Sharjade Pty Ltd v The Commonwealth of Australia; RAAF (Landings) Ex-Servicemen Charitable Fund Pty Ltd (formerly Darwinia Estate Pty Ltd) v Sharjade Pty Ltd [2009] NSWCA 373
HEARING DATE(S):
19, 20 August 2009
JUDGMENT DATE:
26 November 2009
JUDGMENT OF:
Hodgson JA at 1; Young JA at 136; Sackville AJA at 157
DECISION:
In Darwinia’s application for leave to appeal: (1) Leave to appeal granted. (2) Notice of Appeal to be filed within fourteen days. (3) Appeal allowed. (4) Orders of primary judge in relation to Sharjade’s claim against Darwinia set aside. (5) In lieu thereof, Sharjade’s claim against Darwinia dismissed with costs. (6) Sharjade to pay Darwinia’s costs of the application and appeal, and to have a certificate under the Suitors’ Fund Act 1951 if otherwise eligible. In Sharjade’s appeal: (1) Appeal dismissed with costs.
CATCHWORDS:
CONTRACTS – Option agreement between Commonwealth and ex-service organisation for latter to purchase Commonwealth land – Exercise of option – Whether concluded contract for sale then existed – Requirements of such contract as to payment of money – Notice by Commonwealth purporting to make time of the essence for making payments – Payments not made – Commonwealth gives notice of termination – Whether termination effective. - CONTRACTS – Agreement between ex-service organisation and developer concerning development of land – Promise by former to actively promote and assist developer to effect pre-sales of units in development – Promise by developer to arrange finance for the development – Breach by ex-service organisation of its obligation concerning pre-sales – Breach by developer of its obligation concerning finance – Ex-service organisation gives notice of termination – Whether termination effective – Whether developer’s breach such as to justify termination – Whether terminating party precluded by its own breach from effectively terminating agreement. - TORTS – Inducing breach of contract – Elements of tort – Whether Commonwealth, by purportedly terminating option agreement, induced breach by ex-service organisation of its contract with developer.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Sharjade Pty Ltd v Commonwealth [2009] NSWCA 373
Case
[2009] NSWCA 373
Decision Date
CaseChat Overview and Summary
Sharjade Pty Ltd (Sharjade) and Darwinia Pty Ltd (Darwinia) were parties to proceedings in the Supreme Court of New South Wales concerning an option agreement for the purchase of Commonwealth land and a subsequent development agreement. Sharjade, as the developer, sought to enforce its rights against Darwinia, an ex-service organisation, and the Commonwealth. The primary judge made orders in favour of Sharjade against Darwinia, but dismissed Sharjade's claim against the Commonwealth. Sharjade appealed these decisions.
The Court of Appeal was required to determine whether a concluded contract for sale existed between the Commonwealth and Darwinia upon the exercise of an option, particularly in light of payment obligations. It also had to consider whether Darwinia's termination of its agreement with Sharjade was effective, given alleged breaches by both parties, and whether the Commonwealth had induced a breach of contract by Darwinia.
The Court of Appeal found that the option agreement between the Commonwealth and Darwinia did not constitute a concluded contract for sale upon exercise, as essential terms regarding payment had not been satisfied. Consequently, Darwinia's purported termination of its agreement with Sharjade was also ineffective. The court further held that the Commonwealth had not induced a breach of contract by Darwinia. Accordingly, the appeal by Sharjade against Darwinia was dismissed, and the orders of the primary judge in relation to Sharjade's claim against Darwinia were set aside and replaced with a dismissal of that claim. Sharjade was ordered to pay Darwinia's costs.
Orders
Orders of the court
In Darwinia’s application for leave to appeal:
(1) Leave to appeal granted.
(2) Notice of Appeal to be filed within fourteen days.
(3) Appeal allowed.
(4) Orders of primary judge in relation to Sharjade’s claim against Darwinia set aside.
(5) In lieu thereof, Sharjade’s claim against Darwinia dismissed with costs.
(6) Sharjade to pay Darwinia’s costs of the application and appeal, and to have a certificate under the Suitors’ Fund Act 1951 if otherwise eligible.