Payne v Timilty - [2021] NSWSC 986

Supreme Court

New South Wales

Medium Neutral Citation: Payne v Timilty [2021] NSWSC 986
Hearing dates: 5 August 2021
Date of orders: 6 August 2021
Decision date: 06 August 2021
Jurisdiction: Equity
Before: Darke J
Decision:
Summons dismissed with costs.

Catchwords:
CONTRACTS – construction and interpretation of contracts – parties entered into Deed of Put and Call Option in respect of property owned by defendants – Deed defined Call Option Expiry Date as 5.00pm on 24 April 2021 unless contrary intention appears – form of contract annexed to Deed – Clause 21.5 of the form of contract stipulated that if the time for something to be done is not a business day, the time is extended to the next business day – 24 April 2021 was not a business day as defined in form of contract – whether clause 21.5 evinces a contrary intention that warrants departure from the defined meaning of Call Option Expiry Date – held that ordinary businesspeople would understand that the terms of the form of contract would operate only if either the call option or put option was exercised – held that on the true construction of the Deed the Call Option Expiry Date was 5.00pm on 24 April 2021 – plaintiffs in any event failed to pay deposit by cheque as required by the Deed – held that plaintiffs failed to validly exercise call option

Cases Cited:
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Coplin v Al Maha Pty Ltd (2019) 19 BPR 39,485; [2019] NSWCA 159
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12
Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7
Hagerty v Hills Central Pty Ltd (2018) 19 BPR 38,853; [2018] NSWCA 200
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Category: Principal judgment
Parties: Stuart John Payne (First Plaintiff)
Kerrie Ann Payne (Second Plaintiff)
Stephen John Timilty (First Defendant)
Kathryn Jane Timilty (Second Defendant)
Representation:
Counsel:
Mr A J Sullivan QC and Mr J A Trebeck (Plaintiffs)
Mr S Docker and Ms L Cooper-Hackman (Defendants)
Solicitors:
Bruce Macdonald Lawyers (Plaintiffs)
Elliot Tuthill Solicitors (Defendants)

File Number(s): 2021/139818
Publication restriction: None

Judgment

Introduction

These proceedings concern a Deed of Put and Call Option (“Deed”) entered on 23 June 2020 between the defendants (Mr and Mrs Timilty) as Grantor and the plaintiffs (Mr and Mrs Payne) as Grantee in respect of a property in Woolooware Road, Burraneer owned by the defendants.
The matter in dispute is whether the plaintiffs validly exercised the Call Option by delivery to the defendants on 22 April 2021 of a duly executed Notice of Exercise of Call Option and a duly executed form of contract, and by payment of the sum of $280,000 into a bank account of the defendants on 26 April 2021. The sum of $280,000 is the amount of…

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 Payne v Timilty

Details

AGLC: Payne v Timilty [2021] NSWSC 986
Case: [2021] NSWSC 986
Decision Date: 06 August 2021

CaseChat Overview and Summary

The matter of Payne v Timilty involved a dispute regarding the interpretation of a Deed of Put and Call Option. The plaintiffs, Payne, sought to exercise a call option on property owned by the defendants, Timilty, by the specified expiry date. The defendants contended that the plaintiffs had failed to exercise the option validly. The Supreme Court of Victoria was tasked with determining the legal issues arising from this dispute.

The court had to decide whether the terms of a form of contract annexed to the Deed could be interpreted to alter the defined Call Option Expiry Date. The Deed specified that the Call Option Expiry Date was 5.00pm on 24 April 2021, unless a contrary intention appeared. Clause 21.5 of the form of contract stated that if the time for something to be done was not a business day, the time was extended to the next business day. The court had to assess whether this clause indicated a contrary intention that would warrant a departure from the defined Call Option Expiry Date. Additionally, the court needed to determine if the plaintiffs had validly exercised the call option by failing to pay the deposit as required by the Deed.

The court held that ordinary businesspeople would understand that the terms of the form of contract would only operate if either the call option or put option was exercised. Consequently, the court concluded that on the true construction of the Deed, the Call Option Expiry Date was 5.00pm on 24 April 2021. The plaintiffs had failed to pay the deposit by cheque as required by the Deed, which resulted in them not validly exercising the call option. Therefore, the court found in favour of the defendants, holding that the plaintiffs had not validly exercised the call option.

Orders