Retek P/L v First Edition Properties P/L
[2003] QSC 7
•23 January 2003
SUPREME COURT OF QUEENSLAND
CITATION:
Retek P/L v First Edition Properties P/L [2003] QSC 007
PARTIES:
RETEK PTY LTD (ACN 093 673 771)
(applicant)
v
FIRST EDITION PROPERTIES PTY LTD (ACN 101 169 439)
(defendant)FILE NO:
S10371 of 2002
DIVISION:
Trial Division
PROCEEDING:
Trial
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
23 January 2003
DELIVERED AT:
Brisbane
HEARING DATE:
9, 10 and 13 January
JUDGE:
Muir J
ORDER:
Judgment for the defendant against the plaintiff on the claim together with the costs (including reserved costs) of and incidental to the proceedings to be assessed on the standard basis.
CATCHWORDS:
CONTRACT – OFFER AND ACCEPTANCE – ESTOPPEL – contract for sale of land – construction of special condition.
Associated Developers (Aust) Pty Ltd v Allied and General Pty [1995] ANZ ConvR 41
Gange v Sullivan [1966] 116 CLR 418
Khaled v Athanas Bros (Aden) Ltd (1967) 1 BPR 9310 (P.C.)COUNSEL:
Mr Carrigan for the applicant
Mr Morris QC with Mr Maher for the respondentSOLICITORS:
Biggs & Biggs as town agents for Short Punch & Greatorix for the applicant
Parker Simmons for the respondent
The Claim and Counter Claim
The plaintiff, Retek Pty Ltd seeks a declaration that an offer in writing made on 24 October 2002 by the defendant, First Edition Properties Pty Ltd has not been accepted and, alternatively, a declaration that the parties have not entered into a valid contract in writing dated 24 October 2002. It also seeks an order removing a caveat lodged by the defendant in respect of the land the subject of the offer.
The defendant, by counterclaim, seeks –
(a) A declaration that a binding agreement in writing between the parties was entered into on 24 October 2002;
(b) Alternatively, a declaration that the plaintiff is estopped from denying that such an agreement exists;
(c) Specific performance of the alleged agreement.
Non Contentious Facts
The plaintiff, whose directors are Kuo-Cheng Chung and Se-Chin Chen, is the registered proprietor of a parcel of land at Burleigh Heads (“the Land”). Neither of the directors speaks nor understands English and Mr Chung’s son, Chin-Feng Chung, known as Jeff Chung, acts as company representative and spokesman for the directors. For convenience, I will refer to him as Mr Chung and his father as Mr Chung senior.
The plaintiff entered into a conditional contract to sell the Land for $3.6 million, plus GST on or about 26 August 2002. The plaintiff’s directors concluded that that contract was unlikely to proceed to completion, and on 3 October 2002, Mr Chung, by prior arrangement, met with Mr Everingham, Mr Browne and Mr Foreman with a view to negotiating another sale of the Land.
Mr Everingham was an employee of Raine & Horne, Burleigh Waters. Mr Browne, another real estate agent, was an employee of Ray White, Ballina. He and Mr Foreman, an accountant turned property developer, were directors of the defendant. Negotiations then ensued.
On 11 October 2002, the existing contract was terminated. On 12 October 2002, Mr Everingham and Mr Jeff Chung, by prior arrangement, met at a service station at Merrimac. During the meeting, Mr Everingham gave Mr Chung a form of contract in respect of the Land providing for its purchase by the defendant for a price of $3.8 million.
Special condition 4 of the proposed contract provided for the payment of a deposit of $95,000 by an instalment of $20,000 on the signing of the contract with the balance to be paid within 21 days from the date of the contract. Special conditions 1, 2 and 3 made provision for enquiries by the purchaser “in relation to all aspects of the land and improvements” within 21 days “from the date of this Contract”. Special condition 2 obliged the plaintiff, if requested by the defendant in writing, to provide documents and information within its possession or control relevant to such inquiries. Special condition 3 provided –
“If the Purchaser is not satisfied with the results of their inquiries the Purchaser, may by notice in writing to the Vendor, within 21 days of the date hereof terminate this Contract. [when] … all monies paid by the Purchaser under this Contract shall be refunded in full and this Contract will then be at the end …”.
The space provided in the Items Schedule for the insertion of the date of the contract was left blank. The vendor’s agent was stated to be “Raine & Horne Burleigh Waters & Ray White Ballina c/o Raine & Horne Burleigh Waters …”.
12 October 2002 was a Saturday. On the morning of Monday, 14 October 2002, Mr Chung met with Mr Backhaus, a solicitor with the firm Short Punch & Greatorix. The two men went through the contract document and altered it by inserting in paragraph N of the items schedule after “Purchase price: $3.8 million” “+ GST” and striking out parts of clause 34 which deals with the parties’ obligations in respect of Goods and Services Tax. The alterations were designed to oblige the defendant to pay the plaintiff, in addition to the purchase price, “an amount equivalent to the amount payable by the (plaintiff) as GST on the Supply of the Property”.
After his meeting with Mr Backhaus, Mr Chung inserted “14 October 2002” in that part of the items schedule providing for the statement of the contract date. The plaintiff’s directors then signed the amended document on behalf of the plaintiff and initialled it in various places.
Later on the 14th Mr Chung and Mr Everingham met again at the service station by prior arrangement and Mr Chung handed over the amended document. Also on that day Mr Chung was provided with a trust account receipt acknowledging receipt by Raine & Horne from the defendant of the first instalment of the deposit. Later in the day, Mr Everingham requested a key to the gate on the Land so that persons could have access to it for “due diligence purposes”. Mr Chung complied with the request.
Mr Everingham advised Mr Browne by telephone on 14 October that Mr Chung wanted an alteration to the GST clause in the contract document. Mr Browne told him that Mr Foreman was going to New Zealand and would not be available to initial any alterations to the document until 24 October when he would be back on the Gold Coast.
Mr Everingham and Mr Browne met on 15 October at Mr Everingham’s office and discussed access to the Land by the defendant and its representatives. There was also a conversation in which Mr Everingham requested geological and planning reports which he said were wanted by the defendant. Mr Chung told him to speak to the plaintiff’s engineer, Mr Dover, and said he would authorise Mr Dover to provide the reports. Mr Chung then did so. In the course of the next few days Mr Everingham made other requests of Mr Chung in relation to the land which were fulfilled.
On 25 October 2002, Mr Chung collected a signed copy of the contract from Mr Everingham.
There were no communications after 15 October and before 24 October between Mr Chung and Mr Everingham or between any representative of the plaintiff and any representative of the defendant in which reference was made to the signing of the contract or the whereabouts of the subject documents.
On 24 October Messrs Everingham, Foreman and Browne attended a meeting in the offices of the defendant’s solicitors, Parker Simmonds. The directors of the defendant “went though the contract” with their solicitor Mr Parker and initialled the changes to it made by Mr Chung on 14 October. Mr Parker altered the date of the contract to 24 October and that change was initialled also.
There are competing versions of what passed between Mr Everingham and Mr Chung after this meeting. I will return to consider them after concluding this narrative of non-contentious facts.
Mr Everingham and Mr Chung are both agreed that there was a telephone conversation between them on 24 October although they differ as to its content. But it is common ground that in the course of the conversation Mr Everingham informed Mr Chung that the contract date had been changed from 14 October to 24 October. There was a further conversation on 25 October when Mr Everingham telephoned Mr Chung concerning the contract documents. Again, there is no agreement as to the content of the conversation. Mr Chung collected a signed copy of the contract document from Mr Everingham’s offices at about midday that day.
On 25 October Mr Chung and his father engaged in negotiations with representatives of Matchgate Pty Ltd for the sale of the Land. That day, Mr Chung senior signed an unconditional contract for the sale of the Land to Matchgate for a price of $3.7 million plus GST and left a signed copy of the contract with L J Hooker Burleigh Heads by way of an offer to Matchgate.
After initially denying that his mobile telephone was switched off on Saturday, 26 October and Sunday, 27 October, Mr Chung later accepted that it was. Mr Everingham made a number of unsuccessful attempts to contact him that weekend.
On 28 October 2002 at about 12.30pm Mr Chung was advised that Matchgate had accepted the offer.
In a facsimile to Parker Simmonds of 28 October 2002, Mr Backhaus referred to the delivery of duplicate contracts to “our client on Friday the 25th October 2002” and advised “the counter offer of purchase is rejected by our client”. In a facsimile of 29 October 2002 addressed to Raine & Horne Burleigh Waters and Ray White Ballina the agents were requested to refund the deposit.
Parker Simmonds, in a facsimile to Short, Punch & Greatorix of 29 October 2002 advised, inter alia –
“Initially our client made an offer to your client to purchase the property. We are instructed the offer was put to your client on or about 12 October 2002. Your client made amendment to the contract in reference to GST. This counter-offer, inadvertently contained the date 14 October 2002.
Our client accepted your client’s counter-offer on 24 October 2002 by signing and accepting the GST amendment. Our client has not made a counter-offer to your client. Our client has accepted your client’s counter-offer and there is now a binding contract.”
In a facsimile of 1 November 2002 to Parker Simmonds, Short, Punch & Greatorix asserted that the plaintiff’s counter offer on 14 October 2002 included the condition that the defendant had to sign the counter offer by 14 October 2002 in order to accept. It noted “our client has previously informed you that it rejects the counter-offer …”.
Parker Simmonds responded in a fax of the same day stating, inter alia –
“Our client accepted your client’s offer of the purchase price of $3,800,000.00 + GST, initialled item N, and dated the contract 24 October 2002. It is irrelevant that the original date of 14 October 2002 remained on the face of the contract when forwarded by your client. The action of our client is in accordance with standard conveyancing practice in Queensland. It cannot amount to a counter offer because your client’s offer was accepted in its terms. The contract is formed and binding.”
The allegations in the Statement of Claim
(a) On 12 October, Mr Everingham on behalf of the defendant made an offer to Mr Chung on behalf of the plaintiff by giving him a form of contract for the sale and purchase of the Land;
(b) The plaintiff, by Mr Chung, made a counter-offer on 14 October 2002 by Mr Chung’s giving Mr Everingham an amended copy of the contract document. The offer contained the oral term that it remain open for acceptance only on 14 October 2002;
(c) The offer was not accepted on 14 October 2002 and lapsed;
(d) On 25 October 2002, the defendant, by Mr Everingham, made a further offer by giving a signed copy of a form of contract to Mr Chung;
(e) The offer of 25 October was rejected by Mr Chung in a telephone conversation with Mr Everingham on 25 October 2002.
The Allegation in the defence and counterclaim
(a) There was no oral term of the plaintiff’s offer that it must be accepted on 14 October 2002;
(b) It was an implied term of the offer that it was capable of acceptance for a reasonable time up to and including 24 October 2002;
(c) The defendant accepted the plaintiff’s offer by initialling the changes to the contract on 24 October and such acceptance was communicated to the plaintiff’s agent and the plaintiff on that date;
(d) The alteration of the date of the contract in the contract document was made with the implicit consent of Mr Everingham, the plaintiff’s agent who was present when the alteration was made;
(e) Mr Chung told Mr Everingham on 25 October 2002 that the plaintiff “had accepted the contract”;
(f) Mr Everingham communicated the plaintiff’s “acceptance of the contract” to the defendant on 25 October 2002;
(g) In the premises, -
“The defendant accepted the [plaintiff’s] offer of 14 October 2002 on 25 October 2002 by initialling the changes made by the [plaintiff] and inserting the date of initialling.”
(h) On 29 October 2002, Mr Chung told Mr Browne in a telephone conversation that the plaintiff would proceed with the contract and “the defendant continued with due diligence and meetings concerning the leasing of the properties to be developed on the Land”.
The defendant also pleads an estoppel case. The matters relied on to ground the alleged estoppel are –
(a) The doing of work and incurring of expenses by the defendant in relation to the Land to the knowledge of the plaintiff between 15 October 2002 and 25 October 2002 inclusive;
(b) The defendants having been informed on 25 October by Mr Everingham, as agent for the plaintiff, that the plaintiff “had accepted the contract”, the plaintiff by its conduct represented that a “binding contract subsisted between the [plaintiff] and the defendant”.
(c) In the premises the plaintiff is estopped from denying that a binding contract exists.
Did Mr Chung impose an oral condition that the contract be signed and returned to the defendant’s solicitors on 14 October?
Mr Chung swears that at the service station on 14 October he stipulated that the purchaser had to “sign the contract and have it starting from 14 October 2002 … and be returned to the purchaser’s solicitors” that day. He said that Mr Everingham told him that it would be done. In an affidavit sworn before the trial Mr Everingham did not directly address the events of this meeting. He stated that he found out from Mr Browne that Mr Foreman would be absent in New Zealand until 23 October and would need to initial the changes to the contract upon his return. He further stated that after his conversation with Mr Browne he telephoned Mr Chung and told him that Mr Foreman would be away but that the changes to the contract would be made on 24 October. He also said that Mr Chung accepted this position. In cross-examination Mr Everingham denied the substance of Mr Chung’s evidence about what was said in the course of the 14 October meeting.
Mr Browne gave evidence that on 14 October he received a call from Mr Everingham who told him that Mr Chung had agreed that owing to Mr Foreman’s absence in New Zealand it would be in order if the contract was initialled on 24 October.
Mr Browne, in his oral evidence, said that he was in Mr Everingham’s office on 15 October when Mr Everingham called Mr Chung. He said that at the end of that conversation he spoke to Mr Chung about Mr Foreman’s inability to sign the contract until his return from New Zealand. According to him, Mr Chung said “fine”. Mr Everingham has no recollection of this conversation and Mr Chung denies it.
I do not accept that Mr Chung imposed or attempted to impose any condition as to the date the contract was to bear or the date by which it was to be executed and given to any person. I find it inherently improbable that Mr Chung wanted the signed documents returned to the defendant’s solicitors. If he was concerned to ensure that the contract was properly signed and dated and that the signing took place on 14 October he would have wanted the plaintiff or the plaintiff’s solicitors to be provided with a copy of the contract on that or the following day. He would also have been concerned to obtain a copy of the contract prior to 24 October.
Mr Chung had been to see his solicitor on 14 October and although they went through the proposed contract, the conditions which Mr Chung claims the defendant was anxious to impose were not recorded and the contract was left undated.
There were other aspects of Mr Chung’s evidence which lead me to conclude that his evidence generally should be treated with considerable caution. For example, when under pressure in cross examination he asserted his understanding that his diary entry of a conversation on 29 October was not discoverable as recording a “without prejudice” conversation, was derived from a television programme or programmes. I found that explanation improbable.
I think it likely that something was said by Mr Everingham to Mr Chung to the effect that Mr Foreman would be away until 23 October and unavailable to sign alterations to the contract until after this date. I have a degree of scepticism about the evidence of Mr Browne that he alone was not able to initial the contract documents with the prior authority of Mr Foreman or, for that matter, by virtue of the authority conferred by flying minute because of an arrangement between himself and Mr Foreman that all of the defendant’s documents would be signed by both men together. I have concluded however that Messrs. Browne and Foreman did not take earlier steps to initial amendments to the contract because they thought that the plaintiff was unconcerned about the matter and because they had indicated their acceptance of the alteration to the contract which the defendant had requested.
I was invited to reject Mr Everingham’s evidence on the basis that he was, by his own admissions, dishonest. He admitted in his evidence that he had attempted to persuade Mr Chung to assist him in having part of the commission to his employer in respect of the transaction paid to himself. It was said against him also that he was also acting as a real estate salesman without the necessary licence. I accept that his evidence must be treated with caution but examination of his evidence suggests that he was not a partisan witness. I gained the impression that although his recollection was faulty at times he attempted to give his evidence truthfully.
Accordingly, I conclude that the offer constituted by the provision by Mr Chung of the contract documents to Mr Everingham on 14 October and the provision of those documents by Mr Everingham to the defendant remained open for acceptance on 24 October.
Events on and after 24 October
Mr Chung’s evidence is that he was telephoned by Mr Everingham on 24 October at about 3.30 pm and informed that the defendant had altered the date of the contract to 24 October. According to Mr Chung he said:
“The director of Retek Pty Ltd was not happy to change the date and will not accept the change of date as effected. This has affected our good faith towards the purchasers as the original due date for the due diligence was to be 14 days as suggested by the company, than 21 days in the contract produced by the purchasers… . I will have to go and talk to my boss.”
In his affidavit Mr Everingham does not deal directly with this conversation but swears that on 28 October Mr Chung telephoned him and told him that “the sellers had decided not to sell the land” whereupon he said to Mr Chung that he had relayed acceptance of the contract on Friday, 24 October. Also in his affidavit he swears that he telephoned Mr Chung on 25 October
“… to see if everything was in order with the contracts of sale. He stated that the Sellers had agreed and I stated in the telephone conversation that I would ring him later in the afternoon to pick up the contracts of sale…”
In cross-examination Mr Everingham accepted that he had telephoned Mr Chung on 24 October and informed him of the change of date on the contract. He accepted also that when he informed Mr Chung of the change of date, Mr Chung said that he would have to go and talk to his boss. Furthermore, it may be inferred from Mr Everingham’s oral evidence that Mr Chung, on behalf of the plaintiff, did not accept on the 24th the change to the contract.
He further agreed that Mr Chung called at the offices of Raine & Horne at Mermaid Waters on 25 October at which time he said words to the effect that he was not sure whether the directors of the plaintiff would approve the counter-offer.
This evidence, given in cross-examination, conflicts with that in paragraph 8 of Mr Everingham’s affidavit in which he swore:
“On the 25th of October I called Mr Chung to see if everything was in order with the Contracts of Sale. He stated that the Sellers had agreed and I stated in the telephone conversation that I would ring him later in the afternoon to pick up the Contracts of Sale at our usual meeting place … . I stated that it would probably not be until after 6.00 pm and he said that would be okay. I telephoned Mr David Browne, Mr Mark Parker and Ms Carrie Roe-Johnston, the Principal of Raine and Horne, Burleigh Waters to inform them of the above.”
Mr Browne in his affidavit swore that on 25 October he was telephoned by Mr Everingham “with acceptance from Mr Chung”.
Mr Browne, in oral evidence, swore to being informed by Mr Everingham on 28 October that the plaintiff was not proceeding with the sale. In his affidavit he said that he telephoned Mr Chung on 29 October and had a lengthy conversation with him about why the plaintiff did not wish to proceed. He reported Mr Chung as having complained about Mr Everingham’s not telling the truth, not dropping “the contracts back on the 14th as promised” and about an argument concerning the “structure of the agreed commission”. He stated that Mr Chung said that Mr Chen wanted more money and that he offered to meet him in Ballina that afternoon to “discuss the matter face to face”. He further said that Mr Chung offered “compensation for our expenses to date”.
He swore that later on the 29th Mr Chung telephoned him back
“and said he had spoken to Mr Chen and his father and they were going to proceed with the contract … . He said they realised we had initialled now in good faith and they would honour their word and go through with the contract.”
Mr Browne’s version of events receives corroboration from Mr Foreman and Mr Everingham. Each of the latter swears that he was telephoned by Mr Browne on the afternoon of 29 October and informed that, in a telephone conversation, Mr Chung had said that the defendant had agreed to honour the contract. There was no objection to this evidence and it was not put to either Mr Everingham or Mr Foreman that no such conversation took place. Nor was there any explanation of why Mr Browne would be likely to convey such information if he did not believe it to be correct.
The letters from the defendant’s solicitors to the plaintiff’s solicitors of 29 October, 31 October and 1 November however make no mention of any acceptance of an offer on 29 October. The explanation for this is likely to be the focus of the defendant’s solicitors on the view that the defendant had not made a counter offer on 24 October but had accepted the plaintiff’s offer. It seems also that Mr Parker was receiving instructions from Mr Foreman in New Zealand. That may have resulted in a lack of focus on a conversation between Mr Browne and Mr Chung.
What casts the greatest doubt over the defendant’s version of the conversations on 29 October, however, is the fact that at the time Mr Chung is alleged to have said that the defendant was going to proceed with the contract the defendant, to the knowledge of Mr Chung, had entered into the contract with Matchgate Pty Ltd.
Despite the existence of the Matchgate contract I accept Mr Browne’s evidence of his conversations with Mr Chung on 29 October. Mr Chung accepts much of Mr Browne’s version of the first conversation on that day. He accepts that he raised the possibility of a payment of compensation by the plaintiff in respect of due diligence expenses although he insists that any such payment was to be conditional on the plaintiff being found to be at fault. I do not accept that he mentioned this qualification in the discussion.
It may be deduced that at the time of the first conversation Mr Chung was worried about the plaintiff’s contractual position and anxious to avoid litigation. The uncontested evidence is that he made the call which resulted in the second conversation. His account of what was said is implausible and I do not accept it. That does not establish that Mr Browne’s version of the conversation is accurate. But, as I have said, Mr Browne’s version receives a degree of corroboration. Moreover there is reason to suppose that neither Mr Browne nor Mr Foreman initially attached much, if any, legal significance to the events of 29 October. Their focus was on 14 and 24 October. There was thus little incentive for them to fabricate a story abut the 29 October discussion.
I consider that on 29 October the plaintiff’s directors thought that it was in their best interests to proceed with the sale to the defendant. They may have considered that they could terminate the Matchgate contract. It is possible also that the plaintiff had an arrangement with Matchgate which enabled it to avoid liability should the plaintiff be obliged to proceed with the contract with the defendant.
Was a Binding Contract made on 24 October?
The defendant’s primary contention is that the defendant accepted the plaintiff’s offer made by Mr Chung by providing the defendant, through Mr Everingham, with the altered forms of contract on 14 October. It is conceded that in the normal course of events a change to the contract date would be a material alteration giving rise to a counter offer. It is argued however that there was no counter offer here because -
(a) the parties had agreed that the contract would be signed on 24 October;
(b) no additional obligations were imposed on the plaintiff because the date for completion on the contract remained unaltered;
(c) the date affected only the date for due diligence which was inserted solely for the benefit of the defendant; and
(d) there was no alteration of the plaintiff’s interests because the special condition was waived within the time originally contemplated by the provision.
I accept that between 14 and 24 October the parties proceeded on the basis that any further signing required of the defendant would take place after 14 October. That understanding however did not give the defendant any authority to alter the plaintiff’s offer by changing the contract date. The due diligence period ran “from the date of this Contract” and any alteration to the contract date would thus extend the period within which the contract could remain conditional.
It is probably correct to regard the special conditions as for the benefit of the purchaser.[1] But it does not follow that the clauses thus assume an irrelevant status in so far as the vendor is concerned. It may well be that only the defendant had the right to act in reliance on the clauses which are similar in their effect to that considered in Koikas v Greenpark Construction Pty Ltd.[2] As I have pointed out however, an alteration in the contract date impinges on the rights of both parties as it defines the time during which the contract remains subject to the special condition. A change in the date therefore cannot be regarded as immaterial.
Gange v Sullivan [1966] 116 CLR 418 and Associated Developers (Aust) Pty Ltd v Allied and General Pty [1995] ANZ ConvR 41
[2][1970] VR 142.
The fact that the defendant’s solicitors sent a fax to the plaintiff’s solicitors on 4 November asserting that the contract was no longer subject to the special conditions can have no relevance to the question of whether a contract was formed in the first place.
Another argument advanced on behalf of the defendant is that the alteration of the date had no material consequences because of Clause 1.2 and Note 1 to the contract.
Clause 1.2 provides -
“Unless the contrary is shown, the contract shall be deemed to have been formed on the date of this Contract and the date of this Contract shall be deemed to be the date stated in item A.”
“Note 1” appears against the contract date at the top of the items schedule. The note states -
“Insert in item A, the date of signing by the last party to sign”.
It is said that the document proffered to the defendant by the plaintiff required the plaintiff to insert the contract date and it did so. There was thus no alteration to the offer as the 14th had to be changed to 24th October in order to comply with Note 1. Furthermore, it is contended that the contract was formed on the 24th not on 14th October.
The date of formation of the contract however does not affect the operation of the special conditions. As earlier had been observed, they operate from “the date of this Contract”.
I do not accept that the defendant can rely on Note 1 to establish that the altered contract did not result in a departure from the offer but only set out what was required by the terms of the offer. The note is capable of application only in circumstances in which the “contract date” has not been inserted. It would be a surprising result in my view if a footnote providing for the insertion of a date of signing were to be construed so as to authorise the alteration of a deliberately completed part of the contract document.
Accordingly, I conclude that the result of the alteration of the contract date by the defendant was that it made a counter offer to the plaintiff on 24 October.
The estoppel argument
If I am correct in my conclusion that the defendant made a counter offer to the plaintiff on 24 October any acts or omissions of Mr Chung prior to that time do not assist the defendant’s estoppel argument. Both parties were proceeding on the assumption that the plaintiff’s offer of 14 October would be accepted by the defendant. The offer was not accepted by voluntary act of the defendant and it can hardly be said that there is any unconscionability on the plaintiff’s part arising out of events prior to 24 October. The Plaintiff was not obliged to have a new contract date unilaterally thrust upon it.
I am not persuaded, on the balance of probabilities, that Mr Everingham did communicate to Mr Browne on 25 October the plaintiff’s acceptance of the counter offer. It may be that Mr Everingham said something to Mr Browne which lead him to conclude that there was unlikely to be a problem and that he failed to express to Mr Browne the reservations communicated to him by Mr Chung. Accordingly, if the defendant has an estoppel case it must rest on a representation after 25 October. The only possibility is Mr Chung’s acceptance of the existence of a Contract on 29 October but I am not satisfied that the defendant acted to its detriment in reliance on what was said by Mr Chung on that occasion.
Was the plaintiff in breach of s.52 of the Trade Practices Act 1974?
For the reasons given above there was no misleading or deceptive conduct on the part of the defendant prior to 29 October. If there was misleading or deceptive conduct on or immediately following 29 October the defendant did not suffer any detriment as a result of it.
Did a binding Contract come into existence on 29 October?
Mr Chung had authority to communicate acceptance by the plaintiff of any offer or counter offer made by the defendant. The defendant’s counter offer made on the 24th of October was not accepted immediately by the plaintiff and it was rejected in writing by the plaintiff’s solicitors on 28 October. The counter offer was thus terminated and not open for acceptance unless revived.[3] By the time Mr Chung informed Mr Browne on 29 October that the plaintiff would be proceeding with the Contract Mr Browne had made it plain to Mr Chung that the defendant wanted to proceed with the contract in the form of the document initialled on behalf of the defendant on 24 October. The counter offer was thus revived and the contract was formed upon Mr Chung’s communication of acceptance.
[3] Khaled v Athanas Bros (Aden) Ltd (1967) 1 BPR 9310 (PC)
The defendant did not allege in its pleadings that a contract was formed in this manner. It did however allege, as part of its estoppel case, that the subject conversation between Mr Chung and Mr Browne had taken place. As it pleaded the relevant material facts it is entitled to rely on those facts to support an unpleaded legal conclusion. Counsel for the plaintiff, quite properly, took no objection to this course being followed.
Conclusion
There will be judgment for the defendant against the plaintiff on the claim and counter-claim together with the costs (including reserved costs) of and incidental to the proceedings to be assessed on the standard basis.
The contract remains on foot and the defendant is entitled to a decree of specific performance. Counsel are invited to agree on appropriate minutes of order.
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