SUPREME COURT OF QUEENSLAND

[1] HOLMES JA:  The appellant is the executrix of the will of Mr Garry Perry.  She appeals against a declaration that letters from solicitors acting for Mr Perry and a response from the respondent’s solicitor collectively constituted a binding agreement for the transfer to the respondent of Mr Perry’s interest as tenant in common in a Townsville property, and against an order for specific performance of that agreement.  The grounds of appeal are, in essence, that the primary judge erred in making these findings: that the respective pieces of correspondence could constitute an offer and acceptance amounting to a concluded agreement susceptible of specific performance; that Mr Perry’s solicitor had implied authority to sign the purported offer and thus dispose of the property; and that there was a memorandum of the agreement which would satisfy s 59 of the Property Law Act1974.

The parties’ correspondence

[2] The respondent, Ms O'Riley, and Mr Perry had a number of shared financial and property arrangements, which included their holding the Townsville property as tenants in common.  They negotiated with a view to disentangling their affairs.  The question before the trial judge was whether they had reached an agreement for the transfer of Mr Perry’s interest in the property to Ms O'Riley.

[3] The relevant correspondence began with a letter dated 28 September 2010 from Mr Perry’s solicitors to Ms O'Riley’s solicitors.  Its material parts were as follows:

“Our client has instructed us to advise that he is prepared to transfer by way of gift his interest in the property at 5 Peacock Crescent, Condon to either your client or her daughter on the condition that in exchange for such transfer your client and/or her daughter are to discharge the existing joint debt of Sylvia O'Reilly [sic] and our client to Queensland Railway Institute Credit Union.  Our client understands that your client and/or her daughter have already received approval of finance for the existing mortgage to be discharged.

We would therefore request that you confirm that your client agrees to the above and that you then submit to our office the relevant Transfer documents for execution by our client. Would you please advise as to which financial institution will be providing finance to your clients and when they will be in a position to effect settlement.

Our client would like to have this matter finalised as soon as possible and we would therefore request that you forward your response so that this can occur.”

[4] Mr Perry’s solicitors wrote another letter on 3 November 2010, noting that no response had been received to the previous letter and asking:

“Would you please confirm that your client agrees to our client’s proposal contained in our said facsimile and forward the relevant Transfer documents to us for execution by our client.”

[5] On 24 November 2010, Ms O'Riley’s solicitors answered in these terms:

“We refer to your letter of 3 November 2010 and advise that our client has now received finance approval sufficient to discharge the existing joint debt of our mutual clients to Railways Credit Union.

We confirm that we will forward undercover of separate letter, transfer documents to give effect to the proposed transfer.  We confirm that our client is obtaining finance from Railways Credit Union.

We will advise you further when our client is in a position to effect settlement.”

[6] On 9 December 2010, Ms O'Riley’s solicitors wrote to Mr Perry’s solicitors enclosing a transfer and a property transfer information form for execution.  That letter contained what looks to be a standard paragraph, asking whether “any of the chattels included in the sale [were] subject to warranty”.  The transfer contained an error, in the form of a figure of $132,500 inserted as consideration, rather than the discharge of the joint debt.  In response to a question in the property transfer information form as to the relationship between the parties, the answer given was “De Facto”.

[7] Mr Perry died on 14 December 2010 without signing the transfer documents, leaving a will in which he devised his share of the property to his son.

The letter of 28 September as offer

[8] The trial judge found that the letter of 28 September contained sufficient detail to constitute an offer capable of acceptance by Ms O'Riley or her daughter.  It set out the property to be transferred, the consideration and the persons to whom the offer was made.  By seeking confirmation of the agreement and requesting transfer documents, the letter made it clear that the offer was intended to be binding.  The word “gift” was mere surplusage; the transfer was plainly to be for valuable consideration.

[9] In oral submissions on the appeal, the appellant maintained, but did not strongly press, arguments put in her written submissions that the offer was uncertain because of the reference to a “gift” and that it was clear from the letter’s terms that it was simply an invitation to treat, with no contract to be formed until Mr Perry signed the transfer documents.  Instead, the appellant identified as the real issue the uncertainty of the offer because it did not specify who was to be liable to pay the consideration: Ms O'Riley or her daughter, who was not identified.  (Ms O'Riley had two daughters.) The fact that Ms O'Riley had accepted the offer could not retrospectively give certainty to its terms.

[10] The appellant referred to Placer Development Ltd v The Commonwealth of Australia[1] for the proposition that if the promisor were to have a discretion about whether he or she would carry out the promise, there was no contract.  If there were a default in payment and an action were brought for specific performance, Ms O'Riley could answer it by saying that she had not committed herself to make the payment.  The purchaser’s entitlement to obtain specific performance must depend on mutual obligations which would allow the vendor similarly to obtain specific performance.

[11] In determining contractual intention, Lord Wright’s statement in Scammell and Nephew Ltd v Ouston[2] as to the proper approach holds good:

“The object of the court is to do justice between the parties, and the court will do its best, if satisfied that there was an ascertainable and determinate intention to contract, to give effect to that intention, looking at substance and not mere form. It will not be deterred by mere difficulties of interpretation. Difficulty is not synonymous with ambiguity so long as any definite meaning can be extracted.”[3]

[12] There can be no doubt, looking at the correspondence between the parties, that they meant to agree the disposition of the Townsville property.  In my view, the terms of the letter of 28 September in seeking agreement from Ms O'Riley made it clear that the parties to the contract were to be she and Mr Perry.  Notwithstanding the primary judge’s reference to the offer as capable of acceptance by Ms O'Riley’s daughter, it plainly was not made to the daughter.  Instead, the offer was one of transfer of the property to Ms O'Riley or, if she chose, her daughter, in exchange for the discharge of the debt.  The reference to “your client and/or her daughter” as discharging the debt was, as the next sentence of the letter makes clear, the product of an understanding that one or both had access to the necessary finance.  But in the context of Ms O'Riley and no-one else being asked to agree, it is plain that she was to provide the consideration - the discharge of the debt - whatever the mechanism through which it was achieved.  The offer cannot sensibly be read as giving Ms O'Riley an option about whether she carried out the promise to discharge the debt, as opposed to giving her a discretion as to the source from which it was discharged.  Mr Perry would have been entitled to seek specific performance of Ms O'Riley’s promise to discharge the debt.

[13] As to other matters raised, the trial judge was correct in treating the reference to “gift” as mere surplusage.  The information necessary for, and the ultimate form of, the transfer documents are irrelevant to the construction of the letter as an offer.  It is clear from the letter’s second paragraph that the relevant agreement is as to the transfer in exchange for the discharge of the debt, and that the submission of transfer documents is no more than a step to be taken in implementing the agreement, once made.  This case was in the first of the Masters v Cameron[4] categories.

The letter of 24 November as acceptance

[14] In relation to the letter of 24 November 2010, the trial judge noted that the transaction was a relatively simple one between co-owners.  Some looseness in the language used and irrelevancies in the exchange did not deprive the exchange of correspondence of the necessary certainty of meaning.  No sensible interpretation other than unqualified acceptance could be placed on the letter.

[15] The appellant argued that the letter of 28 September 2010 required a two-stage acceptance: Ms O'Riley’s acceptance of the offer to transfer the property and her provision of transfer documents.  Neither of her solicitors’ letters of 24 November or 9 December provided her agreement to the proposal as the 28 September letter required.  The letter of 9 December referred to “the chattels included in the sale”, which went beyond anything Mr Perry had purported to offer; and the transfer documents had an incorrect description of the consideration and identified Mr Perry and Ms O'Riley as de facto partners.  Mr Perry would not have been obliged to sign those transfer documents in consequence.  They were, in reality, an offer which he could accept or reject.

[16] I have already indicated that I do not consider that the letter of 28 September contemplated a two-stage acceptance process; the parties intended to be bound immediately on Ms O'Riley’s agreement, while anticipating the preparation and execution of transfer documents.  The letter of 24 November, while not using the word “agree”, makes it clear that the offer is accepted: Ms O'Riley will discharge the debt and, to put the agreement into effect, will forward transfer documents and proceed to settlement.  Subsequent mistakes in the letter of 9 December and the transfer documents were irrelevant to that acceptance.

Note or memorandum in writing signed by the person to be charged

[17] Section 59 of the Property Law Act 1974 (Qld) provides:

“59Contracts for sale etc. of land to be in writing

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.”

The learned judge found that the letter of 28 September 2010 constituted a note or memorandum of the contract which Mr Perry’s solicitor was lawfully authorised to sign.

[18] In written submissions, the appellant referred to Young J’s statement in Twynam Pastoral Co Pty Ltd v Anburn Pty Ltd[5] as to the requirements of an equivalent section:

“In order to satisfy the section there must be a note or memorandum sufficiently specifying the parties to the contract, the property being sold, the price and the promises being made by the parties...”[6]

She argued that the letter was not a sufficient memorandum or note because it did not refer to any particular promises made by the parties; it was uncertain as to who the parties were; it did not refer to any chattels which were later said to be part of the contract; and it was plain on its face that the transfer documents, when executed, were to constitute the contract.

[19] Secondly, the appellant contended, there was no evidence that Mr Perry’s solicitor had signed the letter or had implied or actual authority to dispose of Mr Perry’s interest.  The letters referred to execution of the transfer documents by Mr Perry.  Ms O'Riley did not adduce any evidence from the solicitor to confirm that he signed the letter with Mr Perry’s authority and it was to be inferred that his evidence on the point would not have assisted.

[20] Although it is not immediately obvious that a letter setting out the terms of an offer could amount to a memorandum of a contract which has yet to be formed when the letter is written, there is authority to the effect that it can.  In Pirie v Saunders[7] the High Court said:

“We do not mean...that it is necessary that the written note must always appear to have been made after the making of the contract for it is clear that a written proposal or offer may by its subsequent acceptance become by the conduct of the parties recognizable as a sufficient note or memorandum of the resulting contract.”[8]

Counsel for the appellant disavowed any contention that the fact that the 28 September letter pre-dated the contract’s actual formation could preclude it from constituting a memorandum of the contract.

[21] As I have already observed, the letter was, in my view, sufficiently certain as to who were the parties and  what was the promise made; and subsequent correspondence and the transfer documents were irrelevant to what was specified in it.  It appears to have been common ground at first instance that the letter of 28 September 2010 was signed by a member of the firm of solicitors acting for Mr Perry; the issue raised in the appellant’s submissions below was whether he had authority to sell the property.

[22] Ms O'Riley deposed to the fact that she had a conversation with Mr Perry himself about his wish to transfer the property to her or her daughter.  That conversation was contemporaneous with the letter of 28 September, and consistent with Mr Perry’s being the driving force behind the letter.  The letter itself indicated that it was written on his instructions.  In the circumstances, the primary judge could properly infer that the solicitor had authority to write it.  It was not necessary that the solicitor have authority to sell the property; it was sufficient that he had authority to sign the letter, the document which constituted the note or memorandum for the purposes of s 59.[9]

[23] None of the grounds of appeal having been made out, I would dismiss it with costs.

[24] MUIR JA:  I agree that, for the reasons given by Holmes JA, the appeal should be dismissed with costs.

[25] MULLINS J:  I agree with Holmes JA.