JLF Corporation Pty Ltd v Mount Petrie Developments Pty Ltd
[2004] QSC 44
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- Unreported Judgment
- JLF Corporation Pty Ltd v Mount Petrie Developments Pty Ltd[2004] QSC 44
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JLF Corporation Pty Ltd v Mount Petrie Developments Pty Ltd[2004] QSC 44
Reported at [2004] 2 Qd R 267
JLF Corporation Pty Ltd v Mount Petrie Developments Pty Ltd[2004] QSC 44
Reported at [2004] 2 Qd R 267
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO: | |
Trial | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 12 March 2004 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27 February 2004 |
JUDGE: | Chesterman J |
ORDER: |
|
CATCHWORDS: | DEEDS – DELIVERY – whether the deed was delivered on the date that it bears or when it was sent by the solicitors for the plaintiff to the solicitors for the defendant – whether, regardless of the date of actual delivery, the date of the deed is taken to be the date that it bears |
COUNSEL: | Mr G A Thompson SC for the plaintiff Mr R I M Lilley for the defendant |
SOLICITORS: | Nicol Robinson Hallets for the plaintiff Hemming & Hart for the defendant |
[1] The plaintiff claims specific performance of the terms of a deed made between it and the defendant which bears the date 24 February 2003 and is entitled ‘Put and Call Option’. In the alternative it seeks damages for breach of contract or for contravention of the Trade Practices Act 1974 (Cth). On 12 February 2004 White J ordered, pursuant to UCPR 483, that a question which arises in the proceedings, the answer to which may determine them, should be tried as a separate issue and before the trial of the remaining issues. The question ordered to be tried separately was whether, on the proper construction of the Put and Call Option the reference to ‘the date of this deed’ in cl. 7.2(c) means 24 February 2003 or 26 February 2003.
[2] Two points were argued before me on 27 February last. The first was whether the deed was delivered on the date it bears, 24 February 2003 or on 26 February 2003 when it was sent by the solicitors for the plaintiff to the solicitors for the defendant. The second question was whether, regardless of the date of actual delivery the date of the deed is taken to be 24 February which, as I have said, is the date it bears.
[3] The defendant, who is described in the deed as the ‘developer’ is the registered proprietor of ten lots of residential land which it created by subdivision in an area known as Mackenzie Rise, near Carindale. One of the objects of the deed was to permit the plaintiff, who is described in the deed as ‘JLF’ to build houses on each of the lots and then sell them to members of the public. Broadly this object was achieved by the following terms:
(a)The defendant granted the plaintiff an option to purchase all of the lots, or so many of them as had not been sold, for a designated price. This was called in the deed ‘the call option’ and was conferred by clauses 1.2 and 2. A fee was paid in consideration of the grant of the call option.
(b)By clauses 1.13, 1.14, and 3 the defendant could require the plaintiff to purchase the land in the event that the plaintiff did not exercise its call option. This right, conferred on the defendant, was called the ‘put option’.
(c)By clause 7.1 the plaintiff was authorised to market the subdivided lots to members of the public.
(d)By clause 7.2 the defendant was obliged to execute contracts with purchasers for individual lots upon production of the contract to the defendant by the plaintiff. This obligation was condition upon, inter alia, the settlement date of any such contract being ‘… not later than 120 days from the date of this deed’. (Clause 7.2(c)).
[4] The value of the lots has increased so that the defendant’s financial interests lie in being able to sell the land beyond the terms of the deed. The plaintiff presented two contracts for the sale of lots which it had negotiated with members of the public but the defendant has refused to execute them on the basis that their settlement dates are later than 120 days from the date of the deed. The settlement dates are later than 120 days from 24 February but not later than 120 days from 26 February 2003.
[5] The defendant executed the deed some time prior to 24 February 2003. The plaintiff executed the deed on 24 February 2003 and its manager, who witnessed the sole director of the plaintiff sign the deed, wrote the date of his signing, 24 February 2003 on the deed. The next day the plaintiff sent the signed deed to its solicitors who received it on 26 February, checked the accuracy of one annexure to the deed and sent it by hand to the solicitors for the defendant.
[6] The plaintiff submits that these circumstances call for the conclusion that the deed was delivered on 26 February which was the date that it intended to be bound by its execution of the document. The deed did not, the plaintiff submits, become operative until then. The defendant disputes this but submits that in any event, the date of the deed is that which it bears regardless of when the deed became operable by delivery. If its submission is right the debate about delivery, which was the subject of brief testimony, will be unnecessary to resolve.
[7] The deed, by cl. 1.18, defines ‘third party contracts’ to mean the form of contract attached and marked annexure ‘C’. Annexure C is the standard form of contract for the sale of houses and land approved by the Real Estate Institute of Queensland and the Queensland Law Society, 5th ed. The annexure identifies the defendant as the seller. Cl. 7 of the deed provides:
‘Sale of Lots
7.1From the date of this deed JLF is authorised to market the lots for sale to third parties.
7.2The developer must at the request of JLF enter into third party contracts and sign and return a third party contract within five business days of receipt of a third party contract from JLF if the contracts:
(a)…
(b)…
(c)have a settlement date not later than 21 days after the finance date or any date extended … but which in any event is not later than 120 days from the date of this deed.
7.3…’
[8] As I mentioned the deed is dated 24 February 2003.
[9] The starting point for construing the phrase ‘the date of this deed’ is Styles v Wardle (1825) 4 B. & C. 908, which appears not to have been much considered, but has been accepted as authoritative: see The Interpretation of Contracts 2nd ed by Lewison at 9.03 and The Construction of Deeds and Statutes by Odgers 4th ed, p. 100. In Styles Bayley J (with whom Holroyd J agreed) said (911):
‘A deed has no operation until delivery, and there may be cases in which … it is necessary to construe date, delivery. When there is no date, or an impossible date, that word must mean delivery. But where there is a sensible date, that word in other parts of the deed means the day of the date, and not of delivery. This distinction is noticed in Co. Litt. 46b, where it is said, ‘if a lease be made by indenture bearing date 26 May, to hold … from the date … it shall begin on the 27th … of May. If the lease bears date the 26th … to have … from the making … or from henceforth, it shall begin on the day on which it was delivered …’ And afterwards it is said, ‘if an indenture of lease bear date which is void, or impossible, as the 30th of February etc. … the term … shall begin from the delivery as if there had been no date at all.’ … I consider that a party executing a deed agrees the day therein mentioned shall be the date for purposes of computation. It would be very dangerous to allow a different construction of the word date … All the authorities give a definite meaning to the word date in general, but show that it may have a different meaning when that is necessary ut res valeat (i.e. to give effect to the deed rather than to allow it to be void).’
[10] The principle expressed in Styles was accepted as correct by the (New South Wales) Court of Appeal in Glebe Administration Board v Tifan [1968] 3 NSWR 455. In that case the question was the meaning of the phrase ‘as from the date hereof’ in a lease. Wallace ACJ said (458):
‘It can be acknowledged that ordinarily such a phrase means the date which a deed bears on its face such as Bayley J, with whom Holroyd J agreed, said in Styles v Wardell … (though) such a phrase may have a different meaning when it is necessary ut res valeat …’
[11] Walsh JA, who dissented said, (461-462):
‘No case has been cited to the court in which the rule of construction on which the appellant relied has been applied to give, to a reference in a deed in which a date is stated, a construction which makes it refer not to that date but to the date of the delivery of the deed. The rule has been stated constantly in the textbooks as being that, in such a case, the reference is to the date stated in the deed itself. The leading authority … is … Styles v Wardell.’
[12] The point in Tifan was that s 17A of the Landlord and Tenant Act 1948 (NSW) prevented an increase in rent of demised premises if the increase were to take effect from a date earlier than that of the instrument which increased the rent. A lease was signed by the lessee on 22 October 1965 and that date was written into the instrument. It was then sent to the lessor, a government board, which executed it with due formality on 16 November 1965. The deed of lease therefore became operative on 22 November. It provided for an increase in rent from ‘the date hereof’. If that phrase referred to the date the lease bore, 22 October, the rent was to increase from a date earlier than the lease. The increase would therefore be prohibited by s 17A.
[13] On these facts a majority of the court overruled the primary judge, Isaacs J, who had applied the principle in Styles to hold that the lease did take effect from the date inserted on the instrument and not the date of last execution.
[14] The reasoning of the majority was that the application of that principle would defeat the evident intention of the parties which was that there was to be a valid lease at an increased rent, and that to achieve that intention it was necessary to construe the phrase as referring to the date on which the deed became operative.
[15] The only point to emerge from Tifan is that the rule of construction expounded in Styles may give way, in a particular case, to a sufficiently clear indication that parties did not mean expressions such as ‘the date hereof’ to mean the date inserted in their document. Accepting this as a correct statement of principle one turns to consider what indications there are to suppose that the plaintiff and defendant did not intend the ordinary meaning of ‘the date of this deed’ to be that which was inserted on the document they signed. The judgment in Tifan established that the ordinary rule of construction will apply unless the evident intention of the parties to the contract would be defeated by the application of the rule.
[16] The defendant submits that this is not a case in which the date supplied is ‘impossible’ or one which gives rise to ambiguity or difficulty in the application of any of the provisions of the deed. If this be right it is conclusive in favour of the inserted date.
[17] The defendant points out that the deed confers rights on both parties. The plaintiff could insist upon the land being sold to it and the defendant could insist upon the plaintiff buying the land. In each case the rights are subject to strict time limits which are set out in the deed. It is therefore important that each party know the date from which those times were to be calculated. This is possible if the date of the deed is taken to be that which it bears. If it be some other date there could be confusion or unfairness if one party knew, but the other did not, the date on which the deed became operative. If the date of the document were in fact the date of delivery, that being the date on which the plaintiff decided to be bound by the deed, the date it inserted would be misleading and could lead to a loss of the defendant’s rights, or an extension of its own without it ever informing the defendant of the relevant date. Certainty is achieved if the document itself sets out the date from which times are to run. These are persuasive arguments.
[18] The plaintiff seeks to find a difficulty in the construction of the deed on the basis that its date is taken to be 24 February. The difficulty is said to be found in cl. 7.1 which authorises the plaintiff ‘to market the lots for sale to third parties’ from the date of the deed. It is said that there could be no authority to sell the lots until the deed came into operation, so that the date of the deed must be the date on which it came into operation. This problem would only arise if the plaintiff had not intended to be bound by the deed when it executed it and wrote in the date of execution. The fact that the difficulty exists only in that circumstance is a compelling argument in favour of the conclusion that delivery occurred then, rather than later. This conclusion would remove the uncertainties I have mentioned which would otherwise be imported into the operation of the deed.
[19] If the defendant’s submission is accepted the deed would operate with certainty. Both parties would know the dates by which their rights had to be exercised. If the plaintiff’s submission is accepted the defendant could be disadvantaged by not knowing the time within which it could act. This disadvantage would only exist if the plaintiff had privately resolved to delay the commencement of the deed’s operation until a date after it signed. The contest is thus between a certain disadvantage to the defendant and a contingent disadvantage to the plaintiff. It cannot therefore be said that the evident intention of the parties would be defeated by the application of the canon of construction found in Styles. The rule should therefore be applied. The obvious implication for the determination of the date of delivery of the deed need not be separately considered.
[20] In my opinion ‘the date of this deed’ where it appears in the put and call option between the parties means 24 February 2003. I will make a declaration in those terms and order that the plaintiff pay the defendant’s costs of and incidental to the determination of that question.