Dolstone Pty Ltd v Bucknall & Bucknall
[1997] QDC 328
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- Dolstone Pty Ltd v Bucknall & Bucknall[1997] QDC 328
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Dolstone Pty Ltd v Bucknall & Bucknall[1997] QDC 328
Dolstone Pty Ltd v Bucknall & Bucknall[1997] QDC 328
DISTRICT COURT | Plaint No 4434 of 1997 |
CIVIL JURISDICTION
JUDGE McMURDO
DOLSTONE PTY LTD (ACN 010 377 170) | Plaintiff |
and
RAYMOND FRANCIS BUCKNALL AND HISAKO BUCKNALL | Defendant |
BRISBANE
DATE 19/12/97
JUDGMENT
HER HONOUR: This is an application for summary judgment for specific performance. By an agreement between the parties on 21 April 1997 the parties had a put call option in respect of land at Brighton to which a signed but undated contract was annexed.
The contract was for the sale of the land for $250,000. The purpose of the put call option was to delay the applicant/plaintiff's liability to pay capital gains tax till the next financial year.
The plaintiff purported to exercise the put option agreement on 1 July 1997 by notice in writing to the defendants in accordance with the option agreement. The notice of 1/7/97 erroneously stated, “We note settlement is due to be completed on 4/7/97.”
The plaintiff through its solicitor exercising implied authority from both parties to fill in the blank dates dated the contract schedule to the option agreement “1 July 1997” and appointed “4 July 1997” as the date for settlement, believing that was the agreed date between the parties.
Pursuant to clause 1 of the put option and call option agreement, the date of completion must be seven days from the date of exercise of the put option or call option. The option must be exercised between 9 a.m. and 5 p.m., 1 July 1997.
The plaintiff's solicitor mistakenly and with no ill intent filled out the blank contract with a completion date of 4/7/97. By letter of 2 July 1997 the defendants purported to repudiate the agreement because of the plaintiff's variation of the date for completion from 8/7/97 as required under the option agreement to 4/7/97. By letter the same day the applicant/plaintiff's solicitor refused to accept any right to repudiate.
The defendants failed to complete on 4/7/97. The plaintiff remained ready, willing and able to complete the contract on 8/7/97 and at all material times. On 25 August 1997 the plaintiff again called for performance of the contract on 5 September 1997. The plaintiff was at all material times ready, willing and able to complete but the respondent/defendants failed to complete and have continued to fail to complete the contract.
The respondent/defendants have prepared a defence claiming the requirement of the applicant/plaintiffs to settle on 4 July 1997 instead of 8 July 1997 as required by the put and call option was a unilateral variation entitling them to refuse to complete the contract.
They also claim that by 25 August 1997 when the plaintiffs called for performance of the contract the defendants had repudiated the contract.
Finally the defendants deny agreeing the completion date of the contract was to be 4 July 1997. This is not an issue before me.
The solicitor for the applicant/plaintiff had implied authority from both parties to fill in the blank dates on the signed contract attached to the put and call option. He had no fraudulent or wrong intention in filling out the wrong completion date pursuant to the option agreement.
The non-fraudulent filling in of blank documents will not of itself avoid the contract: Armor Coatings v. General Credits (1976-78) 17 SASR 259 at 275 and 277. It is not disputed that the applicant/plaintiff's solicitor honestly but mistakenly believed he was filling in the blank dates in accordance with the agreement of the parties.
The correct date was ascertainable from the face of the option agreement, clause 1, as 8/7/97. The put and call option agreement allowed the vendor applicant/plaintiff to exercise the put option on 1 July 1997 between 9 a.m. and 5 p.m. by notice in writing to the purchaser. This was properly done.
Once the option was exercised pursuant to clause 8.1 the purchaser and vendor are deemed to have entered into the scheduled contract on the date of exercise of the option, 1/7/97. The date for completion of the contract was 8/7/97 pursuant to clause 1 of the option. For these reasons the blank dates on the scheduled contract could well have been completed when the option agreement was signed on 21/4/97.
The plaintiff's solicitor innocently erred in filling in the dates. The option agreement is clear as to the settlement date being 8/7/97. Where someone with implied authority to fill in a blank document does so mistakenly the Court will rectify the mistake to accord with the agreement of the parties: Warburton v. National Westminster (1988) 15 NSW LR 238 especially at 247-8, approved in Farrow Mortgage Services v. Slade and Nelson (1996) 38 NSW LR 636 at 640 and 647.
In this case the nature of the alteration is less important because of the clear wording of the option agreement. Therefore the contract despite the incorrectly filled in completion date must be read as in fact requiring completion on 8/7/97. The alteration mistakenly made to the agreed contract by the plaintiff's solicitor was neither material nor fraudulent and therefore does not avoid the respondent/defendants obligations under the option agreement: see Armor Coatings v. General Credits (supra).
On a reading of the option agreement in this case the applicant/plaintiff has complied with its conditions and validly exercised it in the giving of its notice. The purported exercise of the option with the mistaken completion date in the schedule contract was not an attempt to vary the terms of the option.
As Gibbs J said in Quadling v. Robinson (1976) 137 CLR 192 at 201:
“Thus although a notice misstates the terms of the option which it purports to exercise it may nevertheless amount to an unqualified and unconditional exercise of the option. See Carter v Hyde. On the other hand if the grantee of the option sets out his own erroneous understanding of the option and then purports to exercise the option as so understand there will speaking generally be no effective exercise of the option. See Cavalleri v Premier Refrigeration Co Pty Ltd. It must of course depend upon the proper construction of the document by which the grantee purports to exercise an option whether it amounts to an absolute an unqualified acceptance of the rights and liabilities conditionally created by the option.”
The question is has the applicant/plaintiff in purporting to exercise the option properly done so? In Carter v. Hyde, referred to in Quadling v. Robinson (supra) (1922-23) 33 CLR 115 at 122 and 126 a notice exercising an option mistakenly misstated the option by referring to an inventory which was not part of the option. The Court held the acceptance of the option was not made conditional or qualified by the misstatement of the option. Higgins J said at 133 of the mistake in the notice of exercising the option:
“they do not occur in the acceptance of the option as a qualification or condition thereto; they are a mere description of an option which is otherwise clearly identifiable and identified.”
On the facts of this case the applicant/plaintiff has indicated by its notice to the respondent/defendants on 1/7/97 their intention to be bound by the option and annexed contract of sale. In so doing it matters not that it has erroneously named the completion date as 4/7/97 as the option is clear the completion date is 8/7/97.
The notice to exercise the option was not a counter offer in the circumstances. It was a properly exercised option with a mistaken date for completion of the schedule contract repeated in the notice to exercise the option which must be read as 8/7/97 rather than 4/7/97 in accordance with the clear option agreement.
It is undoubtedly correct that upon the proper exercise of the put option by the applicant/plaintiff the schedule contract for the sale of land came into operation. The completion date on that contract had been incorrectly filled in by the solicitor, the correct date for settlement being that specified in the option agreement.
The wrongly inserted date is a nullity, the correct date being that in the option. The incorrect date for completion of the contract did not form a new term of the agreement or a counter offer which was not accepted by the defendant nor did it create a new and different agreement. The parties were bound by the agreement despite the error in filling in the date for completion. The correct completion date was 8/7/97 and both parties were bound by that pursuant to the exercise of the option: see Warburton v. National Westminster (supra).
The failure of the applicant/plaintiff to formally call for performance of the contract on 8/7/97 is irrelevant where the undisputed evidence is that it was then ready, willing and able to tender. See Foran v. Wight (1989) 168 CLR 385.
Summary judgment is only entered where there is clearly no real question to be tried: Australia and New Zealand Banking Group Ltd v. Barry [1992] 2 QdR 12. Courts are extremely cautious before ordering summary specific performance: Woods v. Masters (1987) QConvR 54-243 at 57,657. After careful consideration I am however satisfied this is the appropriate order in this case.
I am not satisfied the defendant has a good defence to the action or has disclosed facts showing a real issue to be tried. I am not satisfied there is an issue or question in dispute to be decided or any other reason justifying a trial in this action.
...
HER HONOUR: I order the respondent/defendants pay the applicant/plaintiff's costs of and incidental to the action including costs of this application to be agreed or taxed.