CONTRACTS – formation – intention to make binding agreement – whether agreement merely preliminary – deed provided regime for parties to value property and exchange and settle contracts for the sale of land – whether deed constituted a binding agreement – held that deed was immediately binding on the parties
EQUITABLE REMEDIES – specific performance – deed containing agreed procedure to facilitate transfer of an interest in property – parties failed to take steps to commence agreed procedure – plaintiff held to have failed to carry out essential obligations under agreement – plaintiff was not shown to be at all relevant times ready, willing and able to perform his obligations – orders for specific performance refused
John Hamilton Watson (Plaintiff) Alan William Watson (Defendant)
Representation:
Counsel: Mr D M Flaherty (Plaintiff) Mr A M B Cornish (Defendant)
Solicitors: Grahams Solicitors (Plaintiff) David Hunter Law (Defendant)
File Number(s):
2020/319316
Publication restriction:
None
Judgment – ex tempore
By a Summons filed on 9 November 2020, the plaintiff, John Watson, seeks orders in the nature of specific performance of an agreement with respect to the sale of a one-half interest in a dairy farm property in Edenville. The agreement is contained in a Deed of Family Arrangement dated 3 May 2016, entered into by the plaintiff and various family members, including the defendant, Alan Watson.
The plaintiff and the defendant are brothers. They hold the various parcels of land that comprise the dairy farm as tenants-in-common in equal shares. The property was a gift to the brothers pursuant to the will of their late father, who died on 25 February 2015. The agreement with respect to the sale is contained within cl 6 of the Deed of Family Arrangement, which provides:
6. Alan has agreed to sell to John Alan’s one half interest in the dairy farm, being all of [sic] property contained at 25 Edenville Road, Edenville being land in Lot 40 in Deposited Plan 6034, Lot 43 in Deposited Plan 6034, Lot 48 of Section A in Deposited Plan 6043 and Lot 1 in Deposited Plan 256970, formerly known as Vol. 2981 Fol. 151, Vol. 12054 Fol. 152, Vol. 3040 Fol. 160 and Vol. 15072 Fol. 113, pursuant to the terms of the will of the deceased as follows:
(a) For such sum as one half of the market valuation determined as agreed by Alan and John and if no agreement can be reached then as determined by a registered valuer appointed jointly by…
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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Details
AGLC
Watson v Watson [2021] NSWSC 229
Case
[2021] NSWSC 229
Decision Date
CaseChat Overview and Summary
The case of Watson v Watson involved a dispute between two parties, both surnamed Watson, concerning the enforceability of a deed that outlined a regime for the valuation of property and the exchange and settlement of contracts for the sale of land. The matter was heard in the Supreme Court of New South Wales. The central issue before the court was whether the deed constituted a binding agreement or if it was merely a preliminary step towards making a binding agreement. The plaintiff argued that the deed was immediately binding, while the defendant contended that the deed was not binding until certain conditions were met.
The court examined the language of the deed and the surrounding circumstances to determine the parties' intention. The deed contained a clear agreement on the procedure to be followed to facilitate the transfer of an interest in the property. However, the parties failed to take the steps necessary to commence the agreed procedure. The court held that the plaintiff had not demonstrated that they were ready, willing, and able to perform their obligations under the deed at all relevant times. Consequently, the plaintiff was held to have failed to carry out essential obligations under the agreement. The court found that the plaintiff was not entitled to specific performance as they had not shown themselves to be ready, willing, and able to perform their obligations under the deed.
The court ultimately concluded that the deed was not immediately binding on the parties but rather required the completion of certain procedural steps before becoming binding. As the plaintiff had not taken the necessary steps to commence the agreed procedure, the court refused the orders for specific performance. The defendant's argument that the deed was not binding until certain conditions were met was upheld by the court.