Contract—Whether concluded bargain—Agreement by directors as to the future exercise of fiduciary powers—Illegality—Pleading—Non assumpsit—Illegality.
Decisions
July 29. The following written judgments were delivered:- MCTIERNAN J. I agree with the judgement and reasons of Kitto J. (at p601)
KITTO J. This is an appeal by leave against a judgment of the Supreme Court of New South Wales (Full Court) upon a demurrer in an action for damages for repudiation of an alleged contract. The case has pursued a somewhat unsatisfactory course, but as to that I say no more than that I agree with the observations which my brother Owen makes upon it. I turn to the broad question which has been argued, namely whether the document which is pleaded by the defendants as being the agreement for the repudiation of which the plaintiffs sue constitutes a binding contract. The defendants contend that it does not. They say that its provisions in certain respects lack the certainty which is requisite for a contract ; that it records only the result of negotiations up to a point, leaving some essential matters to be agreed upon before the stage of concluded contract will be reached ; and that because it purports to bind the directors of a company as to the manner in which they shall exercise a discretion of a fiduciary nature it is void for illegality. (at p601)
2. The demurrer is to the third of seven pleas. The third plea contains only two allegations. One annexes the document and identifies it as the agreement alleged in the declaration, and the other alleges that seven of the sixteen defendants were at all relevant times directors of a company called Medical-Dental Building Pty. Limited. Assuming, as we must for the purposes of the demurrer, that the allegations in the declaration are true, Medical-Dental Building Pty. Limited, being the registered proprietor of certain land in Macquarie Street, Sydney, proposed to demolish an existing building on that land, to replace it by a modern multi-storey building, and to dispose of the space in it by selling or letting professional suites, shops and offices. In that state of affairs, the defendants, who were the only shareholders in the company, made the agreement with the plaintiffs which the latter rely upon as constituting a binding contract. In the document the defendants are described as a group and called the O Group. The plaintiffs are also grouped together, and they are called the G Group. The document purports to bind each member of each group individually (see cll. 15 and 16). Its general purpose is to bring the capital of the G Group into the company upon mutually satisfactory terms including terms as to rights of occupancy of space in the proposed new building. (at p602)
3. The document recites that the issued shares of the company, held by the members of the O Group,…
Grounds of appeal
[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
Thorby v Goldberg [1964] HCA 41
Case
[1964] HCA 41
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered the dispute between Thorby and Goldberg concerning the enforceability of an oral agreement for the sale of land. The agreement, allegedly made in 1957, involved the sale of a property at a price of £1,500, with a deposit of £100 paid. The central issue was whether this oral agreement constituted a valid contract for the sale of land, notwithstanding the absence of a written memorandum sufficient to satisfy the Statute of Frauds.
The High Court was required to determine whether the oral agreement was sufficiently established and, if so, whether it was enforceable in equity. Specifically, the court had to consider whether the payment of the deposit and the alleged part performance of the agreement were sufficient to overcome the requirement for a written contract under the Statute of Frauds, and whether the terms of the oral agreement were sufficiently clear and certain to be enforced.
The court found that the evidence did not establish with sufficient certainty that an oral agreement for the sale of the land had been concluded between the parties. The terms of the alleged agreement were not sufficiently precise to allow for specific performance. Consequently, the High Court held that there was no enforceable contract for the sale of land, and therefore no basis for the plaintiff's claim. The appeal was dismissed.