Nwa Realty Pty Ltd v Christou - [2019] NSWSC 1364

Supreme Court

New South Wales

Medium Neutral Citation: NWA Realty Pty Ltd v Christou [2019] NSWSC 1364
Hearing dates: 3 October 2019
Date of orders: 10 October 2019
Decision date: 10 October 2019
Jurisdiction: Equity
Before: Darke J
Decision:
Order made requiring the defendants to enter into a contract for the sale of land on certain terms.

Catchwords: CONTRACTS – formation – where lessee is granted first right of refusal to purchase property under a lease of such property – where lessor makes offer to plaintiff to purchase property pursuant to first right of refusal – offer stated to be open for 14 day period – where during the period the lessee indicates that it “would offer” to purchase the property on different terms – where lessee subsequently attempted to accept lessors’ offer – whether the lessee had made a counter-offer which operated as a rejection of the lessors’ offer – held no counter-offer made – lessee entitled to order for specific performance
Cases Cited: Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441
Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540
Baker v Taylor (1906) 6 SR (NSW) 500
Bragg v Alam [1981] 1 NSWLR 668
Bragg v Alam (1982) NSW ConvR 55-082
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Goldmaster Homes Pty Ltd v Johnson (2004) 12 BPR 23,167; [2004] NSWCA 144
Hyde v Wrench (1840) 3 Beav 334
Quadling v Robinson (1976) 137 CLR 192
Sahade v BP Australia Pty Ltd (2004) 12 BPR 22,149; [2004] NSWSC 512
Stevenson, Jaques, & Co v Mclean (1880) 5 QBD 346
Woodroffe v Box (1954) 92 CLR 245
Woolworths Ltd v About Life Pty Ltd (2017) 18 BPR 36,983; [2017] NSWSC 1117
Texts Cited: J D Heydon, Heydon on Contract (Lawbook Co., 2019)
Category: Principal judgment
Parties: NWA Realty Pty Ltd (Plaintiff)
George Panayiotou Christou (First Defendant)
Kerry Christou (Second Defendant)
George Costi (Third Defendant)
Antonia Costi (Fourth Defendant)
Paul Andreas Pavlou (Fifth Defendant)
Andry Pavlou (Sixth Defendant)
Representation:
Counsel:
Mr M J Wells (Plaintiff)
Mr S Jacobs (First and Second Defendant)
Mr D D Knoll AM (Third, Fourth and Sixth Defendants)
Solicitors:
Burridge & Legg Solicitors (Plaintiff)
GA Lawyers (First, Second, Third, Fourth and Sixth Defendants)

File Number(s): 2019/283871
Publication restriction: None

Judgment

Introduction

This case concerns a first right of refusal contained in a lease of certain commercial premises in Old Northern Road, Castle Hill. The lease was entered into in 2016 by the plaintiff as lessee and the defendants as lessor. The lease is for a five year term ending on 14 May 2021, with an option to renew for a further five year term. The first right of refusal is contained in cl 14 of the lease. It is in the following terms:

The lessor agrees that in the event that he decides to sell the property he will first offer it to the lessee who must within 14 days of notification of this first right…

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.

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Details

Case: [2019] NSWSC 1364
Decision Date: 10 October 2019

CaseChat Overview and Summary

In this case, the plaintiff, Nwa Realty Pty Ltd, brought an action against the defendant, Christou, in the Supreme Court of New South Wales. The dispute arose from a lease agreement where the defendant was granted the first right of refusal to purchase the property if the plaintiff decided to sell. The plaintiff made an offer to sell the property to the defendant, which was stated to be open for 14 days. During this period, the defendant indicated an intention to purchase the property on different terms. Subsequently, the defendant attempted to accept the plaintiff's offer, but the plaintiff rejected the acceptance as they considered it a counter-offer.

The primary legal issue was whether the defendant's indication of a willingness to purchase on different terms constituted a counter-offer that rejected the plaintiff's original offer, or if it was merely an inquiry or request for negotiation. The court had to determine if the defendant's communication amounted to a rejection of the original offer, thereby negating the defendant's ability to accept the offer later.

The court held that the defendant's communication did not constitute a counter-offer. Instead, it was a mere indication of interest in purchasing on different terms, which did not amount to a rejection of the plaintiff's offer. Consequently, the defendant was still entitled to accept the plaintiff's offer within the specified 14-day period. The court ruled in favour of the defendant, granting an order for specific performance, thereby compelling the plaintiff to sell the property to the defendant as per the original terms of the offer.

Orders