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Gailey Projects Pty Ltd v McCartney

 

[2017] QSC 185

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Gailey Projects Pty Ltd v McCartney & Anor [2017] QSC 185

PARTIES:

GAILEY PROJECTS PTY LTD ACN 135 242 198

(plaintiff)

v

DEREK WILLIAM McCARTNEY, ALSO KNOWN AS DEREK WILLIAMS

(first defendant)
and
ARDEN MANAGEMENT GROUP PTY LTD
ACN 130 077 404 IN ITS OWN RIGHT AND AS TRUSTEE FOR THE AMG TRUST

(second defendant)

FILE NO/S:

No 5367 of 2014

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

5 September 2017

DELIVERED AT:

Brisbane

HEARING DATE:

3 August 2017

JUDGE:

Flanagan J

ORDER:

I will hear the parties as to the wording of the declaratory relief sought and costs.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF SUPREME COURT – DISPOSITION WITHOUT TRIAL – COMPROMISE – where the plaintiff and defendants were negotiating to try and settle a dispute between them about a unit development in Albion, Brisbane – where the dispute concerned an alleged consultancy agreement between the plaintiff and second defendant and the plaintiff’s entitlement to a sum of money and a share of development profits – where the plaintiff and defendant requested the trial judge to stand down the matter on the first day of trial – where a settlement was reached in the courts precinct – where the defendants later sent an email to confirm the terms – where the plaintiff contends that the email did not accurately reflect the terms that were orally agreed – where the defendant claims that the proceedings were resolved by a compromise between the parties – where the plaintiff contends there was no concluded agreement to compromise – where the plaintiff contends in the alternative, that if there was an agreement it was conditional upon the execution of a deed of settlement – whether the parties intended to be bound by their initial oral agreement – whether the parties’ initial oral agreement constituted a settlement agreement – whether the trial was compromised

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – FORMATION OF CONTRACTUAL RELATIONS – AGREEMENTS CONTEMPLATING EXECUTION OF FORMAL DOCUMENT – WHERE CONCLUDED CONTRACT – where a settlement was alleged to have been reached following settlement negotiations on the first day of trial – where the terms of the settlement were made orally – where Senior Counsel for each side had agreed the terms – where the plaintiff sought to withdraw from the settlement on the basis there was no concluded agreement – where the plaintiff argues that in the alternative, if there was a settlement agreement, it was conditional upon the execution of a deed of settlement – whether there was a concluded settlement – whether there was an intention to be bound by the parties – whether sections 11(1)(a) and 59 of the Property Law Act 1974 apply – whether the agreement was required to be in writing to be enforceable – whether there was a difference between the terms of the final offer and the earlier oral agreement – whether the parties entered into a concluded agreement

Property Law Act 1974, s 11(1)(a) and s 59

AJ Lucas Operations Pty Ltd v Gladstone Area Water Board and Anor [2015] QCA 287, cited

Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, cited

Capital Securities No 1 Pty Ltd v Saliba [2016] NSWSC 1093, cited

Freedom v AHR Constructions Pty Ltd [1987] 1 Qd R 59, cited

Gladstone Area Water Board & Anor v AJ Lucas Operations Pty Ltd [2014] QSC 311, applied

GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, applied

Head v Kelk [1963] SR (NSW) 340, cited

Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115, cited

Mainline Investments Pty Ltd v Davlon Pty Ltd [1969] 2 NSWR 392, cited

Masters v Cameron (1954) 91 CLR 353, applied

Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd [2010] QCA 271, cited

Miles v New Zealand Alford Estate (1886) 32 Ch.d 266, cited

Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2009] QCA 60, cited

Nateau Investments Pty Ltd v Pitt St Properties [2015] QSC 101, applied

Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17, cited

Scammell and Nephew Ltd v Ouston (1941) AC 268, cited

Todrell Pty Ltd v Finch (No. 1) [2007] QSC 363, cited

York Air Conditioning v Cth (1949) 80 CLR 11, cited

COUNSEL:

D O’Sullivan QC, with B Kabel, for the applicant/defendant

G Newton QC, with S McCarthy, for the respondent/plaintiff

SOLICITORS:

HWL Ebsworth for the applicant/defendant

Russells for the respondent/plaintiff

  1. On the first day of a two week trial in the Supreme Court of Queensland, the parties requested the trial judge to stand the matter down.  Settlement negotiations ensued. 
  2. The issue for determination is whether the proceedings were compromised at or about 5.00 pm on that day, 31 July 2017.
  3. The defendants say the proceedings were compromised.  By interlocutory application they seek the following declaratory relief:
  1.  a declaration that the proceedings have been resolved by a compromise agreed between the parties; and
  1.  a declaration that the compromise is a defence to the plaintiff’s action.[1]
  1. The plaintiff resists the declaratory relief sought on the following grounds:
  1.  there was no concluded agreement to compromise;
  1.  alternatively, if there was an agreement to compromise it was intended to be conditional upon execution of a deed of settlement;
  1.  further and/or alternatively, if there was a concluded agreement to compromise, it is unenforceable because of the operation of sections 11(1)(a) and 59 of the Property Law Act 1974 (Qld) (“PLA”).
  1. The trial of the proceedings has been adjourned pending the determination of the present application.  The learned trial judge made directions in respect of the present application for the serving of points of claim and defence, together with the exchange of affidavits and submissions.
  2. For reasons which follow I am of the view that the proceedings have been resolved by a concluded agreement to compromise and the defendants are entitled to the declaratory relief sought.

The Course of Negotiations

  1. At the trial the plaintiff was represented by Mr Ashton QC, instructed by Ms Craig of Russells Lawyers.  The defendants were represented by Mr O’Brien QC and Mr Robinson of counsel, instructed by Mr Hocking of Ready Hocking Lawyers.  All five of the legal representatives have sworn affidavits in relation to the present application.  Mr O’Brien, Mr Ashton and Ms Craig also gave brief oral evidence and were cross-examined.  Unsurprisingly the recollection of each witness as to the sequence of offers and what was said is not uniform.  I readily accept that all witnesses sought to provide the Court with their best recollection of the course of the negotiations.  In arriving at my factual findings I have sought to reconcile any differences by a consideration of the preponderance of the evidence.  The only person who took a file note of the various offers was Ms Craig who accepts that her file note is brief.[2]  It does not, in my view, record all the offers that were made in the course of negotiations.  Ms Craig also accepts that she was not present for all conversations conducted between Senior Counsel.  On the evidence before me it is not possible to establish the exact sequence of events and at what stage of the negotiations specific issues were raised.  I have therefore considered the course of the settlement negotiations as a whole in determining whether the proceedings were compromised.
  2. Approximately five days before the commencement of the trial the parties participated in a mediation conducted by Mr Bell QC.  The parties on that occasion were represented by the same Senior Counsel and solicitors.  For the purposes of the present application the parties have each revealed offers made at the mediation.  The defendants had offered $500,000 to settle the proceedings.  This offer had been rejected by the plaintiff.[3]  The plaintiff had made an offer, which was not accepted at mediation, which involved the payment of $500,000 plus the transfer of units in a development at Albion in Brisbane called Jade.[4]  The underlying proceedings involve a dispute concerning an alleged consultancy agreement between the plaintiff and the second defendant and the plaintiff’s entitlement to payment of a sum of money and a share of development profits.  The consultancy agreement was in relation to the Albion development.
  3. On the morning of the first day of the trial, the defendants applied to amend their defence.  The effect of the amendment was to add a new allegation that, in August 2010, Mr Gailey on behalf of the plaintiff and Mr Williams,[5] on behalf of the defendants, agreed that the plaintiff would be “cut in for 5% of the profit of the Albion Project but that if the project went really well this might increase to 10%”.  The application to amend was opposed and ultimately abandoned by the defendants.
  4. At the luncheon adjournment Mr Ashton approached Mr O’Brien, suggesting that the parties continue to pursue the possibility of a settlement.  Mr Ashton stated to Mr O’Brien that the defendants’ suggestion of a proposal to pay to the plaintiff 5% or 10% of the development profit raised the possibility that the matter might be settled on the basis of payment of the $500,000 (offered by the defendants at the mediation), plus 5% or 10% of the development profit.[6]
  5. When the parties returned to Court at 2.30 pm they requested the trial judge to stand the matter down to allow discussions to occur.  This indulgence was granted by the trial judge who informed the parties that he wished to be informed of developments.  The settlement negotiations were conducted in the precincts of the Court by each party utilising Court conference rooms.
  6. In the course of initial settlement discussions it became obvious to the parties that the idea of achieving a settlement involving a percentage of development profit could not be made to work.  The primary difficulty was defining and ultimately determining what the development profit might be.  Mr Ashton then suggested to Mr O’Brien, in the presence of Mr Robinson and Mr Hocking, that they should examine the possibility of settlement on the basis of $500,000 plus transfer to Mr Gailey of some of the “stock”, being the unsold units in the Albion development.  Mr O’Brien responded that the problem with Mr Ashton’s proposal was that Mr Williams did not want anything to do with Mr Gailey and there would be problems if they ran into each other in the Jade Apartment Complex.  Mr Hocking agreed with this and went on to say that, in particular, Mr Williams did not want Mr Gailey to have anything to do with the Body Corporate in the development.[7]  Whilst there is some dispute as to when these statements were made, both Mr Ashton and Ms Craig accept that they were made.[8]  Mr Ashton’s response was that Mr Gailey’s only interest would be in selling the unit as soon as possible and that this was not, therefore, a legitimate concern.[9]  Ms Craig recalls stating that Mr Gailey did not intend to reside at the property and that he was prepared to “sign that in blood”.  She recalls Mr Ashton saying words to the effect that Mr Gailey’s promise not to live in the property would be “gold plated”.[10]
  7. The first offer in the settlement negotiations was made by the defendants.  The offer according to Mr O’Brien was $400,000 cash plus a call option in relation to a one bedroom unit to be exercised in favour of Mr Gailey’s nominee but that it could not be anyone related to him.  Further, Mr Gailey could come in the next day and select one of the one bedroom units available in the development.  Mr O’Brien’s recollection is that either Mr Hocking or himself said words to the effect that the reason for the option being structured in that way was that Mr Williams did not want Mr Gailey to be an owner of a unit in the development because he did not want him interfering with the Body Corporate.  The offer was made to Mr Ashton in the presence of Ms Craig.[11]  Mr Hocking’s recollection is that both Mr Ashton and Ms Craig were present when this first offer was made.  According to Mr Hocking the offer was payment of $400,000 within 24 hours plus a call option over a one bedroom unit of Mr Gailey’s choosing and Mr Gailey was to attend the following day to select the unit.  He recalls Mr Ashton saying words to the effect, “It won’t be enough”.  There was then a brief discussion about the reason for the call option.  Mr Hocking stated that Mr Williams would not accept any chance that Mr Gailey would become the owner of the lot.  He recalls Ms Craig stating that they would need the mortgage released over the lot before the option was granted.  Mr Hocking asked why as the mortgage would typically be released at settlement of the eventual sale.  Ms Craig replied with words to the effect, “If we are getting an option, it had to be over clear title”.  Mr Hocking replied that he assumed it could be done and would check.  He recalls that as Mr Ashton and Ms Craig were leaving the room Ms Craig asked if the lot would include a carpark.  Mr Hocking replied that he had no idea but Mr Gailey could choose from any one bedroom that was available, so presumably he could choose one with a car park.[12] 
  8. Mr Ashton and Ms Craig accept that the first offer conveyed by Mr O’Brien on behalf of the defendants was $400,000 plus a one bedroom unit.  This is recorded in Ms Craig’s file note of 31 July 2017.[13]  According to Mr Ashton there was no mention on this occasion, as far as he can recall, of the matter of the defendants not wanting to interact with Mr Gailey.  There was certainly no reference to Mr Gailey’s family or anyone else in that context.[14]  Nothing really turns on this because Mr Ashton accepts that Mr Hocking had previously stated to him that the defendants did not want any continuing interaction with Mr Gailey.[15]  It would appear from Ms Craig’s affidavit that she was not present when this first offer was made.[16]  Ms Craig does however recall later in the negotiation Mr Hocking saying that his client would not accept any chance that Mr Gailey would become the owner of a unit.
  9. According to Mr O’Brien approximately 15 to 20 minutes after the first offer had been made there was a knock at the door of the defendants’ conference room.  Mr Ashton and Ms Craig entered the room.  Mr Ashton presented a counter-offer of $500,000 and an option in relation to two two bedroom units.[17]  Mr Robinson’s account is that when Mr Ashton and Ms Craig returned the offer was that their client would accept $500,000 and two one bedroom apartments.  This is also Mr Hocking’s recollection.[18]  Ms Craig’s recollection is that the offer which Mr Ashton conveyed was $500,000 plus two two bedroom units.  This is the offer recorded in her file note of 31 July 2017.[19]  As Ms Craig’s recollection is the same as that of Mr O’Brien and is supported by her contemporaneous note I accept that the second offer made was for $500,000 and two two bedroom units.  It is only Mr O’Brien who uses the language of Mr Ashton’s offer taking the form of an “option” in respect of the units.  According to Ms Craig, Mr Ashton did not couch the offer in terms of an “option”.[20]  Ms Craig’s recollection is that any reference to an option only arose much later in the negotiations.[21] Again nothing turns on this because Mr Ashton accepted in oral evidence that the parties ultimately agreed upon a call option.[22]
  10. Mr O’Brien then sought instructions from Mr Williams by telephone.  Having obtained those instructions he located Mr Ashton and Ms Craig and asked them to come back into the defendants’ conference room.  He explained that Mr Williams was very unhappy and that he did not believe that Mr Gailey was negotiating in good faith.  Mr O’Brien said words to the effect that the offer of $500,000 plus two two bedroom units was the same, if not more, than what was offered in the mediation, whereas the defendants had come up substantially from the mediation with an offer of $400,000 plus a one bedroom unit.  Mr O’Brien stated that his client’s position was that there was no point in further negotiations unless Mr Gailey was prepared to make a real offer and show some preparedness to compromise.  Mr O’Brien said words to the effect that he may be able to get the $400,000 increased back up to $500,000 plus a one bedroom unit, but he thought that that was as far as his client would go.[23]
  11. Both Mr Robinson and Ms Craig recall that the next offer was made by the defendants.  The offer was $450,000 plus a one bedroom unit in the Jade Development.[24]  Ms Craig’s recollection, which is reflected in her file note, is that Mr O’Brien offered $450,000 plus a one bedroom unit.  Although this offer is not referred to in the affidavits of Mr O’Brien, Mr Hocking and Mr Ashton, I accept that it was made.  In any event this offer was rejected by the plaintiff.
  12. Mr Robinson cannot recall whether a counter-offer was made by the plaintiff at this stage.[25]  Mr Ashton however recalls that having obtained instructions from Mr Gailey he communicated an offer to Mr O’Brien of $500,000 and a two bedroom unit “as a way of settling things”.[26]
  13. The counter-offer then made by Mr O’Brien on behalf of the defendants is the crucial one.  As there is some variance in each witness’s recollection, I set out the relevant paragraphs of their affidavits:
  1.  Mr O’Brien QC:

“24. I then asked Mr Ashton and Ms Craig to come back into our room.  I said that we had an offer of $450,000 which could be paid within 24 hours, Mr Gailey could have a call option over a 2 bedroom unit, he would be able to choose the unit from a choice of 4 or 5 units available, that he could organise for an inspection of the unit and he could choose whichever unit was available.  I said Mr Peter Hobbs was available the next day to do the inspection.

25. The look on Mr Ashton’s and Ms Craig’s face was one of pleasant surprise.  I recall Mr Ashton saying ‘you must have been working hard on your guy’.  They exited the room.

26. A few minutes later, there was a knock on the door.  Mr Ashton opened the door and leaned over the threshold of the doorway.  He said words to effect of ‘who would be paying stamp duty’.  He said words to the effect that his client didn’t want to be caught paying stamp duty.  Mr Hocking responded that that won’t be an issue because there will be a transfer directly to the nominee of Mr Gailey.  I said words to the effect that because of the option the incoming purchaser will be responsible for the stamp duty, not Gailey.  Mr Ashton seemed to be happy with that response.  I can’t recall exactly what he said as he exited the room.

27. Somewhere between 5 and 10 minutes later, I could hear feet reapproaching the door to our room.  There was a knock on the door.  Mr Ashton and Ms Craig came in and said either ‘We accept’ or ‘We have a deal’. I can’t recall exactly which expression Mr Ashton used.  There was a sense of relief in the room at those words.”

  1.  Mr Robinson:

“13. We then had a further discussion with both Mr Ashton and Ms Craig in the breakout room.  Mr O’Brien said that our clients would settle the proceeding on the basis that they would pay $450,000 within 24 hours and provide a two-bedroom unit.  Mr Hocking said that Mr Gailey could choose the apartment he wanted from the apartments that were available in the Jade development.  He said that Mr Gailey could attend the Jade site the next day (1 August 2017) and choose an apartment.  Ms Craig asked how this would be arranged.  Mr Hocking said that Mr Gailey should call one of two people (one of whom was a Mr Jacobsen and other of whose name I do not recall) to arrange the visit.

14. In the same conversation Mr Hocking reiterated what he said earlier about Mr Williams not wanting Mr Gailey living in the complex and that he did not want him to have anything to do with the body corporate.  He said words to the effect: ‘It should be done by a call option’ so that Mr Gailey would never own the land but would nevertheless be able to sell it.  He also said that this would address the problem of ‘double duty’ which I took to mean the problem of transfer duty being payable twice, once on a transfer to Mr Gailey and then again on the transfer from Mr Gailey to a purchaser.  I think that in this conversation Ms Craig or Mr Ashton asked whether the Defendants would arrange to release any security over the unit selected by the time of sale of the unit.  Mr O’Brien or Mr Hocking said that we would take instructions on that issue.  I think it was in this conversation that Mr O’Brien said words to the effect: ‘We should all stay here at Court to resolve any remaining issues’.  As they left, Mr Ashton said to Mr O’Brien words to the effect: ‘You must have worked hard to get that offer’.  As she left, Ms Craig said (looking at Mr Hocking): ‘Would it have a carpark?’  Mr Hocking replied: ‘I wouldn't have a clue’.

16. Mr Ashton and Ms Craig returned to the breakout room.  I cannot now recall the exact words that they used, but I had an impression that a deal had been reached save for some final details.  I understood that those details were sorted out shortly thereafter as set out below.

17. Mr Ashton raised the potential problem of double transfer duty.  Mr Hocking said words to the effect: ‘That’s why it would need to be a call option’.  Mr Ashton said words to the effect: ‘Excuse me.  I forgot to tell him about that’.  Mr Ashton left the room and Ms Craig remained behind.  After perhaps a few minutes Mr Ashton returned and I recall him confirming that this was in order.  I recall that while everybody (that is, Mr Ashton, Ms Craig, Mr O’Brien, Mr Hocking, and me) was in the room, somebody (I believe it was Mr O’Brien) said words to the effect: ‘We avoided a trial’.  Nobody said anything to disagree with that.”

  1.  Mr Hocking:

“41. Following this call with the client, Mr O’Brien QC again asked Mr Ashton QC and Ms Craig to come into the room.  Once they had both entered the room and closed the door, Mr O’Brien QC told Mr Ashton QC and Ms Craig that the offer is:

  1.  $450,000 within 24 hours;
  1.  that the Plaintiff would get a call option to sell 1 of four, two bedroom units with the Jade development that Mr Gailey could choose from, to an unrelated nominee;
  1.  that Mr Gailey could inspect the units on 1 August 2017 and make a selection by 5pm that day.

42. I believe that it was me who confirmed the two people that Mr Gailey could contact to arrange an inspection.

43. I reiterated that the transfer of the unit would be by way of a call option so that Mr Gailey never had an interest in it but would be able to sell it.

44. Ms Craig again asked if the unit would have a car park and I said I had no idea but there were 4, maybe 5 to choose from.  I told Ms Craig that my reason for my being unclear is that Mr Williams couldn’t remember if there was a fifth 2 bedroom unit available.  I did not say this, but the selection of the unit would dictate if it had any carparks and if so, the number of carparks.

45. Mr Ashton QC and Ms Craig came back into the room shortly before 5 pm.  As Mr Ashton QC was still entering the room, he said ‘we accept’ or ‘we agree’; I cannot recall specifically but it was that short and pointed.

46. At that point Ms Craig said ‘oh we haven’t mentioned stamp duty’ and that our client would have to pay the stamp duty.

47. I said it was by call option so neither of our clients would pay.

48. Under the usual contract of sale, the buyer pays the stamp duty.  Ms Craig said something like, ‘Oh, yes’.

49. Mr Ashton QC said something like ‘Oh that’s right, I forgot to say it was by call option’ and walked out of the room saying he’d be right back.

50. Ms Craig remained.  Mr Ashton QC re-entered the room and said something to the effect of ‘that’s fine’.

  1.   Mr Ashton QC:

“14. Ultimately, Mr O’Brien, conveyed an offer of $400,000 plus a one bedroom unit.  This was the first proposal that involved any ‘stock’.  There was no mention this time, so far as I can recall, of the matter of the defendants not wanting to interact with Mr Gailey.  There was certainly no reference to Mr Gailey’s family or anyone else in that context.

15. The possibility of a counter offer of $500,000 plus two, one bedroom units was raised with Ms Craig and me by Mr Gailey but I cannot recall the precise sequence or detail of what then occurred about that proposal.

16. In the result, though, Mr Gailey expressed a willingness to accept $500,000 and a two bedroom apartment as a way of settling things.  I communicated this offer to Mr O’Brien who later came back with a counter offer of $450,000 plus a two bedroom unit.  Mr Gailey instructed us that this would be acceptable but my instructing solicitor raised the question of payment of stamp duty on the transfer of the unit.  She informed me that the stamp duty on such a transfer would be about $20,000.

17. I recall that Ms Craig, at some point, raised with our colleagues the question of car parks with the 2 bedroom apartments.  I do not have a clear recollection of when this was done.  But I do remember, I think in connection with the topic of carparks, making a light hearted, facetious remark to our colleagues about a pergola.

18. At any rate, in company with Ms Craig, I attended at the defendants’ room and said that $450,000 plus a two bedroom unit would be acceptable but, I said, ‘What about stamp duty’?  Mr Hocking replied that there would be no stamp duty because the transaction would be achieved by option to be exercised in favour of the end purchaser.  Again, I do not recall that there was any reference at this time to any restriction upon Mr Gailey or anyone else exercising the option.

19. At this point, I withdrew to consult Mr Gailey about proceeding by way of the option.  Having received instructions, I returned to the defendants’ room and said words to the effect that this was acceptable.  I said that Ms Craig and Mr Hocking should exchange emails dealing in detail with all matters so as to be clear on them.  I also said that a deed should be prepared.  This was apparently accepted.  Certainly there was no dissent from anyone.”

  1.  Ms Craig:

“13. Mr Ashton and I walked to the conference room where Mr O’Brien, Mr Robinson and Mr Hocking were.  Mr Ashton said we would agree to the $450,000 but it had to be a two-bedroom unit.  I added, ‘With a car park’.  I said words to the effect ‘apparently not all units have a car park’.  Mr Hocking said he didn’t know.  Mr Ashton jokingly said words to the effect ‘now I want you to come back to me at $450,000 with a one or two bedroom unit [I can’t recall which] with a pergola.’  We all laughed.  Ashton then said, ‘What about stamp duty?’  Mr Hocking said words to the effect, ‘We could do it in the form of an option, which would mean there’s no duty payable.  Richard could nominate a purchaser and Arden would transfer the property straight to the purchaser.’  He said words to the effect that there would not be double duty.

14. This was the first occasion during the course of the afternoon in which I had heard the word ‘option’ used.

15. Mr O’Brien said Richard could select a unit – there were, he said, six 2 bedroom units available and they would let us know which ones they were.  Mr Hocking said they had a chap Jacobson (Peter Jacobson) and someone from Devine (a Mr Hogg) who could take Richard through the units tomorrow.  I asked how this would be arranged.  He said he would send me their contact details and we could contact them to arrange a time.

16. Mr O’Brien said words to the effect, ‘My bloke’s got the money; it’s all organised; he can pay it within 24 hours’.  I raised the issue of timing for removal of any security.  Mr O’Brien or Mr Hocking said they would confirm that.  Mr O’Brien said to Mr Ashton words to the effect, ‘Do you want to run the option by your client?’.  Mr Ashton said yes.

17. I stayed in the room with Mr O’Brien, Mr Hocking and Mr Robinson; we had a social discussion.  Mr Ashton left to speak with Mr Gailey.  Mr Ashton returned a few minutes later.  He said something like ‘that’s ok’ or words to that effect.”

  1. Ms Craig does not accept that the offer of $450,000 plus a two bedroom unit was made by Mr O’Brien on behalf of the defendants.[27]  Given the preponderance of the evidence however, Ms Craig must be mistaken in her recollection.  Her file note records the following:

“RG [reference to Richard Gailey]: $450k ok + 2 bed but wants a CP [carpark]

– Not all units come with CP [carpark]

– OK

DO [reference to Damien O’Brien]:

– We choose 6 units available

– s/duty [stamp duty] – Option?

– email to come to me from Hocking with details.”

  1. Whilst Ms Craig’s file note may suggest that the offer of $450,000 plus a two bedroom unit came from Mr Gailey, the file note is equally consistent with her obtaining instructions from her client in response to Mr O’Brien’s offer.
  2. It may be accepted from the conversations set out above that the plaintiff, through Mr Ashton, accepted the following matters:
  1.  the defendant would pay to the plaintiff a cash sum of $450,000;[28]
  1.  this cash sum would be paid within 24 hours;[29]
  1.  the defendants would grant the plaintiff a call option for a lot consisting of a two bedroom unit in the Jade Development;[30]
  1.  the plaintiff was to select the lot at an inspection of the available lots on 1 August 2017;[31]
  1.  two persons were named whom the plaintiff could contact to facilitate the inspection (Mr Hobbs and Mr Jacobsen);[32]
  1.  the plaintiff would receive the proceeds of any sale effected by the call option.[33]
  1. It is convenient at this stage to identify from the points of claim and defence what matters remain in dispute as to the terms of any alleged agreement to compromise.  The first dispute concerns the number of available two bedroom units from which the plaintiff could choose.  Paragraph 2(b) of the points of claim alleges that four or five two bedroom lots were available.  The plaintiff alleges that the defendants would offer six two bedroom lots for the plaintiff’s selection.
  2. Mr O’Brien’s recollection is that the plaintiff would be able to choose a two bedroom unit from a choice of four or five “available” units.[34]  Mr Robinson’s account is that Mr Hocking said that Mr Gailey could choose the unit he wanted from the units which were available in the Jade Development.[35]  Mr Hocking’s version is that the offer was that the plaintiff would obtain a call option to sell one of four two bedroom units within the Jade Development that Mr Gailey could choose from, to an unrelated nominee.[36]  Mr Hocking recalls that Ms Craig asked if the unit would have a car park and he stated that he had no idea but there were four, maybe five to choose from.  He told Ms Craig that his reason for being unclear was that Mr Williams could not remember if there was a fifth two bedroom unit available.[37]  According to Mr Hocking he stated that he would send through an email with three dot points of $450,000, an option over one of four two bedroom lots which was to be selected the following day, and the release of mortgage.[38] 
  3. In a subsequent conversation with Mr O’Brien on 1 August 2017 Mr Ashton recalls saying that there had only ever been reference in their discussions to a choice being made of six units not “four or five”.[39]  Mr O’Brien responded to Mr Ashton’s suggestion of six units stating that it was four or five units available.[40]  Mr Ashton’s recollection is supported by Ms Craig’s file note which refers to “six units avail.”[41]  Ms Craig’s recollection is that Mr O’Brien said that the plaintiff could select a unit and that there were six two bedroom units available.[42]  Mr Ashton confirmed in oral evidence that the plaintiff would have a choice from six two bedroom units.[43]
  4. There was no cross-examination by either party on this issue.  From Ms Craig’s file note and the recollection of both Mr Ashton and Ms Craig I accept that at one stage in the course of settlement negotiations a pool of six two bedroom units from which the plaintiff could choose was mentioned.  The figure “six” however, would have been mentioned in the context that both Mr O’Brien and Mr Hocking were seeking to identify the available pool.  I accept Mr Hocking’s evidence that he expressed some uncertainty to Ms Craig as to how many two bedroom units were in fact available.  I also accept that Mr O’Brien sought to identify the available pool by reference to a range of units namely four to five although the range may have extended to six.  Given the uncertainty expressed by Mr Hocking and the use of a range by Mr O’Brien, the pool of available units was not set in concrete at the number six.  I find that what was conveyed and agreed was that the plaintiff could select from a range of two bedroom units which were available.  This did not entail either Mr O’Brien or Mr Hocking fixing the number of units at six although this number was, in all likelihood, mentioned in the course of negotiations.
  5. The next issue relates to car parks.  The issue of a car park was mentioned in the course of negotiations.  The agreement alleged in the defendants’ points of claim does not refer to a car park.  The defendants submit that a car park was not part of the deal.[44]  According to Mr Hocking the first time Ms Craig raised whether a lot included a car park was in the context of the negotiations concerning one bedroom rather than two bedroom units.  Mr Hocking’s response to Ms Craig was that he had no idea whether the one bedroom unit came with a car park but Mr Gailey could choose from any one bedroom unit that was available so presumably he could choose one with a car park.[45]  When the negotiations reached the stage of discussing two bedroom units, Ms Craig again asked if the unit would have a car park.  Mr Hocking replied that he had no idea but there were four maybe five units to choose from.[46]  From Ms Craig’s file note and her own recollection, I accept that she received instructions from Mr Gailey that he wanted a two bedroom unit with a car park.  Her recollection is that when Mr Ashton said the plaintiff would agree to the $450,000 and a two bedroom unit she added “with a car park”.  She said words to the effect “Apparently not all units have a car park”.  Her recollection is that Mr Hocking said he did not know.  She also recalls Mr Ashton jokingly saying words to the effect “No I want you to come back to me at $450,000 with a one or two bedroom unit (I can’t recall which) with a pergola”.  She recalled all parties laughed at this suggestion.[47]  Ms Craig’s recollection of Mr Ashton’s joke is consistent with his own recollection.  Mr Ashton recalls that Ms Craig, at some point, raised with the defendants’ representatives the question of car parks with the two bedroom apartments.  He does not have a clear recollection of when this occurred.  He does remember however, that in connection with the topic of car parks he made a light hearted facetious remark to the defendants’ representatives about a pergola.[48]  None of the witnesses were crossexamined in relation to this issue.  I find that Ms Craig received instructions from the plaintiff that the two bedroom unit should come with a car park.  I further accept that when she raised this issued with the representatives of the defendants she was informed by Mr Hocking that he had no idea.  Mr Ashton’s comment in relation to a pergola is significant in that it suggests that at the heart of the negotiations was a two bedroom as opposed to a one bedroom unit and that any request for a car park constituted more of a wish list rather than the subject matter of what was actually being sought.  There is no dispute that Mr Hocking’s response on both occasions was that he had no idea whether a one bedroom unit or a two bedroom unit came with a car park.  The evidence does not therefore establish that a car park was a term of any agreement.  Nothing turns on this point because it is evident from Exhibit AJT-1 to the affidavit of Ashley John Tiplady that apparently all two bedroom units in the development come with a car park. 
  6. There is no dispute between the parties that the call option was to be granted over a two bedroom unit with clear title.  Mr Robinson recalls Ms Craig stating that the plaintiff would require any security over the lot to be removed prior to the option being granted.  Mr O’Brien took specific instructions on this issue and informed Mr Ashton “that’s all fine”.[49]  Mr Ashton also accepted this in cross-examination.[50]
  7. Paragraph 2(c) of the defendants’ points of claim pleads as a term of the agreement to compromise that the call option could only be exercised by the plaintiff nominating a purchaser “that is not a related entity to the plaintiff”.  There is no dispute between the parties that the transfer mechanism that was agreed was a call option.  It is also apparent from the evidence that this mechanism was agreed because of Mr Williams’ strong desire that Mr Gailey not live in the development and have nothing to do with the Body Corporate.  There is, in my view, insufficient evidence for the Court to find that the parties agreed that the plaintiff, in exercising the call option, was not permitted to sell to a related entity.  There is no reference to a “related entity” in Mr O’Brien’s recollection of the various offers.[51]  He does recall however, that in relation to the first offer he said that the nominee under the call option could not be anyone related to Mr Gailey.[52]  This is quite different from saying that any nominated purchaser was not to be a related entity to the plaintiff.  Mr Robinson does not refer to such a limitation.[53]  Mr Hocking’s summary of Mr O’Brien’s offer to Mr Ashton does include a call option to sell one of four two bedroom units “to an unrelated nominee”.[54]  According to Mr Ashton, in his subsequent conversation on 1 August 2017 with Mr O’Brien, Mr Ashton stated that there had never been any reference to related parties or related entities.[55]  Ms Craig, in responding to Mr Hocking’s suggestion, states that Mr O’Brien did not say the nominee transferee of the unit selected by Mr Gailey had to be “unrelated”.  She is confident that she would have recalled if Mr O’Brien had said such words.[56]  On the preponderance of the evidence I find that it was not agreed that the call option to be granted to the plaintiff was limited as suggested by Mr Hocking.  His recollection, whilst honestly held, is in my view mistaken and informed by subsequent events.[57]
  8. At no stage in negotiations was it ever discussed what sale price the plaintiff would achieve for the sale of the unit.[58]

Discussion of an exchange of emails and a deed

  1. After the course of negotiations set out above had concluded but while still in the conference room, Mr Hocking rang Mr Williams and said “Done deal”.[59]
  2. Mr O’Brien recalls that after leaving the conference room Mr Ashton asked in front of the others whether they should tell the trial judge that the parties had reached a settlement.  Mr O’Brien said that the solicitors should exchange emails recording what had been agreed and they should tell the judge first thing in the morning that the matter had settled.  Mr Ashton said words to the effect that “our solicitors can deal with that”.[60]  Mr Ashton’s recollection is that he said that Ms Craig and Mr Hocking should exchange emails dealing in detail with all matters so as to be clear on them.  He also said that a deed should be prepared.  He recalls asking Mr O’Brien what he thought they should do as to informing the trial judge about the results of their discussions because his Honour had expressly remarked in Court that he wanted to be informed of developments.  Mr Ashton’s recollection is that Mr O’Brien said words to the effect that they should not inform the judge about the developments until after the solicitors had exchanged their emails.  Mr Ashton agreed saying words to the effect that they should “make sure of things” first.[61]  In oral evidence Mr O’Brien confirmed his recollection that it was he who suggested an exchange of emails confirming what had been agreed and that the trial judge should be informed in the morning that the matter had settled.[62]  This conversation occurred at approximately 5.00 pm on the afternoon of 31 July 2017.  Mr Ashton’s recollection is that it was he who suggested that a deed be prepared.  Mr Ashton confirmed this in oral evidence.[63]  Mr Ashton could not however exclude the possibility that a deed had been suggested by one of the solicitors.[64]  Mr Ashton accepts that it was Mr O’Brien who suggested that the solicitors should exchange emails.[65]
  3. Mr O’Brien in oral evidence was not certain who mentioned a deed.  He was confident it was not him and it may have been Ms Craig.  Mr O’Brien does however have a clear recollection that someone suggested that a deed was not necessary.[66]  Mr O’Brien is confident that it was not Mr Ashton who suggested a deed.[67]  He believes that it was either Mr Hocking or Ms Craig who raised whether a deed was necessary.[68]  Mr O’Brien confirmed in cross-examination that it was his suggestion that emails should be exchanged to set out what had been agreed:

“Yes.  So do we at least agree, then, that there was to be an email exchange confirming whatever the terms might have been agreed? …  No.  No.  It was – what I said was the solicitors should exchange emails that set out what we have agreed.

Yes.  All right? … and so it was after – it was – this was after we had retreated after they had indicated that we – that they accepted our offer.”[69]

  1. I accept Mr O’Brien’s evidence that he said emails should be exchanged to set out what had already been agreed.  I also accept Mr O’Brien’s and Mr Hocking’s evidence that at no stage prior to or during the negotiations had anyone said that there would be no settlement unless and until it was reduced to writing.[70]  I also find that a deed was mentioned but that one of the representatives suggested that it was not necessary.
  2. Mr O’Brien and Mr Robinson subsequently returned to chambers.  Mr O’Brien proceeded to email a number of solicitors who knew that he was unavailable because of the trial stating that he was now available as the matter had settled.[71]  Similarly, the following morning Mr Robinson also informed a solicitor that the trial had settled.[72]  Mr O’Brien sent Mr Ashton an email at 6.44am on 1 August 2017:

“Thanks for your efforts yesterday.  I think both clients are better off for having settled the matter.  We should send an email first thing this morning to the judge presumably.”[73]

  1. I accept that both Mr O’Brien and Mr Robinson conducted themselves consistently with the matter having settled.[74] 

Subsequent events

  1. When Mr Hocking returned to the office on the night of 31 July 2017 he started typing up the points of agreement.  It took him longer than expected because he received phone calls and emails from Ms Coleman, the general manager of the second defendant and Ms English about the terms of settlement.  Ms Coleman is an experienced property lawyer with whom Mr Hocking once worked.  Having not heard from Mr Hocking, Ms Craig rang him at 6.30pm chasing up the email.[75]  Mr Hocking informed Ms Craig that the email was coming.  He was working on the timing of the release of the mortgage for clear title and when that might be achieved.  He stated that he would send the email shortly “with the proposal”.  Ms Craig took a contemporaneous diary note of her discussions with Mr Hocking.[76]
  2. At 7.53pm Mr Hocking sent an email to Ms Craig in the following terms:

“I’ve recorded the terms of settlement below.  I’ve had to add some provisions about the option (price and term) to ensure the option is certain and enforceable on its terms and obviously that our client doesn’t get the sale proceeds.

1.Our client pay the plaintiff $450,000 within 7 days;

2.Our client agrees to grant to the plaintiff a call option over a Lot in the Jade development on the following conditions;

a. the Lot is one of four, two bedroom lots in Stage 1 in relation to which the seller is able to provide clear title at the time of granting the option;

b. the option can only be exercised by a nominee of the plaintiff and one that is not a related entity;

c. the option must be exercised within 3 months of granting the option;

d. if the option is exercised in accordance with this agreement:

i. the seller must sell the Lot to the plaintiff’s nominee for the price nominated by the plaintiff on the seller’s standard terms of sale for lots in the development;

ii. the plaintiff is responsible for all costs associated with the sale of the Lot, including without limitation, any marketing costs or sale commission as if it were the seller;

iii. the plaintiff is entitled to receive the balance proceeds of sale.

3.The plaintiff is to select the Lot from those available by inspection on 1 August 2017.

4.The option will be granted within 14 days of the seller securing the release of mortgage of the lot.”[77]

  1. Ms Craig sent Mr Hocking an email at 8.46am the following morning stating “Your email is not reflective of what we discussed yesterday.  Can you please give me a call to discuss.”
  2. Having received Mr Hocking’s email Mr O’Brien went and saw Mr Ashton.  Mr O’Brien recalls the following conversation:

“He said words to the effect that we had agreed for the payment of $450,000 within 24 hours.  I agreed that that was what we agreed.  He raised that he thought there were 6 units.  I said that had said it was 4 or 5 units available.  He raised an issued about the 3 month period in Mr Hocking’s email and the time period to have the option granted free of security.  He said they wanted 12 months to sell and wanted a time period by which the option would be granted over an unsecured lot.  There was no statement by him that we did not have a settlement.”[78]

  1. Mr O’Brien informed Mr Ashton that he would get instructions. 
  2. Mr O’Brien in a subsequent meeting with Mr Ashton told him that the defendants had no difficulty about specifying a time to provide the option over the lot unsecured, but the 12 months for the option period was a problem because of the holding costs involved.  He told Mr Ashton that in his view they had an agreement that if they could not work out the time for the exercise of the option then it would just be a reasonable time.  Mr O’Brien informed Mr Ashton that they should try to work out a time because it would be better to have certainty about it rather than have a fight about what a reasonable time would be.  Mr O’Brien stated to Mr Ashton either then or a little bit later that as far as he was concerned the matter had been settled.  Mr O’Brien recalls Mr Ashton saying words to the effect that “he thought they had an agreement too but they needed to try and work these things out”.  Whilst Mr Ashton refers to this as a private conversation as between counsel he does not contradict Mr O’Brien’s recollection.[79]  There were a number of subsequent conversations between Mr Ashton and Mr O’Brien in relation to trying to agree the time period for the exercise of the call option.  Later on in the morning, during these discussions, Mr Ashton raised the issue of what would happen if they could not sell within the time period. He asked why the property could not just be transferred to Mr Gailey.  Mr O’Brien responded that that was not the deal and that there was no reason to think that Mr Gailey could not find a buyer within a reasonable time and if that meant he had to drop his price then presumably that is what he would have to do to be able to exercise the option.[80]
  3. At or about 1.00pm or 1.30pm, Mr Ashton presented Mr O’Brien with an email which included a completely new set of terms including payment of $500,000 and a two bedroom unit being transferred to Mr Gailey at the vendor’s cost, including stamp duty.[81]
  4. Ms Craig also had a conversation with Mr Hocking on the morning of 1 August 2017.  She told Mr Hocking that the email he had sent the previous night did not reflect the discussion they had had at Court.  The first issued raised by Ms Craig was that the payment of $450,000 was to be made within 24 hours not seven days.  Mr Hocking agreed stating that he had made that change because he wanted to ensure his client had enough time to transfer the money.[82]  Mr Hocking stated that 24 hours would be fine.[83]  Ms Craig said that she did not like the whole “option thing” at all and asked what would happen if they did not sell.  Mr Hocking replied that the option would be over.  Ms Craig raised that that would mean they would lose their rights.  Mr Hocking responded in the affirmative.[84]  Ms Craig raised other points including the number of available units for selection. She also stated that the plaintiff would want 12 months in which to exercise the option rather than the three months referred to in Mr Hocking’s email.
  5. Mr Hocking accepts that the terms of his email differ from the terms of the settlement reached in the following respects:

“(a) The term in (a) identified that payment of $450,000.00 would be within seven (7) days – whereas we had agreed that the payment would be within 24 hours.  This was changed to provide for assurance of performance in case of banking issues – not intended by me to renegotiate the terms of settlement.  In the haste following the matter and with calls and emails, I overlooked including confirmation that that was the reason for changing that recitation;

  1.  The identification of Stage 1 of the Jade Development as being the group of units for which clear title would be able to be provided.  I do not specifically recall if that was identified in the discussions.
  1.  The identification of the 3 month option period – the period of time had not been covered, but I sought to clarify this to avoid later disputes.
  1.  While the discussions did not specifically cover who would pay marketing and other costs, because the Plaintiff was to sell the unit, I was seeking to clarify that the Plaintiff would be bearing the costs (which I considered to be implicit in the terms in any event).
  1.  The time for preparation of the option document was set out in paragraph 4 at 14 days.  In discussions, we had agreed that the option would commence after the release of any encumbrance on the title of the chosen lot.  I saw that the inclusion of 14 days was to enable a call option to be executed.”[85]

Was there a concluded agreement to compromise?

  1. The first issue is whether there was a concluded agreement to compromise.  This issue raises three sub-issues:
    1. Did the parties have an intention to create legal relations?
    2. Were there material terms which were yet to be agreed or were uncertain?
    3. Was any agreement to compromise intended to be conditional upon execution of a deed of settlement?
  1.  Intention to create legal relations
  1. In AJ Lucas Operations Pty Ltd v Gladstone Area Water Board and Anor[86] Ann Lyons J stated:

“As McHugh JA made clear in GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd, the decisive issue in relation to a determination as to whether there was an intention to be bound is whether such an intention can in fact be ‘objectively ascertained from the terms of the document when read in the light of the surrounding circumstances’. Such surrounding circumstances include the conduct of the parties as well as the correspondence and other words used.  As Muir J stated in Cannon Street Pty Ltd v Karedis:

‘[108] Where, as is the case here, a binding agreement is alleged to have come into existence after oral and/or written communications between the parties over a period of time, the communications alleged to constitute the agreement must be considered in the light of the other exchanges and not in isolation.  Also, the question of whether a binding agreement has been concluded is not always capable of a resolution by attempting to draw out of oral or written exchanges a discrete offer and acceptance.’” (citations omitted)

  1. The settlement negotiations between the parties in the present case were conducted on each side by Senior Counsel.  There had been previous attempts to settle at mediation where the plaintiff’s final offer had included $500,000 plus the transfer of units in the Albion development.  The negotiations took place in the context of the first day of a 10 day trial where the parties sought and obtained an indulgence from the trial judge to stand the matter down so as to permit negotiations to be conducted.  From those circumstances it may readily be accepted that the parties were seeking to avoid the cost of a lengthy trial.  This was the very result noted by Mr O’Brien at the conclusion of negotiations “we avoided trial”.[87]
  2. Viewed objectively there are a number of factors which support a conclusion that the parties intended to create legal relations and enter into a concluded agreement.  Apart from the circumstances I have already referred to, the language used by Mr Ashton on the afternoon of 31 July 2017 namely “we accept” or “we have a deal” and “you must have worked hard on your guy” is language consistent with an intention to create legal relations.  As between Senior Counsel engaged in settlement negotiations this language is, in my view, the language of a concluded agreement.
  3. Further, it is significant that some of the terms of the agreement reached on 31 July 2017 contemplated acts which would be carried out within 24 hours.  This included the payment of $450,000 and the inspection by Mr Gailey of the available two bedroom units.  It is also significant that much detail had been agreed.  The parties had specifically agreed on the mechanism of a call option which was to be granted over a lot which had clear title.  The parties had discussed issues such as stamp duty which would not arise for either party because of the proposed transfer mechanism.  All these factors support a finding that the parties intended to create legal relations.
  1.  Were there material terms which were yet to be agreed or were uncertain?
  1. The plaintiff alleges that the parties had not agreed upon the following six matters:

(1)A time within which the defendants were to obtain clear title over the lot to be the subject of the call option;

(2)The time within which any option was to be exercised;

(3)The price for the call option;

(4)That the option could only be exercised by the plaintiff nominating a purchaser that is not a related entity to the plaintiff;

(5)The time in which the $450,000 was to be paid;

(6)The number of lots and in what stage of the development such lots were available from which the plaintiff could select.

The plaintiff also raises the issue of uncertainty concerning car parks. 

  1. In oral submissions the plaintiff’s primary emphasis was on the timing of the release of the security. 
  2. The plaintiff refers to Mermaids Café and Bar Pty Ltd v Elsafty Enterprises Pty Ltd[88] where Chesterman JA (with whom Holmes and Fraser JJA agreed) stated:

“The appellant challenges the trial judge’s conclusion on two separate but interrelated points.  The first is that her Honour ought to have found that the handwritten document signed by the parties was not intended to be an immediately binding agreement.  The second is that any agreement is uncertain and/or incomplete.  The interrelationship arises in the manner described by Gleeson CJ in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548:

“Nevertheless, in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention.”

  1. In light of my findings above, I am of the view that the parties have not failed to agree on the six matters identified by the plaintiff.  In arriving at this view I observe that courts are always loathed to hold a condition bad for uncertainty and will strive to give effect to the intention of the parties’ agreement, no matter what difficulties of construction arise.[89]
  2. Dealing with the third matter first.  The plaintiff submits that it is objectively likely that it would have insisted upon a term by which the price for the unit could at least be ascertained.[90]  The plaintiff points to Mr Hocking’s 7.53 pm email which states:

“I’ve had to add some provisions about the option (price and term) to ensure the option is certain and enforceable.”

  1. The email continues:

“… if the option is exercised in accordance with this agreement: the seller must sell the Lot to the plaintiff’s nominee for the price nominated by the plaintiff on the seller’s standard terms of sale for lots in the development.”

  1. The defendants submit that the plaintiff’s submission misunderstands the agreement reached. I accept the defendants’ submission.[91]  The agreement of compromise contemplated that the plaintiff would sell the lot and receive the proceeds.  The price of the unit was entirely a matter for the plaintiff.  Price was not a matter that was discussed at all in the course of the settlement negotiations.  This is unsurprising as it was a matter for the plaintiff to determine the price at which it would sell the unit pursuant to the call option.  The price for the relevant lot did not have to be determined as between the plaintiff and the defendants so as to allow a sale to take place.  In such circumstances there can be no uncertainty as to terms created by the fact that price was not discussed nor determined.  The issue of price is irrelevant in considering whether a concluded agreement was reached.
  2. The fourth matter raised by the plaintiff concerns the term of the settlement agreement pleaded in paragraph 2(c) of the points of claim, namely that the option can only be exercised by the plaintiff in nominating a purchaser that is not a related entity to the plaintiff.  The plaintiff submits that the phrase “not a related entity” is inherently uncertain.[92]  I have already found that the call option was not limited to the plaintiff nominating a purchaser that is not a related entity to the plaintiff.[93]  The evidence reveals that in the course of negotiations the relevant term that was agreed upon was simply that the call option could be exercised by the plaintiff nominating a purchaser.  The mechanism of a call option was arrived at because, as communicated to the plaintiff, Mr Williams did not wish Mr Gailey to be the owner of a lot in the development or to have anything to do with the Body Corporate.  Whilst the term pleaded in paragraph 2(c) of the points of claim reflects the term communicated in Mr Hocking’s 7.53 pm email it does not, on the evidence, constitute a term that was actually agreed.
  3. As to the fifth matter there is no uncertainty that the parties agreed that the $450,000 would be paid within 24 hours.  In seeking seven days for the payment of the $450,000 in his 7.53 pm email, Mr Hocking was not suggesting that the agreement was other than the payment of the sum within 24 hours.  He explained that he made that change because he wanted to ensure his client had enough time to transfer the money.  He immediately agreed with Ms Craig when she questioned him, that 24 hours would be fine.  Both Mr O’Brien and Mr Ashton were of the view that the $450,000 had been agreed to be paid within 24 hours.  No uncertainty arises in relation to this agreed term. 
  4. As to the sixth matter concerning the number of two bedroom units from which the plaintiff could choose, the plaintiff submits that no agreement was reached as to this term.  In particular, the 7.53 pm email only refers to four bedrooms in Stage 1 of the Jade Development, whereas paragraph 2(b) of the defendants’ points of claim refers to a selection from four or five two bedroom lots that were available in the Jade Development.  Further, the plaintiff relies on Mr Ashton and Ms Craig’s recollection that the selection was to be made from six, not five or four units.  I have found in paragraphs [23] to [26] above, that what was conveyed was that the plaintiff could select from a range of two bedroom units which were available.  Any range identified by Mr Hocking to Ms Craig was qualified by Mr Hocking’s expressed uncertainty as to the actual number of two bedroom units that were available.  Contrary to what is stated in the 7.53 pm email, the range of units available was not expressly limited to Stage 1 of the development.  That limitation is not reflected in the term of the agreement to compromise identified in paragraph 2(b) of the defendants’ points of claim.  No uncertainty as to this term is created by the mere fact that the range of the units available was from four or four to five or four to six.  All that was agreed was that there would be a number of units to choose from within a range of those units which were available.  Even if the term is accepted as pleaded and the selection is to be made from four or five two bedroom lots, this would still fall within the range.  No uncertainty as to the extent of the range objectively supports the plaintiff’s submission that no agreement was concluded.
  5. The plaintiff submits that the agreement alleged in the defendants’ points of claim does not refer to a car park, and does not deal with the issue of whether the limited number of units available to be selected came with a car park.  In light of my findings in [27] above, nothing turns on this point as the issue of car parks was never the subject of any agreement between the parties and, in any event, all two bedroom units come with a car park.
  6. As to the first and second matters, the plaintiff submits that it is objectively unlikely that it would have agreed to the defendants having an indeterminate time to obtain clear title until any call option was granted:

“The parties were negotiating for the settlement of a Supreme Court action.  The plaintiff can be taken to be seeking to achieve finality and certainty.  The effect of the alleged agreement is that the reasonable time to be inferred for the exercise of the option (para 2(f)) cannot be ascertained.  It is to be within a reasonable time of an uncertain time.  The parties ought not to be taken, objectively, to have intended that result.”[94]

  1. As is evident from my discussion of the evidence above, the parties did not specify a time within which the defendants were to obtain clear title over the lot the subject of any call option.  The defendants submit that a term would be implied that clear title is to be made available within a reasonable time.  The implication of such a term does not therefore connote uncertainty.  As to what is a reasonable time will depend on all the relevant circumstances.  It would also be implied in the term that the defendants make all reasonable efforts to obtain the release of any mortgage.
  2. Senior Counsel for the plaintiff submits however, that the implication of a term requiring the mortgage to be released within a reasonable time does not cure any alleged uncertainty:

“There is no baseline.  It works like this.  You give – the other side, I should say, give no hint as to the time by which they are obliged to give clear title.  And the reasonable time which is then triggered is based on a complete uncertainty.  So it’s within either three months or a reasonable time of an uncertainty because there is no suggestion by them about by which time they’re supposed to give clear title.  It’s not touched upon at all.  … That’s the single - probably the single most significant omission, a terribly important one.”[95]

  1. I do not accept this submission.  Both terms concerning the giving of clear title by the defendants and the exercise of the option by the plaintiff would be subject to implied terms of reasonableness.  As observed by Keane JA (as his Honour then was) in Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd:[96]

“… I am of the view that there can be no doubt as to the orthodoxy of referring to ‘implied terms or … considerations of reasonableness’ in order to determine whether the parties’ ‘consensus is sufficiently comprehensive to be legally binding’.  While the parties might have gone on to negotiate an agreement in relation to the terms of the ‘Put and Call’ option which contained express terms different from those which would be implied by law, it was not necessary that they should do so in order to achieve a consensus sufficiently comprehensive to be given effect by a court.  And as I have already said, the terms of the parties’ correspondence do not suggest that a further negotiation to hammer out the express terms of the Put and Call was actually envisaged by them.”

  1. To similar effect are the observations of Chesterman JA in Mermaids Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd:[97]

“There is, as well, the principle that ‘implied terms or … considerations of reasonableness’ can be resorted to in order to determine whether the parties have reached a consensus which is ‘sufficiently comprehensive to be legally binding’.”

  1. Contrary to the plaintiff’s submission, a “baseline” is in fact established by the use of implied terms.  In accordance with what was agreed, the defendants are impliedly required to take all reasonable steps to provide clear title within a reasonable time over the relevant lot prior to granting the option.  Thereafter by those same implied terms the plaintiff is required to take all reasonable steps to exercise the call option within a reasonable time.  The implication of these terms overcome any uncertainty as to time so as to render the agreement enforceable and binding.
  1.  Was any agreement to compromise intended to be conditional upon execution of a deed of settlement?
  1. Under the heading “Overarching Defence” in paragraphs 2 and 3 of the plaintiff’s points of defence the plaintiff pleads:

“2. Objectively, the parties did not intend to be finally legally bound by any agreement made in the course of settlement discussions between their barristers and solicitors without writing, signed by one of the legal practitioners authorised to sign such writing.

3. Since the parties were negotiating for a Deed of Settlement, the Defendants have not displaced the presumption that the parties did not intend to be legally bound until a Deed was executed by the parties.”

  1. From my findings of fact in [32] to [34] above, the parties did not, in my view, make their agreement to compromise conditional upon the agreement first being reduced to writing and executed in a formal Deed of Settlement.
  2. Paragraph 3 of the plaintiff’s points of defence refers to “the presumption” that the parties did not intend to be legally bound until a deed was executed.  I do not accept that such a presumption arises in the present case.  As observed by Jackson J in Gladstone Area Water Board & Anor v AJ Lucas Operations Pty Ltd:[98]

“[96] However, whether or not it was intended that a deed might ultimately be executed does not answer the relevant question whether the parties were to be bound by a contract made before that step. Nothing in law prevents parties from making a contract and being bound by its terms even though they intend that later the contract will be embodied in the form of a deed. An example is Parker v Alessi. In that case, Bergin CJ in Eq said:

‘The parties’ use of the language “we accept” and “glad to have this sorted”, in the context of their conduct in proceeding with the first loan from SCF soon after these emails, persuades me that they were content to be bound immediately by the terms they had agreed even though the formalisation of the contract by deed (which they both anticipated) was yet to occur: Masters v Cameron (1954) 91 CLR 353.’

[97] In the lexicon used for cases falling within the principle of Masters v Cameron, such an agreement is a “second class” case.

[98] In those circumstances, in my view, whether or not the parties were intending to be bound by a contract in the form of the Deed of Settlement, either in the form of the draft at the first meeting on 16 November 2012 or in the final form settled at the second meeting and executed by Mr Campbell on that day depends on the effect of their oral exchanges on that day.” (footnotes omitted)

His Honour continued:

“[106] In any event, there is nothing inconsistent with the arrangement for exchange and the plaintiffs’ case that a concluded contract was reached, on the footing that this is a second class Masters v Cameron contract. That is, the parties intended to make a contract by Mr Campbell signing and returning the agreed final document but also intended that the Deed of Settlement would be executed in counterparts as a deed and those parts exchanged.

[107] These facts are distinguishable from a case where the parties agree to contract by an exchange of parts, in a context where the usual method of concluding the contract or “jural act” is the fact of the exchange. Thus, the description of the usual practice in a particular context for an “exchange of contracts” in cases such as Commission for the New Towns v Cooper (GB) Ltdhttp://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/qld/QSC/2014/311.html?query= - fn12 and Sindel v Georgiou does not answer the question in the present case whether the parties intended to be bound before the exchange of the counterparts of the deed.

[108] In my view, analysed objectively, the arrangement made between Mr Landsberg and Mr Grace for the exchange of counterparts of the Deed of Settlement on Monday 19 November 2012 was not intended to and did not have the effect that the parties were not to be bound upon Mr Campbell’s signature and return of the final document.” (footnotes omitted)

  1. I accept the defendants’ submission that the evidence does not support the assertion, in paragraph 3 of the points of defence that the parties “were negotiating for a Deed of Settlement”.  I find that the parties were negotiating an immediate compromise of the proceedings.  The purpose of the exchange of the emails was to set out what had already been agreed.  At least one party’s representative had expressed doubt as to whether a deed was necessary.  It was both parties intention to inform the trial judge on the morning of 1 August 2017 that the matter had settled.  As correctly submitted by the defendants, in the context of settlement discussions occurring where the matter had been called on for trial, it is hardly surprising that no condition requiring a deed of settlement prior to there being a concluded agreement was discussed:

“… The court would conclude that counsel and solicitors engaged, well understood that time was, as it were, ‘ticking’.  The adjournment granted was in the nature of an indulgence, and counsel and solicitors can be taken to have understood that they had an obligation to move quickly, either to resolve the dispute, or to bring it back for hearing within the times allocated by the Court.”[99]

  1. In Masters v Cameron[100] the High Court identified three categories of case where the parties have agreed on terms but also agreed that those terms will be dealt with by subsequent formal documentation:

“Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of the negotiation shall be dealt with by a formal contract, the case may belong to any of three classes.  It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time, propose to have the terms restated in a form which will be fuller or more precise but not different in effect.  Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document.  Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract.”

In the present case the evidence does not support a conclusion that this is a matter falling within the third category in Masters v Cameron.  The parties intended to be immediately bound. 

  1. I consider the 7.53 pm email in more detail below when considering the issue of repudiation.  To the extent the 7.53 pm email proposed terms that had not been agreed in the course of negotiations, the agreement to compromise will give effect only to the terms that had been agreed.  The defendants submit that if the parties did intend to be bound, but contemplated the negotiation of further terms, the matter is one where those further terms would be added to the formal contract if agreed, and if no new terms could ultimately be agreed, the formal contract will give effect only to the terms and conditions that had been.[101]  The plaintiff seeks to answer this submission by suggesting that the parties having failed to agree in terms of the 7.53 pm email, the terms as agreed in the Court precincts were so uncertain as to render any agreement unenforceable.[102]  I have already rejected this submission.
  2. Senior Counsel for the defendants submits that the present case is one that falls within what is sometimes referred to as the fourth category of Masters v Cameron.  This fourth category was identified by the New South Wales Court of Appeal in GR Securities v Baulkham Hills:

“Even when a document recording the terms of the parties’ agreement specifically refers to the execution of a formal contract, the parties may be immediately bound.  Upon the proper construction of the document, it may sufficiently appear that ‘the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.”[103]

  1. In the present case the idea of an exchange of emails recording what had been agreed arose in the context where the parties were discussing whether the trial judge should be informed that the matter had settled.  As I have found, the exchange of emails was to record what had already been agreed between the parties.  One of the purposes of the exchange of emails was, according to Mr Ashton, to “make sure of things” and to “deal in detail with all matters as to be clear on them”.  The email exchange was in contemplation of informing the trial judge the following morning that the matter had settled.[104]  None of this evidence suggests that the parties did not intend to be immediately bound.
  2. I find that the proceedings have been resolved by a compromise agreed by the parties at or about 5.00 pm on 31 July 2017.  The terms of agreement to compromise are as set out in paragraph 2(a), (b), (d), (e), (f) and (g) of the defendants’ points of claim.  As to paragraph 2(c) of the points of claim, it was a term of the compromise agreement that the call option would be exercised by the plaintiff nominating a purchaser.  There was however, no limitation agreed that the purchaser was not a related entity to the plaintiff.
  3. On the basis that the Court finds that there was a concluded agreement, the plaintiff raises two further issues:
  1.  was the agreement to compromise repudiated by the email of 7.53 pm?; and
  1.  is the agreement to compromise otherwise unenforceable because of the operation of sections 11(1)(a) and 59 of the PLA?

Was the agreement to compromise repudiated?

  1. I have already set out the 7.53 pm email in paragraph [38] above and the differences identified by Mr Hocking in [45] above.  The differences are pleaded in paragraph 6 of the plaintiff’s points of defence in support of the allegation that the defendants repudiated any agreement to compromise.  In Progressive Mailing House Pty Ltd v Tabali Pty Ltd[105] Mason J stated:

“What needs to be established in order to constitute a repudiation is that the party evinces an intention no longer to be bound by the contract or that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way.”

  1. Gleeson CJ, Gummow, Haydon and Crennan JJ observed in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd:[106]

“The term repudiation is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed renunciation. The test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it.  …  Secondly, it may refer to any breach of contract which justifies termination by the other party.  …  There may be cases where a failure to perform, even if not a breach of an essential term … manifests unwillingness or inability to perform in such circumstances that the other party is entitled to conclude that the contract will not be performed substantially according to its requirements. This overlapping between renunciation and failure of performance may appear conceptually untidy, but unwillingness or inability to perform a contract often is manifested most clearly by the conduct of a party when the time for performance arrives. In contractual renunciation, actions may speak louder than words.”

  1. The plaintiff submits that the proposal of materially different terms in the 7.53 pm email constitutes proof of a refusal to perform the agreement to compromise.  I do not accept this submission.  First, Mr Hocking in the email expressly stated, “I’ve recorded the terms of settlement below.”  This can only be a reference to the terms that had been agreed by the parties that afternoon in the course of settlement negotiations.  Secondly, Mr Hocking in his subsequent conversation with Ms Craig immediately accepted that the time for the payment of the $450,000 was 24 hours, not seven days as suggested in the email.  The only reason Mr Hocking had suggested seven days was because of possible difficulties with banking.  This conduct of Mr Hocking does not evince any intention on the part of the defendants not to be bound by the terms of settlement that had already been agreed.  Mr Hocking expressly confirmed that the deal would remain at 24 hours as agreed.[107]  Thirdly, the mere fact that the email recorded what was Mr O’Brien and Mr Hocking’s recollection as to the number of units that would be available which did not accord with the recollection of Mr Ashton and Ms Craig does not constitute conduct which evinces an unwillingness “to render substantial performance of the contract”.  This is particularly so in circumstances where, as I have found, there was communicated uncertainty as to the actual number of two bedroom units available.  Fourthly, the proposed addition of a reference to “Stage One” in the email is properly construed as either a clarification of the units available, or as proposing a new term (that may or may not be agreed in any future written document).  The conduct is not repudiatory.  Fifthly, the mere fact that Mr Hocking suggested further details including time limits in respect of the exercise of the option should be viewed as an attempt to agree a more precise content for the implied term of reasonable time that would otherwise govern the exercise of the option.

Is the agreement to compromise unenforceable?

  1. The plaintiff submits that the agreement to compromise is unenforceable because of the operation of sections 11(1)(a) and 59 of the PLASection 11(1)(a) provides:

“(1) Subject to this Act with respect to the creation of interest in land by parol –

  1.  no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent lawfully authorised in writing, or by will, or by operation of law … “
  1. Section 59 provides:

“No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged, or by some person by the party lawfully authorised.”

  1. It may be accepted that section 59 applies to an option for the sale of land.[108]  The plaintiff submits that the “purported” call option had the effect of creating an interest in land and the defendants’ case is brought upon the disposition of the defendants’ interest in the land.  It is therefore ineffective, by virtue of sections 11(1)(a) and 59 of the PLA.[109]  I do not accept this submission.  In Nateau Investments Pty Ltd v Pitt St Properties[110] Dalton J drew a distinction between an agreement to compromise and the execution of written documents concerning the creation, or transfer of an interest in land:

“There is authority to the effect that a binding contract for the sale of land will normally not be made until the execution of a formal contract.  I quite accept that authority and the reasoning behind it.  However, I do not think that there is any strong rule in relation to a compromise agreement which involves the parties making various promises to each other, the execution of some of which will involve written documentation concerning the creation, or transfer, of interest in land.  The case of Mermaid’s Café & Bar Pty Ltd v Elsafty Enterprises Pty Ltd is a case in point.  That case concerned a compromise of litigation concerning the terms of a sublease.  The compromise was documented informally, although it expressly contemplated that formal documents would be drawn up and executed.”

  1. I accept the defendants’ submissions that section 59 does not apply to the raising of a defence to an action, and the agreement to compromise the subject of this separate determination is raised as a defence to the action.  Section 59 does not prevent a party bringing a claim on an oral contract, nor does it apply to a person who raises the oral agreement as a defence to an action.[111]  The defendants’ contention in the present application is that the matters the subject of the trial proceedings have been compromised by agreement.  This does not involve any action being brought by the defendants.  Section 59 therefore has no application.[112] 
  2. The defendants further submit and I accept that the agreement to compromise properly construed is not a “contract for the sale or other disposition of land or any interest in land”.  The agreement to compromise does not involve any agreement “for” the sale or disposition of any particular interest in land.  Rather, the agreement is a contractual promise that once the plaintiff exercises its right to select a lot from the available pool, the defendants agree to enter into a contract “for” the sale of the lot that is selected by the grant of a call option.  It is therefore the call option that would be caught by section 59, not the agreement to compromise.[113]  Similarly, the agreement to compromise did not either create or dispose of an interest in land.  Rather, the agreement provided for the future creation of a property interest, being the grant of the call option.  It also follows therefore, that section 11(1)(a) has no application.

Disposition

  1. I will hear the parties as to the wording of the declaratory relief sought and costs.

 

Footnotes

[1]  This declaration is not sought in the interlocutory application but is foreshadowed in the Written Submissions of the Defendants, [1].

[2]  Affidavit of Malisa Margaret Vi Craig, filed by leave 3 August 2017 (“Craig”), [19].

[3]  Affidavit of Ronald Shaw Ashton, filed by leave 3 August 2017 (“Ashton”), [6]; Affidavit of Damien O’Brien, filed by leave 3 August 2017 (“O’Brien”), [6]; Affidavit of Matthew Justin Hocking, filed by leave 3 August 2017 (“Hocking”), [17]; Craig, [11].

[4]  O’Brien, [19].

[5]  Mr Williams is the first defendant and is also known as Derek William McCartney.

[6]  Ashton, [6].

[7]  Affidavit of Edmund Laurence Robinson, filed by leave 3 August 2017 (“Robinson”), [4(b)]; O’Brien, [13]; Ashton, [12].

[8]  Ashton, [12]; Craig, [11] and [43(b)].

[9]  Ashton, [13].

[10]  Craig, [11].

[11]  O’Brien, [13].

[12]  Hocking, [30]-[32].

[13]  Craig, Exhibit MMC-1.

[14]  Ashton, [14].

[15]  Ashton, [12].

[16]  Craig, [8] and [41(e)].

[17]  O’Brien, [15].

[18]  Robinson, [9]; Hocking, [34].

[19]  Craig, [9] and Exhibit MMC-1.

[20]  Craig, [43(c)].

[21]  Craig, [13]-[14].

[22]  T4-29, lines 21-23.

[23]  O’Brien, [18] and [19].

[24]  Robinson, [10].

[25]  Robinson, [11].

[26]  Ashton, [16].

[27]  Craig, [43(j)].

[28]  This is accepted by the plaintiff: see Written Submissions of the Respondent/Plaintiff, [14(a)].

[29]  Written Submissions of the Respondent/Plaintiff, [14(a)].

[30]  Mr Ashton accepted in oral evidence that this was agreed: T4-29, lines 21-23.

[31]  This is accepted by the plaintiff: see Written Submissions of the Respondent/Plaintiff, [14(d)].

[32]  O’Brien, [24]; Robinson, [13].

[33]  This is accepted by the plaintiff: see Written Submissions of the Respondent/Plaintiff, [14(e)].

[34]  O’Brien, [24].

[35]  Robinson, [13].

[36]  Hocking, [41(b)].

[37]  Hocking, [44].

[38]  Hocking, [52].

[39]  Ashton, [22].

[40]  O’Brien, [35].

[41]  Craig, Exhibit MMC-1.

[42]  Craig, [15].

[43]  T4-28, lines 35-36.

[44]  T4-16, lines 21-45.

[45]  Hocking, [32].

[46]  Hocking, [44].

[47]  Craig, [13].

[48]  Ashton, [17].

[49]  Robinson, [18]-[20]; Hocking, [30]-[31].

[50]  T4-29, lines 26-30.

[51]  O’Brien, [24].

[52]  O’Brien, [13].

[53]  Robinson, [13].

[54]  Hocking, [41(b)].

[55]  Ashton, [22].

[56]  Craig, [41(o)].

[57]  See for example: Hocking, [56] and Exhibit MH-1 at p 1, being an email from Mr Hocking to Ms Craig at 7.53 pm, 31 July 2017.

[58]  Hocking, [61].

[59]  Hocking, [53]; O’Brien [29].

[60]  O’Brien, [30].

[61]  Ashton, [19]-[20].

[62]  T4-9, lines 9-12.

[63]  T4-25, lines 45-46.

[64]  T4-26, lines 1-4.

[65]  T4-26, lines 33-34.

[66]  T4-9, lines 15-30.

[67]  T4-11, lines 8-10.

[68]  T4-11, lines 13-14.

[69]  T4-11, lines 25-31.

[70]  O’Brien, [28]; Hocking, [55].

[71]  O’Brien, [31] and Exhibit DO-1 at pp 1-2.

[72]  Robinson, [22].

[73]  O’Brien, Exhibit DO-2.

[74]  It was common ground between the parties that the Court could consider such subsequent conduct in determining whether an agreement had been concluded: see Capital Securities No 1 Pty Ltd v Saliba [2016] NSWSC 1093; see further Nateau Investments Pty Ltd v Pitt St Properties [2015] QSC 101 at [30].

[75]  Hocking, [56]; Craig, [21].

[76]  Craig, [21].

[77]  Craig, Exhibit MMC-1 at p 6.

[78]  O’Brien, [35].

[79]  O’Brien, [36], [39]-[41].

[80]  O’Brien, [42].

[81]  O’Brien, [43].

[82]  Craig, [27].

[83]  Hocking, [64].

[84]  Hocking, [65]; Craig, [30].

[85]  Hocking, [59].

[86]  [2015] QCA 287 at [28].

[87]  Robinson, [17].

[88]  [2010] QCA 271 at [11].

[89]  Written Submissions of the Defendants, [15] citing York Air Conditioning v Cth (1949) 80 CLR 11, 26 citing Lord Wright in Scammell and Nephew Ltd v Ouston (1941) AC 268, 269 with approval.

[90]  Written Submissions of the Respondent/Plaintiff, [29].

[91]  Written Submissions of the Defendants, [16]-[17].

[92]  Written Submissions of the Respondent/Plaintiff, [30].

[93]  See [29] above.

[94]  Written Submissions of the Respondent/Plaintiff, [22].

[95]  T4-62, lines 4-18.

[96]  [2009] QCA 60 (McMurdo P and Atkinson J agreeing) at [51].

[97]  [2010] QCA 271 at [47].

[98]  [2014] QSC 311, [96]-[98], upheld in AJ Lucas Operations Pty Ltd v Gladstone Area Water Board [2015] QCA 287 per Ann Lyons J (with whom Morrison and Philippides JJA agreed) at [77]-[79].

[99]  Written Submissions of the Defendants, [9](c) and [10].

[100]  [1954] HCA 72; (1954) 91 CLR 353 at 360 per Dixon CJ, McTiernan and Kitto JJ.

[101]  Written Submissions of the Defendants, [13] citing GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 635G, 636A (McHugh JA, with whom Kirby P and Glass JA agreed).

[102]  T4-55, lines 15-20.

[103]  At page 634G.

[104]  See [32] above.

[105]  (1985) 157 CLR 17 at 33.

[106]  [2007] HCA 61 at [44]; (2007) 233 CLR 115 at 135-136.

[107]  Hocking, [64].

[108]Todrell Pty Ltd v Finch (No. 1) [2007] QSC 363 per Chesterman J, as his Honour then was, at [88]; Mainline Investments Pty Ltd v Davlon Pty Ltd [1969] 2 NSWR 392.

[109]  Written Submissions of the Respondent/Plaintiff, [59].

[110]  [2015] QSC 101 at [42].

[111]  Written Submissions of the Defendants, [37]-[39] citing Miles v New Zealand Alford Estate (1886) 32 Ch.d 266 at 279; Head v Kelk [1963] SR (NSW) 340 at 349; Freedom v AHR Constructions Pty Ltd [1987] 1 Qd R 59 at 70; Dalton J in Nateau Investments Pty Ltd v Pitt St Properties [2015] QSC 101 at [41]-[43] and [46].

[112]  Written Submissions of the Defendants, [40].

[113]  Written Submissions of the Defendants, [41].

Close

Editorial Notes

  • Published Case Name:

    Gailey Projects Pty Ltd v McCartney & Anor

  • Shortened Case Name:

    Gailey Projects Pty Ltd v McCartney

  • MNC:

    [2017] QSC 185

  • Court:

    QSC

  • Judge(s):

    Flanagan J

  • Date:

    05 Sep 2017

  • White Star Case:

    Yes

Litigation History

Event Citation or File Date Notes
Primary Judgment [2017] QSC 185 05 Sep 2017 -

Appeal Status

No Status