Penrith RSL Club Ltd v Cameron

[2001] NSWSC 413

Reported Decision: (2002) NSW ConvR 56-008

New South Wales

Supreme Court

CITATION:	PENRITH RSL CLUB LTD v CAMERON & ANOR [2001] NSWSC 413 revised - 7/06/2001
CURRENT JURISDICTION:	EQUITY
FILE NUMBER(S):	SC 4041/98
HEARING DATE(S):	14-15/05/01
JUDGMENT DATE:	23 May 2001
PARTIES :	Penrith RSL Club Ltd - Plaintiff Robert John Cameron - First Defendant Bruce William Cameron - Second Defendant
JUDGMENT OF:	Bryson J at 1

COUNSEL :	R. O'Neil - Plaintiff J. Kelly SC, P. Saidi - Defendants
SOLICITORS:	Adams & Partners, Penrith - Plaintiff Coode & Corry, Penrith - Defendants
CATCHWORDS:	VENDOR and PURCHASER - option to purchase "upon the grantor's death" - collateral assurance that widow would not be disturbed - one month after death purchaser assured widow in writing - "... no intention of exercising ... first Right of Refusal ..." - executors transmitted title to widow who occupied property for 7 years and died - purchaser sought to enforce option against her executors - Held - option no longer available for exercise - executors not affected by any equities arising out of dealings with grantor.
LEGISLATION CITED:	Contracts Review Act 1980 (NSW) Real Property Act 1900 (NSW). Conveyancing Act 1919 (NSW) Trade Practices Act 1974 (Cth) Fair Trading Act 1987 (NSW)
CASES CITED:	Woodroffe v. Box & Anor (1954) 92 CLR 245; Bogdanovic v. Koteff (1988) 12 NSWLR 472 Bahr & Anor v. Nicolay & Ors [No. 2] (1988) 164 CLR 604 Beneficial Finance Corporation Ltd v. Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510
DECISION:	Proceedings dismissed: See [33]

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRYSON J.

WEDNESDAY 23 MAY 2001

4041/98 PENRITH RSL CLUB LTD v. ROBERT JOHN CAMERON & ANOR

JUDGMENT

1   HIS HONOUR: The plaintiff claims specific performance of its alleged entitlement to purchase from the defendants the land in Lot 1 Deposited Plan 18688, a house property at 147 Lethbridge Street Penrith. In the Amended Summons the plaintiff claims a declaration that it is entitled to purchase the property from the defendants for $306,666.77 and alternatively a declaration that it is entitled to require the defendants forthwith to make an offer to transfer the property at a price determined by taking and averaging the opinions of three valuers. In their Cross-claim the defendants seek relief against the agreement on which the plaintiff’s claim is founded under the Contracts Review Act 1980 (NSW) and equitable relief based on alleged unconscionable conduct of the plaintiff in obtaining the agreement.

2   Mr Hector Henry Cameron died on 24 February 1990. He was aged 87, he had been retired for many years and was an age pensioner. In 1988 he suffered from very poor vision, as was established by a report of Dr Tidswell an Ophthalmologist in 1980. His corrected visual acuity was 6/60 meaning that he needed to stand 6 metres away to read a chart which a person with normal sight could read at 60 metres. In 1983 he had surgery, but his right eye became blind as a result of infection after surgery. Dr Richardson, who gave evidence, observed in June 1985 and made a note that Mr Cameron’s right eye was blind and he was unable to read with his left. With strong light and magnification he might have been able to make out some large print but he was unable to read normal sized type or find the blank space in a form at which to sign his name. In Dr Richardson’s opinion it would not have been possible for him to read and appropriately sign a document in standard type. In 1989 Mr Hector Cameron was found to have iron deficiency anaemia; he was suspected but not confirmed to have colonic carcinoma; on two occasions he was given blood transfusions, apparently in the months before he died.

3   Mr Hector Cameron bought the house in Lethbridge Street in 1953 and lived there for the rest of his life with his wife Mrs Amy Delilah Cameron, who did not own any interest in the property. The agreement on which the Club sues is a Deed which he signed on 17 June 1988; the seal of the Club had been affixed to the document earlier. Mr Cameron also signed and the Club also executed under Seal a Section 88B Instrument which was annexed to the Deed. The Deed after referring to the parties’ names is in these terms:

WHEREAS the Grantor is desirious of granting to the Club the first Right of Refusal to purchase the Grantors Land and home, being Lot 1 Deposited Plan 18688 contained in Certificate of Title Volume 5591 Folio 183 (hereinafter called the Land) in the terms and conditions as set out hereunder.
NOW THIS DEED WITNESS
1. This deed shall be binding on the parties, their heirs, assigns, Executors or administrators.
2. In consideration of the Club paying the Grantors
(i) Annual Penrith City Council rates,
(ii) Annual Water rates and paying to the Grantor
(iii) the sum of $100.00 per month to be used by the Grantor for maintenance and up-keep on the Grantors Land the Grantor shall give to the Club the first Right of Refusal to purchase the land on the following terms:

(a) upon the Grantor wishing to dispose of the Land during his life, or

(b) upon the Grantor no longer desiring to remain in occupancy of the land, or

(c) upon the Grantor’s death whichever event first occurs.
3. Upon the happening of the events hereinbefore mentioned the Grantor shall offer the said Land for sale to the Club at a price to be agreed upon between the parties but failing agreement at a sale price being the mean average of three valuers registered with the Australian Institute of Valuers and nominated by the then President of the Australian Institute of Valuers New South Wales Division.
4. In further consideration of the Grantor granting to the Club the first Right of Refusal as hereinbefore mentioned the Grantor will forthwith grant to the Club a Right of Carriageway over the land as set out in the annexed Section 88B Instrument and plan. Upon the granting of the said Right of Carriageway to the Club, the Club shall carry out all necessary work to prevent water run-off from the Right of Carriageway onto the said Land and shall erect a 1.85 metre high timber paling fence and a wire security fence along the southern boundary of the Right of Carriageway.

4   The Section 88B Instrument was registered almost immediately and the right of carriageway was recorded on the Certificate of Title on 21 June 1988.

5   In his Will, which he made on 4 March 1983, Mr Hector Cameron appointed the defendants, who are two of his grandsons, as his executors and they obtained probate from this Court on 2 July 1990. The provisions of the will which took effect gave the whole of his estate to his widow; alternative provisions under which he gave shares in his estate to four grandsons and a daughter-in-law did not take effect. Mrs Amy Cameron became the registered proprietor of the property by transmission from the defendants as executors on 1 August 1990.

6   Mrs Amy Cameron died on 11 June 1997. By her will also dated 4 March 1983 she too appointed the defendants, her grandsons, to be her executors. Her will was a mirror of the will her husband made on the same day. Provisions of her will which gave her estate to her husband of course did not take effect, and the provisions of the will which did take effect gave her estate to her executors on trust to divide the estate equally between the same four grandsons (including the two executors) and daughter-in-law. Mrs Cameron was an age pensioner at the time of her death and the house was her most substantial asset; her only other significant assets were two bank accounts totalling $27,391.93.

7   The Club lodged caveat 3851495 in March 1998 and claimed an interest described as “Right of first refusal to purchase the land pursuant to written agreement dated 17.6.1988” The caveat referred to the Deed as the instrument on which the claim was based.

8   The right which Mr Hector Cameron was to grant to the Club under the Deed was described in cl.2 as “the first Right of Refusal to purchase the land” but what this right consisted of has to be understood with the requirement in cl.3 that upon the happening of the events mentioned in cl.2 “the Grantor shall offer the said land for sale to the Club” and the provisions which follow about the price. One of the events (confusingly referred to in cl.2 as terms) was “(c) upon the Grantor’s death” and neither of the other two events occured during Mr Hector Cameron’s life. As cl.1 provides that the Deed should be binding on his executors it should be understood that it was intended that cl.3 would oblige his executors to make the offer upon the happening of the event of his death. Mr Hector Cameron undertook a contractual obligation that upon his death, meaning within a reasonable time after his death, his executors should make the offer referred to. The defendants as executors never did make any such offer.

9   The rights created by the Deed are not easy to understand or state concisely. In my opinion the right created by the Deed was an option to purchase, notwithstanding the reference in cl.2 to the first Right of Refusal. I have been guided by observations of Fullagar and Kitto JJ relating to the document under consideration in Woodroffe v. Box & Anor (1954) 92 CLR 245; there are some similarities in the expressions used in that document and in the Deed. As one of the events which could activate the obligation to offer the land for sale was Mr Hector Cameron’s death and the Deed is said by cl.1 to be binding on his executors it must be understood that there was a contractual promise that the executors of his estate would make the offer. Notwithstanding the use of the inept expression “first Right of Refusal” the option conferred by cl.3 is the only mechanism by which the Club had an opportunity to purchase the land. Except in relation to the offer which the grantor was to make under cl.3 the Club did not have a right of refusal under which the grantor could not sell the land to any other person without first making an offer to the Club. The plaintiff’s case was not presented on any such basis and in any event there is no evidence that Mrs Amy Cameron or her executors have ever proposed to sell the land to any other person. According to the form of words used the Club’s right under cl.3 was to have the executors make an offer to the Club; the Club could then decide whether to accept the offer or not to accept it. As executors had an obligation to make the offer the substance of the rights involved is to be ascertained by treating them as actually having made it, and the effect of doing so is that on Mr Hector Cameron’s death the Club had an option to purchase the land at a price to be established in the way stated.

10   Mr Barry Wilson solicitor of Penrith acted for Mr Hector Cameron and his wife in March 1983 when he took their instructions for wills and attended to the execution of their wills. This was the only legal business which Mr Wilson ever handled for Mr Hector Cameron, and Mr Wilson was not consulted in relation to and did not know of the Deed of 17 June 1988 or the creation of the right of way. Mrs Amy Cameron accompanied by her daughter-in-law Mrs Jean Cameron saw Mr Wilson about February 1990 not long after Mr Hector Cameron’s death and gave instructions in relation to his estate. In some way a copy of the Deed, and also Mr Hector Cameron’s will and his Certificate of Title were delivered to Mr Wilson in connection with these instructions. As well as giving her advice about the terms of the Deed Mr Wilson told Mrs Amy Cameron that he felt duty bound to contact the Penrith RSL Club and advise them that her husband had died, and he did pass this information to the Secretary Manager Mr Tolland. At about the same time Mrs Amy Cameron spoke to Mr Tolland and said to him to the effect that she was worried that the Club might exercise its right of sale under the Agreement with her late husband. Then there was some discussion and decision by the Board of the Club, and Mr Michael Soper, who was Deputy Chairman, was asked to discuss the matter with Mrs Cameron.

11   Mr Wilson’s evidence was to the effect that Mr Tolland telephoned him and said to this effect: “The Club does not intend to exercise its right of first refusal under the Deed but will continue to pay the moneys that were agreed to under the Deed.” Mr Tolland in evidence gives a slightly different account of what he said on this occasion; in Mr Tolland’s evidence he said to this effect: “The Club does not intend at this time to exercise its right of first refusal under the Deed as Mrs Cameron wants to continue to live in the property but the Club will exercise its rights after she dies. But the Club will continue to pay the moneys that were agreed to under the Deed.” Neither is in a very good position to give a full and clear account of the conversation which occurred over nine years before Mr Wilson made his affidavit and over 11 years before Mr Tolland made his. I regard the letter which the Club later sent to Mrs Cameron as a more reliable record in detail of the arrangements made early in 1990. Mr Wilson asked Mr Tolland “Will you please send a letter confirming that the Club will not be exercising the right of first refusal to purchase the Cameron property.” Mr Wilson heard nothing further directly from the Club, either in 1990 or for some years, but he did come to know the contents of the letter which Mr Tolland on behalf of the Club sent Mrs Amy Cameron dated 26 March 1990.

12   On 26 March 1990 the General Manager of the Club wrote to Mrs Amy Cameron, Mr Hector Cameron’s widow. The Directors’ Minutes show that the Club Committee endorsed the terms of the letter before it was sent to Mrs Amy Cameron. The letter said:

I wish to advise having spoken to your solicitor, Mr. Barry J. Wilson, and given him an undertaking on behalf of the Club that the Club has no intention of exercising the Club’s first Right of Refusal over the property known as 147 Lethbridge Street, Penrith.
As far as the Club is concerned it is our undertaking to maintain the consideration in the agreement, that is, the Club will pay -
(i) Annual Penrith City Council rates
(ii) Annual Water rates
(iii) the sum of $100 per month for the maintenance and upkeep
of the property.
On behalf of the Club I apologise for any concern you may have experienced and I hope that the assurances given to you by Mr. R. Cooper and Mr. M. Soper are endorsed by this letter.

13   The letter does not say that the Club was holding open or believed that it was holding open to itself the opportunity to exercise its rights after Mrs Amy Cameron died or at any other time. The only suggestion that there was any indication of any kind that rights were being held open is in Mr Tolland’s evidence about what he said to Mr Wilson on the telephone. I do not regard Mr Tolland’s evidence as altogether reliable or as carrying the probabilities about what the Club then indicated it intended to do; the only material which I accept as doing that is the Club’s letter of 26 March 1990. There is no suggestion either in Mr Tolland’s evidence or anywhere else that there was in any way a bilateral arrangement or any commitment by or on behalf of Mrs Amy Cameron, or of the executors of the late Mr Hector Cameron, that any right would remain open for exercise or that the Club’s rights would be in any way different to the rights conferred by the Deed. The Club’s letter was not directed to the executors at all; no arrangement of any kind was made with them. Nothing in writing was obtained by the Club either from Mrs Amy Cameron or from the executors recording that there had been any arrangement to confer any extended right or other right on the Club; naturally enough as there had not been any such arrangements. The executors knew of the letter of 26 March. They went on to administer the estate and transmit the house to Mrs Amy Cameron.

14   Mr Michael Soper’s assurances to Mrs Amy Cameron are referred to in the last paragraph of the letter. Mr Soper gave evidence in the proceedings to the effect that before Mr Hector Cameron signed the Deed he told Mr Soper that he was worried that if anything happened to him he did not want his wife put out of the house; and that Mr Soper got an assurance from the Club for him that Mrs Amy Cameron would stay there until she wanted to leave or until she died. Assurances to this effect were given repeatedly; they were given by Mr Soper to Mr Hector Cameron at his house before the occasion when he signed the Deed, they were given again when Mr Hector Cameron asked a question about it on the occasion when he did sign the Deed, and the assurances were renewed later a number of times. Mr Soper’s evidence shows that Mr Soper repeatedly renewed the assurances that nothing would be done in relation to the Deed until Mrs Amy Cameron either moved away or died. The assurances were given in response to Mr Hector Cameron repeatedly saying that he was worried about the matter. As this assurance was basic to Mr Hector Cameron’s executing the Deed, it is extremely unlikely that the Club would have been able to obtain specific performance of the rights recorded in the Deed if it had attempted to enforce them after Mr Hector Cameron died and while Mrs Amy Cameron was still alive. However that may be, there was of course no attempt to enforce them.

15   Mr Soper’s evidence also shows that after Mr Hector Cameron died, Mrs Amy Cameron spoke to Mr Soper and said: “I’m worried that I may not be able to stay in the house” to which Mr Soper replied: “The Club is prepared to abide by Hector’s request that you stay in the house until you decide to move out or you pass away.” A similar assurance was given to Mrs Amy Cameron in Mr Soper’s presence by Mr Robert Cooper who was then Chairman of the Club.

16   The executors knew of the letter of 26 March 1990, and proceeded to administer the estate and transmit the house to Mrs Amy Cameron, according to her entitlement under the will. Neither Mrs Amy Cameron nor the executors ever gave the Club any engagement or undertaking that the Club’s opportunity to acquire the property would be held open. The later words of the letter of 26 March 1990, whatever they may have been and tended to indicate, did not indicate that the Club was attempting to reserve an opportunity to exercise the right at a later date, or that Mrs Amy Cameron was invited to agree to this. The Club continued to use the right of way, continued for several years to make payments of Council rates and water rates, and continued to make payments of $100 per month for maintenance and upkeep to Mrs Amy Cameron for the rest of her life. Whatever the Club’s reasons may have been for continuing to make payments, they were not made pursuant to any agreement or arrangement, whether or not evidenced in writing, that the Club should continue to have a first right of refusal or any entitlement to receive an offer, or on any basis other than as recorded in the Deed of 17 June 1988. For the rest of Mrs Amy Cameron’s life the Club did not take any steps to call for performance, and the reason for that was, as its letter of 26 March 1990 showed, that the Club did not at the time wish to have performance of its first right of refusal or entitlement to receive an offer of sale.

17   The Club’s counsel contended that the conduct of Mrs Amy Cameron in the events early in 1990 amounted to a representation that she did not wish the option to be exercised at that point; it was said that the Club agreed with her wish and that the circumstances created an equitable claim that the opportunity to exercise the option should remain open until she died. I do not accept the contention that there was any estoppel or other circumstance which held open the Club’s opportunity to exercise the option. There was nothing in the nature of a representation or assurance by Mrs Amy Cameron about whether or not the Club would have any opportunity to exercise the option at a later time, and an estoppel cannot be created without some reasonably clear basis of that kind. Further, there is no reason in the evidence on which to find that the Club relied on any indication from Mrs Amy Cameron in deciding not to exercise the option; the evidence shows that the Club carried out a course of action to which it was already committed by its dealings with Mr Hector Cameron, and its decision was not produced by any representation made by Mrs Cameron. Still less was it produced by any dealings with the executors.

18   If the Club was entitled to enforce the contractual obligation against the defendants as Mr Hector Cameron’s executors upon his death the Club’s remedy was to call for performance within a reasonable time and in default to sue for specific performance. To obtain specific performance the Club would have had to show that it was ready, willing and able to perform the agreement itself, and it could be met by defences based on delay. It is clearly proved, by the terms of the Club’s letter, and by its inaction for the rest of Mrs Cameron’s life, that the Club was not ready, willing and able to buy the property. In this the Club conformed with assurances which it had given to Mr Hector Cameron before and after he entered into the Deed.

19 For the rest of Mrs Amy Cameron’s life the conduct of Mrs Amy Cameron and of the executors was shaped by the Club’s letter of 26 March 1990. For several reasons the Club lost any right it may ever have had to obtain equitable remedies; it was not qualified by its own readiness, willingness and ability to obtain specific performance, it made a clear representation that it would not act on which Mrs Amy Cameron and the defendants acted for some years, and was wholly inactive and acquiesced in Mrs Amy Cameron being left undisturbed and becoming the registered proprietor of the property. Mrs Amy Cameron became exempt from any claim of the Club to have an equitable interest in the property under s.42 of the Real Property Act 1900 (NSW). There is no basis for regarding her as having been guilty of any fraud in the matter, nor is there a basis for regarding her as being subject to any personal equity in favour of the Club by reason of any undertaking engagement or other circumstances affecting her. Well before she died it became impossible for the Club to obtain any equitable remedy for any interest in the land which may have been created by the Deed. When the house property passed to the defendants as her executors it passed free of any equitable interest of the Club.

20   There are no circumstances in which the defendants as executors of Mr Hector Cameron incurred any personal equity or other liability to a remedy in favour of the Club. They too did not give the Club any undertaking or engagement, and they do not now hold the property in the character of executors of the late Mr Hector Cameron, but solely as executors of the late Mrs Amy Cameron.

21   The time at which the offer was to be made was upon the happening of the event of Mr Hector Cameron’s death, and this means within a reasonable time after his death. The option was not available (as the words literally seem to indicate) only at the very time Mr Hector Cameron died and on the other hand it did not remain available for longer than a reasonable time for exercising the option. It is not necessary to decide definitively how long a reasonable time was. The principal consideration is the time reasonably necessary for the Club to ascertain that the grantor had died, to consider its position and come to a conclusion about whether or not it wished to exercise its option. Other circumstances are the need of his executors to administer his estate, wind-up his affairs and transfer his assets to the persons entitled, and the mechanism for determining the price which, although it is in no way certain, seems to indicate that the property was to be valued as of the time of Mr Hector Cameron’s death; this reading if correct would show the need for prompt exercise to avoid distortions from changes in value. It is to be expected that executors will usually carry out their duties and wind-up an estate within twelve months after the date of death; a reasonable time for exercise should be soon enough to allow this to happen. Another circumstance affecting the time available is the language of cl.3 and the word “upon” which indicates that the exercise is to follow closely on the death. A period of two or three months was probably reasonable, as is illustrated by the Club’s actually making its decision about one month after Mr Hector Cameron’s death. In my finding a reasonable period had expired before the executors transmitted title to Mrs Amy Cameron on 1 August 1990 and it became impossible for them to transfer the land to the Club even if the option had been exercised. When the actual events are considered in detail the option became unavailable for exercise on 26 March 1990.

22   An option to purchase can only be exercised on the terms on which the option was granted, including terms as to time of exercise, and reasonable strictness is required. The time of exercise was not a provision which the Club could waive or extend because it was not a provision made wholly for the protection of the Club. Once the time for exercise of the option passed the Club had no further right related to the option at all; an unexercisable option is as nothing. The Club could not of its own will extend or postpone its opportunity to exercise the option. The Club had no agreement with the executors of Mrs Amy Cameron to extend the time, but if it had, there was no memorandum or writing enforceable under s.23C or s.54A of the Conveyancing Act 1919 (NSW) on which the Club could rely.

23 The reasons I have already stated show sufficiently that the Club cannot succeed. If events or circumstances in some way gained the Club a continuing opportunity to exercise the option that was at its highest an equitable interest in the land, and Mrs Amy Cameron was protected against any such interest by the provisions of s.42 of the Real Property Act 1900 (NSW) when she became the registered proprietor. The indefeasibility of Mrs Amy Cameron’s title and the availability of the protection of s.42 to her as a donee is established by the decision of the Court of Appeal in Bogdanovic v. Koteff (1988) 12 NSWLR 472. As it happened, Mr Koteff the registered proprietor in Bogdanovic v. Koteff had no notice of the prior claim: see 480F-G; but this was not essential to his indefeasibility. She was so protected notwithstanding the fact that she received the property as a gift, and notwithstanding (if it had been the fact, but it is not) that she had knowledge of some further right of the Club when she became the registered proprietor. As provided by s.42(1), Mrs Amy Cameron held the land absolutely free from any such estate or interest as it was not recorded in the register. Notice of an outstanding equitable interest is not enough to affect the entitlement of a registered proprietor; there must, in the word used in s.42, be fraud, or there must be a personal equity arising out of some transaction in which Mrs Amy Cameron involved herself. Although the range of personal equities is potentially wide there is nothing in the facts of this case which could constitute one.

24   When the defendants as executors of her will again came to control the property, of which she remains the registered proprietor to the present time, they received it from a person who was exempt from any equitable interest of the Club, and as a consequence the estate in their hands is also exempt from any such interest. In my opinion her executors and beneficiaries succeed to a title which is free of any equity from which she was protected, whether or not they have yet in their turn become registered proprietors. The fact that she has died cannot bring any such estate or interest back into existence, whether or not her successors gave value for the land.

25   Registered proprietors whether or not they gave value for their interests may be subject to personal equities binding them, but personal equities when they exist arise out of some conduct or involvement of the registered proprietors themselves and not simply out of notice of an equitable interest: Bahr & Anor v. Nicolay & Ors [No. 2] (1988) 164 CLR 604. Mrs Amy Cameron did not participate in the transaction which created the option or in any arrangement which confirmed it. Her executors and beneficiaries are in a similar position. Their position contrasts strongly with the facts in Bahr v. Nicolay where the registered proprietors’ liability arose out of their own conduct.

26   It is not necessary to deal with all claims in the Cross-claim; the defendants are not in need of relief against unconscionable conduct or under the Contracts Review Act 1980 (NSW) because they have not incurred any liability. However their claim goes further and they seek orders which would have the effect of extinguishing the right of way. The Cross-claim was based in part upon the provisions of the Trade Practices Act 1974 (Cth) and of the Fair Trading Act 1987 (NSW) but no submissions were made in support of these bases, and this was appropriate as the transaction between the Club and Mr Hector Cameron was not an event in trade or commerce.

27   The Deed of 17 June 1988 was a very bad bargain for Mr Hector Cameron as he bargained away, straight away, a right of way over almost one-sixth of his land, and in substance wholly lost the use of that part of his land. It was to be and it soon was covered with road works and fenced off from the rest of the property so that he no longer could use it. He used his house for residential purposes but its value was enhanced by its potential to be used or redeveloped for commercial purposes, as some nearby residential properties had been. Its value was closely related to the land area available for redevelopment. One valuer Mr Pye assessed the value of the land within the right of way at 17 June 1988 at $87,000; another valuer Mr Jones valued the right of way at $10,869.00. The value in question was not central to the litigation and these valuations were not tested by cross-examination; but it is obvious that the value was significant and was probably in the order of one-sixth of that of the whole of the land. Mr Hector Cameron parted with it forthwith and got no capital payment in return, and what he got was far less than equivalent value.

28   According to the terms of the Deed cl.4 the consideration for the grant of a right of carriageway was the first Right of Refusal; this was an illusory benefit as it was of no value to Mr Hector Cameron that he or his estate should be bound by an option to purchase. Apart from that he received only the Club’s obligation to pay Council and water rates, and $100 per month which he was to use for maintenance and upkeep of his land, presumably to keep it in a fit state for the Club later to acquire. According to the Deed these were consideration for the first Right of Refusal, not for the Right of Way. The value of the obligation to pay rates depended on how much time passed before an opportunity arose for the Club to exercise the option. The rates were assessed by reference to the land subject to the right of way as well as the rest of the property. All in all it was a very bad bargain. However he and his successors cannot get relief against the bargain just for that reason. The Club did pay Council and water rates and the maintenance payments for the rest of his life. The only provision of the Deed which has any continuing effect is the grant of the Right of Way; Mr Hector Cameron participated in the grant of Right of Way fully, received what he bargained for and never expressed any discontentment with the Right of Way or took any action against it. He remained a member of the Club and well disposed towards it for the rest of his life.

29   Some circumstances affecting the Deed of 17 June 1988 support the view that it was unjust. On the occasion when he approved the terms of the Deed and executed it and the Section 88B Instrument Mr Hector Cameron, who was 86 years of age, long retired and very severely disabled in his vision so that he could not read the document, did not have the assistance and support of any lawyer or relatives. He could if he wished have had the advice and assistance of his grandson or of a lawyer and no conduct on the part of the Club has been shown which prevented him from obtaining assistance of those kinds. At earlier stages in dealing with the Club he had had the assistance of his grandson Mr Robert John Cameron, one of the defendants, who had been told some of the principles of the proposed arrangement, although not all of them, and had not raised any objection or resisted it. It had not been brought home to Mr R.J. Cameron that the possession of Mrs Amy Cameron was not going to be protected. He did know about the right of way and in a general way about the arrangements for payments, but these were not the source of discussion or discontent. Mr Hector Cameron did not have the benefit of any legal advice; the Club had told him that they were prepared to pay for legal advice, but he did not take this up and did not actually have any such benefit. Mr Hector Cameron may have been given a copy of the Deed before the occasion on which it was executed; the letter of 11 March 1988 from the Club’s solicitor to the Club reports that a copy had been sent to him. Receiving a copy would be of limited use to him. He was not able to read the document; it was not read out word for word to him, but its effect was pointed out to him by Mr Cooper the Chairman of the Club. The assurances Mr Hector Cameron was given about Mrs Amy Cameron’s possession meant that he was given a wrong view of the arrangement by the Club, and he was given repeated assurances which, although given sincerely and later carried through, were not in accordance with the terms of the Deed. Although some Club officers have claimed in evidence that Mr R.J. Cameron was present when this was done, I am satisfied having regard to his evidence that he was not present on this occasion, although he had attended an earlier meeting. What made the transaction in the Deed vehemently unjust was the lack of any protection for Mrs Amy Cameron, although this was very important for Mr Hector Cameron and the Club officers also regarded it as basic to the arrangement and gave him assurances on the subject. As things have fallen out this unjust aspect of the transaction has not produced any adverse consequence, as the Club’s later behaviour adhered to the assurances that had been given.

30   The grant of the right of way was, as I have said, a very bad bargain for Mr Hector Cameron, but the evidence shows that it was fully considered by him, the grant was carried out completely and he did not ever take any action to alter the arrangement or complain about it. The matter of the right of way was completed, past and closed in his lifetime, and if it was reopened now, it would be reopened to the benefit of other persons and not of Mr Hector Cameron. In the circumstances I am of the view that no relief against the grant of the right of way should be given by the Court.

31   There was argument before me about whether the price of $306,666.77 put forward in the plaintiff’s case was ascertained in accordance with cl.3. There was no evidence in the plaintiff’s case of readiness, willingness or ability to carry out the purchase at any other price. In my opinion that sum was not ascertained in accordance with cl.3 as the mechanism in cl.3 was not followed; under that mechanism there would be an exercise of the option and then an attempted agreement, and only failing agreement would there be a reference to valuers. Further issues were argued before me about the date as of which the property was to be valued, and whether the property was to be valued on the basis that the right of way had already been created, or on the basis that it did not exist. Further, defendants’ counsel contended that the Deed was uncertain with respect to the date of valuation and for that reason was unenforceable. I leave these issues undetermined although I incline to the view that the date for valuation is the date of death.

32   A right of First Refusal or right of pre-emption is not an interest in land and is not a caveatable interest; see Beneficial Finance Corporation Ltd v. Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510 at 532. On the other hand an option to purchase is usually treated as an interest in land and a caveatable interest. The earliest event which was arguably an exercise of option on behalf of the Club was a letter of its solicitors to the executors’ solicitors on 25 June 1997; that letter was not altogether unequivocal and it was disputed whether it would have been an effectual exercise of the option; I leave that undetermined. In my opinion the Club does not have a caveatable interest and did not have one when the caveat was lodged. The caveat should now be withdrawn.

33  

Orders:

(1) On the plaintiff’s claim give judgment for the defendants with costs.
(2) Dismiss the Cross-claim.
(3) Order that each party pay its or their own costs of the Cross-claim.
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Last Modified: 06/07/2001