McIntosh v Hadco Constructions Pty Limited

[2003] NSWCA 348

CITATION:	McIntosh v Hadco Constructions Pty Limited & Anor [2003] NSWCA 348 revised - 5/12/2003
HEARING DATE(S):	24/11/03
JUDGMENT DATE:	24 November 2003
JUDGMENT OF:	Sheller JA at 15; Hodgson JA at 16; Ipp JA at 1
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	REAL PROPERTY - Option to purchase residential property granted to grantee or his nominee - No nomination of a nominee made at time counterparts exchanged - only grantee signing counterparts - Whether option was void pursuant to Conveyancing Act 1919, s 66ZG(1). ND
LEGISLATION CITED:	Conveyancing Act 1919, s 66ZG
PARTIES :	Robert James McIntosh (Appellant) Hadco Constructions Pty Limited (First Respondent) Kathleen Jane McIntosh (Second Respondent) Insert (Second Respondent)
FILE NUMBER(S):	CA 40705/03
COUNSEL:	G R Waugh (Appellant) D Warren (First Respondent) Submitting Appearance (Second Respondent)
SOLICITORS:	Sorensen & Brown (Appellant) Macquarie Lawyers (First Respondent) M Strikis (Second Respondent)

LOWER COURTJURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	ED 5514/02
LOWER COURT JUDICIAL OFFICER :	Windeyer J

CA 40705/03
ED 5514/02

SHELLER JA
HODGSON JA
IPP JA

Monday 24 November 2003

ROBERT JAMES McINTOSH v HADCO CONSTRUCTIONS PTY LIMITED & ANOR

Judgment

1 IPP JA: By agreement dated 3 March 2001 and subsequently varied, the appellant and the second respondent granted to Mr Arthur Haddad or his nominee an option to purchase certain residential property.

2 The agreement in question was made by an exchange of counterparts. One counterpart was signed by the appellant and the second respondent as grantors, and the other by Mr Haddad as grantee.

3 At the time the counterparts were exchanged, Mr Haddad had not nominated a nominee. Moreover, at that time, the first respondent was not in existence.

4 After the exchange of counterparts had taken place, Mr Haddad named the first respondent as nominee. After that had occurred, the first respondent exercised the option and claimed specific performance of it.

5 The appellant and the second respondent resisted this claim, and proceedings were commenced. The action was heard by Windeyer J, who ordered specific performance.

6 The appellant appeals on the ground that his Honour erred in holding that the option was valid. The appellant contends that his Honour ought to have held that the option was void pursuant to s 66ZG (1) of the Conveyancing Act 1919 because one of the counterparts by which the option was granted had not been signed by the first respondent.

7 Section 66ZG of the Conveyancing Act 1919 provides:

“ Option void in certain circumstances
(1) An option granted for the purchase of residential property is void:
(a) unless it is granted by way of exchange of counterparts, one of which is signed by the purchaser and the other signed by the vendor, or
(b) if it exercisable within 42 days after it is granted or, if a different period is prescribed, within that period.
(1A) Subsection (1)(a) does not render an option void if it was granted, without an exchange of counterparts, before the commencement of the amendment made to this section by the Conveyancing Amendment Act 1997 and it was signed in duplicate by both parties.
(2) If an option is void under this section, section 66ZE applies as if an effective notice of rescission of the option had been served under this Division, except that:
(a) the purchaser is not liable to the forfeiture provided for under that section, and
(b) that section has effect as if it provided that the whole of the consideration paid in relation to the option and the whole of any deposit paid in relation to the purchase of the property are payable to the purchaser.”

8 "Purchaser" is defined by section 7 (1) of the Act, which relevantly provides:

“ Purchaser means a purchaser for valuable consideration, and includes a lessee, mortgagee, or other person who for valuable consideration acquires an interest in property, except that in Part 4, Divsions 5 and 6 purchaser means only a person who acquires an interest in or charge on property for money or money’s worth; and purchase has a meaning corresponding with that of purchaser ”.

9 Section 66ZG forms part of Part 4 Division 9 of the Act and, in that Part, "purchaser" has an extended definition. According to this definition, "purchaser" includes "a prospective purchaser, and also includes a grantee or prospective grantee of an option."

10 It is not necessary in this appeal to decide the precise meaning of this extended definition. It is sufficient to point out that, at the time counterparts were exchanged, no nomination of a nominee had been made and, indeed, the eventual nominee did not at that time exist. Thus, at the time the exchange of counterparts took place, there was only one purchaser, within the meaning of the definition, in existence. That was Mr Haddad.

11 As I have mentioned, Mr Haddad, as grantee, signed his counterpart. On that basis, in my opinion, the option was valid. It was signed by the purchaser, as defined; namely, Mr Haddad. There was no other “purchaser” then in existence.

12 In my view, on that basis, it cannot be said that the option was void within the meaning of s 66ZG (1).

13 It is unnecessary to consider what the legal position would be were a nomination to be made prior to the exchange of contracts and were the nominee to be in existence.

14 In my opinion, the appeal should be dismissed with costs.

15 SHELLER JA: I agree.

16 HODGSON JA: I agree.

17 SHELLER JA: The order of the Court is that the appeal is dismissed with costs.

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Last Modified: 12/05/2003