Dorrough Investments Pty Ltd, Re [1996] QSC 12

IN THE SUPREME COURT OF QUEENSLAND No. 696 of 1996 Brisbane Before Shepherdson J. IN THE MATTER OF THE PROPERTY LAW ACT 1974 AND IN THE MATTER OF AN APPLICATION BY DORROUGH INVESTMENTS PTY LTD JUDGMENT - SHEPHERDSON J. Judgment delivered 7/2/1996 CATCHWORDS: CONTRACT - Construction and Interpretation - Contract between applicant and respondent containing special type-written conditions Australian Broadcasting Commission v. Australasian Performing Right Association Limited (1973) 129 CLR 99 at p. 109 applied. Counsel: Mr P.J. Goodwin for the applicant. Mr. D.C. Andrews for the respondent. Solicitors: Lock Lim & Associates for the applicant. Clarke & Kann for the respondent. Hearing date 30 January, 1996 -- 1 of 9 -- IN THE SUPREME COURT OF QUEENSLAND Brisbane No. 696 of 1996 Before Shepherdson J. IN THE MATTER OF THE PROPERTY LAW ACT 1974 AND IN THE MATTER OF AN APPLICATION BY DORROUGH INVESTMENTS PTY LTD JUDGMENT - SHEPHERDSON J. Judgment Delivered 7 February 1996 The applicant Dorrough Investments Pty Ltd is the purchaser from the respondent Jennings Sinnamon Park Pty Ltd of certain vacant land at Sinnamon Park. The sale and purchase is evidenced by a written contract dated 24 October 1994 made between the parties. The contract contains a number of type written special conditions found in Annexure "A". Before mentioning certain of these special conditions I note that the contract identifies "Brisbane City Council" as "Local Authority". Special conditions 2 to 6 (inclusive) read:- "2. This Contract is subject to the Purchaser within 90 days after the date hereof receiving from the Brisbane City Council ("Council") a satisfactory consideration in principal (sic) approval with respect to the rezoning of the Land in accordance with the terms hereof and should such consideration in principal (sic) approval not be satisfactory to the Purchaser, the Purchaser shall give written notice to the Vendor not later than the date which is 90 days after the date hereof and upon receipt of such written notice by the Vendor this Contract shall be at an end and all moneys paid by the Purchaser -- 2 of 9 -- 2 hereunder to the Stakeholder shall be refunded to the Purchaser. If such written notice is not received by the Vendor in accordance with this Clause, the Purchaser shall be deemed to have received from the Council a satisfactory consideration in principle approval. 3. This Contract is subject to the Council, on or before the date which is 9 months after the date hereof, approving, on conditions acceptable to the Purchaser, the application of the Purchaser to amend the Town Plan for the City of Brisbane by removing the Land from the Non Urban Zone and including the Land in the Commercial Zone ("rezoning application"). 4. In the event that:- . The Purchaser is required to enter into a Rezoning Deed with the Council in respect of the Land before the Council will apply to the Governor-in-Council for rezoning approval with respect to the rezoning application then the Purchaser will enter into such Deed with the Council; . The Council requires a bond to be lodged pursuant to any Rezoning Deed the Purchaser shall lodge such a bond with the Council. 5. This Contract is subject to the publication in the Queensland Government Gazette of an Order-in-Council approving the rezoning application, within 4 months after the date upon which the Council applies to the Governor-in-Council for the rezoning approval. 6. Should the Council not have approved the rezoning application in accordance with Clause 3 of this Annexure A and provided that such failure is not due to the default of the Purchaser, the Purchaser having done all things required of it expeditiously, then the Vendor shall grant to the Purchaser such extensions of time as shall be reasonably necessary:- . to enable the Council to process the rezoning application, which extension shall not be later than the date which is 12 months after the date hereof; and . for the rezoning approval to be published in the Queensland Government gazette in accordance with Clause 5 of this Annexure A, which extension shall not be later than the date which is 15 months after the date hereof." The sale and purchase has not been settled; the applicant purchaser has, pursuant to s. 70 of the Property Law Act sought the following declarations:- 1. A declaration that upon a proper construction of the special conditions Annexure "A" to the contract notification of rezoning of the land the subject of that contract is required to be published in the Queensland Government Gazette on or before 9 May 1996; and 2. A further declaration that upon a proper construction of the special conditions to the contract -- 3 of 9 -- 3 the vendor is not entitled to terminate the contract pursuant to clause 11 of the special conditions Annexure "A" before 9 May 1996. The respondent vendor has opposed the application but has made no formal cross- application. Its counsel, Mr Andrews, in the course of his submissions has sought to have the court make the following declarations:- 1. That upon a proper construction of the special conditions Annexure "A" to the said contract publication in the Queensland Government Gazette of an Order in Council approving the rezoning of the land the subject of the contract is required on or before the 24 January 1996. 2. That upon a proper construction of the said special conditions, for want of the said publication on or before the 24 January 1996 either party is entitled to terminate the said contract. The applicant's argument before me centred on special conditions 3, 5, and 6. The date referred to in special condition 3 and which is 9 months after the date of the contract is 24 July 1995; the date referred to in special condition 6 and which is 12 months after the date of the contract is 24 October 1995 and the date referred to in special condition 6 and which is 15 months after the date of the contract is 24 January 1996. The affidavit material before me includes exchanges of correspondence between the solicitors for the applicant and the solicitors for the respondent and shows that the parties acting under special condition 6 agreed to the following extensions:- 1. Extending the date under special condition 3 to 24 July 1995 and extending the date by which the rezoning approval is to be published in the Queensland Government Gazette to 22 December 1995. 2. Extending the date referred to in special condition 3 to 24 October 1995 and extending the date by which the rezoning approval is to be published in the Queensland Government -- 4 of 9 -- 4 Gazette to 24 January 1996. Time has continued to be of the essence in the contract. On 10 October 1995 Brisbane City Council had determined that the land should be rezoned on conditions. There had been one objector to the application to rezone and an appeal to the Planning and Environment Court ensued. On 19 December 1995 this appeal was resolved when the Planning and Environment Court made certain consent orders which enabled the applicant to proceed towards gazettal in the Queensland Government Gazette of an Order in Council approving the rezoning application. The Brisbane City Council was required to apply to the relevant Minister of the Crown for approval by the Governor in Council of the amendment to the planning scheme resulting from the rezoning (s.4.5(1) of the Local Government (Planning and Environment) Act 1990). The applicant's solicitors found on 19 December 1995 that such approval by Order in Council could not occur earlier than 25 January 1996 with gazettal a few days thereafter. At the time of the hearing before me it appeared that the Order in Council will not be published in the Gazette before 9 February 1996. The applicant's solicitors have declined any further extension of the time for gazettal. The relevant principles applicable in a case such as the present were re-stated by Gibbs J. (as he then was) in Australian Broadcasting Commission v. Australasian Performing Right Association Limited (1973) 129 CLR 99 at p.109 when he said:- "It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the -- 5 of 9 -- 5 purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, "even though the construction adopted is not the most obvious, or the most grammatically accurate", to use the words from earlier authority cited in Locke v. Dunlop (1888) 39 Ch. D.387, at p. 393 which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case (1880) 16 Ch.D. 681, at p. 686. Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas & Co. Ltd. v. Arcos Ltd. (1932) 147 L.T. 503, at p. 514, that the court should construe commercial contracts "fairly and broadly, without being too astute or subtle in finding defects", should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v. Australian Chilling and Freezing Co. Ltd. (1968) 118 C.L.R. 429 at p. 437." Mr. Goodwin in his argument for the applicant submitted that special condition 5 in effect stood alone and that the second part of special condition 6 was meaningless. Special condition 5 does not stand alone. As Gibbs J. said in the above cited passage, the whole of the instrument has to be considered since the meaning of any one part of it may be revealed by other parts and the words of every clause must if possible be construed so as to render them all harmonious one with another. Leaving aside special condition 2 (which it is unnecessary to consider) the draftsman of the contract provided for two conditions - the first was that Brisbane City Council should on or before 24 July 1995 approve on conditions acceptable to the applicant the applicant's rezoning application (special condition 3). The second was that stipulated in special condition 5 namely that the contract was subject to the publication in the Queensland Government Gazette of an Order in Council approving the rezoning application within four months after the date upon which the council applied to the Governor in Council for the rezoning approval. It is true that in special condition 5 the date upon which the Council was to apply to the Governor in Council is not stated. The draftsman knew that it was Brisbane City Council who bore -- 6 of 9 -- 6 the obligation of applying to the Governor in Council for the rezoning approval and its gazettal (see special condition 4). If it were not for special condition 6, Mr Goodwin's submission that special condition 5 "stands alone" would have much to commend it. However, special condition 6 is present and must be considered as it is part of the contract. There was no dispute that the precondition of special condition 6 had been fulfilled - the Council had not approved the rezoning application in accordance with special condition 3 and such failure was not due to the default of the applicant, the applicant having done all things required of it expeditiously. Special condition 6 in effect then required the respondent to grant to the applicant such extensions of time as should be reasonably necessary;- First, an extension of time to enable the Brisbane City Council to process the rezoning application and Secondly, an extension of time for the rezoning approval to be published in the Queensland Government Gazette "in accordance with" special condition 5. However, special condition 6 expressly provided that in the first case the extension should not be later than the date which was 12 months after 24 October 1994 and that in the second case the extension should not be later than the date which was 15 months after 24 October 1994. This latter date was 24 January 1996. It is true that although special condition 5 required publication in the Queensland Government Gazette within 4 months after the date on which Brisbane City Council applied to the Governor in Council for rezoning approval, it might fairly be said that the operation of special condition 6 might permit only a three month gap between the Council applying to the Governor in Council for rezoning approval and the Gazettal of that rezoning. Such a result might seem rather -- 7 of 9 -- 7 harsh in that the four months stipulated in special condition 5 had been reduced by special condition 6 to three months. However, as Gibbs J. has pointed out this court has no power to amend the contract. I should say that I have noted that in the opening words of special condition 6 the draftsman has used the phrase "approved the rezoning application" and in dealing with the first extension of time has used the phrase "process the rezoning application". Is the change significant? I do not think so. The words have different meanings and if it were necessary for me to do so I would construe "process" as including the initial approval by Brisbane City Council and the procedure involved in the Brisbane City Council applying to the Governor in Council under s.4.5 of the Local Government (Planning and Environment) Act 1990. In special condition 6 "process" has a wider meaning than "approve". In my view the second part of special condition 6 is not meaningless and special condition 5 does not "stand alone". Nor do I consider the second part of special condition 6 ambiguous. It is, in my view unambiguous. I consider that on its proper construction the contract fixes the date which is 15 months after 24 October 1994 namely 24 January 1996 as the last date by which the rezoning application of the subject land was to be published in the Queensland Government Gazette. In the result I have concluded that the declarations sought by the applicant must be refused. I should say that I sympathise with the applicant. It has borne the trouble and expense of obtaining the local authority approval to the rezoning but has been unable to complete the final step namely gazettal within the time stipulated in the contract. At the end of the day the respondent may benefit from the applicant's acts. I turn now to the declarations which Mr Andrews sought. I am prepared to make the first of these but I am not prepared to make the second. I decline to make the second because there is no -- 8 of 9 -- 8 formal application for such a declaration before me and the matter of entitlement to terminate (other than under clause 11) was not canvassed in the evidence. In the result then the following are the orders which I make:- 1. Application filed on 23 January 1996 is dismissed. 2. I declare that upon a proper construction of the special conditions Annexure "A" to the contract of sale dated 24 October 1994 made between Dorrough Investments Pty Ltd as purchaser and Jennings Sinnamon Park Pty Ltd as vendor notification of approval by Order in Council of rezoning of the land the subject of that contract is required to be published in the Queensland Government Gazette on or before 24 January 1996. I shall hear from the parties on the matter of costs. -- 9 of 9 --