Option Holdings Pty Ltd v Guo

Option Holdings Pty Ltd (Option) appealed a decision of the primary judge concerning a dispute over equitable interests in property. The primary dispute involved competing claims to the property at 123 Darlinghurst Road, Darlinghurst, NSW, between Option and Mr. Guo. Option sought to enforce an alleged oral agreement of accord and satisfaction, which it claimed extinguished Mr. Guo's equitable interest in the property.

The Court of Appeal was required to determine whether a binding oral agreement of accord and satisfaction had been formed between Option and Mr. Guo. Further, the court had to consider whether, even if such an agreement existed, it was supported by good consideration, particularly in light of the principle that part payment of a debt is generally not good consideration. Finally, the court was asked to determine the priority of competing equitable interests in the property, specifically whether Option had actual or constructive notice of Mr. Guo's earlier equity, and whether Option held a "registrable dealing" for the purposes of section 43A of the *Real Property Act 1900* (NSW).

The Court of Appeal found that no genuine dispute existed between the parties at the time of the alleged oral agreement, which was a necessary element for an accord and satisfaction to be effective. Consequently, the court held that the purported oral agreement was not binding. Furthermore, the court determined that Option had not provided good consideration for the alleged agreement. Regarding the priority of equitable interests, the court concluded that Option had constructive notice of Mr. Guo's earlier equity and did not hold a registrable dealing within the meaning of section 43A of the *Real Property Act 1900* (NSW).

The appeal was dismissed with costs.