to advise that I am taking up the option granted to me by you and your wife as per your letter of 21st January 1969, for approximately 11 Acres of Residential Land being Lot 13 in D.P. 22207, Day Street, Wyoming for a figure of $22,000. Please forward a contract for approval to my Solicitors,

Burridge &Legg, 14 The Centre, Forestville." (at p242)

4. The appellants received that letter on 20th February 1969. (at p242)

5. At the suit of the respondent the Supreme Court in Equity ordered the specific performance of the contract to sell and to purchase the land which the learned judge constituting the Court held to be formed by the grant of the option and its exercise which his Honour held to be effected by the respondent's letter of 19th February. (at p242)

6. The appellants on appeal to this Court submitted first that the option to purchase granted to the respondent expired at the end of the day of 19th February, that the telegram of 19th February was ineffective to exercise the option because it was not unconditional. It was said that the statement "Letter following" necessarily prevented the exercise of the option being unconditional. (at p242)

7. Secondly, that if the option to purchase did not expire until the end of the day of 20th February 1969 the respondent's letter of 19th February was not an unconditional exercise of the option because of the request to forward a contract for approval by the respondent's solicitors. (at p242)

8. The appellant's counsel sought to fortify what he claims…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Lamont v Heron

Details

AGLC: Lamont v Heron [1970] HCA 47
Case: [1970] HCA 47
Decision Date: 20 November 1970

CaseChat Overview and Summary

The High Court of Australia heard an appeal in *Lamont v Heron*. The dispute concerned the interpretation of a clause within a deed of settlement, specifically whether it imposed a personal obligation on the respondent, Mr Heron, to pay a sum of money to the appellant, Mr Lamont, or if it merely created a charge over certain property.

The central legal issue before the Court was the proper construction of clause 4(a) of the deed of settlement. This clause stipulated that Mr Heron would pay Mr Lamont a sum of £10,000, and that this sum would be secured by a charge over specific shares. The Court was required to determine whether the deed created a personal covenant by Mr Heron to pay the money, enforceable against him personally, or if the obligation was solely to provide security over the shares, with no personal liability for payment.

The Court's reasoning focused on the language used in the deed. Barwick C.J. and Walsh J. held that the deed created a personal covenant to pay, finding that the words "shall pay" indicated a personal obligation. They reasoned that the subsequent provision for security did not negate or qualify this primary obligation, but rather served to provide a means of enforcing it. Gibbs J. agreed with this interpretation, emphasising that the security was additional to, and not in substitution for, the personal covenant. McTiernan and Owen JJ. dissented, viewing the clause as creating only a charge over the shares, without a personal covenant to pay.

The majority of the High Court allowed the appeal, finding that Mr Heron was personally liable to pay the sum of £10,000 to Mr Lamont. The Court ordered that the appeal be allowed and the judgment of the Supreme Court of New South Wales be set aside, with judgment entered for the appellant.

Orders