SUPREME COURT OF QUEENSLAND

Transcription

1 SUPREME COURT OF QUEENSLAND CITATION: PARTIES: Moffatt Property Development Group P/L v Hebron Park P/L [2009] QCA 60 MOFFATT PROPERTY DEVELOPMENT GROUP PTY LTD ACN (plaintiff/respondent) v HEBRON PARK PTY LTD ACN (defendant/appellant) FILE NO/S: Appeal No 8336 of 2008 SC No 4789 of 2008 DIVISION: PROCEEDING: ORIGINATING COURT: Court of Appeal General Civil Appeal Supreme Court at Brisbane DELIVERED ON: 20 March 2009 DELIVERED AT: Brisbane HEARING DATE: 19 February 2009 JUDGES: ORDER: McMurdo P, Keane JA and Atkinson J Separate reasons for judgment of each member of the Court, each concurring as to the orders made 1. Appeal dismissed 2. Appellant to pay respondent's costs of and incidental to appeal to be assessed on the standard basis CATCHWORDS: CONTRACTS GENERAL CONTRACTUAL PRINCIPLES OFFER AND ACCEPTANCE AGREEMENTS CONTEMPLATING EXECUTION OF FORMAL DOCUMENT WHETHER CONCLUDED CONTRACT where offer and acceptance expressly stated to be unconditional where main terms agreed between parties where agreement contemplates drafting of put and call by lawyer where appellant alleges language used not determinative of intention to be bound where appellant alleges lack of agreement on further terms indicative of absence of intention where appellant alleges agreement conditional on drafting of put and call by lawyer whether correspondence evidencing agreement constitutes a concluded contract

2 2 CONVEYANCING STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE PROTECTION OF PURCHASERS OBLIGATIONS ON VENDOR: DISCLOSURE, WARNINGS AND LIKE MATTERS where respondent developer acquiring land as stock where appellant non-compliant with Property Agents and Motor Dealers Act 2000 (Qld) (PAMDA) requirements where PAMDA affords respondent statutory remedies for non-compliance by appellant where parties conducted negotiations without regard to PAMDA requirements whether non-compliance with PAMDA renders agreement non-binding CONTRACTS GENERAL CONTRACTUAL PRINCIPLES STATUTE OF FRAUDS, SECTION 4 NOTE OR MEMORANDUM CONTENTS DESCRIPTION OF PARTIES where appellant alleges that correspondence evidencing agreement does not on its face identify respondent as party to contract where correspondence omits proprietary limited designation for body corporate where correspondence provides other identifying particulars sufficient to identify respondent as party to contract whether correspondence inadequate note or memorandum under s 59 of the Property Law Act 1974 (Qld) Property Agents and Motor Dealers Act 2000 (Qld), s 366B, s 366D, s 367 Property Law Act 1974 (Qld), s 59 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540, considered Butt v McDonald (1896) 7 QLJ 68, cited Godecke v Kirwan (1973) 129 CLR 629; [1973] HCA 38, considered G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, considered Inland Revenue Commissioners v Raphael [1935] AC 96, cited Mackay v Dick (1881) 6 App Cas 251, cited Marek v Australasian Conference Association Pty Ltd [1994] 2 Qd R 521, considered Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72, considered Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2008] QSC 177, affirmed Niesmann v Collingridge (1921) 29 CLR 177; [1921] HCA 19, considered Scammell (G) & Nephew Ltd v Ouston [1941] AC 251, cited Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596; [1979] HCA 51, cited

3 3 COUNSEL: SOLICITORS: Sheehan v Zaszlos [1995] 2 Qd R 210; [1994] QCA 145, considered S J Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd [1989] 2 Qd R 87, considered Teviot Downs Estate P/L & Anor v MTAA Superannuation Fund (Flagstone Creek and Spring Mountain Park) Property P/L [2004] QCA 57, considered S L Doyle SC, with F G Forde, for the appellant B D O'Donnell QC, with A J Shah, for the respondent Herbert Greer for the appellant Thompson McNichol for the respondent [1] McMURDO P: The appeal should be dismissed. I agree with Keane JA's reasons and proposed orders. [2] KEANE JA: The appellant, to which I will refer as "Hebron Park", is the registered proprietor of 20 acres of rural residential land at Forest Glen on the Sunshine Coast. The respondent, to which I will refer as "Moffatt", is a property developer. An exchange of correspondence between the parties in April 2008 gave rise to a dispute as to whether Hebron Park had made a binding agreement with respect to the sale of the land to Moffatt. [3] The dispute proceeded to a trial in the Supreme Court. The learned trial judge determined the dispute in Moffatt's favour, declaring that a letter dated 8 April 2008 signed by both parties constitutes a valid and binding agreement, and ordering that the agreement be specifically performed and carried into execution. [4] Hebron Park seeks to have his Honour's decision set aside by this Court. In this Court, Hebron Park contends, as it did below, that the parties did not intend to be legally bound to a sale and purchase of the land by the letter of 8 April 2008, and, alternatively, if the parties did intend to be legally bound, the terms of their agreement were not sufficiently certain to be enforceable. Hebron Park's third argument is that the letter of 8 April was not a sufficient note or memorandum for the purposes of s 59 of the Property Law Act 1974 (Qld) to enable Moffatt to maintain its claim. [5] The determination of the issues between the parties on the appeal turns, as it did below, upon the proper conclusions to be drawn from primary facts which are not in dispute. It is convenient to discuss the issues which arise on the appeal directly by reference to the reasons of the learned trial judge. Some brief reference to the factual background is necessary first. The factual background [6] In July 2007 Mr Peter Edwards, the husband of Mrs Kim Edwards, the sole director of Hebron Park, caused Mr Muldrew, a real estate agent, to seek a buyer for the land. Mr Muldrew raised the matter with Mr Prebble, a director of Moffatt. Mr Prebble expressed interest in the land on behalf of Moffatt, but Mr Edwards withdrew Mr Muldrew's authority to negotiate with Moffatt when he began negotiations with another potential buyer. 1 1 Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2008] QSC 177 at [2].

4 4 [7] In March 2008 Mr Edwards told Mr Muldrew that Hebron Park had not sold the land and that Mr Muldrew "could try and sell it if he could". Mr Muldrew then contacted Mr Prebble again. Moffatt was still interested in acquiring the land and negotiations ensued between the parties. 2 [8] Mr Prebble signed a letter dated 4 April 2008 on the letterhead of the "Moffatt Property Development Group Established 1975 Property Developers Project Managers" to Mr Muldrew, a real estate agent who was acting for Hebron Park. The letter referred to the ACN of Moffatt. The letter read: "Re: Site for Sale Corner Mons Road & Owens Creek Road, Forest Glen Dear Mark As discussed we are interested in purchasing the block of land located on the corner of Mons Road and Owens Creek Road, Forest Glen, Sunshine Coast and would appreciate you putting the following offer to the vendor on our behalf: Purchase price $3,000, $300, non refundable deposit released when vendor signs contract Contract will be unconditional in the form of an Put & Call Settlement 12 Months from date of contract The vendor to remain responsible for the insurance of the property until settlement A couple of matters that you may wish to pass on to your vendor are; From the vendors point of view a Put & Call is good because it will defer his capital gains tax. If we release that sort of money on deposit then to protect ourselves we need to take one of the following actions: The first is a consent caveat and that prevents him from selling the property from under us. If there is a mortgage then the bank will have to give consent to the caveat. If we can t achieve a caveat then we need a mortgage on the property, we would obviously need to know if there is a first mortgage, if there is then we need to take a second mortgage and also need to ascertain there is enough value left to protect us in the second mortgage, bearing in mind the value of the deposit. Mark, as discussed we are very interested in this site and believe that with the success of our recent development of the Gateway Business Centre in Brisbane and our Emerald projects, we are well placed to take this project through to completion. We look forward to hearing from you." (emphasis in original) 2 [2008] QSC 177 at [3].

5 5 [9] Further negotiation elicited counter-offers from Hebron Park. Mr Prebble sent a letter dated 8 April 2008 to Mr Muldrew. Once again the letter contained the ACN of the respondent. The letter was subsequently signed by Mrs Edwards on behalf of Hebron Park on 9 April. As so signed, it was in the following terms: "Re: Site far Sale 5 Owens Creek Road, Forest Glen Dear Mark As discussed our latest unconditional offer for the block of land located at 5 Owen Creek Road, Forest Glen, Sunshine Coast, L2 RP Parish Mooloolah is our final offer to purchase and we would appreciate you putting that offer to the vendor once again on our behalf: Purchase price $3,000, $500, non refundable deposit released when vendor signs contract Contract will be unconditional in the form of an Put & Call Settlement 12 Months from date of contract The vendor to remain responsible for the insurance of the properly until settlement We do require a security over the land to ensure that our deposit is secured in the form of a caveat, or mortgage. If the vender accepts this offer, please have him sign off the letter of offer as accepted and we will instruct our Lawyer to prepare the contract documentation. Regards [Signature] Myles Prebble Ph I Kim Maree Edwards of Hebron Park Pty Ltd acknowledge acceptance of the above offer for the land located at 5 [O]wen Creek Road, Forest Glen, Sunshine Coast being L2 RP Parish Mooloolah." (emphasis in original) The first issue on the appeal: Did the parties intend to be legally bound? [10] It is fair to say that in support of the appeal Hebron Park relied principally on the argument that the learned trial judge had erred in resolving this issue against the appellant. Some brief reference to the learned trial judge's reasons is necessary here. His Honour said of the correspondence set out above: 3 "The form of the document, to use a neutral term, of 8 April 2008 suggests it was meant to give rise to a binding agreement. It was addressed to the defendant's agent and set out the plaintiff's latest, 'final', offer to purchase the defendant's land. The letter in express 3 [2008] QSC 177 at [22] [24].

6 6 terms required the defendant to sign the letter if it accepted the offer. The defendant, by its director, duly signed and dated the letter below an express '... acceptance of the... offer...', which had been included for that purpose, and to have that effect. The defendant's signature is very significant. It is difficult to see what it was intended to do, if not to bind the defendant to the contract which came into existence upon its acceptance of the plaintiff s offer There is in this case a document signed by both parties and signed, from the terms of the letter itself, on the basis that by signing the defendant accepted the plaintiff's offer." [11] The learned trial judge also referred to some matters of fact relating to the dealings between the parties both before and after 8 April It is common ground that his Honour did not err in principle in referring to these dealings between the parties insofar as they were apt to shed light on the objective intention of the parties as at 8 April Hebron Park disputes the significance of these dealings. His Honour said: 4 "The course of negotiations tends to reinforce the conclusions that the parties intended to bind themselves to the terms set out in the letter. The plaintiff had been interested in buying the property 12 months earlier. Its interest was terminated by the defendant s dalliance with another prospective purchaser. That suit having cooled the defendant again invited an approach from the plaintiff which, when made, resulted in counter-offers. It is not surprising that the plaintiff should have wanted finality and wanted the defendant to commit itself to sell the land. It chose a form of words appropriate to obtaining commitment should the defendant decide to sell on the proposed terms. The defendant indicated its acceptance in the form designated by the plaintiff to obtain that commitment. When one considers whether the parties intended to be bound by the letter it is relevant to regard what the parties said and did. Mr Edwards' asked Mr Muldrew whether the plaintiff would 'let the deal go' if the defendant paid its costs, incurred, no doubt, with respect to the negotiations and agreement. It is an obvious inference from the question that Mr Edwards thought he had undertaken some obligation to the plaintiff which could only be abrogated at a price. The only source of the obligation is the letter of 8 April 2008 which the defendant signed." The approach of the learned trial judge [12] At first instance the parties framed the issue as to whether the letter of 8 April manifested an intention by the parties to be legally bound to a sale and purchase of the land by reference to the categories of contract discussed in the decision of the 4 [2008] QSC 177 at [25] [26].

7 7 High Court in Masters v Cameron. 5 High Court is as follows: The relevant passage from the decision of the "Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three classes. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract. In each of the first two cases there is a binding contract: in the first case a contract binding the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not and in the second case a contract binding the parties to join in bringing the formal contract into existence and then to carry it into execution Cases of the third class are fundamentally different. They are cases in which the terms of agreement are not intended to have, and therefore do not have, any binding effect of their own " [13] Moffatt contended that this case fell within the second category, and Hebron Park contended that it fell within the third. [14] On Hebron Park's behalf a number of factors were said to show that the parties had not intended to conclude a bargain in terms of the letter of 8 April. The learned trial judge summarised them as follows: 6 " It contemplated that the parties would be bound not by the letter but by a different contract, the 'Put & Call'. The deposit was not to be paid on the signing of the letter but upon the execution of the 'contract'. Settlement was to occur 12 months from the date of execution of the 'contract', not from the date of execution of the letter." [15] Hebron Park also relied upon observations by Cooper and Byrne JJ (with which McPherson SPJ agreed) in Marek v Australasian Conference Association Pty Ltd (1954) 91 CLR 353 at ; [1954] HCA 72. [2008] QSC 177 at [16]. [1994] 2 Qd R 521 at

8 8 in support of the view that there is something in the nature of a presumption of fact that parties do not intend to make a binding agreement for the sale of land until the execution of a formal contract. Their Honours said: "The usual expectation of parties in negotiation for the sale of land is that they will not be taken to have made a concluded bargain unless and until a formal contract is executed. In this State real estate is ordinarily agreed to be sold by the execution by vendor and purchaser of a form of contract adopted by the Real Estate Institute of Queensland and approved by the Queensland Law Society. This notorious fact largely explains why these days in land sales the 'expectation is strong that the parties do not intend to be bound until a formal contract is executed'. Exceptionally, the conduct of the parties may reveal an intention to make a binding agreement concerning land before a formal contract is signed However, such cases are rare. Where solicitors are to assist in the preparation of a contract for the sale of real estate, that factor tends to make it less likely that the parties desire to be finally committed before the contract's execution. In Carruthers v Whitaker [1975] 2 NZLR 667 Richmond J, McCarthy P and Woodhouse J concurring said: ' when the parties instructed their respective solicitors they all had in mind only one form of contract a formal agreement to be prepared and approved by the solicitors. When parties in negotiation act in this way then the ordinary inference from their conduct is that they intend to contract by [a] document which each will be required to sign. It is unreasonable to suppose that either party would contemplate that anything short of the signing of the document by both parties would bring finality to their negotiations.'" [16] The learned trial judge referred to this passage from Marek. His Honour was evidently troubled by the suggestion in this passage that the courts should be predisposed in favour of the third category in Masters v Cameron where the putative agreement concerns the sale of land. His Honour said: 8 "This passage is commonly cited as authority for the proposition it contains. That proposition is emphatically expressed but, with respect, it must be observed that it is one of fact and not of law. Whether parties intend to be bound by a particular document, or form of agreement, is a question of fact in the particular case. It is not a rule of law that parties negotiating the sale of land are not bound to buy or sell, as the case may be, until a formal contract in an approved form is executed. 8 [2008] QSC 177 at [18] [21].

9 9 This was the approach taken by a subsequent decision of the Court of Appeal, Sheehan v Zaszlos [1995] 2 Qd R 210 in which the Court (213): 'The respondent sought to call in aid... a line of New Zealand cases which appear to hold that in commercial contracts or contracts for the sale... of land for commercial purposes, where the parties contemplate the execution of a formal contract, the 'natural inference' is that the parties are not to be bound until at least the contract have been formally executed on each side: Carruthers v Whittaker.... No doubt where parties intend to contract in accordance with a common practice it may be readily inferred that they did not contemplate the coming into existence of a binding contract except in accordance with that practice.... But in the absence of any such common practice we think that any such 'natural inference' is inconsistent with the view expressed in Masters that the question in which of the three classes there identified a case will fall 'depends on the intention disclosed by the language the parties have employed'...; to which we would add 'or inferred from their conduct'.' In my respectful opinion this is the accurate statement of the law. Marek was not referred to but the authorities on which it depended were disapproved. I approach the question, whether the agreement falls into the second or third category defined by Masters, on the basis that it is one of fact." [17] On the hearing of the appeal, Hebron Park accepted that the categorisation of the putative agreement is indeed a question of fact, but argued that his Honour erred in failing to appreciate the guidance afforded by the statement in Marek in relation to the resolution of this question of fact. [18] The learned trial judge concluded that the putative agreement in this case should be regarded as falling within the second Masters v Cameron category. His Honour said: 9 "The case has some similarity to Niesmann v Collingridge (1921) 29 CLR 177 in which a written document signed by the defendant gave the plaintiff 'the firm offer' of some land at a specified price payable 'on the signing of a contract' and specified dates thereafter. Sixpence was paid for the option. The plaintiff verbally accepted the offer and thereby exercised the option. The defendant refused to sell. His suit for specific performance succeeded. Knox CJ said (182): '... The document... contains (1) the names of the parties; (2) a sufficient description of the property; (3) the amount of the purchase money, and (4) the terms of 9 [2008] QSC 177 at [28] [32].

10 10 payment. It is expressed to constitute a 'firm offer' of the property, and it is supported by valuable consideration. Any reference to a contract as an independent document is in the provision fixing the dates for payment of the purchase money in other words 'the signing of the contract' is referred to only as fixing a point of time. The offer made is not expressed to be 'subject to' or 'conditional upon' the execution of a formal contract. It does, however, necessarily import that it was in the contemplation of both parties that a formal contract should be signed... and... the meaning of the parties was that acceptance of the offer should be followed by the execution by both... of a written contract.' Rich and Starke JJ said (184-5): '... The parties did conclude an agreement in the terms of the offer. The plaintiff made a firm offer, for a small consideration, in which all the essential terms of the bargain were stated, and it was not expressed to conditional or subject to acceptance in writing or the execution of a contract in writing, simply that the purchase money should be paid at or within certain times from the date of signing a contract. This unconditional offer the plaintiff duty [sic] accepted, and so concluded the agreement. The provision for payment of the purchase money on the signing of the contract was... a 'term of the bargain'. Thus, the purchaser could not be compelled to pay the purchase money unless the contract was signed. It was a condition of the obligation to pay. But, when the parties had concluded such an agreement, the necessary implication is that each of them will sign a contract in accordance with the terms of the agreement.' In Godecke v Kirwan (1973) 129 CLR 629 Walsh J (with whom Mason J agreed) held that because the document in question provided for the acceptance of the offer therein set out, and it was duly accepted, the parties intended to make a bargain, which was to take effect immediately. The fact that neither offer nor acceptance was expressly stated to be 'subject to' the signing of a further contract similarly pointed to that conclusion (640). These features are present in the letter of 8 April The absence of an expression indicating that the agreement is subject to, or conditional upon, the execution of further, fuller, documents was thought significant in Niesmann as well as Godecke. I therefore conclude that the agreement constituted by the letter is in the second category." (emphasis in original)

11 11 The appellant's criticisms of the trial judge's approach [19] Hebron Park contends in this Court that the learned trial judge erred in failing to appreciate that he was bound by the authority of Marek to regard a putative agreement for the sale of land which contemplates the execution of a formal contract as presumptively within the third category of contracts discussed in Masters v Cameron. It is said that his Honour erred in regarding the decision of this Court in Sheehan v Zaszlos 10 as exhibiting a disapproval of that approach. There is some force in this argument, but as will be seen, I consider that it is without consequence for the ultimate resolution of the question of fact on which this aspect of the appeal turns. [20] Another broad criticism made by Hebron Park of the learned trial judge's approach is that his Honour is said to have "entirely separate[d] his analysis of the question of intention to be bound from the nature of the uncertainties in the terms putatively agreed." It is argued that the lack of precision in the terms of the exchange of correspondence is itself eloquent of the absence of an intention to be finally bound unless a formal contract is executed. In fairness, it should be noted that the learned trial judge expressly adverted to the overlap between Hebron Park's arguments about intention to create legal relations and uncertainty of terms. In this regard, his Honour said: 11 " A substantial argument advanced by the defendant in support of its first ground, that the parties did not intend to be bound by the letter of 8 April 2008, was that the terms of the letter were incomplete, thereby making any agreement contained in it uncertain and showing that the parties did not then intend to commit themselves to a sale and purchase. The suggested uncertainty is also relied upon as a separate ground of invalidity." [21] It is no doubt true that a failure to agree upon terms material to a sale of land may tend to demonstrate the absence of an intention to be finally bound to such terms as have actually been the subject of consensus; but for the reasons which will appear, I do not consider that this consideration leads to the conclusion that the parties here intended that their agreement of 8 April 2008 should not bind them unless they first executed the terms of the Put and Call. The authorities on the first issue [22] In S J Mackie Pty Ltd v Dalziell Medical Practice Pty Ltd, 12 McPherson J (with whom Macrossan CJ and Shepherdson J agreed) said that there is a strong traditional expectation that in the negotiation of sales of land the parties do not intend to be bound until a formal contract is executed. But it is clear from that case as well as the decision of this Court in Teviot Downs Estate P/L & Anor v MTAA Superannuation Fund (Flagstone Creek and Spring Mountain Park) Property P/L 13 whether or not that expectation applies in a particular case depends on the totality of factual context. The passage which the learned trial judge cited from Sheehan v Zaszlos itself recognises that, where parties can be seen, from the course of their negotiations to be negotiating in accordance with a common practice, an inference may readily be drawn that they intend not to be finally bound until a formal contract [1995] 2 Qd R 210; [1994] QCA 145. [2008] QSC 177 at [14]. [1989] 2 Qd R 87 at [2004] QCA 57 at [14] [15], [22], [63].

12 12 is signed in accordance with that practice. Whether the parties to a transaction can be seen to be negotiating within a particular tradition or practice in mind is itself a matter of fact. [23] In Teviot Downs Estate P/L & Anor v MTAA Superannuation Fund, 14 this Court accepted that the correct approach was stated in G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd 15 by McHugh JA, with whom Kirby P and Glass JA agreed. McHugh JA said: "An agreement for the sale of property at a specified price does not necessarily indicate a legally binding contract. The magnitude, subject matter, or complexities of the transaction may indicate that the agreement was a limited one not intended to have legal effect: Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310 at In New South Wales, real estate is ordinarily sold by signing and exchanging contracts in the form approved by the Real Estate Institute and Law Society. Accordingly, even though the parties agree in writing that real estate is sold for a specified price, the presumption is that no binding contract exists until 'contracts' are exchanged: Smith v Lush (1952) 52 SR (NSW) 207 at 212; 69 WN (NSW) 220 at 222; Allen v Carbone (1975) 132 CLR 528 at 533. The vendor contends that the proper conclusion to be drawn from the sale of land, buildings and equipment which constitute a hospital containing sixty-two beds is that the sale was to be the subject of a formal contract drawn up by lawyers. However, the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances: Godecke v Kirwan (1973) 129 CLR 629 at 638; Air Great Lakes Pty Ltd v K S Easter (Holdings) Pty Ltd (1985) 2 NSWLR 309 at , 337. If the terms of a document indicate that the parties intended to be bound immediately, effect must be given to that intention irrespective of the subject matter, magnitude or complexity of the transaction. Even when a document recording the terms of the parties' agreement specifically refers to the execution of a formal contract, the parties may be immediately bound. Upon the proper construction of the document, it may sufficiently appear that 'the parties were content to be bound immediately and exclusively by the terms which they had agreed upon whilst expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms': Sinclair, Scott & Co Ltd v Naughton (at 317). Thus, in Niesmann v Collingridge (1921) 29 CLR 177, the defendant made a 'firm offer' of his land to the plaintiff at a specified price part of which was payable 'on the signing of contract'. The plaintiff verbally accepted the offer. The High Court upheld a finding that [2004] QCA 57 at [14] [15]. (1986) 40 NSWLR 631 at

13 13 there was a binding contract. Rich J and Starke J said (at 185) that the signing of the contract was a term of the bargain which could be specifically enforced. That decision was applied in Godecke v Kirwan where a document signed by the vendor and the purchaser offered to buy the vendor's land at a specified price subject to the conditions of the Transfer of Land Act 1893 (WA) and eleven special conditions. Possession was to be taken 'upon the signing and execution of a formal contract of sale within 28 days of acceptance of this offer'. One of the special conditions provided for 'a further agreement to be prepared by (the vendor's) solicitors containing the foregoing and such other covenants and conditions as they may reasonably require'. The High Court held that the document constituted a contract. Walsh J, with whose judgment Mason J agreed, said that the parties did not intend to make the execution of a formal contract a condition of the existence of a binding contract. He held (at 641) that ' there should be implied a promise by each of the parties that he would sign a formal contract within the twenty-eight days and would do everything necessary to enable this to be done within that time'." [24] Marek was a case where parties were negotiating through solicitors with the execution of a contract for the sale of land in the standard REIQ form in contemplation. In this case, however, while the parties contemplated that a formal contract would be drawn up by the "Lawyer" for Moffatt, they were not negotiating through solicitors. Further, there was no evident contemplation of the ultimate execution of a standard form REIQ contract. On the contrary, what was in contemplation was the execution of a document in the form of a "Put and Call". Finally, and importantly, there was no suggestion in the correspondence that there were terms of that option still to be the subject of negotiation and agreement rather than prepared by Moffatt's lawyer. The letter signed by the parties concluded on the footing that if the vendor signed the "letter of offer as accepted", the purchaser would "instruct [its] lawyer to prepare the contract documentation". It is to be noted that it did not contemplate that the contents of the contract documentation would be the subject of further negotiation or agreement. In this respect, as I shall show directly, the present case may also be contrasted with cases such as Australian Broadcasting Commission v XIVth Commonwealth Games Ltd 16 where the negotiation of further terms was in contemplation. [25] Niesmann v Collingridge is a decision of the High Court of Australia. It was a case of a sale of land. The binding authority of a decision of the High Court is not to be frittered away. But as is apparent from the reasons of McHugh JA in G R Securities, there is no real tension between Niesmann v Collingridge and a "traditional" predisposition of the kind referred to in Marek. The first issue: Discussion [26] In this case, the difficulty with the argument advanced for Hebron Park, and which I think is a fatal difficulty, is that the offer which Mrs Edwards accepted in an unqualified way by her signature on behalf of Hebron Park was expressed to be an "unconditional" offer. The unqualified acceptance of the unconditional offer gave rise to an agreement which was explicitly unconditional. The argument advanced 16 (1988) 18 NSWLR 540 at 551.

14 14 on behalf of Hebron Park would have it that, although the agreement so constituted was expressed to be unconditional, it was in truth conditional on the execution of a further agreement. Hebron Park was not able to refer to any decided case which would support a decision by the Court to disregard such an unequivocal expression of the parties' intention. In my respectful opinion, the other evidence of the parties' intention does not warrant such a course. [27] Hebron Park argues that the evidence that Mr Edwards offered to pay Moffatt's costs if it was willing to "let the deal go" was equivocal. It was said that Mr Edwards' offer was equally explicable as an attempt to clarify what might otherwise be a disputed position given that Hebron Park was entertaining offers from other would-be purchasers. It may, I think, be accepted that this evidence is not decisive of the objective intention of the parties as at 8 April Of greater significance, however, is the evidence, referred to by his Honour, and mentioned in paragraph [10] of these reasons. That evidence tends to show a basis for a concern on both sides to reach a commitment in respect of the sale of the land after a long period of unconsummated interest in that regard. The terms of the letter of 8 April 2008 are to be understood against the background of a negotiation begun 12 months before and recently resurrected. In such a context, the objective importance for the parties of bringing the negotiation to a close is apparent. [28] Mr Doyle SC, who appeared with Mr G Forde of Counsel on behalf of Hebron Park, sought to meet the difficulty that, on his argument, the signing of the letter of 8 April 2009 by his client was meaningless, by the suggestion that the signed acceptance of Moffatt's offer was consistent with a process of negotiation, intended to be ongoing, in which consensus was to be reached on the "big ticket" items first, before moving on to a negotiation of the precise terms of the Put and Call. 17 [29] Mr Doyle SC relied upon Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd 18 where Gleeson CJ, with whom Hope and Mahoney JJA agreed, observed that: "in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention." But as is apparent from Gleeson CJ's later remarks, that case was concerned with a case: "where it was contemplated that there would be express agreement on a number of important matters which the parties had not yet got around to discussing, or in respect of which their discussions were still at a very incomplete stage, the parties had made an agreement on the most important subject of their transaction, that is, the price, in the confident expectation that they would in due course come to terms on the other issues that needed to be addressed." Cf Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 543. (1988) 18 NSWLR 540 at 548. (1988) 18 NSWLR 540 at 551.

15 15 [30] Here the evidence did not suggest that further negotiation was regarded as essential by the parties. As in Niesmann v Collingridge, 20 the terms of the correspondence exchanged between the parties contemplated the execution of a further contract as the means whereby the bargain which they had concluded would be implemented. It is necessarily implicit in such an agreement that the parties will co-operate to do what must be done to make the further agreement. 21 [31] In this case, if the signed acceptance of the offer had no legally binding effect, either side could immediately shift its ground on any of the "big ticket" items in the further negotiation which would ensue. The parties would be back to where they were 12 months before. It is, I think, difficult to attribute to parties who signed the letter of 8 April 2008 a willingness to countenance such an outcome. [32] In my respectful opinion, there is no more substance in Mr Doyle's suggestion than there was in the attempt made on behalf of the appellant (Niesmann) in Niesmann v Collingridge to give a sensible explanation of the transaction between the parties which did not involve acceptance that the parties intended to conclude a binding agreement. In that regard, Knox CJ said: 22 "The appellant's contention in effect is that the acceptance by Collingridge (even if it had been made in writing) conferred no legal right on him and imposed no legal obligation on the appellant the position being, according to the argument, that both parties had the right after acceptance to continue or to withdraw from negotiations, and that there was nothing binding unless after acceptance both parties agreed on all the essential terms, including those apparently settled by the offer, and embodied the result of that agreement in a formal contract. In other words, it is argued that if Collingridge duly accepted the offer the parties were exactly in the same position as if the offer had never been made, except for the transfer of sixpence from one to the other. It follows from this argument that the so-called 'offer' was not open to 'acceptance' by Collingridge in any real sense of that word. It is said that what Collingridge obtained under the offer was the right to insist that the vendor should abstain for a reasonable time from withdrawing the offer either expressly or by selling the property to some other person; but it is apparent that the right to insist on the continuance of an offer which is incapable of being converted by acceptance into a contract is entirely illusory. I find it impossible to entertain the idea that the parties intended that this so-called 'firm offer' should be so futile a proceeding as the appellant now contends." [33] The offer made in the letter of 8 April 2008 was expressed to be unconditional. The Put and Call contract which the offer contemplated was also described as unconditional. That is a clear indication that the exercise to be devolved upon Moffatt's lawyer was a drafting exercise intended to facilitate the mechanical aspects involved in the completion of the transaction to which the parties had made (1921) 29 CLR 177. See also G R Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631 at 635. (1921) 29 CLR 177 at

16 16 a binding commitment. The following observations of McHugh JA in G R Securities 23 are apposite: "Under the agreement each party was obliged to do all that was necessary on his part to enable the other party to have the benefit of the agreement concluded by the correspondence: Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607. This included doing everything necessary to enable contracts to be exchanged by 18 April 1986: Godecke v Kirwan (at 641). If the parties agreed on additional terms, they would be added to the formal contract. If they did not, the formal contract would give effect only to the agreed terms and conditions of the correspondence. The case, therefore, is one where the parties were bound by the informal agreement but expected to make a further contract which by consent might contain additional terms: Sinclair, Scott & Co Ltd v Naughton (at 317)." [34] Hebron Park points out that the substantive obligations of the parties as to the timing of completion and arrangements at settlement, the precise timing of the payment of the deposit, the place of settlement, the detail of the responsibility for insurance, the obligations as to the payment of GST (if any) and the terms of the "Put and Call", are not spelt out in the correspondence. But, as McHugh JA said in G R Securities, the implied obligation of each party to co-operate with the other to ensure that each side obtains the benefit of its bargain serves to supply these deficiencies. 24 To the extent that one party refuses to co-operate with the other in conformity with this obligation, the innocent party may be entitled to treat that lack of co-operation as a repudiation of the contract and bring it to an end or, in the alternative, to enforce the contract. [35] Mr Doyle SC argues that the putative agreement in the present case is outside the authority of the decision in Niesmann v Collingridge because in the latter case "the only reason for introducing the reference to the signing of a contract was to fix the date of payment of the first and subsequent instalments of purchase money." 25 Mr Doyle argues that, while accepting that the signing of the Put and Call would fix the date from which times for performance would be reckoned, the Put and Call had further significance in that it was intended to consist of terms yet to be agreed. But, as has already been mentioned, the evidence does not disclose an actual program of further negotiation in the contemplation of the parties. [36] I am not unmindful of the point that absence of agreement upon all possible subjects of negotiation may point to a difficulty as to intention to be bound, as well as to a difficulty about certainty of terms; but in the present case there is no warrant in the evidence of the negotiations of the parties for assuming that they held an expectation of further negotiations. The preparation of the Put and Call was to be the responsibility of Moffatt's lawyer. As in Godecke v Kirwan, 26 what was to be included in the Put and Call was "not dependent on further agreement between the (1986) 40 NSWLR 631 at See also Mackay v Dick (1881) 6 App Cas 251 at 263; Butt v McDonald (1896) 7 QLJ 68 at 70 71; Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 at 607. (1921) 29 CLR 177 at 183. (1973) 129 CLR 629 at 642.

17 17 parties". On the view of Walsh J in Godecke v Kirwan, 27 with which Mason J agreed, the authority of Moffatt's lawyer to draft the Put and Call was limited to terms which were reasonable and relevant to the Put and Call contemplated by the letter of 8 April In the event of a dispute as to whether what Moffatt's lawyer drafts is reasonable, that dispute would be a matter which the court can decide. [37] It is also suggested on behalf of Hebron Park that the putative agreement does not fit neatly within the second category in Masters v Cameron. It may be said that this suggestion involves an unduly restrictive view of that category. It may also be said that the putative agreement in this case belongs, like that in G R Securities, to a fourth category. In my respectful opinion, however, there is little purpose to be served in seeking to resolve the issue of classification. A concern as to classification should not be allowed to obscure or distract from the real task of the court which is to ascertain and give effect to the intentions of the parties. As Sir Anthony Mason said recently: " [T]he categories (or classifications of Masters v Cameron ((1954) 91 CLR 353), be they three or four, are no more than exemplifications of the general principle that, in the case of written documents, the intention of the parties is to be resolved objectively and as a matter of construction of the relevant documents. The categories are necessarily subject to the general principle." 28 [38] Hebron Park also argues that there was no intention to conclude an agreement because the actual purchaser was not identified. Reference was made to the letterhead which described the "Moffatt Group" as something established in 1975, whereas company searches show that Moffatt was only registered in March of But Moffatt, the respondent, is identified unequivocally by its ACN. That being so, it is only by recourse to extrinsic evidence can any argument arise as to the identity of the respondent, but if regard is had to that evidence it becomes clear that, as his Honour found, the respondent was the contracting party. 29 The PAMDA point [39] A further criticism of the learned trial judge's approach was advanced. This point was not agitated at trial. This criticism relied upon the circumstance that the context in which the negotiations in the present case occurred included the Property Agents and Motor Dealers Act 2000 (Qld) ("the PAMDA"). This legislation requires certain formalities for the benefit of purchasers of residential land. These formalities do not impede the formation of a legally binding contract; but if these formalities are not complied with, the purchaser may, within a specified period, elect to terminate the contract. 30 The argument which is put on behalf of Hebron Park is that it would be an extraordinary thing to hold a vendor bound unless and until the formalities necessary to bind the buyer irretrievably to the contract had been complied with. [40] It is necessary to bear in mind that when one speaks of the intention of the parties in this field of discourse, one is speaking of the objective intention of the parties, being (1973) 129 CLR 629 at ). Sir Anthony Mason, "Opening Address [to the Journal of Contract Law 20 th Anniversary Conference]" (2009) 25 Journal of Contract Law 1, 6. [2008] QSC 177 at [67]. See s 366B(2), s 366D and s 367(2) of the Property Agents and Motor Dealers Act 2000 (Qld).

18 18 their "intention as expressed". 31 The negotiations between the parties did not advert to the need for compliance with the PAMDA requirements. The intentions actually expressed by the parties were not qualified or conditional by any concern to observe these requirements. That this was so is hardly surprising. As Mr O'Donnell QC, who appeared with Mr Shah for Moffatt, points out, this is not a case of the kind spoken of in the relevant provisions of the PAMDA where the contract is "given to the buyer by the seller". This is not a case of a sale of a residence to a consumer but of an acquisition of stock by a developer. [41] In my respectful opinion, the unremarked existence of the formal requirements of the PAMDA do not afford a convincing basis for concluding that the parties' "intention as expressed" was not to make a legally binding agreement immediately. The first issue: Conclusion [42] In summary then, as to the first issue in the appeal, I am respectfully of the opinion that the express words of the correspondence between the parties, understood in a context of the longstanding interest of both parties in the sale of the property, left no room for an inference that they did not intend to be bound to a sale of the property until the execution of a formal contract. The second issue on the appeal: Uncertainty or incompleteness of terms [43] Hebron Park advances the argument that the terms of the letter of 8 April 2008 were not sufficiently certain to be enforced. To a consideration of that argument I now turn. At the outset I should say that the arguments advanced on appeal in relation to this issue have largely been canvassed in my discussion of the first issue. The arguments in relation to the second issue may, I think, be dealt with more briefly. The approach of the learned trial judge [44] His Honour took his guidance on the resolution of this second issue from the statement of Lord Wright in Scammell (G) & Nephew Ltd v Ouston: 32 " '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.' It is only where: '... the language used was so obscure and so incapable of any definite or precise meaning that the court is unable to attribute to the parties any particular contractual intention' that the court will conclude there was no contract.'" Cf Inland Revenue Commissioners v Raphael [1935] AC 96 at 142. [1941] AC 251 at 268. [2008] QSC 177 at [36].

19 19 [45] The learned trial judge summarised Hebron Park's three principal arguments on this issue: 34 "It remains to consider the defendant's three particular points of objection: that the letter did not identify the consideration for the grant of the option rights, nor specify when or how the rights were to be exercised." I will address these arguments in turn. Consideration for the agreement [46] The learned trial judge rejected the first of Hebron Park's arguments. His Honour said: 35 "Consideration was provided by the parties' mutual conferral of rights and assumption of obligations. The plaintiff s 'Call' option was consideration for the defendant s 'Put' option. The consideration for the right conferred on the plaintiff to buy the land was the right it conferred on the defendant to sell it. There is an alternative approach. The consideration for the grant of an option need be no more than a peppercorn. One commonly sees options of this type granted in consideration of the payment of $1. When the parties agreed, as in my opinion these parties did, that they should execute a Put & Call option agreement their presumed intention must have been that the agreement was to be binding, which would require valuable consideration. It would be an appropriate case in which the law would imply a term that each party would give sufficient consideration, e.g. $1 to the other to make the contract binding. The implication of such a term is necessary to give business efficacy to the agreement, and is so obvious as to go without saying. As well, such a term is reasonable, capable of clear expression, and does not contradict any express term of the contract. The five conditions for the implication of terms as described in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales ( ) 149 CLR 337 at 347, are satisfied." [47] No challenge was made in this Court to this aspect of the learned trial judge's reasons. For my part, I would observe simply that the exchange of mutual promises clearly afforded sufficient consideration to bind the parties to their bargain if those promises were intended to create an enforceable contract. The exercise of the option [48] As to the second of the arguments advanced on behalf of Hebron Park on this point, the learned trial judge said: 36 "The answer to the point that nothing is said as to the mode by which the option was to be exercised is that any form of notice would have been sufficient. In the absence of the specification of a particular [2008] QSC 177 at [44]. [2008] QSC 177 at [45] [46]. [2008] QSC 177 at [47].