Sharjade Pty Ltd v Commonwealth

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.