WOHB Pty Ltd v Williams[2024] QDC 94

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The plaintiff WOHB Pty Ltd (through its director Mitchell McIlwain) and the first defendant Justin Gregory Williams (as trustee of The Williams Family Trust) entered into an option agreement on 23 March 2018 in respect of a block of land at 62 Rodney Street, Wynnum configured as two lots.  The plaintiff purchaser had five months from the date of the agreement to exercise the option to purchase the property either directly or by nomination and purported to exercise the option by nomination after that five month option period had expired.  The plaintiff’s Further Amended Statement of Claim seeks damages on the basis of an implied condition precedent, alternatively rectification; repudiation by the defendants; damages arising from the plaintiff terminating the option agreement for breach; fraudulent or negligent misrepresentation by the defendants (subsequently abandoned on the final day of the trial); misrepresentation as to the ownership status of the property mounting to misleading and deceptive conduct under the Australian Consumer Law; and a claim for restitution for unjust enrichment. Describing the plaintiff’s pleadings as confused and confusing is, at best, an understatement.
2. [2]
   Justin Gregory Williams (first defendant) and Anita Maria Nivala (second defendant), collectively “the defendants”, advance a counterclaim which alleges that the work commenced by the plaintiff pursuant to the option agreement was not completed in full, and the defendants were not given the information to which the defendants were entitled within a reasonable time after the expiry of the option period, which the plaintiff did not exercise within five months.  In particular, despite a specific request, the plaintiff failed to provide documents and information relating to the reconfiguration of the water and sewerage connections on the property, which had not been completed at the conclusion of the option period.

Defined terms

3. [3]
   Amended Claim (AC): The Amended Claim and the Second FASOC which is sought to be filed by leave of the court.
4. [4]
   FASOC: Further Amended Statement of Claim filed 9 September 2022.
5. [5]
   Second FASOC: Second Further Amended Statement of Claim which is sought to be filed by leave of the court.
6. [6]
   FADC: Further Amended Defence and Counterclaim filed 7 November 2022.
7. [7]
   FAD: Further Amended Defence portion of the FADC.
8. [8]
   FAC: Further Amended Counterclaim portion of the FADC.
9. [9]
   FARA: Further Amended Reply and Answer filed 21 March 2023.
10. [10]
    FAR: Further Amended Reply portion of the FARA.
11. [11]
    Answer: Answer to Counterclaim portion of the FARA.
12. [12]
    Option Agreement: The 23 March 2018 Option Agreement. This is different to the 10 February 2018 Option Agreement.
13. [13]
    February document: The 10 February 2018 Option Agreement.
14. [14]
    TB: Trial Bundle.

The facts

15. [15]
    It is convenient at the outset to traverse the facts, which are relatively brief and straightforward. All findings of fact, where contested, are in accordance with the civil standard (balance of probabilities).
16. [16]
    Mitchell Robert McIlwain, director of the plaintiff company, together with his father Graeme McIlwain, in late January 2018, arranged to physically inspect a property at 62 Rodney Street, Wynnum which they found on an ad on realestate.com.^[1]
17. [17]
    On 10 February 2018 Mitchell McIlwain, Graeme McIlwain, Maude Thompson from real estate agency, Purplebricks, and Justin Williams (first defendant) met at 62 Rodney Street, Wynnum. While sitting on the carpet (there was no furniture in the house at the time), a handwritten agreement was drawn up by Ms Thompson, then signed by Mitchell McIlwain on behalf of the purchaser WOHB Pty Ltd and by Justin Williams as trustee for the Williams Family Trust.^[2]
18. [18]
    The operative terms of that brief handwritten agreement are as follows:-

“Dated 10.2.18

Call option premium:

$100,000 (non-refundable)

Exercise price $500,000

Total if exercised $600,000

Exercise date: six months from 10/2/2017 (or confirmed execution)

Call option premium: paid upon contract execution

Seller: Justin Williams as trustee for the William [sic] Family Trust

Buyer: WOHB Pty Ltd/Mitchell Robert McIlwain – Director

Offer: Seller has (???) no liability for cost of buyer developing

Buyer shall develop the site with no cost or liability to the seller

Buyer shall pay all costs of approval and otherwise

Buyer & Seller to finalise ASAP

Target execution: 16th February 2017 [sic]

Subject: subject to agreement on final form agreement

Seller: Justin Williams ATF WFT

Purchaser: WOHB Pty Ltd

Received sum of $100 as initial deposit”^[3]

19. [19]
    On 27 February 2018, Maude Thompson from Purplebricks forwarded an email received from the first defendant which in turn attached an option agreement and associated documentation (the sales contract that would apply if the option was exercised).^[4]  Relevantly, in that email chain, the email from the first defendant to Maude Thompson of 27 February 2018 contains this paragraph:

“The term of the option is five months because the other side has one month to get their deal in order to move forward.  If they declare the option at five months but don’t want to go through with it by the sixth month mark the construction of the agreement permits such.  This means that from their side they just declare the option at five months no matter what knowing they have a month to get out of it they want.”

20. [20]
    Further in the same email there is this paragraph:

“Let them know I don’t want much argy bargy on this agreement as there is other interest in the property and this captures very well what both parties have sought.  The five-month v six-month thing may seem odd at first but the lawyers tell me this is pretty much how it is done as it gives the other side one month to get their own sales contracts in place within the term of the option period.”^[5]

21. [21]
    The draft of the option agreement attached to the first defendant’s email of 27 February 2018 relevantly referred to an option fee of “$100,000”,  an option period of “5 months from the agreement date” and identified the first defendant as “trustee of the Williams Family Trust”.^[6]  On 27 February 2018 Mitchell McIlwain forwarded the email chain and attached documents to Tony Stolar at Stolar Law.^[7]
22. [22]
    On 2 March 2018 Mitchell McIlwain received an email from Maude Thompson at Purplebricks which contained a title search.  That email was forwarded by Mitchell McIlwain to his father Graeme McIlwain.^[8] Relevantly, the title search dated 6/12/2017 identified the registered owner as:- “Justin Gregory Williams” and “Fang Williams” trustee under instrument 714511823.^[9]
23. [23]
    In an email from the first defendant to Mitchell McIlwain dated 15 March 2018 (onforwarded shortly afterwards by Mitchell McIlwain to Stolar Law and to Graeme McIlwain), there is a paragraph which reads:

“The reference to my ex-wife is not needed and should be removed.  (1) I simply won’t be able to get her signature and (2) she is not a trustee anymore.  She has no legal right to enter into transactions on behalf of the Williams Family Trust.  Clause 8.1 (representations and guarantees) should satisfy you that the document is lawfully being entered into by me.  As an aside I informed you when we met there were issues my side and that the ex-wife would not be able to sign the contract.  I will do the paperwork to remove her from the agreement as soon as we finish the call option.  If you want I can personally show you the documents received form [sic] the Family Court saying she has no interest in the Williams Family Trust – this [sic] documents have various personal matters so I don’t want to scan and send them.”^[10]

24. [24]
    Attached to the first defendant’s email of 15 March 2018 is a second version of the option agreement.  That version of the option agreement contains text which has been struck through.  Relevantly, the description of “the seller” which had contained the term “Justin Gregory Williams and Fang Williams as trustees of the Williams Family Trust” had the name “Fang Williams” struck through; Recital C under the heading “Background” contained additional words “and register” and “distinct”; and Recital D, which referred to a “guarantor”, was struck through. Clause 7.2 had been amended to read “the purchase price for property is exclusive of GST”.^[11]
25. [25]
    Relevantly, under the heading “First Schedule”^[12] – “Item 4 Option Period” specified “five months from the agreement date” and “Item 7 – Base Lot Price” had been amended to read “$300,000 for each lot”. 
26. [26]
    The final executed copy of the option agreement^[13] identified the parties as “Justin Gregory Williams and Anita Maria Nivala as trustees of the Williams Family Trust” and “WOHB Pty Ltd (ACN 624 271 969)” and was signed on 23 March 2018 by Mitchell McIlwain, Director, on behalf of the plaintiff and by Justin Williams and Anita Nivala.
27. [27]
    Mitchell McIlwain recalls signing the agreement in the presence of the first and second defendants and a female solicitor, and being subject to time constraints because he had to catch a flight.^[14]
28. [28]
    The First Schedule^[15] identifies at Item 3 the option fee of $100,000.
29. [29]
    At Item 4, the Option Period provides:-

“Five months commencing on the date of this agreement and ending on the date that is five months after the date of this agreement.”

30. [30]
    Item 6 – Purchase Price specifies “$500,000” and Item 7 – Base Lot Price provides:

“$250,000 for each Lot.”

31. [31]
    Relevantly, a page described as “Third Schedule (the contract)” in this copy of the contract (which Mitchell McIlwain gave evidence was provided to him sometime after the signing date^[16]) has a blank page under that heading.  A full copy of the option agreement including the pro forma “Contract for Houses and Residential Land” (Queensland Law Society & REIQ) is at Exhibit 1 – Trial Bundle (‘TB’) 778-811 with the proforma contract for houses and residential land uncompleted (except for the completion of the name of the seller as “Justin Gregory Williams and Anna Maria Nivala as trustees under instrument 714511823”).^[17]
32. [32]
    On 30 August 2018 Mitchell McIlwain sent an email to Justin Williams which stated, in part:

“…

I have some good news.  We have managed to secure a contract for lot 64 Rodney Street.

As per clause 5 of our option agreement please see the attached Notice to Nominee form which has the details of the buyer and the sale price for you. 

Also attached is the contract they had provided which I will need to have signed by your wife and yourself in order to finalise the sale.

…”^[18]

33. [33]
    In a subsequent email by Mitchell McIlwain to Justin Williams on 31 August 2018, Mr McIlwain stated:

“We sincerely apologise we thought we had a 6 month agreement and with all the difficulties we have experienced with the Wesley Mission it took us slightly longer than expected to get contracts.

We have had a think overnight and have decided we are going to build on one of the blocks ourself (sic) so can give you a signed unconditional contract on Monday which can settle in 14 days.

The second contract which we can also give to you any time before or on Monday then settles 14 days from when the sewer connection is installed which we are getting designed already (66 days or before from signing of contract). 

To avoid all the countless hassles with changing of title, transferring of ownership etc can you please advise if this is OK?

Your consideration of the extreme circumstances we faced with the Wesley Mission would be much appreciated.”^[19]

34. [34]
    Justin Williams in an email dated 3 September 2018 responded:

“Without prejudice

Hi Mitch

My interpretation of our agreement is that since the option has expired and expired before you sought to exercise it you no longer have an interest in 62 Rodney Street.  If I am incorrect please outline why you think so.

While I feel for you my wife and I have considered this matter at length and can not relax any of he (sic) terms of the agreement.

As a way forward, I can consider completing the current sale you have proposed in order to keep the current buyer and Century 21 happy.  However I need to better understand the nature of the conditions in the sales contract.  I will call Century 21 to better understand the conditions.

Please also promptly remove the caveat from the property and provide the detailed outline of work completed to date in accordance with the terms of our agreement.”^[20]

35. [35]
    In a letter to the first and second defendants dated 4 September 2018, Mitchell McIlwain stated:

“Option agreement

We refer to our option agreement executed on 23 March 2018 and advise that you have defaulted in the performance of your obligations under the agreement and the Agreement is hereby terminated.

In accordance with clause 16.4, the seller has not within 14 days of the date of the agreement supplied the Buyer with documents in possession of the Seller that relate to the development of the property as follows:

• The correct Registration Confirmation Statement was not forwarded to the Buyer until 21 June 2018.
• The missing Page 16 of the Option Agreement was not forwarded to the Buyer until 2 August 2018.
• The Seller has not supplied a copy of the Formal Notice of Entry issued by Archipelago Architects for the survey work associated with the development on the adjoining site and the document signed by the Seller authorising entry to the Property for the surveyor to undertake survey work on the Property.

Please pay the following amounts forthwith which have been expended by WOHB Pty Ltd under the terms of the Option Agreement.

Deposit $100,000

Demolition $17,150

Consultant’s fees $9,450

Legal fees $8,600

Loss of profit $50,000.00

Total amount owing $185,200

I request payment in the sum of $185,200 be made within 14 days from the date of this correspondence.

…”^[21]

The issues

36. [36]
    I note that there is little dispute about the facts. However, the convoluted, confused and confusing (and, at times, conflicting) pleadings in the plaintiff’s case require a careful and exhausting attention to the detail in this case. It is therefore useful for this judgment to deal with the plaintiff’s pleadings on an issue-based approach.

Did the 10 February 2018 agreement have any effect after the 23 March 2018 option agreement?

37. [37]
    The plaintiff’s case is that the “bare bones” handwritten 10 February 2018 agreement and the 23 March 2018 Option Agreement “stand side by side and have an independent co-extensive relationship”.^[22]
38. [38]
    The defendants’ submission is that the 23 March 2018 Option Agreement subsumed the earlier handwritten 10 February 2018 agreement and, as of 23 March 2018, exclusively governed the contractual rights between the parties. With respect, that submission is undoubtedly correct.
39. [39]
    There are two clear and inescapable reasons for that conclusion, namely;

    1. Clause 21 of the 23 March 2018 Option Agreement provides:-

“This agreement contains the whole agreement between the parties and supersedes any prior agreements, understanding or negotiations whether written or oral.”^[23]

2. The 10 February 2018 agreement contains a clause which provides “Subject: subject to agreement on final form agreement.”^[24]

40. [40]
    I consider that the 23 March 2018 Option Agreement, containing, as it does, a whole agreement clause at clause 21, reflects the contractual reality that the 23 March 2018 option agreement is, as the defendants submit, the contemplated final form agreement.
41. [41]
    The plaintiff submits^[25] that the 10 February 2018 Option Agreement was between the plaintiff and Justin Gregory Williams, whereas the 23 March 2018 Option Agreement was between the plaintiff, Justin Gregory Williams and Anita Maria Nivala.  Consequently, it is argued there is no identity in parties between the two relevant agreements.
42. [42]
    With respect, that submission must fail for the following reasons:-

    1. It is clear that the purpose of clause 21 of the 23 March 2018 Option Agreement is to contain “the whole agreement between the parties”.^[26] In those circumstances, the 23 March 2018 Option Agreement must be the only agreement that governs the rights, obligations and expectations of the parties to it.
    2. The defendants submit^[27] (and I accept) that “the plaintiff’s construction would necessarily require acceptance that the [23 March 2018] whole agreement clause prohibits reliance on any negotiations that took place between Mr McIlwain and both defendants but not any negotiations that took place between Mr McIlwain and only one defendant – which makes no sense”, and relies on the principles identified by the High Court in Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd (2014) 251 CLR 640, [35]:

“The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean.  That approach is not unfamiliar.  As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract.  Appreciation of the commercial purpose or objects is facilitated by an understanding ‘of the genesis of the transaction, the background, the context [and] the market in which the parties are operating.’  As Arden LJ observed in re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption ‘that the parties … intended to produce a commercial result.’  A commercial contract is to be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience.’”

[footnotes omitted]

Clearly, the plaintiff sought and intended to enter into an agreement with the defendants in respect of the property the subject of the 23 March 2018 Option Agreement and the submission that the 10 February 2018 document was to have a co-extensive operation has no substance whatsoever.

3. The parties were well aware that, at the time the 10 February 2018 handwritten agreement was signed by Justin Williams “as trustee for the Williams Family Trust”, the second defendant, Anita Nivala was not a trustee of the trust that owned the property; no other agreements were entered into prior to the 23 March 2018 Option Agreement; and between the 10 February 2018 agreement and before the 23 March 2018 Option Agreement, Ms Anita Nivala became a trustee of the trust.
4. The defendants submit (and I accept) that the “Whole Agreement clause [clause 21] should be interpreted with that mutual knowledge in mind”,^[28] and in any event, it would make commercial nonsense and work commercial inconvenience to have two parallel agreements in different terms covering the exact same subject matter.^[29]

43. [43]
    Although Masters v Cameron (1954) 91 CLR 353, taken with the subsequent decision of G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 identifies four categories of agreements that contemplate further agreements, the litigation in this matter involves a situation where the contemplated further contract has been entered into; it explicitly identifies in its terms that it “contains the whole agreement between the parties”;^[30] and consequently, it is irrelevant which Masters v Cameron (and G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd) category the 10 February 2018 agreement falls into. 
44. [44]
    I accept without hesitation the submission that from the execution of the 23 March 2018 Option Agreement, the 10 February 2018 agreement had no further contractual effect.

Misleading and deceptive conduct

45. [45]
    The plaintiff pleaded that it was induced to enter into the option agreement by a fraudulent or negligent misrepresentation by the defendants remaining silent about a neighbouring development, but abandoned this claim on the final day of trial.^[31] However, the plaintiff appears to maintain that the first defendant made misrepresentations as to the “ownership status” of the property which constituted misleading and deceptive conduct under the Australian Consumer Law (ACL).  The plaintiff argues that “there was a mismatch between the six-month option exercise date in the February contract by comparison with the five-month exercise date in the 23 March 2018 document, which was misleading, in the context of the first defendant’s explanation in the 27 February 2018 email from the first defendant to Maude Thompson at Purplebricks.^[32]
46. [46]
    There is a threshold issue in respect of the plaintiff’s claim based on alleged contraventions of ACL s 18. It is necessary to prove that the allegedly misleading conduct was done by the defendants “acting in trade and commerce” in selling the property.
47. [47]
    In Macks v Viscariello (2017) 130 SASR 1, [221], Lovell J, Corboy and Slattery AAJ held:

“As a general rule private dealings are not in trade or commerce and are not subject to the TPA and its statutory equivalents: O'Brien v Smolonogov.  However, as the Full Federal Court observed in Taylor v Crossman (No 2), allegedly misleading or deceptive representations may have been made in trade or commerce even if the maker of the impugned representations was not actually engaged in trade or commerce at the time when the representations were made. So, for example, representations may have been made in trade or commerce if they concerned establishing a commercial enterprise in the future.  It is always necessary to consider the representation in issue in the particular context in which it was made.”

[footnotes omitted]

48. [48]
    In O'Brien v Smolonogov (1983) 53 ALR 107, where the appellants acquired five adjoining lots of land and subsequently advertised two of them for sale in the newspaper and sold them, Fox, Sheppard and Beaumont JJ held the appellants were not acting in trade and commerce. 

“In the present case, it cannot be suggested that the lands acquired by the appellants became trading stock (see FC of T v St Hubert's Island Pty Ltd (in liq) (1978) 19 ALR 1; 138 CLR 211).  Nor is it a case where the taxpayer's activities amounted to more than the mere realization of a capital asset and constituted the carrying on of land development (see FC of T v Whitfords Beach Pty Ltd (1982) 39 ALR 521).  The land itself was not used for any business activity: it was not used for farming or grazing.

It follows, in our opinion, that the only possible feature of the case which could conceivably be relied upon to suggest that the impugned conduct occurred in trade or commerce was the resort by the appellants to a newspaper as a medium of public advertisement of the land and the use made by the parties of the telephone for the purpose of conducting negotiations.

…

But, in our view, the mere use, by a person not acting in the course of carrying on a business, of facilities commonly employed in commercial transactions, cannot transform a dealing which lacks any business character into something done in trade or commerce. … 

The conduct complained of was not something done by the appellants in the course of carrying on a business and it lacked trading or commercial character as a transaction.”

49. [49]
    The unchallenged evidence in this case from the first defendant^[33] is that the property was purchased as the first defendant’s home (with his then wife Fang Williams) in 2006; the property was then subsequently transferred into the Williams Family Trust for asset protection purposes in 2010; then after the first defendant purchased and moved into a different home at [redacted], he, as trustee of the trust, continued to own the property; the trust has never owned any properties other than the subject property and [redacted], both of which were purchased as the first defendant’s home at the time; and the trust has never engaged in the business of buying and selling property professionally.^[34]  Evidence from the first defendant is that prior to entering the 23 March 2018 Option Agreement, he had rented the property out^[35] but the property was untenanted as of 10 February 2018.^[36]
50. [50]
    In the circumstances, I conclude:^[37]

    1. The property was originally purchased by the first defendant as a home to live in and not as an asset to be used for a commercial trading enterprise.
    2. While the first defendant did rent the property out for some period between ending his personal residence in it and the 10 February 2018 agreement, that rental period had no causal relationship either to his initial acquisition of the property or its sale, such that the renting of the property did not mean that the first defendant was acting in trade and commerce when he contracted to sell it.
    3. The defendants’ negotiation for and entry into the 23 March 2018 Option Agreement was not done in trade and commerce.
51. [51]
    It follows that the plaintiff’s claim, to the extent it is based upon alleged contraventions of ACL s 18, must fail.

Trustees of Williams Family Trust Issue

52. [52]
    This issue was identified by the defendants^[38] as follows:-

“Overview

44: In various paragraphs of the FASOC^[39] the plaintiff alleges (or seeks to make issue of the fact) that:

1. as at 13 March 2018 the first defendant’s ex-wife, Fang Williams, remained a trustee of the Williams Family Trust; and

2. Fang Williams remained recorded on the property’s registered title as a co-owner (as co-trustee of the Williams Family Trust) after the Option Agreement was signed (only being replaced on the title by the second defendant on 19 April 2019).^[40]

45: The plaintiff’s allegations which flow from this are, variously, that:

1. the first defendant represented himself to be the sole owner of the Property;^[41]

2. the first defendant made representations to the plaintiff that Fang Williams was not a trustee of the Williams Family Trust;^[42]

3. the first defendant represented that he was the sole trustee of the Williams Family Trust;^[43]

4. the defendants did not have good title to grant an option over the Property as at the date of entry into the Option Agreement;^[44]

5. the First Defendant represented that Fang Williams had been removed as a trustee of the Williams Family Trust.^[45]

46: The plaintiff further alleges that the change in the registered title from the first defendant and Fang Williams as trustees to the first defendant and the second defendant as trustees (or perhaps notification of the change) was a condition precedent for the Option Period in [the] Option Agreement running or perhaps to the whole agreement’s existence.^[46] 

53. [53]
    The defendants submit (and I accept) that, for the following reasons, this aspect of the plaintiff’s claim must fail:

    1. Fang Williams was removed as a trustee of the Williams Family Trust by a resolution document^[47] made on 11 March 2012 by the first defendant, who is also appointor of the trust with power to remove trustees.^[48]  The first defendant authenticated the resolution of 11 March 2012^[49] which removed Fang Williams as a trustee and was not cross-examined on the point.
    2. It follows that although Fang Williams remained recorded on the registered title of the property as a co-trustee with the first defendant until 19 April 2018, she was not, in law, a co-trustee of the Williams Family Trust at the relevant time.
    3. On 16 March 2018 the second defendant was appointed as the second trustee of the Williams Family Trust^[50] and the same document appointing the second defendant as the second trustee also purported to record the removal of Fang Williams as trustee.  The first defendant gave evidence that this was done for convenience because Fang Williams needed to be removed from the title of the property but as of 16 March 2018, the first defendant could not locate the 2012 resolution removing Fang Williams as trustee.^[51]  Clearly, on the evidence of the first defendant, there can be no doubt that the resolution of 16 March 2018 was a sensible (but ultimately unnecessary) precaution.  The removal of Fang Williams from the position of trustee by the first defendant was clearly within the power of the first defendant in his role, not as a trustee, but as appointor of the trust.^[52]
    4. Pursuant to s 15(2) of the Trusts Act 1973, the removal of Fang Williams as trustee in 2012 vested the trust property previously legally owned by her in the sole remaining trustee (the first defendant) and the appointment of the second defendant as co-trustee in 16 March 2018 then vested legal ownership of all trust property jointly in the first and second defendants as trustees.^[53]
54. [54]
    The issue raised by the plaintiff in its reply,^[54] namely that the first and second defendants were not the registered owners of the property until June 2018 when a corrected registration confirmation statement was issued by the Registrar of Titles, was nothing more than the correction of an internal typographical error of the Land Registry and I have no hesitation in accepting that, as the corrected registration confirmation statement records,^[55] the registered owners of the property as of the lodgement of dealing 718700413 on 19 April 2018, were the first and second defendants who had an indefeasible title (given that no allegations of fraud in relation to the title nor other relevant exceptions to indefeasibility have been pleaded).
55. [55]
    The 23 March 2018 Option Agreement at Recital A states:

“Upon the registration of the Form 1 at the Titles Office to record the change of trustee of The Williams Family Trust, the Seller will be the registered owner of the property described in Item 2 of the First Schedule (“the property”).”

56. [56]
    Relevantly, the Option Agreement identifies that “Justin Gregory Williams and Anita Maria Nivala” as “trustees of the Williams Family Trust” are “the Seller”.^[56]
57. [57]
    The change of trustee of the Williams Family Trust was registered on 19 April 2018. Given that any resulting contract based on the draft contract in the 23 March 2018 Option Agreement would have provided a 30 day settlement and expressly only obligated the defendants to be the legal owner of the property at settlement, then there was no impediment, legal or practical, to the plaintiff exercising its option under the Option Agreement.
58. [58]
    It follows that any issue arising out of the change of trustee of the Williams Family Trust and/or the registration of that change (and perfecting any error in respect of the spelling of the second defendant’s name on the Land Title Registry) raised no difficulty whatsoever in the plaintiff exercising its option pursuant to the Option Agreement. This aspect of the plaintiff’s claim must fail.

Condition precedent

59. [59]
    The plaintiff pleads that the 23 March 2028 Option Agreement was subject to a condition precedent which is not contained in the terms of the agreement.
60. [60]
    The option period is defined in Item 4 of the First Schedule^[57] as “five months commencing on the date of this Agreement and ending on the date that is five months after the date of this Agreement”.  The Option Agreement was dated 23 March 2018^[58] and accordingly the option expired on 23 August 2018.
61. [61]
    The Statement of Claim in paragraph 19 pleads a reference to Recital A in the Option Agreement which provides:-

“Upon the registration of the Form 1 at the Titles Office to record the change of trustee of the Williams Family Trust, the Seller will be the registered owner of the property described in Item 2 of the First Schedule (“the Property”).”^[59]

62. [62]
    The Statement of Claim paragraph 19(a) alleges that “because of indefeasible title, the first defendant could not contract out the ownership of the property until the condition precedent was met”.
63. [63]
    In the circumstances, it is clear that there was no condition precedent contained within the Option Agreement.  The Option Agreement itself expressly acknowledges that the defendants were not at the time of its execution the registered owners of the property but clause 2.2 of the Option Agreement required the plaintiff to pay the option fee ($100,000) immediately upon signing; clause 3.1 entitled the plaintiff to immediately exercise the option; and clause 16.1 entitled the plaintiff to immediate access to the property to carry out works subject to obtaining public liability insurance.^[60]
64. [64]
    It should be noted that the option fee was in fact paid upon signing^[61] and the plaintiff almost immediately accessed the property to carry out demolition of the building on the property.^[62]
65. [65]
    With respect, such a condition precedent would have conflicted with the express immediate rights and obligations of the Option Agreement.^[63]
66. [66]
    The plaintiff, in fact, exercised its right of access to start work,^[64]  being aware that the defendants were not both, at the time, the registered proprietors of the property.
67. [67]
    Mitchell McIlwain accepted in cross-examination that he could not recall discussion of a condition precedent and conceded that there were no discussions of the Option Agreement being conditional upon the removal of Fang Williams from the title of the property.^[65]
68. [68]
    Further, the first defendant gave evidence that he would not have given permission to demolish the existing house on the property if the Option Agreement was conditional upon something that had not yet occurred.^[66]
69. [69]
    I am satisfied that, at the very least, as at 23 March 2018 (the signing of the Option Agreement), the first and second defendants were the equitable owners in fee simple of the property and had accepted that they would be the registered proprietors and be capable of completing the contract if the option were executed pursuant to the annexed form of sale contract that warranted by clause 7.4(1) that at the settlement of such a sale, being 30 days from the contract date, they would be the registered proprietors and capable of completing the contract.^[67]
70. [70]
    In the circumstances, I conclude that the option period, by its own terms,^[68] ran from the date of the Option Agreement, which was enforceable by the plaintiff from the time it entered into the agreement and thus required the defendants to perfect their registration as registered proprietors capable of completing any sale by settlement date.
71. [71]
    It follows that there is no express or implied condition precedent contained in the Option Agreement. Accordingly, I conclude that none of the events pleaded by the plaintiff represent the option period commencing; namely the first defendant’s text message to the plaintiff on 2 May 2018 advising the defendants were now the registered owners of the property on the title;^[69] nor the first defendant’s email to the plaintiff on 8 May 2018 providing a copy of the Registration Confirmation Statement showing the change;^[70] nor the plaintiff’s receipt of a registration confirmation statement showing the correction on the title of a typographical error in the name of one of the owners of the property.^[71]
72. [72]
    Accordingly, there is no basis to construe the Option Agreement to contain a condition precedent based on proof that the defendants were conjointly the registered owners of the property, and accordingly, the Option Agreement commenced on 23 March 2018 and concluded on 23 August 2018. It follows that any aspect of the plaintiff’s claim predicated on the Option Agreement concluding after 23 August 2018, must fail.

Rectification for mistake

73. [73]
    The plaintiff seeks rectification of the Option Agreement to change the option period from five months to six months,^[72] pleading that the plaintiff believed the Option Agreement contained a six-month option period^[73] and that this six-month option period was omitted from the form of the contract ultimately signed, due to mistake by the first defendant.^[74]
74. [74]
    I have no hesitation in concluding that there is no basis for rectification because, put simply, there was no mistake.  The amendment of the option period from six months in the handwritten agreement of 10 February 2018^[75] to the five-month period in the Option Agreement^[76] arose from communications between the first defendant and Mitchell McIlwain via Ms Maude Thompson, the real estate agent from Purplebricks.
75. [75]
    On 27 February 2018 the first defendant sent an email to Maude Thompson (who forwarded it Mitchell McIlwain, who in turn forwarded it to his solicitor, Tony Stolar) which attached a draft version of the Option Agreement with an option period stated to be “five months from the Agreement Date”.^[77]
76. [76]
    The covering email contained an explanation, which although rather opaque, clearly flags the rationale for a deliberate change from a six-month option period to a five‑month option period in these terms:-

“The term of the option is five months because the other side has one month to get their deal in order to move forward.  If they declare the option at five months but don’t want to go through with it by the six‑ month mark the construction of the agreement permits such.  This means that from their side they just declare the option at five months no matter what knowing they have a month to get out if they want.

…

Let them know I don’t want much argy bargy on this agreement as there is other interest in the property and this captures very well what both parties have sought.  The five-month vs six-month thing may seem odd at first but the lawyers tell me this is pretty much how it is done as it gives the other side one month to get their own sales contracts in place within the term of the option period.”^[78]

77. [77]
    The draft version of the Option Agreement attached to the email of 27 February 2018 at Schedule 1^[79] incorrectly states at Item 6 that the purchase price was $600,000 – subsequently corrected to $500,000; at Item 7 where it states that the Base Lot Price is “The price determined for each lot by an independent valuer or real estate agent”, subsequently changed to $250,000 per lot; and in respect of Item 4 (the Option Period) was changed (in the final executed Option Agreement) from “five months from the Agreement Date” in the 27 February 2018 version^[80] to “five months commencing on the date of this Agreement and ending on the date that is five months after the date of this Agreement”.^[81]
78. [78]
    Mitchell McIlwain accepted in cross-examination that the “23 March [2018] Option Agreement form provided for a five-month option period rather than the six-month option period, not as a typographical error, but as a deliberate change”;^[82] and also accepted in cross-examination that in his text message to the first defendant on 13 March 2018^[83] and in his email to the first defendant dated 16 March 2018,^[84] the repeated reference to “five months” was a reference to the option period being five months.^[85]
79. [79]
    In short, I have no hesitation in concluding that there was no mistake requiring rectification, but that each of the parties, after further negotiation, accepted that the “option period” in the executed Agreement of 23 March 2018 should be five months, rather than the six-months contained in the original handwritten Agreement of 10 February 2018. This aspect of the plaintiff’s claim must fail.

Validity of exercise of option

80. [80]
    The plaintiff pleads that it had sent an email to the first defendant seeking to exercise its option by exercising its nomination rights under the Option Agreement, on 30 August 2018 (as indicated above, seven days after the expiration of the Option Period in the 23 March 2018 Option Agreement).^[86]
81. [81]
    The plaintiff seeks a declaration that it validly exercised the option in the way pleaded in FASOC 33A on 30 August 2018.^[87]
82. [82]
    As the defendants correctly identified, the pre-requisite to any such relief would be that the plaintiff would need to persuade the court:-

    1. that the option could be validly exercised on 30 August 2018; and
    2. that the option was validly exercised on 30 August 2018.
83. [83]
    The Option Agreement provided that the plaintiff could itself be the buyer of the property, which required the delivery of a notice of exercise of option pursuant to clause 3 of the Option Agreement.^[88]  Alternatively it could exercise the option on the basis that a nominee would be the buyer of the property pursuant to Option Agreement, clause 5.^[89]
84. [84]
    The plaintiff purported to exercise the option on 30 August 2018, but (in addition to exercising that option after the conclusion of the Option Period), the plaintiff did not comply with clause 5.  In particular, the plaintiff did not give the defendants a “nomination notice required by clause 5.2(a).^[90]  The purpose of this mechanism is that the defendants as seller would be able to draft the sale contract and insert the relevant deposit amount.  The purported nomination notice accompanied by a sale contract which the plaintiff itself had drafted provided only for a deposit of $11,000 on a $360,000 purchase price.^[91]
85. [85]
    Further, there has been a complete failure to comply with clause 5.4 of the Option Agreement^[92] which relevantly required that a valid nomination notice must be accompanied by a Property Occupations Act form 8 in duplicate signed by the nominee (as buyer); a nominee contract in duplicate signed by the nominee and completed with the selling agent’s details (including licence number); sale price; deposit and details of the lot the subject of the notice and the details of the nominee as buyer; and a cheque for the deposit payable to the stakeholder.
86. [86]
    There is no evidence that the purported nomination notice delivered on 30 August 2018 was accompanied by either the Property Occupations Act Form 8 notice nor the cheque for the deposit payable to the stakeholder.
87. [87]
    I conclude that, in any event, the option could not be exercised as of 30 August 2018, but if it could, it was not validly exercised by the plaintiff in accordance with the Option Agreement.

Purported exercise of option and determination

88. [88]
    Although the plaintiff in their submissions^[93] referred to termination of the Option Agreement by the defendants, there are no pleaded allegations nor documents in evidence which demonstrate that the defendants terminated or purported to terminate the Option Agreement.  The plaintiff pleads that it terminated the Option Agreement on 4 September 2018^[94] and seeks a declaration that such a termination was valid.  Although Mitchell McIlwain initially gave evidence asserting that Mr Williams had terminated the Option Agreement, he clarified his evidence and eventually conceded that the defendants did not terminate the agreement.^[95]
89. [89]
    The plaintiff’s email of 31 August 2018 (following the purported exercise of the option on 30 August 2018) stated in part:-

“Hi Justin,

We sincerely apologise we thought we had a six-month agreement and with all the difficulties we have experienced with the Wesley Mission it took us slightly longer than expected to get contracts …  your consideration of the extreme circumstances we faced with the Wesley Mission would be much appreciated.”^[96]

90. [90]
    The first defendant responded on 3 September 2018 by stating (in part):-

“Hi Mitch,

My interpretation of our agreement is that since the option has expired, and expired before you sought to exercise it you no longer have an interest in 62 Rodney Street.  If I am incorrect please outline why you think so.”^[97]

91. [91]
    The plaintiff asserts that it validly terminated the Option Agreement on 4 September 2018^[98] due to the defendants’ default in breach of clause 16.4 in these terms:-

“In accordance with clause 16.4, the seller has not within 14 days of the date of the agreement supplied the buyer with documents in possession of the seller which relate to the development of the property as follows:-

• the correct registration confirmation statement was not forwarded to the buyer until 21 June 2018;
• the missing page 16 of the Option Agreement was not forwarded to the buyer until 2 August 2018;
• the seller has not supplied a copy of the Formal Notice of Entry issued by Archipelago Architects for the survey work associated with the development on the adjoining site and the document signed by the seller authorising entry to the property for the surveyor to undertake survey work on the property.”^[99]

92. [92]
    Clause 16.4 of the Option Agreement provides:-

“The Seller shall within 14 days of the date of this Agreement supply the Buyer with all approvals, plans, reports, licences and all other documents within the possession or control of the Seller that relate to the development of the Property.”

93. [93]
    I have no hesitation in concluding:-

    1. The defendants could not have breached clause 16.4 as the corrected registration confirmation certificate did not exist within 14 days of the contract date (23 March 2018) and was provided within two days of it coming into existence and into the possession of the defendants.
    2. The defendants could not have breached clause 16.4 in respect of not providing page 16 of the Option Agreement^[100] as this agreement itself is not a document contemplated by clause 16.4 to be provided within two weeks.
    3. The plaintiff took a complete originally signed and witnessed copy of the Option Agreement (although not initialled on every page) with him on 23 March 2018, although because he was in a hurry to catch a flight to the Formula 1 in Melbourne, he did not take with him a fully initialled copy of the Agreement.^[101]
94. [94]
    On 30 March 2018 Mr Mitchell McIlwain requested a copy of the “fully signed” Option Agreement “when you get a chance next week”^[102] and this was provided by reply email on 6 April 2018 from Justin Williams, albeit with the standard REIQ contract and its schedule omitted, with a cover email stating:-

“Please find attached a scanned copy of the document that we initialled as well as signed last week.  I have not scanned the REIQ contract we initialled as we made no changes to this but let me know if you need this as well.  (I have to flip pages by hand on my scanner!).”^[103]

95. [95]
    The plaintiff did not advise the defendant that it wanted the initialled copy of page 16 of the Agreement until an email sent on 27 July 2018^[104] and that page was supplied on 2 August 2018.^[105]
96. [96]
    I have no hesitation in concluding that the Option Agreement was not intended at clause 16.4 to have a second original (fully initialled) copy of the Option Agreement within the definition of the documents that the defendants were obliged to provide within 14 days or risk being in breach of the agreement entitling the other party to terminate it.  In addition, there were no formal notice of entry documents ever in existence.
97. [97]
    Further, as of 30 August 2018 the plaintiff, being aware of the alleged defaults, still purported to exercise the option, clearly electing to affirm the Option Agreement and not terminate for the alleged defaults.
98. [98]
    Accordingly, the plaintiff has failed to make out a valid termination of the Option Agreement due to the asserted default by the defendants in breach of clause 16.4.

99. [99]
    I conclude, therefore, that the plaintiff had no basis on which to terminate the contract for breach, and accordingly is not entitled to relief on that basis.
100. [100]
     It therefore becomes unnecessary to consider what, if any, monetary relief flowed from termination of the contract pursuant to alleged breaches of clause 16.4.

Repudiation

101. [101]
     The plaintiff pleads^[106] that the defendants “wrongly rescinded the Agreement and claimed the option had expired” but there is of course, no pleading as to what conduct of the defendants rescinded the Agreement, nor, in my view, is there any evidence whatsoever that the defendants rescinded the Agreement.  All that occurred is that the plaintiff purported to exercise an option under the Agreement on 30 August 2018 after the option had expired on 23 August 2018. This aspect of the plaintiff’s case must fail.

Application to amend the Claim and Further Amended Statement of Claim

102. [102]
     At the commencement of the trial, the plaintiff sought to amend the Claim filed 18 April 2019 and the FASOC filed 9 September 2022, and a copy of the proposed Second FASOC is Exhibit 5 at the trial.
103. [103]
     The submission by the plaintiff is that it was intended to collate in one place the various remedies referred to throughout the earlier version of the pleading.
104. [104]
     Although Mr Ivessa, for the defendants, made submissions at some length in respect of what he submits are amendments that are too late and too prolix, the reality is that there is simply no utility in granting the application, in the light of the conclusions I have reached in respect of the plaintiff’s case.
105. [105]
     As is no doubt obvious from the terms of this judgment, I consider that the plaintiff has completely failed to make out its case, and a further amendment, at this late stage, will have no utility whatsoever.
106. [106]
     Accordingly, the application to amend the Claim and FASOC, is refused.

Conclusion

107. [107]
     The inevitable conclusion is that the plaintiff’s case has completely failed.  Accordingly, the plaintiff’s claim should be dismissed.

Counterclaim

108. [108]
     The defendants in their counterclaim assert that after the plaintiff requested, and the defendants granted consent for the plaintiff to demolish the house on the property and reconfigure sewerage and power, in about April 2018, the plaintiff disconnected but did not complete works necessary to reconnect the sewerage and power.^[107]
109. [109]
     Option Agreement clauses 16.1, 16.3, 16.6, 16.7 and 16.9 provide:

Clause 16.1 “The Seller grants the Buyer and its officers, consultants, servants, workmen and agents unrestricted access to the Property for the purpose of carrying out inspections, investigations, surveys, tests and to develop the Property (including but not limited to earthworks and operational works on the Property) at the Buyers cost. The Buyer agrees to indemnify the Seller from and against all actions, costs, claims, proceedings and demands that the Seller may suffer or incur as a result of the Buyer being afforded access to the Property in accordance with the provisions of this clause. The Buyer must obtain and keep in full effect in the name of the Buyer, any [sic] noting the interests of the Seller, any insurances over the Property that are reasonable required by the Seller, including but not limited to contractor’s all risk insurance and public liability insurance with limits of not less than $10,000,000 per occurrence. All insurance policies required by this clause will be taken out with insurers acceptable to the Seller and on policies and in forms satisfactory to the Seller. The Buyer must supply the Seller with copies of the certificates of currency of each insurance policy taken out in accordance with this clause. The Buyer must provide these certificates of currency to the Seller before any access is granted. The Seller must act reasonable in this regard.”

Clause 16.3 “The Seller shall promptly:

1. Sign (as registered owner of the Property) all development applications that the Buyer may wish to make in respect of the Property;
2. Sign all consents and other documents required to enable the Buyer to complete, lodge and pursue its proposed development within a reasonable time of being requested to do so by or on behalf of the Buyer including but not limited to:
   1. Owner’s consent for power abolishment;
   2. Owner’s consent for Queensland Urban Utilities for Water and Sewerage connections; and
   3. Owner’s consent for IDAS Form 1 for the Demolition Approval Application.”

Clause 16.6 “The Buyer must ensure that any work undertaken in developing the property needs to be completed in full (including removal of any rubbish) to the standards as defined in the Queensland Building and Constructions Commission Act 1991 and in accordance with any approvals required by relevant authorities.”

Clause 16.7 “In the event that the Buyer does not exercise the Call Option within the Option Period, the Buyer must provide the Seller with any and all information relating to the work undertaken (including but not limited to drawings, plans, approvals etc) within a reasonable time from the expiry of the Option Period and assigns all interest and rights to these to the Seller.”

Clause 16.9 “The Buyer will obtain written consent of the Seller prior to undertaking any works on the Property (including but not limited to the demolition of the house of the Property), which consent shall not be unreasonably withheld.”

110. [110]
     The plaintiff’s answer:-

     1. admits that the plaintiff requested, and the defendants granted, consent for the plaintiff to demolish the existing house on the property^[108] ;
     2. appears to deny that it requested consent to disconnect and reconnect the sewerage;^[109]
     3. admits disconnecting the sewerage and power in May 2018^[110] ; and
     4. does not expressly deny (and accordingly pursuant to Uniform Civil Procedure Rules 1999 (Qld) r.166(1) is taken to have admitted) that it did not reconnect sewerage and power.^[111]
111. [111]
     In cross-examination, Mr Mitchell McIlwain accepted that:-

     1. the document at Exhibit 1 – TB 1359 was a sewerage reconfiguration plan prepared by his father, Graeme McIlwain which was lodged as part of a water application with Queensland Urban Utilities to reconfigure the sewer;^[112]
     2. Mr Williams signed a QUU owner’s consent^[113] which was a pre-requisite to the plaintiff obtaining approval from QUU to the water application;^[114] and
     3. the plaintiff did not finish the sewerage reconfiguration works.^[115]
112. [112]
     Whether the plaintiff requested and was given consent to reconfigure the sewerage and failed to complete that work in full, or the plaintiff disconnected the sewerage without consent, the plaintiff’s contractual obligations pursuant to clauses 16.6 and 16.7 of the Option Agreement^[116] extend to any work that was actually commenced to be undertaken by the plaintiff in the course of developing the property.
113. [113]
     The plaintiff clearly undertook steps, including causing drawings, plans, approvals and/or applications to be prepared, lodged and or obtained in respect of the sewerage works^[117] and it is clear that the plaintiff did not reconnect the sewerage.  The plaintiff admits that by a letter dated 16 November 2018^[118] the defendants demanded the plaintiff deliver to the defendants all information relating to the works undertaken on the property by the plaintiff, including but not limited to drawings, plans and approvals and to assign all interests and rights to these to the defendants by 30 November 2018 and that demand was not acceded to by the plaintiff.^[119]
114. [114]
     Clearly the defendants incurred and paid the following costs and expenses necessary to complete such works in full, and the first defendant gave evidence^[120] identifying the relevant documents and explaining each individual cost item:-

115. [115]
     I conclude that the plaintiff has relevantly breached clauses 16.6 and 16.7 of the Option Agreement, and that the defendants are entitled to succeed in their counterclaim in the sum of $24,030.93. I note this varies slightly from their pleaded case, but this is of little moment in the circumstances.

Orders

116. [116]
     I make the following orders:

1. The plaintiff’s application to amend the Claim, and FASOC, is refused.
2. The plaintiff’s claim is dismissed.
3. The first and second defendants’ counterclaim against the plaintiff be allowed. The plaintiff to pay the first and second defendants the sum of $24,030.93.

Costs

117. [117]
     I will hear the parties on costs.