NCR Securities Pty Ltd v Ballard
[2004] QSC 31
•27 February 2004
SUPREME COURT OF QUEENSLAND
CITATION:
NCR Securities Pty Ltd v Ballard [2004] QSC 031
PARTIES:
NCR SECURITIES PTY LTD
(ACN 097 185 110)
(plaintiff)
v
LAURICE GERALDINE BALLARD
(defendant)FILE NO:
SC No 9604 of 2003
DIVISION:
Trial
PROCEEDING:
Trial
ORIGINATING COURT:
Supreme Court, Brisbane
DELIVERED ON:
27 February 2004
DELIVERED AT:
Brisbane
HEARING DATE:
16 February 2004; 17 February 2004; 18 February 2004
JUDGE:
Chesterman J
ORDER:
1. Judgment for the defendant
2. Plaintiff to pay the defendant’s costs to be assessed on the standard basis
CATCHWORDS:
CONTRACT – GENERAL CONTRACTUAL PRINCIPLES – OFFER AND ACCEPTANCE – MATTERS NOT GIVING RISE TO BINDING CONTRACT – STATEMENTS OF INTENTION, NEGOTIATIONS AND INVITATIONS TO TREAT – AGREEMENTS NOT INTENDED TO CREATE LEGAL RELATIONS – where the defendant entered into negotiations with the plaintiff concerning the sale of the defendant’s property – whether the defendant intended to be bound by the terms of a negotiated
documentCOUNSEL:
A M Daubney SC, with G D Beacham, for the plaintiff
P J Dunning for the defendantSOLICITORS:
Steindls for the plaintiff
Bell Legal Group for the defendant
The defendant, Mrs Ballard, is the owner of 2.8 hectares of land located at
lot 101, Billinghurst Crescent, Coomera. It is on the western side of the highway just north of the Coomera River in a rapidly growing residential area of the Gold Coast which has been identified by developers as suitable for subdivision into small residential lots. Mrs Ballard has three neighbours, all of whom own similarly sized blocks which have also attracted the attention of speculators and developers. On
24 August 2002 the defendant signed a contract to sell her land to Questband Pty Ltd (“Questband”) for a price of $881,750 conditional upon Questband obtaining local government approval for the subdivision and development of the land. Questband executed similar contracts with Mrs Ballard’s neighbours. Its evident purpose was to create a substantial subdivision utilising all four properties. The contract between Questband and Mrs Ballard contemplated that local government approval would be obtained within three months. This hope was disappointed and the date for settlement was progressively extended until June 2003. The conditions were fulfilled but on the date eventually set for completion Questband failed to appear. It had been unable to borrow the money necessary to pay the vendors.
Mrs Ballard and her neighbours rescinded their contracts. Questband was reluctant to lose its profitable development and lodged caveats forbidding dealing with
Mrs Ballard’s land and that of her neighbours.
The plaintiff is a development company owned by Mr Norman Rix who has for many years been a prominent real estate dealer and developer on the Gold Coast. Mr Rix, too, observed the potential value of land in the defendant’s vicinity. He instructed his acquisitions manager, Mr Richard Duce, to approach residents to inquire whether they wished to sell and if so on what terms. Mr Duce spoke to
Mrs Ballard in April 2003 and learnt that her land was under contract to Questband. News of that company’s failure to complete the purchases soon reached Mr Rix and Mr Duce began negotiating with Mrs Ballard for the sale of her land. Mrs Ballard had agreed with her neighbours that they would act uniformly in the question of selling because they anticipated obtaining a higher price if all four blocks were sold to the same developer and any owner who did not sell would suffer a diminished amenity of life. Mrs Ballard’s neighbours had committed themselves to purchasing other properties on the faith of their contract with Questband. When their contracts failed to complete they were anxious to do business with the plaintiff which agreed to buy their land on much the same terms that had been agreed with Questband.
Mrs Ballard too, was prepared to sell but the course of negotiations was far from smooth. It has culminated in the plaintiff alleging, and Mrs Ballard denying, that they executed a binding contract for the sale of her land on 16 July 2003. The present action is one to compel the specific performance of the alleged contract of sale.
The trial of the action proceeded with great efficiency. Counsel for both parties carefully and comprehensively identified the points of fact and law in dispute and presented their respective cases and submissions with particular clarity. Despite the multiplicity of points which were addressed the case in the end turns upon the content of a conversation between Mr Duce on behalf of the plaintiff and
Mrs Ballard on 16 July 2003. The resolution of that question of fact depends on an assessment of the credit of the two witnesses. For that reason it is appropriate to set out at some length the course of the negotiations between the plaintiff and the defendant and the conversations between them, both before and after 16 July.
Notwithstanding what he had been told when he spoke to Mrs Ballard in April
Mr Duce called again on or about 19 May 2003 to ask about the possibility of her selling to the plaintiff. He also inquired about the availability of the neighbouring blocks. The vendors entertained an apprehension that the contracts with Questband would not settle. Mr Duce knew, or suspected that this was the case.
Mrs Ballard is a middle aged single woman whose health is not robust. She had been approached by numerous real estate agents and developers in the year or so leading up to June 2003. She knew her property was sought after for development and appreciated that the lifestyle she had enjoyed would come to an end unless she could relocate. She was concerned to obtain a sufficient purchase price to allow her to buy a conformable property and enjoy some financial security. With that goal in mind in May or June of 2003 she compiled in handwriting ‘a summary of the terms that (she) had decided she would need if (she were) to sell (her) property.’ She used the list as an ‘aide memoir’ when agents called and asked what terms she would want if she sold. This document was never shown to Mr Rix or Mr Duce. One of the terms Mrs Ballard wrote was:
‘I can occupy rent free after settlement for nine months or twelve months.’
The date appointed for settlement of Questband’s contract was 23 June 2003.
Mrs Ballard was away but returned to the Gold Coast on about 25 June. Mr Duce came to see her on 26 June. They spoke briefly. Mr Duce told her that the plaintiff had agreed to buy her neighbour’s properties and was ‘interested in buying’ her land. The next day, 27 June, Mr Duce again returned to Mrs Ballard’s home. Her recollection is that Mr Duce extolled Mr Rix’s experience and reputation as a developer. Mrs Ballard replied that she knew Mr Rix. As a young man he had worked in her father’s real estate office. Mr Duce left but some hours later, about 5.00 pm, rang to say that he and Mr Rix wished to call on her. She protested but
Mr Duce insisted. They arrived about 6.00 pm and stayed for two hours. Mr Rix advised Mrs Ballard that he had agreed to buy the properties adjoining hers and said he would offer her $1.1 million for her land. Mrs Ballard said she had decided not to sell at that time because she ‘had nowhere to go’. Mr Rix offered the services of Mr Duce to find a suitable property. He said also that he would agree to ‘virtually any terms that suited’ Mrs Ballard; that he would pay whatever deposit she required and allow whatever period between contract and settlement that suited her. He also said that she should not be concerned about the caveat lodged by Questband because he would ‘take care of that’ even if he did not purchase her land.
Mrs Ballard repeated her concerns that her health was not good, she had not found another house which attracted her and she did not wish to sell without having secured another house of her own. Mr Rix said he would offer a 90 day contract (i.e. 90 days between contract and settlement) during which Mrs Ballard could locate another property. He pointed out to her the disadvantage of living where she was while the land around her was developed. He suggested that she might care to buy a house in one of his developments. The meeting ended on this rather inconclusive note.
Mr Rix did not give evidence about this meeting though, in cross-examination, he agreed that (i) Mrs Ballard had not agreed to sell her property at that meeting;
(ii) her concern was to obtain a good price and to find somewhere else to live;
(iii) he offered Mr Duce’s services in connection with her second requirement.
Mr Duce did not address this conversation in his evidence in chief, but in
cross-examination (T 75.35-T 76.1) he corroborated salient parts of Mrs Ballard’s account. He accepted that the meeting did not end with any agreement for the sale of the property, but it was agreed that he would immediately commence looking for another property with Mrs Ballard. He confirmed that Mr Rix mentioned the figure of $1.1 million as the purchase price, but said he, ‘might go to $1.2 million’.
On 2 July 2003 the defendant’s solicitors wrote to Mr Rix. The letter referred to the caveat lodged by Questband and went on:
‘… we have this day given notice requiring its removal. We have also demanded the withdrawal of the caveat and settlement notice by 5.00 pm tomorrow and have threatened to apply to the court for an appropriate order if the caveator fails to comply.
Our client instructs us that you approached her recently and kindly offered to attend to the removal of the caveat irrespective of whether our client enters into a contract with you. Accordingly, would you please confirm this in writing and how you wish our client to proceed?’
A response came the next day from the plaintiff’s solicitors:
‘I have spoken with Norm Rix concerning your letter of 2 July 2003.
He instructs me that he was prepared to enter into a contract with your client for the purchase of her property, based on a verbal agreement being made with her last Friday (27 June) to pay $1.3 million, but since then she has changed her mind and is now wanting $1.6 million, which is uneconomic to my client. He, therefore, will only be proceeding with the purchase of the three other properties, with whose vendors he has already agreed to fund the actions to remove the caveats.’
It is clear from the evidence of Mr Boston, the plaintiff’s solicitor, that he would have written the letter only after obtaining Mr Rix’s express instructions.
On or about 1 July 2003 Mrs Ballard and Mr Duce commenced looking for a suitable house. Mrs Ballard did not see anything she thought would meet her needs though one property at Riverglen was of some interest. They inspected it twice. At about 5.30 pm on 7 July Mr Duce called at Mrs Ballard’s home and gave her, in a sealed envelope, a written offer from the plaintiff to buy her land for $1.2 million. He asked her to sign it then and there, but she replied, ‘I am not signing anything without my solicitor.’
Mrs Ballard did not accept the offer. That night she considered what she wished to achieve following the sale of her property. Primarily she wanted another home and the only prospect she had seen to date was that at Riverglen. She wrote out a list of the terms she would accept to sell her property to the plaintiff. They included the acquisition of the Riverglen property by the plaintiff on her behalf. The list reads:
‘1. $750,000 plus 44 gallon drum Roundup spray.
2. 30 square double brick house with 6 foot eaves, 9 foot ceilings
and large cornices and architraves, two storey wide staircase designed of my choice.
3. Sml wide cut tractor/slasher/ride on mower thingy (easy to use).
4.You throw in the sealed driveway while doing roads at Coomera.
5.Plus the dog and then I’m happy.
6.You pay all or any commissions or GST etc and any hidden cost factors.
7.90 day settlement.
8.6 months free rent here if necess.
9.You give list of your needs to my solicitor draws up contract.
10.Need use of Richard to find comr. Property (factories etc.).
11.Need 74 flood levels for Council – you can get it on your computer.’
The first item refers to the amount of money Mrs Ballard wished to have in hand after she had sold her Coomera property and acquired the Riverglen property. Item 4 refers to the fact that the plaintiff would have road making machinery nearby for the development of her property if she sold to the plaintiff. Item 5 is a reference to a stray dog had been cared for by the owners of that property and to which
Mrs Ballard had developed an instant attachment. This item, she explained, was not meant seriously. Item 8 is a reflection of Mrs Ballard’s concern that she should be allowed to occupy her own home, after its sale, until she found some place else to live. The stipulation was that she be allowed to reside rent free in her own home for a period up to six months for that purpose. Item 10 refers to a perception
Mrs Ballard formed that she should invest the surplus cash in an income producing commercial property which Mr Duce would locate for her. Item 11 refers to the water levels of the 1974 floods.
The next day, 8 July, Mr Duce visited Mrs Ballard. He came unannounced mid morning, ‘to discuss the $1.2 million contract.’ Mr Duce asked her to sign the contract. She replied that she was concerned about selling and having to buy later in a market that was steadily rising. Mr Duce pressed her to sign the contract. She resisted and said that her solicitor had not seen the contract and she would not sign any contract until he had done so and advised that it was in her interests to do so. Mr Duce responded that the contract provided for a five day ‘cooling off period’ and pointed to the covering page of the standard form contract. Mrs Ballard replied that there was no point in her selling because she had not found any other place that she liked and could afford. Mr Duce asked Mrs Ballard to indicate clearly what terms she would require if she were to sell. She then handed him the list which she had written out the night before. He read it, laughed, and said that Mr Rix would not accept it. When he left, though, he took the note with him. The next day,
9 July, Mr Duce telephoned Mrs Ballard and told her that Mr Rix had thrown her list ‘out of the window’. It was, however, produced by the plaintiff on disclosure.
Later that day Mrs Ballard telephoned Mr Duce and asked him to come to her house for further discussions. She proposed a contract in which the ‘cooling off period’ was extended to seven days in which time Mr Duce would assiduously search for a house for Mrs Ballard. If he was unsuccessful the contract would be determined. If he found something suitable she would keep the contract to sell to the plaintiff on foot. It was likely that Mrs Ballard made a note to reflect this proposal on one of the counterparts of the contract which Mr Duce had left with her on 7 July. He took that with him, but it has been lost or mislaid.
On 10 or 11 July Mr Rix and Mr Duce together called on Mrs Ballard. Mr Rix asked whether she wanted ‘to sell or not’. Mrs Ballard repeated her explanation of requiring a period of seven days within which to find a replacement property and her right to determine the contract if she could not. Mr Rix reacted a little angrily and asked her to sign the contract. When Mrs Ballard would not, the conversation ended with Mr Rix saying that he would negotiate with her no longer and would proceed to develop the neighbouring properties and would exclude Mrs Ballard’s land from the development. Mr Rix has no recollection of the conversation.
Mr Duce denied Mrs Ballard’s account.
On Saturday, 12 July 2003 Mr Rix visited Mrs Ballard. He gave her a magazine advertising properties for sale in the vicinity of Coomera. He said she should sell her property to the plaintiff and rehearsed the reasons he had given at the meeting of 27 June. He then said that Mr Duce would call on her the next Monday, 14 July, with another written offer to sell, this time with a nominated price of $1.25 million. That Monday Mrs Ballard was contacted by an estate agent who had a prospective buyer for her land. The buyer was a Melbourne woman (Mrs Yerondais) who wished to inspect the property the following Wednesday, 16 July. Mrs Ballard agreed and made an appointment. Later that day Mr Duce called in with the promised offer from the plaintiff for $1.25 million. He asked Mrs Ballard to sign the contract. She said she would not until a solicitor had first read it and advised her. She told Mr Duce of the appointment she had made for the Wednesday and would not sign until that prospective purchaser had had an opportunity to inspect her land.
About mid morning on 12 July 2003 Mrs Ballard telephone Mr Rix. Her recollection is that she spoke about her concern that her property might become eroded should it rain heavily during the development of the adjoining blocks.
Mr Rix replied that she, ‘should just sell to (the plaintiff) and to stop causing trouble.’
Mr Rix agrees he called on Mrs Ballard and left her the property magazine. In a very succinct passage (exhibit 3 para 25) he asserted that ‘she had already agreed to sell in the conversation … earlier that morning for $1.25 million.’ Mr Rix agreed he said that Mr Duce would bring the contract round on Monday.
On the afternoon of 14 July Mr Duce called by Mrs Ballard’s house. They spoke. He said that the offer of $1.25 million would be withdrawn if Mrs Ballard did not sign it immediately. She refused. He then requested that she return to him the two contract documents. She would not.
The following day, 15 July, the defendant’s property was inspected by
Mrs Yerondais and her agent. Late in the afternoon they presented Mrs Ballard with a written offer to buy her property for $1.455 million and importuned her to sign. Mrs Ballard said she would not sign without passing ‘everything over to (her) solicitors’. They offered to drive her to her solicitors, but as it was late in the evening, after 7.00 pm, Mrs Ballard declined their offer, generous though it was. During the meeting Mr Duce rang to ask if Mrs Yerondais had made an offer. She told him she had and hung up. She asked Mrs Yerondais and her agent to leave because she ‘was too tired to think any more’ and wished to end the pressure being put on her to sign.
On the morning of 16 July 2003 Mr Duce went to Mrs Ballard’s house again. The terms of their conversation is critical to the outcome of the litigation. It was during their meeting that the plaintiff alleges Mrs Ballard made a written offer to sell her land to the plaintiff for $1.4 million which the plaintiff, by Mr Rix, accepted that day. The only persons present were Mr Duce and Mrs Ballard.
After Mrs Yerondais and her agent left the defendant on the evening of 15 July
Mrs Ballard made a handwritten note summarising in her words the essential terms of the offer that had been made. Her note reads:
‘$1.455000.00
Has to be $1.4 million after commission. 90 days settlement.
12 months free rent if necess (building?)
Me remove any or all of house if leave is required (Bldg?)
$50G dep released and non refundable if u pull the plug for any reason other than caveat
$10G of ↑ to commission and bal. on settlement
…
Time flex …’
Mr Duce’s account of the meeting of 16 July was:
‘… Mrs Ballard said that the people that were there the day before had made a greater offer … of $1.455 … and I told Mrs Ballard … why not let Mr Rix possibly match that offer and give him the same opportunity of buying her property. I said wouldn’t you rather sell to Norm … and we worked … out $1.455 less the commission less what else we were offering in terms of 52 weeks of accommodation at $400 a week was about $20,000, less the commission that was about $30,000 odd … it was about $1.4 and then Mrs Ballard … said “Well tell Norm that’s what I will accept” and I said “Norm is not going to believe you unless you put it on contract”, so I pulled out the contract that we initially made to Mrs Ballard and Mrs Ballard wrote her full name … changed the price to $1.4 million … then she said she wants $50,000 deposit not $25,000 deposit and then we read the special conditions in the contract … the last two … were worded wrongly (Mrs Ballard and myself thought) … so I said … “write down your special conditions, exactly what you want.” and Mrs Ballard wrote down her special conditions. I got Mrs Ballard to sign those special conditions. I got her to sign the contract. I then witnessed the signatures on the contract. I got her to initial the changes and then I told Mrs Ballard I would take it and see what Norm says … and she said “see if you can get Norm to sign my offer.”’
Mr Duce did take the contract to Mr Rix’s office where he signed it, though initially expressing annoyance because the price was ‘a lot more’ than that being paid to the adjoining owners.
Mrs Ballard’s account is, of course, different. Her evidence was that Mr Duce arrived at about 9.30 in the morning and immediately asked whether Mrs Yerondais had made an offer. Mrs Ballard told him she had and he then asked what terms they had offered. Mrs Ballard told him something about the terms. Mr Duce asked whether Mrs Ballard had told Mrs Yerondais ‘about the caveat’. She said she had not because she had forgotten about it because she was tired. Mr Duce then advised her that Mrs Yerondais would withdrawn her offer as soon as she heard that the property was subject to a caveat. He said to her, ‘Go on, ring them and tell them … they won’t want anything to do with all of this.’ Mrs Ballard understood Mr Duce to be teasing, not hectoring.
After repeating his gloomy prognostication about Mrs Yerondais’ reaction Mr Duce said, ‘Wouldn’t you rather sell to Norm?’. She said she would, but pointed out that the latter offer was for a higher price though she acknowledged that the plaintiff had bought the adjoining properties so it would seem fair to allow him to buy hers.
Mr Duce then requested her to ‘write it down’, but Mrs Ballard answered that
Mr Duce could tell him what she had said and if Mr Rix were interested ‘he could get back to her’. During this conversation Mrs Yerondais’ agent telephoned to ask if she had signed the contract left the night before. Remembering Mr Duce’s caution she told the agent about the caveat and explained that she had not mentioned it the night before due to an oversight. The agent did not seem perturbed at the news. Mrs Ballard returned to her conversation with Mr Duce who importuned her to ‘give Norm the same offer.’ Mrs Ballard agreed she would and told Mr Duce to relay the terms to Mr Rix. Mr Duce insisted that she, ‘write it down because
Mr Rix wouldn’t take any other information seriously after everything that’s happened …’ After making this point several times Mrs Ballard agreed that she would make a written note of the terms of the offer she had received from
Mrs Yerondais to be conveyed to Mr Rix by Mr Duce with a view to his making an offer to the same effect, if he chose. Mr Duce suggested that ‘those cancelled contracts’ he had left some days earlier be used as the medium of expressing the terms by which Mrs Ballard would entertain an offer from the plaintiff.
The ‘cancelled contracts’ were the written offers made by the plaintiff two days earlier. Mrs Ballard retrieved them from her table and perused the terms with
Mr Duce. The document was a standard form of contract for houses and land approved by the Real Estate Institute of Queensland Ltd and the Queensland Law Society Incorporation, 5th Edition. Mr Duce cajoled Mrs Ballard into writing her name and address on the first page headed ‘Reference schedule’ in which details of the vendor, purchaser and property are to appear. Mrs Ballard then also had the handwritten note on which she had summarised the terms of the competing offer made the night before. She showed it to Mr Duce. They first discussed the price. Mr Duce pointed out that no commission would be payable on the sale to the plaintiff and suggested that the price to be indicated to the plaintiff should reflect that saving. The commission was identified at $40,000. Mrs Ballard performed the subtraction in writing on her note. Below the contract price of $1.455000 she wrote ‘40000 comm’ to arrive at the sum of ‘$1.415’. Mr Duce said, ‘bring it down to $1.4.’ Mrs Ballard initially refused, but Mr Duce repeated his request and in the end she agreed. On the same note Mrs Ballard wrote on the top ‘1.4 Norm’.
Mr Duce suggested that Mrs Ballard should make changes to the standard printed terms but she thought the task would take too long and ‘it was not (her) job anyway’. She noticed what she described as ‘a blank page’ in the document and decided that she would, ‘just write it all down here and if Norm’s fine with this he can get back to me and we can send it to my solicitors and if there’s going to be a contract they’ll draw it up.’ Mr Duce agreed to that proposition and Mrs Ballard then wrote out on the third printed page of the document her ‘special conditions’. What she wrote was:
‘90 day settlement.
12 mths free rent if necess.
Me remove any or all house or not.
$50,000 dep released and non refundable if you pull plug for any reason other than caveat, which your solicitors handle only.
U must aid in every way me relocate.’
When she had completed the task Mr Duce said to her that the last condition would prove bothersome because it would oblige the plaintiff to help the defendant pack and move. Mrs Ballard laughed and said she needed that kind of help but went on:
‘… don’t worry about it … Norm will make sure it’s worded properly in any actual contract.’
Mr Duce accepted the point and then told Mrs Ballard she should sign the document because, if she did not, Mr Rix ‘won’t believe you … won’t take you seriously.’ He then pressed her to sign and initial what she had changed or added to the document.
Apart from writing the special conditions which I have mentioned Mrs Ballard did make other changes. On the first page on which she had written her name and address she struck out the purchase price of $1,250,000 and wrote instead $1,400,000. She also struck out the figure of $25,000 against the heading ‘Deposit’ and wrote beneath it $50,000. She added the word ‘Signing’ to indicate that the deposit should be paid on the signing of a contract. Page 2 included six typed special conditions. The first three concerned the removal of the Questband caveat on which settlement was dependant. Clauses 3 to 6 read:
‘3.The buyer agrees to pay the seller’s legal costs of any application to remove the caveat not to exceed $5,000 …
4.…
5.The buyer agrees to allow the seller to remain in occupation of the property after settlement date, for a minimum period of four calendar months from the date of the contract, by way of licence for no fee, the seller keeping the property well maintained … The buyer will give the seller a minimum of one month’s notice to vacate.
6.If required by the seller, the buyer will pay for residential accommodation for the buyer subsequent to the buyer vacating the property, of equal standard to the property, for a period not exceeding 12 calendar months from the date of this contract and at a rental not to exceed $400 per week.’
In special condition 3 the words ‘not to exceed $5,000’ were crossed out. The deletion has been initialled by Mrs Ballard and Mr Rix. Mrs Ballard’s recollection is that the deletion was not made during her conversation with Mr Duce on 16 July.
In cross-examination Mr Duce accepted that he did ask Mrs Ballard to put in writing the terms she wanted if she were to sell her land to the plaintiff. He denied that
Mrs Ballard said that if her terms were acceptable to the plaintiff that the parties, ‘would have to have a proper contract written up by the solicitors.’ He denies, as well, suggesting that the earlier offer, the cancelled contract, be used as a palimpsest. Mr Duce claimed that the purchase price was adjusted by a reduction of ‘30 something thousand’ for the commission and further by a calculation, ‘that Norm was paying Mrs Ballard $400 a week for 52 weeks which worked out to be
20 odd thousand so the net price was $1.4’. Mr Duce denied that in writing the special conditions Mrs Ballard referred to her handwritten note of the terms of the Yerondais contract. He was adamant that it was not on the kitchen table at which they sat because he knew ‘exactly what was on her kitchen table.’
Mr Duce had this to say about the alteration to the typed special conditions and inclusion of the handwritten ones:
‘… Mrs Ballard had changed the price … put her deposit, put her full name and address there and then we read the special conditions and Mrs Ballard said that where (condition 3) said “not to exceed … $5,000” “what if it does exceed $5,000?” … she said she wasn’t going to agree to that, she crossed it out and initialled it. We read the other conditions and special conditions 5 and 6. To both of us it was worded wrongly. … So we went to the next page and I said “Well you write down exactly what you want on that page.”’
Page 1 of the document identified Steindls, the plaintiff’s solicitors, as the deposit holder. That item was not altered on 16 July. Likewise cl 2.2 of the standard terms was not changed or deleted. It provided:
‘(1)The buyer must pay the deposit to the deposit holder at the time shown in the reference schedule. The deposit holder will hold the deposit until the party becomes entitled to it.
(2)The buyer will be in default if it:
(a)Does not pay the deposit when required;
(b)Pays the deposit by post dated cheque; or
(c)Pays the deposit by cheque which is dishonoured on presentation.’
Clause 2.4 provided that the party entitled to receive the deposit was the seller if the contract settled; the buyer if the contract terminated without default by the buyer; and the seller if the contract was terminated due to the buyer’s default. The deposit was not payable until one of those events determined who was entitled to payment.
On or about 16 July Mrs Ballard received a letter, dated 15 July, from Australand Holdings Ltd (“Australand”) which read:
‘… we hereby advise that Australand may be prepared to purchase your property, subject to … board approval based on the terms and conditions as follows:
Purchase price - $1,600,000
Conditional contract – the contract will be subject to obtaining Gold Coast City Council approval to subdivide the land … with all conditions … being to the absolute satisfaction of Australand
Due diligence – a 30 day due diligence period will form the first part of the contract. During this time we will need to undertake geo-technical and contamination investigations …
Deposit – 5% in total to be paid upon satisfactory completion of the above due diligence period …
Contract – 12 months from completion of the due diligence
Settlement – 90 days from acceptance of the development application conditions …’
Mr Rix gave evidence that when Mr Duce returned to his office on 16 July with the offer signed by Mrs Ballard he and Mr Duce went to inspect a property at Pimpama. On their return Mr Duce, who was driving his car, received a telephone call from Mrs Ballard on his car phone. Mrs Ballard asked whether Mr Rix had accepted her ‘contract’. Mr Duce answered affirmatively. Mrs Ballard said, ‘Oh, that’s a pity. I should have checked my letterbox first as there is another person wanting to buy the property for $1.6 million.’ Mr Rix had a clear recollection of the conversation for the reason, as he explained in cross-examination, ‘a snake had come across the road just as Mrs Ballard had rung and we ran over the snake, so I remember that quite clearly.’
Mr Duce corroborated the account. According to him:
‘Mrs Ballard asked me if Norm had accepted the offer. I said, yes, he had and we were on our way to the solicitors … and she said … I wish I had checked my letterbox before I had signed the contract because I’ve got an offer in there for 1.6.’
Mrs Ballard denied that conversation. She agreed she rang Mr Duce on his car phone, but said she called to complain that he had misled her when he predicted that Mrs Yerondais would be concerned about the existence of the caveat and would withdraw her offer. That had not happened and she felt, it seems, that Mr Duce had put her in a false position viz a viz Mrs Yerondais.
Mr Rix went to Steindls that same afternoon and gave Mr Boston a copy of the document which had been signed by Mrs Ballard and Mr Duce that morning. He had Mr Rix initial the changes and execute the document as the plaintiff’s acceptance of the offer. The plaintiff did not on that occasion pay the deposit. A cheque for $50,000 dated 17 July payable to Steindls was delivered to those solicitors, probably on that day. The trust account receipt is also dated 17 July.
Late in the afternoon of 17 July Mr Rix and Mr Duce went to Mrs Ballard’s house. Mr Duce had telephoned earlier to advise they were coming. Mr Rix brought with him a bottle of champagne. The purpose of the visit, and the champagne, they said, was, ‘to celebrate the sale.’ During the celebration they, ‘discussed the sale of the property’ and Mr Duce, ‘continuing to look for alternative premises for
Mrs Ballard.’ There was also more personal conversation about mutual acquaintances and shared past experiences. Mr Rix recalls the occasion as harmonious.
Mr Duce has a similar recollection. His account was that the discussion centred mostly on, ‘what properties Mrs Ballard was looking for and what I was going to try and find her, what she’d be happy with …’ while, ‘Mr Rix talked a lot about old times …’ Mr Duce thought that the contract, the execution of which was the cause of the celebration was not ‘even mentioned.’
Mrs Ballard’s account of this meeting is confusing. In her written evidence in chief she said that on the Thursday morning, 17 July, Mr Duce rang to tell her that
Mr Rix had signed the contract and ‘it is a legal document now’. Mrs Ballard protested that it had to go to her solicitor ‘to be written up properly.’ She insisted that it was ‘only a proposal’ as Mr Duce well knew. He replied that it was now ‘a legal document.’ When Messrs Rix and Duce came to her property they had half a glass of champagne each and ‘heatedly discussed the matter. Norm kept saying … the contract was a legal document. I replied … it was never meant to be …’
Mr Rix vacillated between saying Mrs Ballard could ‘have any contract (she wanted)’ and saying that his solicitors, ‘had checked it and … (it) is a legal document.’
In cross-examination Mrs Ballard agreed that the meeting was ‘mostly happy’ though she denied it was a celebration to mark the execution of the contract because, she said, ‘we didn’t have a contract at that stage.’ She thought there may have been some discussion about the communications she had had with Questband concerning its failure to settle its contract. She denied that they discussed
Mr Duce’s role in finding a suitable home. At the conclusion of her evidence
Mrs Ballard had this to say about the meeting:
‘… we spent a lot of time talking about dad and old times … but then … I said to Norm … it has to be a proper contract written up by my solicitor like we agreed to. And … Norm would say … yes whatever you want but then he’d kind of qualify it and say … that’s a legal document … and I said no it was never meant to be a contract … and Norm would say alright, okay and then he’d say … no … that’s a legal document … and I said no … that’s what the heated stuff was about … but then after it … he’d sort of like humour me and … say … alright whatever you want … and then say … that’s a legal … and it would sort of start up again.’
Mrs Ballard said that Mr Duce told her, when he announced that he and Mr Rix would be coming, that the meeting was ‘to celebrate that we were going to do a contract.’
The last conversation to mention occurred some days later between Mr Rix and
Mrs Ballard. According to Mr Rix Mrs Ballard said that, ‘when she signed the contract it was just in her own words. She wanted to make that contract a legal document.’ Mr Rix replied that it was a legal document; she had signed it and initialled changes to the plaintiff’s offer. She objected that she wanted it ‘put in legal terms’. She did not want to change the meaning of anything but to have it put ‘in legal terms as the solicitor would do.’ Mr Rix said he had no objection and would instruct his solicitor to prepare a document which reproduced the meaning of the agreement of 16 July.
Mrs Ballard disputes this account. Her recollection is that she said to Mr Rix that they had to proceed the way she and Mr Duce had agreed. She wanted her solicitors to draw up a document ‘so that the words say what I believe they say.’ Mr Rix replied that he would ‘sign anything … any contract’ Mrs Ballard desired.
Mrs Ballard kept a diary in which she recorded meetings and summaries of her conversations with estate agents, including the plaintiff’s. Extracts from the diary were tendered by consent. Some of them are significant. For 16 July Mrs Ballard wrote:
‘(Mr Duce) got me to write down a counter-offer for (Mr Rix) for terms for him to offer a contract on.’
For the 17th the entry is:
‘(Mr Rix) and (Mr Duce) came up with champagne and wanted to do a contract.’
The entry for the 21st is:
‘(Went to) Currumbin with (Mr Duce). Saw house … lovely land. (Mr Rix) said he’d sign any contract I like.’
On 16 July the plaintiff’s solicitors wrote to the defendant’s solicitors advising that they acted on behalf of the plaintiff and enclosed the defendant’s ‘signed copy of the contract’. The defendant’s solicitors replied by a letter dated 18 July:
‘Mrs Ballard advises … that she at all times made it clear to … your client … that any contract for the sale of her property was to be subject to perusal and approval by this office. …
We are further instructed that your client’s representatives requested our client to sign the contract at a figure she would be prepared to accept as a sign of good faith to your client that our client would agree to sell at that price. … Our client does not regard herself as bound to any contract in the circumstances under which her signature to the document was secured.’
By letter written on 21 July, but wrongly dated 3 July, the plaintiff’s solicitors replied:
‘Our client refutes the allegations in your … letter … Our client has been made aware that your client has received another offer for the property (possibly at a higher price) and this may be the reason she is adopting this line.
Our client requires the contract to be performed.’
The defendant’s solicitors replied on 22 July 2003. They said, inter alia:
‘3.Our client indicated that she was prepared to negotiate and requested a new contract to be prepared which would cover her concerns.
4.Your clients agent requested our client to write the concerns down and sign the contract as a sign that she was serious about accepting a counter-offer from your client and she did this in the belief that a new contract would be prepared, signed by your client and submitted to our firm for perusal and advice prior to signing.
The handwritten special conditions clearly show that our client was expecting a further contract as some of the conditions contradict the typewritten special conditions …
Our client has no interest in other third party contracts and only wishes to be sure that her legal rights are protected … We were instructed on Friday (18 July 2003) to submit a formal contract which addressed our client’s concerns set out in the handwritten special conditions in the contract. There is no desire by our client to increase the price as suggested in your correspondence … The contract will provide for the same price and deposit but will have the following special conditions …
1. Settlement to be within 90 days.
2.If caveat is not removed then either party can terminate with your client obtaining a refund of the deposit.
3.Your client to indemnify our client in respect of all costs associated with the removal of the caveat. The current special conditions dealing with this are inconsistent. We would prefer to deal with this by correspondence and not have it included in the contract …
4.Our client is to remain in occupation of the property rent free for 12 months if required with our client having the right also to remove part or all of the house located on the property.
5.If our client decides to vacate the property your client to contribute $400 per week towards rent on an alternative property for 12 months.
Can we now proceed to prepare the contract and submit it to you for consideration? …’
There was no immediate reply and on 24 July 2003 the defendant’s solicitors wrote again to the plaintiff’s solicitors:
‘Our client met with … Richard Duce yesterday and was informed that the terms of our letter were acceptable except that you require clarification in relation to the rent free period. We confirm that our client will require a condition that states that:-
1.She can elect to stay on the property for 12 months following settlement rent free; and
2.If during the 12 month period she elects to vacate the property and rent, your client will contribute $400 per week towards such rental for the balance of the 12 month period.
Would you please submit the contract with the redrafted special conditions as a matter of urgency …’
On the same date, 24 July, the plaintiff’s solicitors wrote a letter, part only of which was received into evidence. In effect the plaintiff insisted upon performance of the document of 16 July.
On 29 July the plaintiff’s solicitors wrote to the defendant’s solicitors asserting that, ‘a valid contract has been entered into, the deposit has been paid and our clients do not agree that the contract is vague or uncertain …’ The letter also advised that Steindls, as stakeholder, were ‘in a position’ to release the deposit, the plaintiff’s cheque having been cleared. A cheque payable to Mrs Ballard was enclosed. By a letter dated 30 July the defendant’s solicitors returned the cheque on the basis that there was no binding contract in existence between the parties.
The critical issue in the case is the characterization of the document prepared between Mr Duce and Mrs Ballard on 16 July, signed by her and later by Mr Rix. The plaintiff’s contention is that it was a counter-offer by Mrs Ballard directed to the plaintiff for acceptance. The defendant’s contention is that it was an indication of the terms on which she would entertain an offer from the plaintiff. It was, in other words, an invitation to treat and not an offer capable of acceptance. The answer to the question depends entirely upon an assessment of the credit of the two witnesses.
I have no hesitation in preferring the evidence of Mrs Ballard to that of Mr Duce and Mr Rix though, of course, the critical dispute is between Mrs Ballard and
Mr Duce. Although her evidence was in some respects confusing I formed the distinct impression that she had a good recollection of events and related them honestly. She was subjected to very searching, though entirely proper,
cross-examination which confirmed my opinion of her veracity.
There are a number of reasons why I disbelieve Mr Duce on the critical issue. The first concerns his evidence about the derivation of the price of $1.4 million. It was common ground that the plaintiff was to be given a chance to match the offer made by Mrs Yerondais, which was for $1.455 million. Mrs Ballard said that the price was reduced to reflect the fact that she would not pay commission on a sale to the plaintiff. The amount of commission was not known, or at least not proved, but it was less than $55,000. Mr Duce’s explanation for the further reduction to arrive at the price of $1.4 million was that he and Mrs Ballard agreed a subtraction to reflect the rent which the plaintiff might pay on Mrs Ballard’s behalf. The amount of any rent which the plaintiff might have to pay was conjectural: depending on circumstances nothing might be paid. More importantly there is a contemporaneous note made by Mrs Ballard of the factors that led to the reduction of the price. It makes no mention of an allowance for rent. It shows only a deduction for the saving in commission.
The second ground for suspecting Mr Duce’s veracity is his assertion that the note Mrs Ballard made summarizing the terms of the offer made by Mrs Yerondais was not on the table when he spoke to Mrs Ballard and formed no part of her authorship of the handwritten special conditions. This cannot be right. There is a remarkable similarity in the terms of the handwritten special conditions and the terms summarized in the note. The first two conditions are identical. The order of the conditions is the same. The condition concerning payment of the deposit reproduces verbatim the terms of the note.
The third ground concerns the terms of the document itself. To my mind they make it clear that the document cannot have been intended to be an offer which, on acceptance, would be the contract between the parties. There are several reasons for this conclusion. The first is that the handwritten special conditions are abbreviated. They do not form complete or grammatical sentences. Neither Mr Duce nor
Mrs Ballard was unintelligent. Both had experience in the completion of contracts for the sale and purchase of real estate. If the special conditions were meant to be terms of a binding contract they would have been set out more fully and with greater regard for the rules of syntax. ‘Me remove any or all house or not’ may be a sufficient indication to a solicitor that a clause was required to be drafted to allow the vendor to remove fixtures and/or fittings or parts of the structure of the house if she wished. I do not believe it is an expression Mrs Ballard would have used, or
Mr Duce would have allowed, if they were together composing the terms of a contract. The same can be said for the condition ‘U must aid in every way me relocate.’ At the very least the pronoun which forms the subject for the verb ‘Must aid’ would have been spelt in full, and the objective pronoun would have been placed in the customary position, after the second verb.
There are more fundamental considerations. The written offer from the plaintiff which formed the basis for the palimpsest of 16 July was a standard form contract which provided for the payment of a deposit to a stakeholder pending completion or termination. Mrs Ballard had received other offers pursuant to which the deposit would have been paid directly to her. It was this entitlement which is the subject of the fourth handwritten special condition. It conflicts expressly with the standard form terms as to the deposit. Mr Duce cannot have been ignorant of that fact. If the document were intended to take effect as a contract the reference to Steindls as stakeholder in the reference schedule would have been deleted as would standard terms 2.2, 2.3 and 2.4. Mr Daubney SC endeavoured to overcome this problem by submitting that the printed and handwritten terms as to the deposit can be reconciled. His submission was that both conditions could be fulfilled by a construction which required the payment of the deposit initially to Steindls as stakeholder and then to the vendor pursuant to the handwritten condition. No time is specified for the payment by the stakeholder to the vendor but Mr Daubney submitted that the usual implication as to a reasonable time would be made. The offer of payment of the deposit to Mrs Ballard on 29 July was, it was submitted, within a reasonable time. I cannot accept the submission. Although it has a superficial attraction the construction called for a pointless obligation. If the deposit were to be paid directly to the vendor there is no obvious reason why the payment should be delayed, even for a reasonable time, by paying it first to a stakeholder. Of greater difficulty for the submission is the fact that clauses 2.2 and 2.4 of the printed terms are irreconcilable with the content of the handwritten condition, which entitled Mrs Ballard to the deposit prior to settlement and the right to keep it save in the circumstance that the Questband caveat was not removed. The printed terms provide a completely different set of rights.
There is a still more significant problem. The terms of the second handwritten condition is inconsistent, indeed irreconcilable, with the typewritten additions numbered 5 and 6. The purport of those was that Mrs Ballard could remain in occupation of her house, after settlement, for at least four months and thereafter at the will of the purchaser which could require her to vacate on giving one month’s notice. If it gave notice within 12 months of the settlement date the plaintiff was obliged to pay for rented accommodation for Mrs Ballard in an amount not exceeding $400 per week until the first anniversary of the settlement. The purport of the handwritten condition is that Mrs Ballard was to have the right to occupy her house for up to 12 months without cost to her. The difference is, of course, that the development of the land could be delayed by Mrs Ballard’s electing to reside in the house for the full 12 months. The terms of the typewritten conditions would have allowed the purchaser to insist upon her vacating the house after four months though it would then have to pay for rented accommodation.
The presence in the document of two irreconcilably different clauses as to the same subject matter is explicable on Mrs Ballard’s version of events. She said she was communicating to the plaintiff the terms on which she would entertain an offer. The term in question, that she was to have the right to occupy her house for up to a year after settlement, would be included in any offer the plaintiff might make. The offer would not include inconsistent or superseded clauses. However, the inclusion of the two inconsistent clauses is inexplicable on Mr Duce’s account, which is that Mrs Ballard was composing the terms of an actual contract. On this basis the handwritten condition altered what appeared in the typed special conditions 5 and 6 which would have been struck out.
This condition is the sticking point between the parties. The correspondence which I rehearsed shows that the defendant’s solicitors indicated that Mrs Ballard would bind herself to a contract on the terms found in the document of 16 July on the basis that she was given the right to occupy her home for up to 12 months after settlement without cost. Mr Rix made it clear in re-examination that the plaintiff would not accept such a term. He said (T 61.8-.18):
‘… the letter that was produced by Bells altered from the agreement which I already had with Mrs Ballard. The letter … clearly stated that Mrs Ballard wanted to be in possession of the property for 12 months, whereas the contract I had signed with Mrs Ballard, the contract which is being disputed now, had me looking after her for 12 months and paying her rent. So the contract had been varied by Bells.’
Mr Duce said that Mrs Ballard included as one of her handwritten special conditions ’12 months free rent if necess’ because she and he found it difficult to understand what was meant by the typewritten clauses. The handwritten clause was meant to supersede them. This cannot be right. If it were right Mrs Ballard would surely have struck out clauses 5 and 6 as indicating they were to be disregarded having been replaced by the second handwritten clause. In any event there is nothing incomprehensible about the typed script. The meaning is clear. It is true that the word ‘buyer’ where it appears for the second time in cl 6 is an error. The word ‘seller’ should have been used but that is obvious and the mistake cannot have been thought to give rise to difficulty.
This last point depends for its validity upon the handwritten clause having the meaning I have ascribed to it. Mr Daubney SC who appeared for the plaintiff with Mr Beacham submitted that the proper construction of the handwritten clause is that it is a succinct amalgam of the typed clauses 5 and 6. The argument is that ‘12 months free rent’ denotes that the plaintiff was to provide the defendant with free accommodation for up to 12 months either in her own house or rental accommodation. The difficult with the submission is that that construction would not address Mrs Ballard’s express desire to remain in her house for a substantial period after settlement to enable her to find a suitable replacement home; nor would it give rise to a term of sufficient certainty to be enforceable.
The two points must be dealt with separately.
There can be no doubt that Mrs Ballard was concerned to have a new home before she was required to vacate her existing one. I accept her evidence that she expressed this concern to Mr Duce and Mr Rix. Indeed it is the only credible explanation for the inclusion of the typed special conditions 5 and 6. The phrase ‘free rent’ is no doubt ambiguous and could, as Mr Daubney points out, describe equally well Mrs Ballard’s occupation of her former home or of some rental accommodation. During their negotiations, however, the meaning of the term was made clear. When Mrs Ballard wrote out her list of requirements which she gave to Mr Duce on 9 July she had written ‘6 months free rent here if necessary’. The ‘here’ obviously was a reference to her then home. She was specifying the right to occupy the house after settlement for a set period. Mr Duce must have understood it in that sense. When Mrs Ballard came to summarize the terms of Mrs Yerondais’ offer she noted ’12 months free rent if necess’. I am satisfied Mr Duce saw the note on 16 July. Mrs Yerondais had offered to allow Mrs Ballard to stay in her house for 12 months and the note referred to that part of the offer, though it is not clear on the evidence that Mrs Ballard expressly told Mr Duce about this. Nevertheless I am satisfied that he understood Mrs Ballard’s brief expression of the condition signified a right to occupy her home.
The point about uncertainty is that the condition as construed by Mr Daubney would leave undetermined who was to decide whether the accommodation to be provided was Mrs Ballard’s home or rented accommodation. The condition does not make it clear whether Mrs Ballard could elect to stay in her house or move to rental accommodation or whether the plaintiff could insist that she locate her house and move to other accommodation if it wished to proceed with the development. The right to elect was clearly important and the clause does not describe whose it was.
There is a further reason for disbelieving Mr Duce. It is found in his corroboration of Mr Rix’s evidence of the telephone conversation with Mrs Ballard when they were returning by car to the plaintiff’s solicitors. I frankly disbelieved Mr Rix’s evidence. There are two reasons for my disbelief. The first is that the volunteered corroborative detail of the hapless snake struck me as an invention put forward cynically by a witness to make it appear as though he had a good recollection of the event. Impressions aside I do not believe the plaintiff’s version of the conversation because it does not accord with the known facts. Mrs Ballard was not anxious to accept a higher offer of $1.6 million. Indeed the correspondence from Australand did not amount to an offer. It was no more than an indication of interest in purchasing and an invitation to commence negotiations. Moreover the suggested terms were conditional and payment, if it eventuated, would be delayed by at least 12 months. The plaintiff’s offer was for an unconditional immediate payment of $1.4 million. The Australand ‘offer’ was not demonstrably better. In any event
Mrs Ballard made it clear in correspondence that she was willing to sell to the plaintiff for $1.4 million if it agreed to the term as to her right to occupy the home for 12 months. I am satisfied that Mr Rix invented the conversation in an endeavour to provide an admission by Mrs Ballard that she had made an offer to the plaintiff which she understood was capable of immediate acceptance. Mr Duce’s corroboration of this invented conversation discredits his testimony.
Although the primary dispute on credit is between Mrs Ballard and Mr Duce it is necessary to indicate my preference for her evidence over that of Mr Rix. I doubt his veracity for the reason I gave earlier concerning the conversation on the afternoon of 16 July. In addition to that the letter written on his instructions by Steinls on 3 July contained a clear falsehood. Mr Boston wrote it, I am satisfied, having obtained Mr Rix’s express instructions. The assertion that Mr Rix and
Mrs Ballard had made a ‘verbal agreement’ on 27 June for the purchase of the property for $1.3 million was a complete invention. It came in answer to a request that Mr Rix confirm he had promised to pay Mrs Ballard’s costs of an application to remove the Questband caveat. Mr Rix avoided the potential liability by an unnecessary lie.
There is another reason. In cross-examination when Mr Rix’s attention was drawn to the letter from the defendant’s solicitors of 22 July he affected surprise and indicated that he was prepared to make a contract on the terms offered in the letter. When his attention was drawn particularly to condition 4 he said that he, ‘would have been happy for Mrs Ballard to remain in occupation rent free for 12 months if necessary.’ He went on to say that her right to remain in the home was, ‘in keeping with the original conditions of the contract we produced for her for $1.2 million.’ In re-examination, as I have mentioned, Mr Rix was adamant that the ‘contract’ which Mrs Ballard had signed did not give her the right to remain in the home for 12 months. Such vacillation on the point in dispute makes me doubt the reliability of Mr Rix’s evidence.
It is impossible to believe Mr Rix’s evidence summarised in paragraph 21. Given the assiduity with which Mr Duce and Mr Rix had attempted to persuade
Mrs Ballard to sell to the plaintiff, had she agreed to sell on the telephone on
12 July, Mr Rix would have taken the contract with him when he delivered the magazine and secured her signature then and there. He would not have waited until the 14th. There is no doubt from the evidence of both Mr Rix and Mr Duce that the plaintiff was extremely anxious to acquire the defendant’s land for incorporation in its development. This evidence appeared for the first time in Mr Rix’s affidavit in reply.
The findings I have made dispose of the action. I have accepted Mrs Ballard’s account of her conversation with Mr Duce on 16 July. I am satisfied that she was requested to list the terms on which she would be prepared to contract with the plaintiff. She did so, making it clear that she was doing no more than identifying the terms of an offer which had been made to her and which the plaintiff could match if it wished. She also made it clear to Mr Duce that any written offer which may be made by the plaintiff in response to her invitation would be the subject of perusal and advice by her solicitors before she signed it. The document signed by the defendant was not an offer and was known by Mr Duce not to be an offer.
Mrs Ballard did not intend to contract with the plaintiff on the basis of that document and Mr Duce knew it. It follows that the plaintiff’s purported acceptance of the document did not give rise to a binding contract.
On any view of the law regulating the formation of contracts the events of
16 July did not give rise to a binding agreement. If one has regard to the objective indications of intention provided by what Mr Duce and Mrs Ballard said to each other the document of 16 July was not, in fact, an offer. It was not intended to be or to become a contract. The parties did not intend by it to create a legal relationship between them. If one has regard to the individual subjective intentions of Mr Duce and Mrs Ballard the result is the same. It is, on occasions, permissible to have regard to the subjective intentions of parties to a purported contract to ascertain whether there was a meeting of minds so as to give rise to a contract. See Babsari Pty Ltd v Wong [2002] 2 Qd R 576 at 584-587. There is no doubt that Mrs Ballard did not intend the document to become a contract. It is not possible to know what secret thoughts or desires Mr Duce entertained but if it were his subjective intention that the document should be treated by the plaintiff as an offer and accepted so as to make it a contract his intention did not match Mrs Ballard’s and there was no agreement.
If it mattered I would be prepared to find that Mr Duce induced Mrs Ballard to utilise the earlier written offer as a means of tricking her into producing a document that purported to be a contract, or at least an offer capable of acceptance by the plaintiff.
It is difficult to know what to make of the meeting on 17 July. I do not accept the evidence of Mr Rix and Mr Duce that it was to celebrate the successful conclusion of negotiations and the making of a final contract. Mrs Ballard’s account of it was not entirely consistent, nor clear. It is likely that Mr Rix and Mr Duce went round in an endeavour to persuade Mrs Ballard that she had agreed to sell on the terms of the previous day’s document. When pressing the point Mrs Ballard objected and Mr Rix changed the subject. I think Mrs Ballard’s brief description of the occasion in her diary comes closest as an account of what happened. Mr Rix and Mr Duce ‘wanted to do a contract’ and thought the champagne may have been of assistance.
There are other obstacles in the plaintiff’s path. Even if the document of 16 July were intended by Mrs Ballard to form the basis of a contract between her and the plaintiff the latter’s acceptance of the offer would not have given rise to an enforceable contract. The terms of the document of 16 July are too uncertain to constitute a contract. This is because the typewritten special conditions 5 and 6 are inconsistent and irreconcilable with the handwritten condition relating to the right of occupation. I have indicated my view of the construction of the handwritten clause. It cannot stand with the earlier clauses. The clauses cannot be severed from the balance of the contract because the right conferred by them was clearly of considerable importance to the contracting parties. The defendant would not have contracted without the protection of 12 months’ free accommodation during which she was to find another home.
This particular problem cannot be overcome by preferring the later handwritten clause to the earlier typed ones. This is a mode of construction to which resort is sometimes had but it would not help the plaintiff. The difficulty here is that the plaintiff expressly repudiated any contract which gave Mrs Ballard the right to occupy the house for up to 12 months. If there had been a binding contract and it contained that term the plaintiff repudiated it and evinced the clearest intention not to perform a contract including that term. The defendant did not in terms accept the repudiation but she consistently denied the existence of a contract.
One further difficulty should be noted. There is also an uncertainty arising from the conflicting provisions of the document about the payment of the deposit. It requires both the payment of the deposit to Steindls as stakeholder pending the events specified in cl 2.2 and payment directly to the vendor to be refundable on one contingency only which is not found in cl 2.2.
The plaintiff seeks to avoid this problem by advancing the construction mentioned earlier. This requires the deposit to be paid to the vendor by the stakeholder after a reasonable time. That cannot be longer than the time taken for the plaintiff’s cheque to clear, no more than five days according to Mr Boston. This gives rise to a difficulty of its own. The deposit was payable by the plaintiff when it executed the contract. However it paid not on signing but a day late. The cheque was not proffered to Mrs Ballard’s solicitors until 29 July, thirteen days after the plaintiff signed. This was a breach of the contract. Clause 6 made time of the essence for performance of the obligations imposed on the parties to the contract. The late payment of the deposit allowed the defendant to terminate the contract. She did not purport to bring it to an end by reason of that breach but did, by her solicitors’ correspondence, assert that there was no contract binding on her. The reason given was that the parties had not intended to contract. The defendant’s action in denying the existence of a contract with the plaintiff was justified on the basis of the plaintiff’s breach of the essential term as to payment of the deposit. The fact that she did not turn her mind to that point, or invoke it as justification for her refusal to perform the contract is irrelevant.
‘… it is enough that upon the true facts a party is entitled to act as he has done, and his justification is independent of his own knowledge of the facts …’
Landers v Schmidt [1983] 1 Qd R 188 at 196 quoted with approval by McPherson J in Minion v Graystone Pty Ltd [1990] 1 Qd R 157 at 164.
The plaintiff is not entitled to specific performance of the contract it alleges. There must be judgment for the defendant with costs to be assessed on the standard basis.
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