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  4. Seymour CBD Pty Ltd v Maroochydore Convenience Centre Pty Ltd - [2000] QCA 327

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Seymour CBD Pty Ltd v Maroochydore Convenience Centre Pty Ltd[2000] QCA 327

Seymour CBD Pty Ltd v Maroochydore Convenience Centre Pty Ltd[2000] QCA 327

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Seymour CBD P/L v Maroochydore Convenience Centre P/L & Ors [2000] QCA 327

PARTIES:

SEYMOUR CBD PTY LTD ACN 010 302 860

(plaintiff/appellant)

v

COMMONWEALTH BANK OF AUSTRALIA

ACN 123 123 124

(first defendant)

MAROOCHYDORE CONVENIENCE CENTRE PTY LTD

ACN 010 640 169

(second defendant/third party/first respondent)

RANDALL ALEXANDER FERRIS

(third defendant/second respondent)

FILE NO/S:

Appeal No 5466 of 1999

SC No 939 of 1996

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

15 August 2000

DELIVERED AT:

Brisbane

HEARING DATE:

27 April 2000

JUDGES:

McMurdo P, Davies JA and Mackenzie J

Joint reasons for judgment of McMurdo P and Mackenzie J; separate reasons of Davies JA, concurring as to the orders made.

ORDER:

Appeal dismissed with costs to be assessed.

CATCHWORDS:

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER CASES – whether terms of contract entirely contained in contract form or whether modified by accompanying letter – whether contract form and letter constituted a counter-offer

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER CASES –  whether terms of letter capable of contractual acceptance – whether terms unenforceable for uncertainty

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – OTHER MATTERS – whether material breach of contract – rescission of contract – specific performance and damages

Australia Media Holdings v Telstra Corporation (1998) 43 NSWLR 104, referred to

Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, referred to

Coal Cliff Collieries v Sijehama P/L (1991) 24 NSWLR 1, considered

Godecke v Kirwan (1973) 129 CLR 629, referred to

Gold Coast Carlton Pty Ltd v Kamalesaran (1984) ANZ Conv Rep 709, referred to

Leighton Properties Pty Ltd v Hurley [1984] 2 QdR 534, considered

Rutherford v Acton-Adams [1915] AC 866, applied

Sweet & Maxwell Ltd v Universal News Services Ltd [1964] 2 QB 699, considered

Thorby v Goldberg (1964) 112 CLR 597, referred to

Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426, referred to

Walford v Miles [1992] 2 AC 128, referred to

COUNSEL:

J S Douglas QC with A M Daubney for the appellant

S L Doyle SC with D G Clothier for the respondents

SOLICITORS:

Nicholsons for the appellant

McCullough Robertson for the respondents

  1. McMURDO P and MACKENZIE J: This is an appeal from a decision of the Chief Justice dismissing both the appellant vendor's action against the respondent purchaser for specific performance of a contract for the sale of unit 138 in "Admiralty Towers 1" and its claim for moneys due by the second respondent (Mr Ferris) as guarantor of the obligations of the first respondent, Maroochydore Convenience Centre Pty Ltd ("Maroochydore") under that contract.  The appellant also appeals as to the declarations made by the Chief Justice in favour of the purchaser.
  1. The appellant ("the vendor") first contends that the contract was wholly contained within the contract form and was not modified by the accompanying letter of 23 December 1993; alternatively, if the contract comprised both the contract form and the letter, it embodied terms unenforceable for uncertainty; finally, any breach was not a material breach justifying termination of the contract; rather there should have been specific performance and damages. The vendor does not take issue with the Chief Justice's primary findings on factual issues.

The facts

  1. Mr Ferris, the principal of Maroochydore ("the purchaser"), attended at the LJ Hooker "Admiralty Towers" site office in October 1993 and met with LJ Hooker's representative, Mr Terry. Mr Ferris wanted to purchase a large unit with good carparking and storage spaces and signed a letter of intent in respect of a penthouse; he specifically noted two parking bays and nearby storage close to the lift. The purchase of this penthouse did not proceed.
  1. On 16 November 1993, Mr Terry telephoned Mr Ferris to discuss the potential purchase of unit 138, a three bedroom apartment on the 23rd floor of the building. Mr Ferris was keen to ensure that he had as much storage area as possible; Mr Terry knew that storage and parking facilities were important to Mr Ferris. Mr Terry told Mr Ferris: "You will like this one. It's got good car parking, good storage and you will be happy with this." Mr Ferris discussed with Mr Terry the desirability and position of unit 138's tandem car parks 81 and 82 which included an additional adjoining triangular area, suitable for parking his son's motorbikes, jet skis or a small car. They also agreed that Mr Ferris would receive a large storage area near the basement lifts with the purchase of unit 138. Mr Ferris saw unit 138 as a stepping stone; it was too small for his family needs in the long term but he would move in and use it to "trade up" to a larger unit, such as a penthouse, in which he and his children would live permanently.
  1. The vendor's solicitors forwarded a draft contract to the purchaser's solicitors on 19 November 1993 which provided in a plan attached to the Eleventh Schedule[1] for a large enclosed storage area to the right of and in addition to car parks 81, 82 and the open triangular area.
  1. The accompanying covering letter stated:

"6.Please do not make any change to the pre-printed Agreement without discussing it with us first.

  1. If there are any Additional Provisions in the Eleventh Schedule, the Purchaser should sign at the foot of each page of those Provisions."
  1. On 30 November 1993, Mr Terry told Mr Ferris that the storage areas were to be redesigned awaiting advice from the Brisbane City Council but it was intended that Mr Ferris would be allocated a good storage location near unit 138's car parks.
  1. The parties continued to negotiate about a number of issues including the car park and storage entitlements and varied the draft contract. By 8 December 1993 the lawyers for the parties agreed the contract would nominate the storage area rather than allowing the vendor to nominate it within two days of the execution of the contract.
  1. On 9 December 1993, the vendor's solicitor sent the purchaser's solicitor a re-engrossed copy of the Eleventh Schedule identifying car parks 81 and 82; this did not include any storage area beyond the open triangular area adjacent to those car parks. Mr Ferris did not think this reflected his agreement with Mr Terry but as he was travelling overseas he signed the guarantee contained in the contract form and instructed Mr Brain, Maroochydore's secretary, to sort it out for him; Mr Ferris flew to Canada.
  1. Between 13 and 23 December 1993, discussions between the parties or their agents established that the storage lockers near the basement lifts had been allocated to others and were no longer available. After further negotiation the parties agreed that the purchaser would receive with unit 138 car parks 81 and 82, the adjacent triangular open area and a storage facility to be constructed between car parks 82 and 89A.
  1. The contract form contained the following clauses as amended:

"12.3… The Vendor acknowledges that the Purchaser shall be entitled to the Lot with measurements and to a standard substantially in accordance with the Specifications provided further that notwithstanding the definition of 'specifications', if any changes made to the Specifications set out in this Agreement which materially prejudice the Purchaser, the Purchaser may terminate this Agreement and the deposit shall be refunded to it.

13.1The Purchaser expressly acknowledges that the terms and conditions set out in the Agreement including the Schedules and Annexures contain the entire Agreement as concluded between the parties notwithstanding any negotiations discussions prior to the execution hereof and notwithstanding anything contained in any brochure, report or other document prepared by the Vendor its Agents for submission to prospective purchasers and the Purchaser further acknowledges that he has not been induced to enter into this Agreement by any representation verbal or otherwise made by or on behalf of the Vendor which is not set out in this Agreement.

…

  1. The Vendor shall not be entitled to exercise the rights granted in this Clause so as to change the Purchaser's car space or storage space."
  1. On 23 December 1993, Mr Brain, who was in regular contact with Mr Ferris, wrote to Mr Terry:

"As arranged, we return herewith both copies of the abovementioned contract, duly executed, subject to the following:

11TH SCHEDULE – BASEMENT CAR PARK AND STORAGE.

With regard to the CAR PARKING and STORAGE areas, we confirm our telephone conversations in which you agreed, as the Vendor's Agent that:

  1. the car park spaces hatched are numbers 81 and 82;
  1. the developer will construct a storage area with solid walls to the reasonable requirements of the purchaser, between car parks 89A/90A and 82 using the rectangular pillar as part of one of the walls;
  1. the rectangular area between car park 82 and car parks 89A-90A cannot presently be absolutely committed, as the Brisbane City Council has indicated that it will require the wall between the car park and the boardwalk at this point to be relocated to allow for the provision of seating on the boardwalk;
  1. the rectangular area referred to in (c) above shall, after the specific requirements of the Brisbane City Council are known, be used as the site of the storage area to be constructed, as referred to in (b).  You agreed that the developer will discuss with the purchaser the reasonable requirements of the purchaser as to the storage space, before construction of the storage space is commenced.  The suggested location for the storage area is set out on the car park drawing attached hereto and marked "H".

…"

 The plan "H" indicated a storage area of about 15.38 square metres.

  1. On 23 December 1993, Mr Brain also wrote to the vendor's solicitors in the following terms:

"Dear Mr Douglas

ADMIRALTY TOWERS

CONTRACT TO PURCHASE APARTMENT 138

As arranged with Mr David Terry of L J Hooker Brisbane Project Marketing, we enclose herewith both copies of the abovementioned contract, duly executed.

Also enclosed is the original enclosure letter, addressed to Mr Terry, in which we set out the conditions agreed with Mr Terry, as vendor's agent, in connection with the carpark and storage area applicable to the apartment being purchased.

Mr Terry asked in the interest of avoiding unnecessary delays that we forward the contract direct to your office."

  1. Mr Ferris instructed Mr Brain to execute the contract on behalf of Maroochydore only because of the further agreement as to car parking and storage.
  1. The vendor's solicitors responded to the purchaser's solicitors on 24 December 1993 acknowledging receipt and raising another matter irrelevant to these proceedings which was clarified in a facsimile from the purchaser's solicitors that day. The vendor's solicitors confirmed the vendor's execution of the contract and requested the purchaser's bank guarantee for the deposit amount of $68,000, which was provided. The vendor did not at any time raise for discussion the matters in Mr Brain's letter to Mr Terry.
  1. Settlement of the contract was to take place on 30 January 1996. The vendor did not then provide the purchaser with the car parking and storage entitlements either in accordance with its letter of 23 December 1993 or in accordance with the unmodified contract form; instead it offered a solid walled storage area which had been constructed on a part of the triangular area adjacent to carparks 81 and 82, about seven square metres less and about half the size of the area described in the letter. The storage area between car parks 82 and 89A had been allocated to another unit; the triangular parking area adjacent to car parks 81 and 82 had been truncated by the smaller solid walled storage area and was unsuitable for parking a small car or jet ski on a trailer. The purchaser purported to terminate the contract because of the vendor's failure to provide the agreed car parks and storage.
  1. Valuer Mr Johnston did not regard the additional carparking facility offered by the triangular area adjacent to carparks 81 and 82 as of major value in the marketplace because it would require moving the cars in 81 and 82 to gain access to it; it would have value in the marketplace as an additional storage area. The market value of the difference between the triangular car park/storage area described in the contract and that actually offered by the vendor at settlement was about $6,000; a separate 10 square metre storage area had a value of $8,500-$9,000; the contract price for unit 138 was $680,000.
  1. His Honour preferred the evidence of Mr Ferris and Mr Brain to that of Mr Terry and concluded that the sending of the letter and contract from Maroochydore to the vendor's solicitors was a counter offer by the purchaser with the letter modifying the contract form; the vendor's conduct in executing the contract form and requesting the purchaser's deposit by way of bank guarantee within seven days without any relevant discussion of the modifying terms amounted to an unqualified acceptance of that offer; the contract for the sale of unit 138 was included in the contract forms as modified by the contents of the purchaser's letter of 23 December 1993 to Mr Terry; at settlement the vendor did not provide the storage area that it had contracted to provide; this was an important component of the contract for the purchaser; there was a material difference between what the vendor in fact offered and what it was contractually obliged to offer; the purchaser was entitled to terminate the contract.

Was the contract modified by the letter of 23 December 1993?

  1. The vendor contends that Mr Brain's letter of 23 December 1993 to Mr Terry was an offer to immediately agree to the contract form on the unmodified terms contained in the contract form; the letter was extraneous to the contract form and was an invitation to treat or an offer to negotiate in the future for possible variations to the contract as to the storage area.
  1. The parties' discussions as to the purchase of unit 138 extensively canvassed the provision of suitable storage areas and the advantages of the triangular area adjacent to car parks 81 and 82 for use as a parking space for a third small vehicle, motor bikes or jet skis; Mr Terry knew that the car parking and storage areas were important to Mr Ferris.
  1. The letter accompanying the contract form executed by the purchaser noted that the contract was:

"… subject to the following:

ELEVENTH SCHEDULE – BASEMENT CAR PARK & STORAGE

With regard to the CAR PARKING and STORAGE areas, we confirm our telephone discussions in which you agreed … ."

(our emphasis)

  1. Mr Brain's letter to the vendor's solicitors referred to his letter to Mr Terry and noted that it "set out the conditions agreed with Mr Terry as vendor's agent, in connection with the carpark and storage area applicable to the apartment being purchased."
  1. The vendor emphasises their letter of 19 November 1993[2] and cl 13.1 of the contract form;[3] but the purchaser was not obliged to agree to the terms set out in the contract form and was entitled to make a counter offer, which it did, modifying the terms of the contract, including cl 13.
  1. The oral and documented history of the negotiations between the parties, the wording of Mr Brain's letters, the vendor's request for the purchaser's bank guarantee and its subsequent execution of the contract without any further discussion of the modifications made in the letter to Mr Terry are objective support for the findings of the primary judge. His Honour was entitled to conclude that the contract form and the letter together constituted an offer from the purchaser and that the vendor's subsequent execution of the contract and the request for the purchaser's bank guarantee for $68,000 within seven days without further relevant discussion constituted an unqualified acceptance of the purchaser's offer.

Were the terms of the contract unenforceable for uncertainty?

  1. The vendor submits that the terms set out in Mr Brain's letter of 23 December 1993 to Mr Terry were unenforceable for uncertainty: the letter expressly acknowledged that "the rectangular area between carpark 82 and carparks 89A/90A cannot presently be absolutely committed, as the Brisbane City Council has indicated that it will require the wall between the carpark and the boardwalk to be relocated to allow for the provision of seating on the boardwalk"; it envisaged further negotiations between the parties about "the reasonable requirements of the purchaser as to the storage space before construction of the storage space is commenced; the storage area depicted on the plan attached to the letter was no more than "a suggested location for the storage area"; the letter is a mere record of the parties' willingness to enter into future discussions about carparks and storage or an agreement to agree.
  1. The courts will not enforce an agreement to agree: see Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd[4] and Walford v Miles[5] but the status of contracts to negotiate is less certain under Australian law: see Australis Media Holdings v Telstra Corporation.[6]  In Coal Cliff Collieries v Sijehama P/L,[7] Kirby P (with whom Wardell AJA agreed) analysed the relevant authorities and principles.[8]  He concluded that:

"… provided there was consideration for the promise, in some circumstances a promise to negotiate in good faith will be enforceable depending on its precise terms. …

… the proper approach to be taken in each case depends upon the construction of the particular contract: Australia & New Zealand Banking Group Ltd v Frost Holdings Pty Ltd (1989) VR 695; see note (1991) 65 ALJ 59.  In many contracts it will be plain that the promise to negotiate is intended to be a binding legal obligation to which the parties should then be held."[9]

  1. Here the parties reached agreement and went beyond agreeing to agree; they agreed to the construction of a storage area using the rectangular pillar as part of one of the walls with the specific requirements to be discussed before construction, once the Brisbane City Council's requirements for seating on the boardwalk were finalised. The future construction of the storage area was not to be determined by negotiation but rather by reference to the reasonable requirements of the purchaser. This was a certain agreement with an objective intention to legally bind, not an uncertain agreement to agree or a proposal to further negotiate: see Sweet & Maxwell Ltd v Universal News Services Ltd,[10] where Pearson LJ noted that such a condition:

"… enables the court to decide on the reasonableness of a requirement if the parties are unable to agree. … (it) is a convenient and effective means of dealing with the position where the parties have agreed on the main points but have not yet settled the details, and wish to make a binding agreement immediately.  By using a formula such as this, introducing the objective test of reasonableness, the parties avoid making a mere agreement to agree, which would be unenforceable."[11] 

These words are apposite here; the modifications made by Mr Brain's letter were a sensible means of dealing with the unknown Council requirements.

  1. The vendor submitted the contractual uncertainty arose because of the indeterminate location of the storage area; it was unknown how much of the area would be required by the Brisbane City Council; therefore there could be no agreement as the outcome was contingent upon a third party. This does not make the agreement contractually uncertain; if the Council were to require a large part of the proposed storage area then the purchaser's storage area would be correspondingly reduced, consistent with the contract which mandatorily stated that once the requirements of the Council were known the rectangular area "shall … be used as the site of the storage area to be constructed."[12]
  1. The primary judge correctly found the terms of the agreement contained in Mr Brain's letter to Mr Terry of 23 December 1993 were contractually enforceable.

Was the breach a material breach warranting rescission of the contract, or was the vendor entitled to specific performance and the purchaser merely entitled to damages?

  1. The grounds of appeal as to materiality (2.10 and 2.11) and the appellant's written submissions in reply suggest that materiality of the breach is at issue even where this Court determines there was a binding contract between the parties as amended by Mr Brain's letter of 23 December 1993. The oral submissions suggest that perhaps the appellant's argument as to materiality of the breach was limited to a finding by this Court that the contract between the parties was in accordance with the contract form unmodified by the letter of 23 December 1993, constituting only the difference between the triangular hatched area adjacent to car parks 81 and 82 in the contract and the seven square metres of enclosed storage space actually offered at settlement. In those circumstances we think it prudent to deal with the materiality of the breach of contract on the first mentioned basis.
  1. We understand the vendor's argument is as follows: At settlement the purchaser was offered seven square metres of enclosed storage space constructed in the triangular hatched area adjacent to car parks 81 and 82; although less than half the size of the storage area under the modified contract, this was not materially different from the contractual agreement to provide both the open triangular hatched area adjacent to car parks 81 and 82 and the additional storage area referred to in the letter of 23 December. There was no evidence, the vendor submits, that the difference between what should have been provided and what was provided materially affected the value of the property, the contract price of which was $680,000; the proper order was for specific performance with damages.
  1. The learned Chief Justice found that what the vendor offered at settlement as to carpark and storage materially prejudiced Maroochydore even though they were not the predominant components of the $680,000 sale; they were nevertheless important components to Mr Ferris and Mr Terry knew this; Mr Ferris lost the use of an area adequate for the parking of a third small vehicle, jet ski trailer or additional storage; the absence of the separate storage area rendered the unit less desirable and saleable; good car and storage space was of considerable particular importance to Mr Ferris and was not diminished by his wish to "trade up".[13]
  1. If a vendor sues and is in a position to convey substantially what the purchaser had contracted to get, the court "will decree specific performance with compensation for any small and immaterial deficiency, provided that the vendor has not by misrepresentation or otherwise disentitled himself to his remedy": Rutherford v Acton-Adams.[14]
  1. The issue of materiality is sometimes, as here, a finely balanced one. The smallness of the money or area involved, though relevant, is not conclusive. For example, in Leighton Properties Pty Limited v Hurley,[15] Hurley entered into a contract to purchase a townhouse in a proposed building units plan; in accordance with plans and specifications which showed a guest suite with sink and stove on the upper level, a laundry situated downstairs and a bar on the ground floor.  When the contract was due for settlement, no sink or stove was provided in the guest suite, the laundry was on the upper level and no bar was provided.  Hurley rescinded the contract.  Connolly J (with whom Campbell CJ and Demack J agreed) found that the breach was material, noting:

"What the appellants contracted to get was a townhouse with a guest suite including a sink and stove on the upper level.  What was tendered did not answer this description and the respondent adamantly refused to install the necessary plumbing and fittings save at the expense of the appellants.  … what was tendered on the date for settlement was not substantially what the appellants had contracted to get.   The following passage from the judgment of Myers CJ in Southland Investments Limited v Public Trustee (1943) NZLR 580 at p 610 is in my judgment very much in point.  After pointing out that the mere question of smallness of area or of money value is not the test although they are factors, his Honour went on:

'In order to decide whether the purchaser is getting substantially that which he bargained for, the court is bound to consider every incident by which the property offered can be differentiated from that contracted for: Lee v Rayson [1917] 1 Ch 613 and Ridley v Oster [1939] 1 All ER 618.  It is not sufficient, in my view, that the existing accommodation … would be nearly as good as the present accommodation."

See also Tiplady v Gold Coast Carlton Pty Ltd[16] and Gold Coast Carlton Pty Ltd v Kamalesaran.[17]

  1. Mr Ferris' accepted evidence was that car parking and storage were important to him in this inner-city apartment; he intended to live in the unit for at least a time; he would not have entered into the contract but for the modified terms as to storage. At settlement the vendor offered a small parking area unsuitable for a third small car and seven square metres less storage than was agreed. The issue of materiality on these facts was a matter about which reasonable minds could properly differ but the learned Chief Justice was entitled to conclude that the purchaser was not offered at settlement that which it had substantially contracted to get. It follows that the purchaser was entitled to rescind; it was also entitled to the declarations made in its favour.
  1. The appeal should be dismissed with costs to be assessed.
  1. DAVIES JA:  I have had the advantage of reading the joint reasons for judgment of the President and Mackenzie J.  Their Honours' very full statement of the relevant facts relieves me of the need to repeat them here.  I shall accordingly refer to them only so far as it is necessary to explain these reasons.
  1. In the trial of this action the questions in issue between the appellant and the principal respondent Maroochydore Convenience Centre Pty Ltd were:
  1. was there a binding contract between them in terms of a formal contract document ("the contract form") as amended by a letter from the respondent to the appellant's agent of 23 December 1993;
  1. alternatively was there a binding contract between them in terms of the contract form;
  1. if yes to 1, was what the appellant tendered on settlement substantially different from that which it contractually promised;
  1. if yes to 2, was what the appellant tendered on settlement substantially different from that which it contractually promised;
  1. was the respondent entitled to relief under the Trade Practices Act.
  1. There were other issues which might arise consequent upon the answers to those questions and further issues involving the respondent Commonwealth Bank of Australia in respect of a cheque and the other appellant Ferris, the principal of Maroochydore, upon a guarantee but it is unnecessary to refer to these further. The learned trial judge decided the case in the respondent's favour by answering question 1 "Yes" and question 3 "Yes". Accordingly his Honour did not find it necessary to decide question 5 although he indicated that he would, if necessary, find Mr Terry's representations misleading and deceptive.
  1. Before this Court the only questions in issue were questions 1, 2, 4 and 5. I mention this specifically because the President and Mackenzie J in their reasons have also dealt with question 3. In my view, however, it is clear that the appellant contested the question of materiality of the difference between what was promised and what was tendered on settlement only on the basis that the contract was upon the contract form; in which case the only difference between what was promised and what was tendered related to a triangular storage area, adjacent to car spaces 81 and 82, provided for in the contract form. It did not contend that if what was promised was that triangular area together with the area the subject of the letter of 23 October 1993, what was tendered was not materially different from what was promised.
  1. If, as I think, his Honour was correct in answering question 1 in the way in which he did it will therefore be unnecessary to consider any of the other questions. That question may be re-stated in the following way:
  1. when the respondent sent to the appellant the signed contract form together with the letter of 23 December 1993 were they together intended as a counter offer to the appellant which the appellant intended to accept by later communicating to the respondent its signature of the contract form?  I am, of course, referring to intention in an objectively observable way.
  1. If so was that an offer capable of acceptance?  Here I am considering the arguments of the appellant that it was not so capable either because it envisaged further agreement or because it was uncertain in its meaning.
  1. It is convenient to state the questions in that way although there is some overlapping between the first question and the first aspect of the second. It is also convenient to consider those questions in that order.
  1. Was the letter and the contract form intended as a counter offer which was intended to be accepted?
  1. This question must be determined on the basis partly of oral evidence, his Honour preferring the evidence of the respondent's witnesses, Mr Ferris and his company secretary Mr Brain, to that of Mr Terry the appellant's agent, but primarily on the terms of the letter of 23 December 1993. The importance of the oral evidence is that the letter was written in a context in which it was common ground that the respondent would, by the contract, provide as storage space not only a triangular area adjacent to car parks 81 and 82 but also an additional larger area.
  1. A reading of the letter of 23 December 1993 in that context, in my opinion, requires a conclusion that it was intended, together with the contract form, to be a counter offer by the respondent to the appellant to include in the contract an oral agreement already reached between Mr Brain on the respondent's behalf and Mr Terry on the appellant's behalf. The letter is headed "CONTRACT TO PURCHASE APARTMENT 138". Then follow terms indicating that an oral agreement had already been reached with respect to the additional storage area:

"... we confirm our telephone discussions in which you agreed ... that"

"The developer will construct ... "

"The rectangular area ... shall ... be used ... ".

  1. I would conclude from these and other terms of that letter that they were intended by the respondent to form part of the contract between it and the appellant. The appellant's only action upon receipt of that letter and the returned executed contract form was to execute it itself and to communicate that fact to the respondent. I would have no doubt that, at that point, the parties intended to contract on the basis of the contract form as modified by that letter.
  1. It appears to be on this issue that the appellant raised the "entire contract" point. It was submitted that the parties could not have intended the letter to form part of a contract between them because the contract form which they executed contained a term, cl 13.1, which stated that the terms and conditions set out in it contained the entire agreement as concluded between the parties notwithstanding any negotiations or discussions prior to execution of it and notwithstanding anything contained in any brochure, report or other document prepared by the vendor or its agent. That submission in my opinion misunderstands the effect of what occurred. The intention of the respondent, in sending to the appellant its letter of 23 December 1993 together with the contract form executed by it was to make a counter offer on those terms; that is on the terms of the contract form as modified by that letter. That would necessarily involve modification, to that extent, of cl 13.1. It was that offer which the learned trial judge, correctly in my view, concluded was accepted by the appellant.
  1. Were the terms of the letter capable of contractual acceptance?
  1. The appellant pointed to a number of aspects of this letter which, it was submitted, led to the conclusion either that it was not capable of acceptance because it left important matters still to be agreed or that it was so uncertain as to be incapable of having contractual effect. It is convenient to deal with each of those aspects in turn.
  1. First it was said that paragraph (c) of the letter recognized that there was yet no final agreement. The phrase "cannot presently be absolutely committed" was relied on as was the fact that it was uncertain how much of the area, graphically described in the drawing attached to the letter, would be taken by the Brisbane City Council for seating on the boardwalk. Read as a whole, however, the paragraph simply recognized that the precise area and its dimensions depended on how much of it the Brisbane City Council would take. It is important that no further agreement between the parties was contemplated or required; which puts an end to any contention about the necessity for further agreement. Moreover there is nothing uncertain about a provision such as this. The parties were content to agree that what would be conveyed would be the agreed area less such part of it as was taken by the Brisbane City Council.
  1. The second aspect of the letter relied on by the appellant was the statement in paragraph (b) that the developer would construct the storage area "with solid walls to the reasonable requirements of the purchaser"; and that in paragraph (d) that the vendor "will discuss with the purchaser the reasonable requirements of the purchaser as to the storage space before construction of the storage space is commenced". The appellant submitted that these provisions were uncertain; alternatively that the reference to discussion implied further negotiation. Neither, in my view, is the case. As to the latter the reference to discussion was merely a reference to the developer ascertaining from the purchaser what its reasonable requirements were for construction of the storage area with solid walls. As to the former the requirement appears to be limited to the manner of construction of the walls of the storage area rather than its size or dimensions both of which, subject to the Brisbane City Council requirements, are graphically described in the drawing attached to the letter.
  1. There are two reasons why these provisions are not uncertain. In the first place, there is, relevantly, an important distinction between, on the one hand, leaving a term of a contract, especially an essential one, to be fixed by one of the parties, which in effect confers a discretion upon that party as to whether to perform the contract or not, and, on the other, leaving to one party the manner in which a term is to be performed.[18]  These provisions are of the latter kind.  Secondly there is here the added requirement of reasonableness;  "the reasonable requirements of the purchaser".[19]  Together they ensure that the provisions are sufficiently certain.
  1. The final aspect of the letter relied on is the reference in paragraph (d) to the "suggested location" of the storage area being set out on the drawing. But of course it could only be suggested, in the sense of not being final, until the Brisbane City Council had indicated, as it did before settlement, what its requirements were. I do not think that the quoted phrase indicated either an intention that there needed to be any further agreement or, subject to the Brisbane City Council requirement, that there was any uncertainty as to the location of that storage area.
  1. Accordingly, in my view, the contract as found by the learned trial judge was sufficiently certain and enforceable and the appeal must accordingly be dismissed with costs.

Footnotes

[1]  The Eleventh Schedule contained a number of additional provisions, including the following:

"2.CAR AND STORAGE SPACES: The car and storage spaces forming part of the lot shall be in accordance with the plan attached hereto, as hatched in black. …"

[2]  See [6] of these reasons.

[3]  See [12] of these reasons.

[4]  (1982) 149 CLR 600 at 604.

[5]  [1992] 2 AC 128, 136.

[6]  (1998) 43 NSWLR 104, 127.

[7]  (1991) 24 NSWLR 1.

[8]  21 to 26.

[9]  At 26.

[10]  [1964] 2 QB 699.

[11]  At 733.  See also Harmon LJ at 726 and Buckley J at 735; Godecke v Kirwan (1973) 129 CLR 629 per Walsh J at 641-643 with whom Mason J agreed at 648.

[12]  See [14](d).

[13]  Judgment p 9-10.

[14]  [1915] AC 866, 869-870.

[15]  [1984] 2 QdR 534.

[16]  (1984) 3 FCR 426, 445.

[17]  (1984) ANZ Conv Rep 709, 714.

[18]Thorby v Goldberg (1964) 112 CLR 597 at 604 – 605, 613.

[19]Sweet and Maxwell v Universal News Services Ltd [1964] 2 QB 699;  Godecke v Kirwan (1973) 129 CLR 629 at 642 – 643, 648.

Close

Editorial Notes

  • Published Case Name:

    Seymour CBD Pty Ltd v Maroochydore Convenience Centre Pty Ltd

  • Shortened Case Name:

    Seymour CBD Pty Ltd v Maroochydore Convenience Centre Pty Ltd

  • MNC:

    [2000] QCA 327

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Davies JA, Mackenzie J

  • Date:

    15 Aug 2000

Litigation History

EventCitation or FileDateNotes
Primary Judgment[1999] QSC 10114 May 1999Claims for specific performance and moneys owing by guarantor dismissed: de Jersey CJ
Appeal Determined (QCA)[2000] QCA 32715 Aug 2000Appeal dismissed: McMurdo P, Davies JA, Mackenzie J

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Australia & New Zealand Banking Group Ltd v Frost Holdings Pty Ltd (1991) 65 ALJ 59
1 citation
Jump To
Cite 1 - (1991) 65 ALJ 59
Australia & New Zealand Banking Group Ltd v Frost Holdings Pty Ltd (1989) VR 695
1 citation
Jump To
Cite 1 - (1989) VR 695
Australis Media Holdings Pty Ltd and Ors v Telstra Corporation Ltd and Ors (1998) 43 NSWLR 104
2 citations
Jump To
Cite 1 - (1998) 43 NSWLR 104
Cite 2 - (1998) 43 NSWLR 104
Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600
2 citations
Jump To
Cite 1 - (1982) 149 CLR 600
Cite 2 - (1982) 149 CLR 600
Coal Cliff Collieries Pty Ltd v Sijehama Pty Ltd (1991) 24 NSWLR 1
2 citations
Jump To
Cite 1 - (1991) 24 NSWLR 1
Cite 2 - (1991) 24 NSWLR 1
Godecke v Kirwan (1973) 129 CLR 629
3 citations
Jump To
Cite 1 - (1973) 129 CLR 629
Cite 2 - (1973) 129 CLR 629
Cite 3 - (1973) 129 CLR 629
Gold Coast Carlton Pty Ltd v Kamalesaran (1984) ANZ Conv Rep 709
2 citations
Jump To
Cite 1 - (1984) ANZ Conv Rep 709
Cite 2 - (1984) ANZ Conv Rep 709
Lee v Rayson (1917) 1 Ch 613
1 citation
Jump To
Cite 1 - (1917) 1 Ch 613
Leighton Properties Pty Ltd v Hurley[1984] 2 Qd R 534; [1984] QSCFC 42
2 citations
Jump To
Cite 1 - [1984] 2 Qd R 534
Cite 2 - [1984] 2 Qd R 534
Ridley v Oster [1939] 1 All E.R. 618
1 citation
Jump To
Cite 1 - [1939] 1 All E.R. 618
Rutherford v Acton-Adams (1915) AC 866
2 citations
Jump To
Cite 1 - (1915) AC 866
Cite 2 - (1915) AC 866
Southland Investments Limited v Public Trustee (1943) NZLR 580
1 citation
Jump To
Cite 1 - (1943) NZLR 580
Sweet & Maxwell Ltd v Universal News Services Ltd (1964) 2 QB 699
3 citations
Jump To
Cite 1 - (1964) 2 QB 699
Cite 2 - (1964) 2 QB 699
Cite 3 - (1964) 2 QB 699
Thorby v Goldberg (1964) 112 CLR 597
2 citations
Jump To
Cite 1 - (1964) 112 CLR 597
Cite 2 - (1964) 112 CLR 597
Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426
2 citations
Jump To
Cite 1 - (1984) 3 FCR 426
Cite 2 - (1984) 3 FCR 426
Walford v Miles (1992) 2 AC 128
2 citations
Jump To
Cite 1 - (1992) 2 AC 128
Cite 2 - (1992) 2 AC 128

Cases Citing

Case NameFull CitationFrequency
JJ Richard & Sons Pty Ltd v Precast Concrete Pty Ltd [2010] QDC 2722 citations
JJ Richards & Sons Pty Ltd v Bowen Shire Council[2008] 2 Qd R 342; [2008] QCA 161 citation
Ritson v Ryan [2018] QCATA 1482 citations
1

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