Pollard v Pollard
[2019] VSC 21
•8 February 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2018 00479
| BRUCE THOMAS POLLARD | Plaintiff |
| v | |
| CATHERINE MARY POLLARD | First Defendant |
| REGISTRAR OF TITLES | Second Defendant |
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JUDGE: | Daly AsJ |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 13 November 2018 |
DATE OF JUDGMENT: | 8 February 2019 |
CASE MAY BE CITED AS: | Pollard v Pollard |
MEDIUM NEUTRAL CITATION: | [2019] VSC 21 |
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REAL PROPERTY – Caveat lodged by the plaintiff’s former wife on the basis of an option to purchase the subject property pursuant to Deed – Whether former wife was offered the option to purchase consistent with the terms of the Deed.
CONTRACTS – Construction – Obligations imposed upon plaintiff in relation to the sale of the property – Whether any offer was made when notice of sale was given – Whether damages are adequate remedy for sale of land – Pianta v National Finance and Trustees Ltd (1994) 180 CLR 146, referred to – Whether lack of mutuality of the parties’ obligations is an obstacle for grant of specific performance – equitable remedies – equity does not relieve parties from the consequences of their bargains.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B Harding | Blackwood Family Lawyers |
| For the First Defendant | Mr P W Lithgow | Gadens Lawyers |
| For the Second Defendant | No appearance |
HER HONOUR:
The plaintiff, Mr Bruce Pollard, and the defendant, Ms Catherine Pollard, were formerly married. After they separated in 2004, they entered into a matrimonial settlement in July 2004, which was documented in a deed dated 19 July 2004 (‘Deed’). The Deed provided for Mr Pollard to assume full ownership of a company, Victorian Child Care Properties Pty Ltd (‘VCCP’), which owned a property at 77 Campaspe Drive, Croydon Hills (‘property’). The property at that time was valued at approximately $300,000, and was leased to a childcare operator for approximately $30,000 per annum. The title of the property was subsequently transferred from VCCP to Mr Pollard in 2008.
Clause 5.7 of the Deed provided as follows:
That in the event that the Husband wishes to sell the freehold property owned by VCCP, he must first give the Wife the first option to purchase same, at a value calculated by multiplying the annual gross rent paid by the tenants at such time on the property, by 10 times, but in the event of the property being untenanted at the time, then at the current market value of the property established by sworn valuation, the cost of which is to be shared equally between the parties, and the Wife to be given at least 30 days’ prior notice in writing of such intention to sell, with the Wife to then exercise her option to purchase the property within 21 days of having received such notice of intention to sell by the Husband.
In 2006, Mr Pollard converted the property into residential premises, and the property was leased until March 2018 at an annual rental of $24,700. In February 2018, Mr Pollard decided to sell the property. However, Mr Pollard is unable to give clear title of the property, as on 10 November 2009, Ms Pollard lodged a caveat over the title of the property. The caveat referred to the following grounds of claim:
As beneficiary of an option to purchase pursuant to a written agreement between the caveator, Bruce Thomas Pollard, Victorian Childcare Properties Pty Ltd and Pollard Services Pty Ltd dated 16 July 2004.
In February and March 2018, the parties corresponded about the foreshadowed sale of the property. This correspondence is reproduced in full below.
On 7 February 2018 at 11.49pm, Mr Pollard wrote to Ms Pollard as follows:
Hi Cath,
I have had a real estate agent access Campaspe.
He valued the property at 850K-900K.
This is only an estimate and I know if you were wanting to buy the property a Qualified Valuer if (sic) required to value it.
Having said all that, if you are not interested in purchasing, then the cost of a Qualified Valuer is an expense that can be avoided.
Please advise of your intentions as this property is going on the market.
Bruce.
On 9 February 2018 at 11.47am, Ms Pollard replied as follows:
At this point in time, I am not interested in purchasing the property.
Withdrawal of Caveat will be provided at settlement.
On 9 February 2018 at 11.58am, Mr Pollard replied as follows:
Catherine,
In the “Deed of Financial agreement” it states you will be given (in writing) first option to purchase the freehold of this property (77 Campaspe Drive). This has been executed. You then had the option to purchase the property or decline the option. You have declined to purchase the property. T (sic) is is only one fist (sic) option.
All requirements of the Deed of financial agreement have been met. There is, therefore no legal justification for a caveat to still be on this property. Remove it immediately so it is then an unencumbered property for sale.
On 10 February 2018 at 3.08am, Ms Pollard replied as follows:
The Caveat will remain in place until settlement.
On 17 February 2018, at 4.23pm, Ms Pollard wrote again:
Refer to clause 5.7 of the Deed of Financial Agreement. Please advise the current annual gross rent paid by the tenants to you, and I will reconsider my position.
On 17 February 2018 at 7.08pm, Mr Pollard responded as follows:
House will be put on the mark (sic) after tenant moves out, so annual rent not relevant
On 17 February 2018 at 7.50pm, Ms Pollard replied as follows:
Please refer to clause 5.7 of the Deed of Financial Agreement as current tenancy is relevant at the time of deciding to place the property on the market. Annual rent is relevant as you have decided to put the property on the market while it is still tenanted as per your previous emails. Please advise annual gross rent paid by the tenant to you, as I now wish to exercise my right under clause 5.7 of the Deed of Financial Agreement to purchase at 10 times the current annual rent received.
and further, at 7.55pm, Ms Pollard wrote again:
With regard to annual rent please advise the total annual amount as disclosed to the Australian Taxation office in your last taxation return because that will be relied upon as deciding the value of the rent under clause 5.7 of the Deed of Financial Agreement.
On 12 March 2018, at 10.22pm, Ms Pollard wrote as follows:
As previously confirmed by you in your emails, you now wish to sell to (sic) this property.
Just confirming that I wish to exercise my right under clause 5.7 of the Deed to purchase at 10 times the current annual rent. I note from internet searches (which have been recorded), signage on the property, and your previous emails that the property is currently tenanted.
Please confirm the annual rental amount disclosed to the Australian Taxation Office in the last financial year.
My right to purchase under the Deed remains in place because you have exercised your right to sell.
Ms Pollard wrote again on 23 March 2018 as follows:
further to my email below, I confirm that it is a matter of public record that Total Plumbing Systems Pty Ltd listed its principal place of business at 77 Campaspe Drive, Croydon Hills and that Nicholas James Mitchell listed that address on public records.
Up until very recently (and probably after you received the below email), as shown in photographs taken of the property on 6 March 2018 (which was after you informed me of your intention to sell the property) and recent “googlemaps” searches, Total Plumbing Systems Pty Ltd had large advertising placed on the “school” side fence of the property. Internet searches also show that this is the address where the business currently operates from. Based on the evidence, it is clear that at the time of advising me of your intention to sell the property, that the property was tenanted. And this is regardless of any steps taken by you to attempt to show otherwise including the removal of the Total Plumbing Systems’ advertising on the side fence of the property.
I have contacted the mortgagee of the property, the National Australia Bank, and confirmed that I hold the caveat on the title and that I have informed you of my intention to exercise my rights under clause 5.7 of the Deed of Financial Agreement, and that is to purchase the property at ten times the current annual rent. The NAB representative informed me that the NAB is unable to take any action on the title (ie sell the property and/or discharge the mortgage) until I agree to remove the caveat on terms that I am entitled to under the Deed of Financial Agreement.
Searches of current four bedroom properties for rent in Croydon Hills show an average rent of between $450.00 and $500.00 per week.
Please confirm the annual rent disclosed to the Australian Taxation Office in the last financial year, as once again I confirm that this is the figure to be relied upon in clause 5.7 of the Deed of Financial Agreement.
There was additional correspondence between Mr Pollard’s solicitors and Ms Pollard between March and June 2018, which failed to resolve matters. On 19 July 2018, Mr Pollard issued this proceeding, seeking the removal of the caveat. On 17 August 2018, I made orders that the proceeding proceed as if by way of writ, and there be a full trial of the issue in dispute, being whether Ms Pollard exercised or rejected the option to purchase the property contained in clause 5.7 of the Deed. If this issue is decided in Mr Pollard’s favour, the caveat should be removed. If the issue is decided in favour of Ms Pollard, there should be an order for specific performance compelling Mr Pollard to sell the property to Ms Pollard for the sum of $247,000. Mr Pollard’s estimate of the current value of the property is in the range of $850,000 to $900,000.
In his statement of claim, Mr Pollard relied upon the notice, the 9 February email, and his response to the 9 February email in support of his contentions that:
(a) Ms Pollard has elected not to exercise her option to purchase the property;
(b) that option is now spent; and
(c) Ms Pollard can no longer call upon the option.
Mr Pollard claims the following in his prayer for relief:
A.A declaration that the first defendant has not exercised her option to purchaser under clause 5.7 of the financial agreement.
B.A declaration that the first defendant has no proprietary interest in the property.
C.An injunction against the first defendant preventing her or any of her servants, agents, contractors, associates or employees from lodging any caveats or making any application with a view to staying a sale by the plaintiff of the property.
D.An order that the first defendant pay the plaintiff’s costs of and incidental to this proceeding on an indemnity basis.
E.Any further order that this Honourable Court thinks fit.
In her defence and counterclaim, Ms Pollard:
(a) admitted that the notice was given in the terms alleged by Mr Pollard, but denied that the notice provided her with an opportunity to purchase the property, on the basis that:
(i)The 7 February Notice informed the First Defendant that she could exercise an option purchase the Property by paying market value, which was about $850,000 to $900,000.
(ii)The 7 February Notice failed to disclose to the First Defendant that the Property was tenanted and failed to disclose the annual gross rent being paid by the tenants.
(iii)The 7 February Notice did not give the First Defendant the option to purchase the Property in the sum being 10 times the annual gross rent being paid by the tenants at the time.
(b) she admitted that the 9 February email was in the terms alleged by Mr Pollard, but stated that at the time she sent the email she was not aware that the property was tenanted, or of the terms of clause 5.7 of the Deed
(c) she said that when she sent the 9 February email, she had not been put to her election in relation to the option to purchase the property for ten times the annual gross rental being paid by the tenants; and
(d) she denied that she elected not to exercise the option to purchase the property in a sum being ten times the annual gross rental being paid by the tenants; and
(e) she asserted that she has exercised the option to purchase the property for the sum equivalent to ten times the annual gross rent paid by the tenant(s) of the property;
In her counterclaim, Ms Pollard contended that she has a proprietary interest in the property, and stated that:
By reason of the First Defendant having exercised the Option to Purchase, there is an agreement between the Plaintiff and the First Defendant that the Plaintiff will sell the Property to the First Defendant at a price being 10 times the annual gross rental being paid by the tenants on 7 February 2018.
Further, Ms Pollard asserted that:
(a) Mr Pollard has failed to perform his obligations under the Deed;
(b) she is ready, willing and able to purchase the property at a price of $247,000; and
(c) she is entitled to specific performance of the Deed or damages in lieu of performance.[1]
[1]The loss being the difference between the market value of the property at 7 February 2018 and the purchase price payable by Ms Pollard pursuant to the Deed.
Mr Pollard relied upon an affidavit sworn by him on 19 July 2018. He deposed, in summary, as follows:
(a) the effect of the Deed was an equal separation of assets, superannuation, and liabilities between him and Ms Pollard;
(b) at the time of entry into the Deed, he and Ms Pollard agreed the value of the property was $300,000, with an annual rental of approximately $30,000;
(c) in 2006 he converted the property into residential premises;
(d) from 2016 to March 2018 the property was leased to a residential tenant for $24,700. The tenant gave notice of his intention to vacate in October 2017, but did not vacate the premises until 5 March 2018;
(e) in February 2018 he decided to sell the property, which he believed had a value of $850,000 to $900,000, which prompted him to send Ms Pollard the email of 7 February 2018 (‘notice’); and
(f) he exhibited the correspondence referred to at paragraphs 5 to 13 above.
Ms Pollard relied upon an affidavit sworn by her on 10 August 2018. She deposed, in summary, as follows:
(a) she referred to the background facts and the Deed, and referred to clause 8.6 of the Deed, which provides that
Each party must execute any document and perform any action necessary to give full effect to this document, whether before or after performance of this document;
(b) when she received the notice, she was not aware that the property was tenanted, and she was not aware of the terms of clause 5.7 of the Deed;
(c) she made the following observations about the notice:
Having decided to sell the Property, the Plaintiff quite properly gave me notice. However, as apparent from the email dated 7 February 2018:
(a)The email did not inform me that the Property was tenanted and therefore did not inform me of the gross rent being paid for the Property;
(b)The email did not give me the option to purchase the property at a value calculated by multiplying the annual gross rent paid by the tenant at that time;
(c)Notwithstanding that the Property was tenanted, the email only enquired if I was interested in purchasing the Property at market value, which the plaintiff had been informed was valued at $850,000 to $900.000;
(d)The email did not give any indication that the plaintiff’s wish to sell the Property was in any way conditional upon timing or any other consideration;
(e)The email did not give any indication that any exercise of option by me to purchase the Property could not operate immediately or was conditional upon any other consideration.
(d) she was not interested in purchasing the property in the price range of $850,000 to $900,000. When she sent the 9 February email in response to the notice, she was not aware that the property was tenanted;
(e) while Mr Pollard’s response to the 9 February email referred to the Deed, it did not disclose that the property was tenanted;
(f) she received no reply to her emails of 17 February 2018 or her emails of 12 March 2018 and 23 March 2018;
(g) she exhibited a letter to her from Mr Pollard’s solicitor of 29 June 2018, when she was first informed that the tenant paid $475 per week in rent; and
(h) she exhibited a letter from her solicitors to Mr Pollard’s solicitors of 23 June 2018, where her solicitors confirmed that she was ready, willing and able to purchase the property for $247,000.
Counsel for Mr Pollard submitted that, in the 9 February email, Ms Pollard rejected the option to purchase. After that time, it was not capable of exercise, and as such, she has no proprietary interest in the property.
Counsel for Mr Pollard submitted that clause 5.7 of the Deed has four operative parts, as follows:
(a) Mr Pollard must give Ms Pollard first option to purchase should he wish to sell the property;
(b) the purchase price is to be calculated by reference to the annual rent payable in respect of the property if tenanted, or by a sworn valuation if not tenanted;
(c) Ms Pollard must be given at least thirty days’ notice in writing of Mr Pollard’s intention to sell the property; and
(d) Ms Pollard may exercise her option to purchase within 21 days of receipt of the notice, that is, she was required to exercise the option by 28 February 2018.
Counsel for Mr Pollard submitted that Mr Pollard complied with the notification requirement in the Deed. The Deed did not require Mr Pollard to inform Ms Pollard whether or not the property was tenanted. The notice made express reference to the terms of the Deed: it was open to Ms Pollard to review the Deed prior to responding to the notice. That she failed to do so is irrelevant. Further, Ms Pollard is a qualified lawyer, who was capable of protecting her own interests.
Counsel for Mr Pollard referred to the relevant legal principles governing the exercise of options, and submitted that a fair reading of the 9 February email, in all of the circumstances of its receipt, was that Ms Pollard was not interested in exercising the option to purchase the property. This conclusion is reinforced by Ms Pollard stating on two occasions that she would remove the caveat upon settlement, her effective non-response to Mr Pollard’s statement that ‘you have declined to purchase the property’, and Ms Pollard’s statement in her email of 17 February 2018 that she would reconsider her position after receiving further information.
Counsel for Mr Pollard submitted as follows (citations omitted):
It is clear that in considering whether an option has been exercised the ordinary rules of offer and acceptance must be applied.
It is trite to say that once an offer has been made, and it is rejected by the offeree, the offer terminates and is no longer capable of acceptance. A communication rejecting an offer takes effect when received by the offeror.
It cannot be disputed that after rejecting the option to purchase on 9 February 2018, the option was terminated or spent and could not be exercised. It is not possible to reject an offer one day, and accept it the next.
Counsel for Mr Pollard submitted that it was disingenuous for Ms Pollard to suggest that she was misled or deceived by Mr Pollard. Further, given that Ms Pollard is seeking relief by way of specific performance, she must come to court with clean hands: Mr Pollard spent a substantial amount of money on the property in 2006, from which Ms Pollard now seeks to obtain a benefit.
Counsel for Ms Pollard submitted that Mr Pollard, by offering to sell the property at market value, did not make an offer in accordance with the terms of the Deed. Ms Pollard merely rejected the wrong offer. He submitted that, given that the notice did not correctly identify the appropriate method of valuing the property, the 9 February email is not a conclusive exercise of the option to purchase. Her subsequent exercise of the option on 17 February 2018 was made within 21 days of the notice.
Counsel for Ms Pollard submitted that ‘election is an intentional act done with the knowledge of the right to elect’. No real election was made in the 9 February email, in circumstances where Ms Pollard had not been informed that the property was tenanted. Further, the 9 February email did not waive the 21 day option period.
Counsel for Ms Pollard rejected the contention that she was not coming to Court with clean hands. She is simply seeking to enforce her contractual rights. Mr Pollard has been receiving rent from the property for many years. That the bargain he entered into many years ago (when he was represented by lawyers) could now be seen to be a poor bargain is not a basis for equity to intervene. Finally, there is no evidence to support the submission that Mr Pollard has spent a lot of money on the property.
As can be seen from the above, this is a case where there is no real dispute about the facts: the dispute concerns the legal consequences of the communications between the parties. However, with due respect to the parties’ legal representatives, the current case does not fit within a simple framework of offer and acceptance, or for that matter, election and waiver.
When considering the issues in dispute in this proceeding, the starting point is, of course, the Deed. No issue can be taken with the validity of the Deed. It was freely entered into by the parties with the assistance of their lawyers, and it is evident from the contents of the Deed as a whole that careful consideration was given to the separation of the parties’ financial affairs. This matter is also relevant to the submissions advanced on behalf of Mr Pollard that equity would not allow Ms Pollard to obtain a windfall. Further, the terms of the Deed remain enforceable, there being no bar to the bringing of any action prior to 19 July 2019. [2]
[2]Limitation of Actions Act 1958 (Vic), s 5(3)
In my view, properly construed, clause 5.7 of the Deed imposes two distinct obligations upon Mr Pollard. First, Mr Pollard was required to give thirty days’ notice of his intention to sell the property. Secondly, but concurrently with the first obligation, he was required to give Ms Pollard the option to purchase the property at ten times the annual rental receivable at the time he gave notice of his intention to sell the property. The obligation to offer the property to Ms Pollard for sale at market value only arose if the property was untenanted, which was not the case when Mr Pollard sent the notice.
Accordingly, Mr Pollard did not comply with his obligations under the Deed. It is correct, but beside the point, to say that the Deed did not impose an obligation upon Mr Pollard to inform Ms Pollard that the property was tenanted. Rather, the obligation imposed upon Mr Pollard was to give Ms Pollard the option to purchase the property at the price calculated in accordance with the Deed. He failed to do so. The question remains: what consequences flow from that failure? Further, in that context, what is the legal effect of the 9 February email?
In my view, the consequences of Mr Pollard’s failure to comply with his obligations under the Deed are those which ordinarily flow from any breach of contract for the sale of land: Ms Pollard is, subject to the usual discretionary considerations governing such a remedy, entitled to an order for specific performance of Mr Pollard’s obligations to offer to sell her the property consistent with the terms of the Deed and the undisputed facts, being that the property was tenanted at the time of the giving of the notice.
Considered in that context, the terms of the 9 February email are largely irrelevant, because in the 9 February email, Ms Pollard was responding to an offer in different terms than that required to be made under the Deed. While her rejection of that offer was in fairly clear and unequivocal terms, the clarity or otherwise of that rejection does not confer relevance upon an otherwise irrelevant communication. Further, it is also not relevant that at the time of the 9 February email it was clear that she had not read the Deed or recalled the terms of clause 5.7 of the Deed. The only obligation imposed upon her by the Deed was to respond to an offer made in accordance with the Deed within 21 days of the notice. No such offer was ever made to her. It was not incumbent upon her to enquire whether the property was tenanted, or to make her own enquiries.
Given the above, the question of whether Ms Pollard was required to make an election does not really arise. This is not a situation where Ms Pollard was required to choose between two inconsistent rights: at the time of the giving of the notice, she only had one right, being the right to receive the option to purchase the property at a price equal to ten times the annual rental. Further, having regard to all of the circumstances, the terms of the 9 February email did not amount to a waiver of her right to have the property offered to her for purchase in accordance with the terms of the Deed.
Turning now to the question of whether the remedy specific of performance is available to Ms Pollard, in order for the Court to make an order for specific performance, the party seeking specific performance must establish that:
(a) there is an agreement;
(b) there has been an actual or threatened breach of that agreement;
(c) damages would be an inadequate remedy for the breach; and
(d) there are no discretionary considerations which would warrant the Court denying relief.
There is no doubt that there was an agreement. Further, I have found that Mr Pollard breached his obligations under the Deed. The correspondence between the parties and the existence of this proceeding evidence Mr Pollard’s refusal to comply with the terms of the Deed. The question remains whether damages would be an adequate remedy for the breach, and whether there are any discretionary considerations which would deny Ms Pollard relief by way of specific performance, or at all.
Given the nature of the property (an investment property) and the lack of any real personal connection between Ms Pollard and the property, this is probably a case where in fact damages would be an adequate remedy, although in the absence of a sworn valuation or a sale of the property, the precise amount of damages is unable to be assessed at the present time. However, it is clear from the authorities that, subject to any relevant discretionary matters, specific performance is usually available where the subject matter of the relevant contract is land, even where the land is used for commercial purposes.[3]
[3]Pianta v National Finance and Trustees Ltd (1994) 180 CLR 146, 151.
Turning to the discretionary factors, there are some well-established rules governing the circumstances where specific performance will not be ordered. In particular, the courts will not order specific performance where to do so would cause an injustice. At first glance, compelling Mr Pollard to sell Ms Pollard the property for a price approximately $600,000 less than the estimated value of the property, and indeed less than the estimated value of the property as at the time of entry into the Deed, would appear to effect an injustice.
However, such a conclusion is more difficult to reach once all of the circumstances are considered. Most important amongst these is the fact that the parties freely entered into the Deed, advised by their solicitors, and indeed, the parties executed certificates to that effect. As observed by counsel for Ms Pollard, equity does not intervene merely to relieve a party of the consequences of a bad bargain. To that I would add that, in the absence of any disability or disentitling conduct, equity does not intervene merely to protect a party from the consequences of their poor decision making. Mr Pollard had complete control over the property and the decision making process. It was he who decided to convert the premises to residential use in 2006, thus perhaps reducing the rent which could be obtained for the property. It was he who decided to send the notice prior to the tenant vacating the property in March 2018. It was he who decided to spend funds upon improvements, albeit there is no evidence of what funds were spent, and whether they enhanced the value of the property. Given the existence of the caveat on the property since 2009, he made the decision to sell the property in circumstances where he must have known Ms Pollard might wish to exercise the option. In any event, even if specific performance was refused, any considerations of unfairness would not disentitle Ms Pollard to damages at common law.
Further, there is no evidence of any hardship to Mr Pollard if specific performance were to be ordered. At the time of the parties’ entry into the Deed, the property was encumbered by a mortgage securing the sum of $58,000. Since that time, he has received rent from the property. The only real ‘hardship’ to Mr Pollard is that he will not benefit from the increased value of the property.
Further, there has been no disentitling conduct on the part of Ms Pollard. All she has done is to insist upon the performance of the terms of the Deed. She has pleaded that she is ready, willing and able to exercise the option and complete the purchase of the property. While this allegation was not admitted by Mr Pollard in his defence to counterclaim, it was not an issue in contention at trial. Finally, no concern arises as to whether making an order for specific performance would require the Court to undertake a supervisory role: Mr Pollard is simply required to execute some documents upon receipt of the purchase price.
One basis upon which the Court might decline to order specific performance is on the arguable lack of ‘mutuality’ of the obligations of the parties under the Deed.[4] The authorities[5] provide that the Court will decline to order specific performance against a party where the contract concerned does not impose obligations upon the other party which, if breached, would attract relief by way of specific performance. In the current case, the Deed imposed no obligation upon Ms Pollard to do anything in relation to the property: it conferred upon her an option to purchase the property. If she did nothing, the option lapsed.
[4]Hume v Monro (No 2) (1943) 67 CLR 461, 483.
[5]N.C. Seddon and M.P. Ellinghaus, Cheshire and Fifoot’s Law of Contract (LexisNexis Butterworths, 9th Australian ed, 2008) [24.11].
However, there is some commentary which expresses some doubt as to whether lack of mutuality is an immutable obstacle to the grant of specific performance.[6] Further, while Ms Pollard is not obliged to exercise the option, if she did exercise the option in accordance with the terms of the Deed, she would then be exposed to an order for specific performance if she failed to complete the purchase, as an obligation to complete the purchase would be implied into the Deed. In my view, this implied term gives rise to the necessary mutuality. In any event, the Deed contains numerous terms imposing obligations upon each party with respect to matters other than the property, many of which would be enforceable by an order for specific performance.
[6]Ibid.
Given that specific performance is an equitable remedy, it would be open to the Court to fashion a remedy which might be perceived to be ‘fairer’ to Mr Pollard in all of the circumstances. In particular, orders could be made requiring Ms Pollard to account for the funds spent by Mr Pollard on improvements to the property. However, the difficulty in fashioning such an order is that there is no evidence whatsoever as to what funds have been expended upon the property, and the contribution that any refurbishments have made to the increase in the value of the property.
One issue which does arise which requires further submissions from the parties prior to the making of final orders is the fact that clause 5.7 of the Deed is silent as to the question of whether Mr Pollard is required to offer the property to Ms Pollard free of encumbrance, or may be offered ‘as is’, that is, subject to a mortgage in favour of the National Australia Bank. There is no evidence as to the sum secured by this mortgage. One might ordinarily expect that the property should be sold free of any liabilities, but in order to avoid further disputation between the parties, I shall seek further brief submissions upon this issue prior to making final orders, as well as regarding the question of costs.
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