Excel Quarries Pty Ltd v Payne [1995] QSC 90

IN THE SUPREME COURT OF QUEENSLAND No. 1199 of 1994 Brisbane [Excel Quarries P/L v. B.C. Payne] BETWEEN EXCEL QUARRIES PTY LTD (ACN 010 056 407) Plaintiff AND BRENDA CORAL PAYNE Defendant JUDGMENT -SHEPHERDSON J. Judgment delivered 24/5 /1995 CATCHWORDS: Specific performance of agreement for lease - whether condition precedent to execution of the lease by lessor has been fulfilled - pleas of estoppel, waiver and election. Counsel: R.I. Hanger Q.C. and I.D. Houston for Plaintiff R.V. Hanson Q.C. and R.M. Derrington for Defendant Solicitors: Hunt and Hunt for Plaintiff Connor O'Meara McConaghy for Defendant Hearing date: 23 and 24 February 1995 -- 1 of 37 -- IN THE SUPREME COURT OF QUEENSLAND No. 1199 of 1994 Brisbane [Excel Quarries P/L v. B.C. Payne] BETWEEN EXCEL QUARRIES PTY LTD (ACN 010 056 407) Plaintiff AND BRENDA CORAL PAYNE Defendant JUDGMENT -SHEPHERDSON J. Judgment Delivered 24 May 1995 In this action the plaintiff has sought "specific performance of the agreement for lease dated 4 October 1989 for lease by the defendant to the plaintiff of land described as Lot 3 on RP No. 214949 in the County of Canning Parish of Maroochy containing 88.2416 ha and being the whole of the land contained in Certificate of Title Volume 7086 Folio 45 situated at Yandina Creek Road, Yandina in the State of Queensland". The plaintiff has not pursued a claim for damages for breach of contract in lieu of or in addition to specific performance. The defendant has opposed the plaintiff's right to specific performance but before I mention the basis of her opposition it is necessary that I make certain findings so that that basis of opposition can be better understood. The evidence at the trial was partly by affidavit and partly oral. -- 2 of 37 -- 2 I find that on 4 October 1989, the defendant and Alistair James Payne of the one part and Ikacool Pty Ltd entered into a deed. That deed (a copy of which is ex. DRK1) described the plaintiff and Alistair James Payne as "the intending lessors" and Ikacool Pty Ltd as "the intending lessee". I pause to say that Ikacool Pty Ltd changed its name to Suncoast Quarries Pty Ltd and by a written agreement dated 4 February 1991, made between Suncoast Quarries Pty Ltd and Exsell Quarries Pty Ltd it assigned its interest in the deed of 4 October 1989 to Exsell Quarries Pty Ltd. Exsell Quarries Pty Ltd has since changed its name to Excel Quarries Pty Ltd the abovenamed plaintiff. The deed of 4 October 1989 contained four recitals which read:- "A. The intending Lessors are the registered proprietors of an estate in fee simple of the land described as Lot 3 on Registered Plan No. 214949 in the County of Canning Parish of Maroochy containing 88.2416 hectares and being the whole of the land contained in Certificate of Title Volume 7086 Folio 45 situated at Yandina Creek Road, Yandina in the State of Queensland (called "the said land"). B. The intending lessors are the registered proprietors of an estate in fee simple of the land described as Lots 1 and 2 on Registered Plan no. 214949 in the County of Canning Parish of Maroochy containing 12.032 hectares and being the whole of the land contained in Certificates of Title Volume 7086 Folios 43 and 44 (called "the neighbouring land"). C. The intending lessee proposes that it will lease the said land as is described in the First Schedule hereto (such part being called "the demised premises") for a term of twenty-one (21) years commencing on the first day of the calendar month immediately following the date upon which the said land is rezoned to Extractive Industry subject to the terms hereof. D. The intending Lessors and the intending Lessee have agreed to enter into and execute the Lease contained in the Second Schedule hereto (called "the said lease") upon and subject to the fulfilment of the terms and conditions contained in this Deed." In the operative part of the deed the parties entered into certain covenants with each other. Of these covenants the plaintiff, in its pleading, has relied on the following:- -- 3 of 37 -- 3 (a) Clause 1 which reads:- "1. The intending lessee will forthwith upon the execution hereof commence with the preparation of an application with the necessary supporting information to the Maroochy Shire Council to exclude the said land from the Rural A Zone and to include the said land in the Extractive Industry Zone and shall within six months of the execution hereof lodge such an application." (b) Clause 2 which reads:- "2. The granting of the said lease shall be subject to the following conditions:- (a) the gazettal of rezoning of the said land from Rural A Zone to the Extractive Industry Zone under the Town Planning Scheme for the Maroochy Shire Council upon terms and conditions satisfactory to the intending lessee within six (6) months of the date of application referred to in clause 1 hereof or such extended time as permitted by clause 4(b) and 4A(a) hereof; and (b) the results of a site exploration program to be conducted by the intending lessee proving to the entire satisfaction of the intending lessee the sufficiency of rock on the demised premises to enable the conducting of a viable business operation of extractive industry and the extraction of rock in the opinion of the intending lessee suitable as road base and for crushing and screening as aggregates on the demised premises for the period of the proposed lease within two (2) months of the date of gazettal of rezoning referred to in subclause (a) hereof; and (c) the consent of the Maroochy Shire Council to the lease of the said land in accordance with the provisions contained in the First Schedule upon terms and conditions satisfactory to the intending lessee on or before the date for obtaining the results referred to in subclause (b) hereof," (c) Clause 4 which reads:- "4. If the Maroochy Shire Council shall fail or refuse to rezone the said land to extractive industry or approve the rezoning to extractive industry subject to any terms and conditions not suitable to the intending lessee then; - -- 4 of 37 -- 4 (a) the intending lessee may at the cost of the intending lessee in all respects appeal to the Local Government Court against the failure or refusal or the imposition of any terms and conditions which the intending lessee believes not to be reasonable and relevant in all the circumstances and subject to its indemnifying the intending lessors against all costs which the intending lessors may incur by reason of instructions or requests made to the intending lessors by the intending lessees or agents acting on the intending lessee's behalf; and (b) the time within which to obtain the gazettal of the rezoning is extended to a period expiring one month after the date of the next meeting of the Maroochy Shire Council to be held after the date of handing down by the last Court of Appeal of judgment in relation to any appeal or appeals against the decision of the said Maroochy Shire Council or, that date following the handing down by the last Court of Appeal of judgment in relation to the appeal or appeals against the decision of the said Maroochy Shire Council on which the rezoning is gazetted, whichever is the later date (provided always however that such appeal or appeals are promptly commenced and diligently prosecuted by the intending lessee); or (c) the intending lessee may determine this deed." (d) Clause 5 which reads:- "5. Upon the occurrence of the events described in clause 2(a) and (b) hereof to the satisfaction of the intending lessee and the obtaining of the Maroochy Shire Council's consent referred to in 2(c) the intending lessors will grant to the intending lessee a lease of the demised premises in the terms and upon and subject to the conditions described in the Second Schedule (called 'the said lease') and each party shall execute the said lease within fourteen (14) days of its being tendered for execution." I mention also cl.6 of the deed which reads:- "6. The date of commencement of the said lease shall be the first day of the calendar month immediately following the date upon which the rezoning is gazetted in terms of clause 2(a) or receive results of site exploration test referred to in clause 2(b) or receives the consent of the Maroochy Shire Council to the said lease whichever is the later." Because of the assignment to the plaintiff which has occurred I mention that by cl.13 of the -- 5 of 37 -- 5 deed the intending lessee had the right to assign or transfer its interest thereunder without the consent of the intending lessors. Recital A defines "the said land" and it is the land the lease of which is sought to be enforced by a decree of specific performance. Recital C shows that the intending lessee proposed to lease "the said land' and Recital D referred to the lease into which the parties agreed to enter and execute. This latter recital refers to a "Second Schedule" to the deed. The deed which I have - and it is only a photocopy - contains two "First Schedule" and no "Second Schedule". The first numbered First Schedule is a photocopy of plan No. 214949 and shows Lots 1-3; lot 3 containing 88.2416ha is clearly shown - this is "the said land". I mention in passing that ex.15 is a photocopy of RP 214949. The second numbered "First Schedule" is plainly an error - it appears on the first page of a document entitled "LEASE". That "LEASE" shows Alistair James Payne and Brenda Coral Payne to be "lessor" and Ikacool Pty Ltd to be "lessee". It also shows the real property description, namely Lot 3 on RP 214949 County Canning Parish Maroochy and the description of land being leased is said to be "the whole of the abovementioned lot". At trial nothing was said about this error in that the form of lease appeared as "First Schedule" and not as "Second Schedule". I read the second numbered "First Schedule" as meaning "Second Schedule". I find that on 27 January 1990 Suncoast Quarries Pty Ltd applied to the Maroochy Shire Council for approval of the Council to exclude the land described in the application "from the Rural A Zone and then include it in the Extractive Industry Zone of the Town Planning Scheme" of the Shire of Maroochy. The description of the land in the application was "Lot 3 on RP 214949 original portion 449 Parish of Maroochy County of Canning". The area of the land was said to be 88.2416 -- 6 of 37 -- 6 hectares more or less and the location of the land was said to be Yandina Creek Road, Yandina Creek. The application went on to show that the rezoning "comprises the whole of the land described above". The subject area was shown on plans as 88.2416ha being Lot 3 on RP 214949. The use desired for the land was said to be:- "Extractive industry, including the winning, processing, stock piles, and distribution of quarried products." The application for rezoning showed the names of the registered proprietors to be "Alistair James Payne and Brenda Coral Payne" and the photocopy application before me (ex.DRK2) shows that these two persons consented to the application on 27 January 1992 by signing it. By a letter dated 23 May 1990, (ex. DRK3) the Maroochy Shire Council notified the authorised agent of Suncoast Quarries Pty Ltd that it refused the rezoning application for the above described land and the names and addresses of a large number of objectors were set out in the letter. This letter caused cl.4 of the deed of 4 October 1989 to operate. The intending lessee acted under cl.4(a) and on 21 June 1990, Suncoast Quarries Pty Ltd filed in the Local Government Court at Brisbane, (LG Appeal No. 158 of 1990) an appeal against the whole of the decision of the Maroochy Shire Council as set out in the above letter dated 23 May 1990. Council of the Shire of Maroochy was named as respondent to this appeal. (see ex.DRK4). On 6 December 1990, His Honour Judge Quirk sitting in the Local Government Court ordered that the appeal be listed for hearing for two weeks commencing on 13 May 1991. Subsequently the date for commencing the hearing was amended to 20 May 1991. On 4 February 1991, a document entitled "Agreement for Assignment" was entered into between "Alistair James Payne and Brenda Coral Payne" as "the intending lessors", Suncoast Quarries Pty Ltd (formerly Ikacool Pty Ltd) ("the assignor"), Exsell Quarries Pty Ltd ("the assignee") and Exsell Concrete Pty Ltd ("the guarantor"). This assignment recited (inter alia) the -- 7 of 37 -- 7 above deed dated 4 October 1989 and described "the land" as Lot 3 on RP No. 214949. The deed recited the refusal of the Maroochy Shire Council to rezone the land (as appearing in the letter of 23 May 1990), the commencement of proceedings in the Local Government Court on 21 June 1990 and the proposed commencement of the appeal hearing on 20 May 1991. Effectively, Suncoast assigned to Exsell Quarries Pty Ltd all its rights and obligations under the deed of 4 October 1989 and the assignee assumed those obligations and agreed to pursue with all necessary skill and expedition the Local Government Court Appeal. During or about June 1991, and based on advice from consultants, particularly in respect of likely noise and environmental impacts (including concerns expressed by objector residents about the then recent identification of a rare plant species on the western portion of Lot 3) and on legal advice Excel Quarries Pty Ltd decided that it would limit excavation to the eastern knoll on Lot 3 and would not quarry the western knoll on Lot 3. The plaintiff then caused revised plans to be prepared showing development of the quarry based on extraction being limited to the eastern knoll. According to the affidavit of John Alan Johnson, the General Manager of the plaintiff "the balance area of the land remained an integral part of the proposed quarry operation as the site for various extraction related activities and as a buffer area for housing development to the north west". In oral evidence before me Johnson swore that the application by plaintiff was for rezoning the whole of Lot 3 and that even though the plaintiff had applied to rezone the whole of the land there was never any proposal to extract the whole of the land. In the events which happened the appeal in the Local Government Court (later the Planning and Environment Court) commenced on 15 July 1991. It continued for two weeks until and including 26 July 1991; it recommenced on 25 November 1991 and concluded on 3 December 1991. Her Honour Judge O'Sullivan who heard the appeal reserved her decision and on 23 January -- 8 of 37 -- 8 1992, she gave written "reasons for judgment". I should at this stage say that according to Mr Johnson, at the commencement of the hearing on 15 July 1991 before Judge O'Sullivan, counsel for the appellant informed Her Honour that the appellant intended to limit its quarrying activities to the eastern knoll of the land. I shall turn to this aspect later. It is apparent from the material before me and I so find that the reasons given by Judge O'Sullivan on 23 January 1992, did not conclude the appeal which she had heard. I say that because it was not until an order was made by Her Honour on 7 October 1992 after further hearings on 6 and 7 October 1992, that her Honour ordered that the appeal be allowed and that the application to exclude from the Rural A Zone and to include in the Extractive Industry Zone the land described as Lot 3 on RP No. 214949 be approved in accordance with the schedule attached to the order dated 7 October 1992 and marked A. Before I come to Schedule A to that order, it is important to note that on page 2 of her reasons delivered on 23 January 1992, her Honour said:- "The appellant proposes to quarry the eastern knoll on the subject land in accordance with the plans prepared by Mr David Kershaw. Prior plans to quarry the western knoll have been abandoned and that area is not included in the land now sought to be rezoned." Kershaw was a Director of Suncoast Quarries Pty Ltd. Messrs Cooper Grace Ward acted as Solicitors for the appellant in the Local Government Appeal and they act for it as plaintiff in the present action. Mr Grace of that firm wrote to Mr and Mrs Payne at their Brisbane address on 28 January 1992. A copy of that letter which is ex.DJG2 reads:- "Dear Mr and Mrs Payne -- 9 of 37 -- 9 Re: Coolum Quarry Site We are pleased to advise that last week the Planning and Environment Court adjudged that the Council's decision be overturned and that an approval be given upon terms and conditions to be negotiated. We attach a copy of the judgment for your information. You will note that the matter is returnable before the Court in April, by which time, the conditions should have been agreed upon or, in default of agreement, the matter will have to be resolved by the Court. We will keep you informed." This letter did not inform the defendant and her husband that the plaintiff did not (as Judge O'Sullivan found) seek rezoning of all the land comprising Lot 3. The letter of 28 January 1992, did not direct the Paynes' attention to the passage from page 2 of the Reasons for Judgment which I have already set out. After 23 January 1992, the plaintiff negotiated with Maroochy Shire Council for several months concerning conditions to be imposed. It was not until on or about 16 June 1992, that Maroochy Shire Council formally notified plaintiff through its solicitors of the conditions it proposed. (see Johnsons' affidavit - para 17) On 6 October 1992, the hearing of the appeal resumed and lasted two days. This hearing was primarily concerned with the appropriate conditions. Ex.4 before me is a photocopy of typed submissions made by the appellant's counsel to Judge O'Sullivan. Ex.9 before me is a photocopy transcript of pages 12 - 20 (inclusive) of the further hearing on 6 October 1992. It is fair to say that during these negotiations the plaintiff, as appellant, objected to conditions 1 and 1A proposed by Maroochy Shire Council on the grounds that there was no jurisdiction to amend the application in respect of the zoning sought. (see. ex. 8 which is a copy letter dated 22.6.92 from Cooper Grace and Ward to Shire Solicitor Maroochy Shire Council). Mr Grace, who was plaintiff's solicitor in the appeal and in the present case told me and I -- 10 of 37 -- 10 accept that when the hearing before Judge O'Sullivan resumed on 6 October, the appellant's counsel submitted that there was some doubt (and counsel cited authority) whether the Local Government Court had in fact the power to approve a rezoning where there were to be two zones and only one rezoning had been applied for. (see p.27/50). Mr Grace agreed with Mr Hanson Q.C. Counsel for the defendant that in October 1992, the appellant was, on counsel's advice, still pressing to have the whole of Lot 3 zoned to extractive industries without any duality of zoning. In the event, when the final judgment was given by her Honour on 7 October 1992, Her Honour allowed the appeal and ordered that the application to exclude from the Rural A Zone and to include in the Extractive Industries Zone the land situated at Yandina Creek Road described as Lot 3 on RP No. 214949 County Canning, Parish of Maroochy be approved in accordance with a schedule attached to Her Honour's order and marked A. That Schedule A contained a list of conditions. It is unnecessary to refer to all the list. Suffice to say that in effect the conditions divided Lot 3 into two areas as follows:- 1. "Operational Area/Site" - this was the area detailed by a metes and bounds description in condition 1 appearing in Schedule A. (this area was wholly within Lot 3); 2. "Balance Area" - meant Lot 3 "excluding the area defined by metes and bounds in condition 1. Her Honour then went on to say (inter alia) in condition 1 "Only the operational area is to be rezoned to extractive industry." In condition 1A her Honour said:- "The balance area is to be rezoned to 'Special Facilities - ancillary quarry operations in accordance with approval and conditions'. " Thereafter, in the Queensland Government Gazette dated 25 March 1994, at pages 1162-3 appeared an Order-in-Council said to commence on 25 March 1994, which relevantly amended the Town Planning Scheme for the whole of the Shire of Maroochy as follows:- -- 11 of 37 -- 11 Description of Land Rezoned Zone from which Land Excluded and Zoning maps affected Zone in which Land included and Zoning maps affected Lot 3 on RP No. 214949 Parish of Maroochy Rural A Zone as shown of sheet 29 Partly Extractive Industry Zone and partly Special Facilities Zone as shown on sheet 29/9 Ex.18 before me is a certified true and correct extract of the Maroochy Shire Council's Town Planning Scheme showing sheet 29. Attached to it is Map No. 29/9 (also certified). This Map No. 29/9 includes a locality sketch showing how Lot 3 has been zoned "Special Facilities" and "Extractive Industry". There are two separate areas - Lot 3 is divided by a line on map 29/9. I mention now that Alistair James Payne died on 10 February 1993. In early May 1994, Mr Johnson the General Manager of the plaintiff received from his solicitors the lease document in triplicate between the plaintiff and Brenda Coral Payne the defendant. On 23 May 1994, he visited the defendant at her home and gave her the lease for signing. She has declined to sign it. I mention now the pleaded defences relied on at trial; they are:- 1. That a condition precedent to the plaintiff's right to the lease has not been fulfilled, namely that "the gazettal of rezoning of the said land from Rural A Zone to the Extractive Industry Zone under the Town Planning Scheme of the Maroochy Shire Council" has not occurred; 2. That the gazettal of rezoning occurred beyond the time stipulated in the deed of 4 October 1989. To these pleas, the plaintiff has responded by pleading in reply and answer matters which it says:- -- 12 of 37 -- 12 (a) show that after the defendant and her husband received the Reasons for Judgment in late January 1992, and thereafter their actions were consistent with a desire and intention to affirm the agreement for lease. (b) that after gazettal of the rezoning, the actions of the defendant were consistent with a desire and intention to affirm the agreement for lease. (c) that the conduct of the defendant and her husband (and after her husband's death her conduct) led the plaintiff to believe for two and a half years that the decision of Judge O'Sullivan dated 7 October 1992 was acceptable and that the defendant would execute the lease; (d) that by reason of matters pleaded by the plaintiff the defendant elected to proceed with the agreement for lease and not to enforce any rights she might otherwise have to terminate the contract or claim damages in respect any alleged breach; (e) in addition or alternatively the actions of the defendant and her husband and the actions of the defendant, particulars of which are pleaded, amounted to a representation that she would not enforce any rights she might otherwise have to terminate the contract or claim damages, that the plaintiff relied on those representations, that the defendant failed to adhere to the representations and that the plaintiff has suffered detriment and that the defendant is estopped from terminating the contract or claiming damages. When I come to deal with the plaintiff's replies, I shall make further findings but at present I turn to the defendant's defences. As to the condition precedent point, I am required to interpret the deed of 4 October 1989. That deed is a commercial document. I am required to construe a commercial -- 13 of 37 -- 13 contract "fairly and broadly without being too astute or subtle in finding defects" (Lord Wright in Hillas & Co v. Arcos Limited (1932) 147 Law Times 503 at 514). (Australian Broadcasting Commission v.Australasian Performing Right Association (1973) 129 CLR 99 at 109). In Cohen & Co v. Ockerby & Co (1917) 24 CLR 288 at 300 Isaacs J. said that expressions in a mercantile contract - "are to be read in no narrow spirit of construction, but as a court would suppose two honest business men would understand the words they have actually used with reference to their subject matter and the surrounding circumstances." Again, in Upper Hunter County District Council v. Australian Chilling and Freezing Co Ltd (1967-8) 118 CLR 429 at 437 Barwick CJ, in speaking of the search for the intention of the parties to commercial contracts and the resolution of uncertainty in the meaning of what they have agreed said:- "No narrow or pedantic approach is warranted, particularly in the case of commercial arrangements." In Tricontinental Corporation Limited v. HDFI Limited (1987) 21 NSWLR 689 Samuels JA (at p.703) defined a "condition precedent" as follows:- "It is a stipulation in an agreement upon the fulfilment of which the existence of a contract, or of a principal obligation under an existing contract, is made contingent." With respect I adopt that definition. His Honour went on to say:- "The stipulation may involve the occurrence of an event that is independent of both parties, or it may require a unilateral act: see Halsbury's Laws of England 4th ed. Vol 9 Par.511 at 353." In the present case, it is my view that condition 2(a) stipulated for the gazettal of the rezoning of the whole "of the said land" from the Residential A Zone to the Extractive Industries Zone. This was an event which was independent of the parties in the sense that the District Court -- 14 of 37 -- 14 Judge sitting in the Local Government Court had first to allow the appeal and then the desired rezoning had to be gazetted. In another sense it was not independent of the parties in that the onus of instituting an appeal process lay on the plaintiff. In my view, while the plaintiff must be viewed as contractually bound to take all reasonable steps on its part towards obtaining the agreed rezoning, the rezoning was an event independent of both parties to the deed of 4 October 1989, but not entirely independent of one of the parties - Ikacool Pty Ltd. In saying this I recognise that the defendant and her husband were obliged, by the Maroochy Shire Council application form to consent to the rezoning application. If the condition in cl. 2(a) were a condition precedent, it was one which might be unfulfilled without any breach of contract (see Ankar Pty Ltd v. National Westminster Finance (Aust) Ltd (1987) 162 CLR 549 at 555-6). I say this simply because the Planning and Environment Court as successor to the Local Government Court might well have decided, despite the best efforts of the appellant before it, to dismiss the appeal and so the rezoning would not have occurred. At the end of the day I consider that on the proper construction of the deed, condition 2(a) was a condition precedent to the granting by the defendant of the lease in the terms of the Second Schedule (see cl.5 of the deed). I note also that in Woodfall Landlord and Tenant (27th Edition) (Vol. 1 at para. 533) the authors say:- "Where a condition must be performed before the estate can commence, it is called 'a condition precedent'; but where the effect of the condition is either to enlarge or defeat an estate already created, it is then called 'a condition subsequent'." In my view it cannot for a moment be supposed that the parties to the deed of 4 October 1989 intended that the lease should come into existence without the gazettal of the rezoning stipulated for in cl.2(a) having first occurred. Had the lease come into existence before that gazettal, -- 15 of 37 -- 15 the plaintiff's right to occupy the land for the purpose of extractive industry (see cl.6.01 of the form of lease in the Second Schedule) must have been illegal. The parties cannot be supposed to have intended that result. Clause 2(a) being a condition precedent - has it been fulfilled? In my view the answer must be "no". I say that because cl.2(a) requires gazettal of rezoning "of the said land' from Rural A Zone to the Extractive Industries Zone under the Town Planning Scheme for the Maroochy Shire Council. The deed of 4 October 1989 defines "the said land" in Recital A - it is Lot 3. The gazettal of 25 March 1994, shows that Lot 3 was not rezoned from Rural A Zone to Extractive Industries Zone - part only was and another part was rezoned from Rural A to a different zone not stipulated for in cl.2(a). The rezoning stipulated for in cl.2(a) was essential to the existence of the lease, specific performance of the agreement to give which is now sought. In the view which I take of the matter, the defendant, who is the survivor of herself and her husband (they together being the original intending lessors) was entitled to insist upon a literal compliance with cl.2(a) in order to create the liability in them to execute the agreed lease. In saying this I rely on what was said by Samuels JA (at p.705F) and Waddell A -JA at p.718G in Tricontinental Corporation Limited v. HDFI Limited (supra). Samuels JA said:- "Where an act by one party is condition precedent to the liability of the other, whether it has occurred or been fulfilled depends upon if the act proffered matches the description of the condition precedent in the contract, and not upon the seriousness of the divergence from that description." Waddell AJA said:- "It is said that the requirement that such notices be in writing is not a matter of substance and that Tricontinental should be held to have performed the provisions if oral notices were given which satisfied the commercial purpose. In my opinion, this is not correct. The clear commercial purpose of the provisions is to -- 16 of 37 -- 16 provide a mechanism whereby the liability on the part of HDFI can be established in a way which is unambiguous and certain. It is essential in commercial dealings that provisions of this kind should be applied strictly so that parties know exactly where they stand." Mr Hanger Q.C. has submitted that the gazettal of 25 March 1994, achieved the same result as if the whole of Lot 3 had been rezoned to Extractive Industry with part only of the land to be mined. He elicited evidence from the defendant that on a prior occasion she and her husband had applied for the consent of the Maroochy Shire Council to mine what is now Lot 3. Ex.13 is a photocopy of a letter dated 25 January 1977 from the Shire Clerk of the Council to the defendant and her husband concerning a proposal by them for a quarry on the land. It is apparent from that letter that the Council was prepared to approve a quarry for an area of 8ha only subject to certain provisions. Ex.14 is a photocopy of a letter dated 3 January 1979, from the defendant and her husband to the Maroochy Shire Council applying for the issue of a permit to quarry property then described as subdivision 2 of portion 449 Parish of Maroochy. A map was attached and it was proposed to work 8ha only. Although the real property description differs from Lot 3 it is not in dispute that the 8ha was part of what is now Lot 3. The defendant and her husband later subdivided the land as shown on the copy plan No. 214949 which is ex.15. Although I have no doubt that the defendant and her husband did apply in 1977 and 1979 for Council approval to quarry on what is now Lot 3 - limited to an area of about 8ha - these matters are extrinsic to the deed of 4 October 1989. In my view they do not play any part in my construction of that deed. The general rule (as set out in Cross on Evidence (Australian Edition)) at para.3 9145 applies. It is:- "Extrinsic evidence is generally inadmissible when it would, if accepted, have the -- 17 of 37 -- 17 effect of adding to varying or contradicting the terms of ... a document constituting a valid and effective contract or other transaction." I am to determine the intention of the parties from their written deed. Mr Hanger has further submitted that the defendant is, to use his words "not a naive little old woman" and that she possesses business acumen. He went on to submit that with the gazettal of 25 March 1994, the defendant got what she bargained for namely a quarry on Lot 3 with the biggest possible area which could be mined. I reject all Mr Hanger's submissions on this aspect of the case. The words of the contract are perfectly plain - there is no ambiguity. The gazettal of the rezoning of "the said land" (Lot 3) from Rural A Zone to Extractive Industry Zone was required by condition 2(a). Such rezoning did not occur. Mr Hanger's submissions in effect amount to saying that there has been substantial compliance which cl.2(a). As to this submission I respectfully adopt the following statement by Samuels JA in Tricontinental Corporation v. HDFI Limited (supra) p. 705:- "It seems to me to follow from Ankar that it is meaningless to speak of the substantial performance of a condition precedent. Either it has been performed or it has not. If it has, performance enlivens the obligation to which the stipulation is a condition precedent. If it has not, the obligation does not arise." Mr Hanger's next submission was that the condition in cl.2(a) was solely for the intending lessee's benefit and can therefore be and has been waived by his client. This submission involves, for the purposes of the submission, a concession that rezoning of "the said land" had not occurred in accordance with cl.2(a). Mr Hanger relies on the following passage from the judgment of Gibbs CJ in Sandra Investments Pty Ltd v. Booth (1983) 153 CLR 153 at 157:- "The approval referred to in cl.24 was expressed in the form of a condition precedent but it was a condition precedent not to the formation of the contract but to the obligation to complete it." -- 18 of 37 -- 18 His Honour then referred to Perri v. Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at pp. 543, 551, 557-558 and 565.. One of the pages to which his Honour referred was in the judgment of Mason J (as he then was) at p.551 where his Honour said:- "There is an obvious difference between the condition which is precedent to the formation or existence of a contract and a condition which is precedent to the obligation of a party to perform his part of the contract and is subsequent in the sense that it entitles the party to terminate the contract on non fulfilment. In the first category, the transaction creates no rights enforceable by the parties unless and until the condition is fulfilled. In the second category there is a binding contract which creates rights capable of enforcement, although the obligation of a party, or perhaps of both parties to perform depends on fulfilment of the condition and non fulfilment entitles him to terminate." The present case is in the second category. (see clause 5 of the 1989 deed). At p.551-2 Mason J later said:- "But in each class of case, the transaction creates no enforceable rights in respect of the subject matter of the transaction unless the condition is fulfilled, because until the occurrence of that event, there can be no binding contract." Condition 2(a) is a condition precedent to the performances by the parties to the 1989 deed, of their obligation to execute the lease in the Second Schedule (see Condition 5 of the 1989 deed). I approach the question whether or not the condition in cl.2(a) was solely for the intending lessee's benefit by asking whether the deed of 4 October 1989 provided for the consequences which flow from a failure to fulfil that condition. Clause 2 says nothing of such consequences. Clause 4, which I have already set out, is headed "Appeal to Local Government Court". In my view, cl.4 is concerned with an appeal to the Local Government Court by the intending lessee in any one of the three events predicated in the opening four lines of cl.4. One of those occurred and in that event the intending lessee had two choices - either to appeal at its own cost with -- 19 of 37 -- 19 consequent time extension for gazettal (see 4(a) and (b)) or to determine the deed (see 4(c)). The use of "or" between 4(b) and 4(c) is significant. In the events which happened the intending lessee chose to appeal. I reject Mr Hanger's submission that cl.4(c) shows that cl.2(a) operated for the sole benefit for the intending lessee. Although it is true to say that the intending lessee alone had the choices available under cl.4 it is I think more important to concentrate on cl.2(a) because that is the condition which it is said was solely for the intending lessee's benefit. In cl.4A the parties to the deed provided for the situation in which an objector to the rezoning application appealed to the Local Government Court against a proposal by Maroochy Shire Council to grant the application to rezone. I have not set out cl.4A. Suffice it to say that it provided in cl.4A(a) machinery for calculating an extension of time for gazettal of the rezoning and it gave the intending lessee the right to determine the deed (cl.4A(b)). Again, the word "or" appears between 4A(a) and 4A(b). I interpret cl.4A(b) as giving the intending lessee the right to determine the deed if any person lodged an objection to the application for rezoning with the Maroochy Shire Council and appealed to the Local Government Court against a proposal of the Council to grant the application. Mr Hanger also relies on cl.5 of the deed. It appears earlier in these reasons. Particular reliance is placed on the words "to the satisfaction of the intending lessee". These words do not, in my view, show that the condition in cl.2(a) was solely for the intending lessee's benefit. These words in my view represent a shortened version of the words "upon terms and conditions satisfactory to the intending lessee" appearing in cl.2(a). I consider that these are matters solely for the intending lessee's benefit, but matters which the lessee was called on by clause 5 to consider only after gazettal of the rezoning "of the said land" had occurred. That rezoning not having occurred, I fail to see that the above words in cl.5 can be relied on to show that condition 2(a) was -- 20 of 37 -- 20 solely for the intending lessee's benefit. In my view of the deed, it does not provide for any consequences flowing from a failure to fulfil condition 2(a). Despite such failure, can it fairly be said that condition 2(a) was solely for the intending lessee's benefit? Looking at the deed and leaving aside cl.2(b) and 2(c) which are not relevant to this question, the plain intention of the parties was that once the gazettal referred to in cl.2(a) occurred within the specified time and on terms and conditions satisfactory to the intending lessee, then the parties were to sign the lease in the form in the Second Schedule; the parties had provided in the deed itself the machinery for fixing the date of commencement of the lease, the rental and the date the rental became payable. The form of lease in the Second Schedule showed a lease of the whole of Lot 3 - not part of it. The rezoning of the said land (Lot 3) from Rural A Zone to Extractive Industry Zone was basic to the obligation of the parties to execute the lease. The rezoning stipulated for, had it occurred, gave legitimacy to the lease transaction to be entered into between the parties. The form of lease in the Second Schedule shows the lessee was to use the demised premises (the whole of Lot 3) for the purpose of extractive industry (see cl.6.01). Such a use was unlawful without the rezoning stipulated for. The lease transaction involved obligations on both sides - one of these was the obligation of the lessee to pay the lessor the rent reserved. Without the rezoning any rent paid would have been paid under a contract being performed by the lessee illegally. In my view it was obviously in the interest of both parties to have a lease to be performed lawfully as opposed to unlawfully. For this basic reason, I would reject the submission that cl.2(a) was solely for the benefit of the intending lessee. -- 21 of 37 -- 21 Mr Hanson made submissions on this aspect of the matter. He submitted that in the form of the lease in the Second Schedule there were certain provisions which showed that cl.2(a) was not solely for the benefit of the intending lessee. The first of these was cl.6.06 which reads:- "The lessee acknowledges that the lessor may grow crops and graze stock upon the demised premises not used for the time being by the lessee for the purposes of or in connection with the running of the business of extractive industry hereunder but if the lessor shall grow crops or graze cattle as aforesaid the lessee shall not be liable to the lessor for any loss of or damage to such stock or crops arising out of the reasonable and proper conduct of the business of extractive industry carried on pursuant to this lease." This aspect of the submission raises problems for the defendant because, had the whole of Lot 3 been rezoned extractive industry, the uses specified in cl.6.06 namely growing crops and grazing stock would have been prohibited uses in such a zoning (see Town Planning Scheme (ex.2)). Further, they are prohibited uses on that part of Lot 3 which has been rezoned Special Facilities (see Town Planning Scheme (ex.2)). I reject Mr Hanson's submission on this point. The defendant cannot rely on a use stipulated for in the lease yet prohibited by the town plan, to attempt to show that cl.2(a) is not solely for the intending lessee's benefit. Mr Hanson next relied on s.15 of the form of lease in the Second Schedule. Under this section (as it is called) the lessee may determine the lease prior to expiration if (inter alia) the lessee shall have extracted all material able to be quarried by law from the demised premises. The evidence of the geologist Kershaw a Director of Suncoast showed clearly that:- (a) It was not until 1991 that Suncoast decided to extract from the eastern knoll only on Lot 3 (see p.60); (b) That by the time the matter came for hearing before the Local Government Court it then suited the convenience and the business purposes of the appellant to be content -- 22 of 37 -- 22 with the eastern knoll only and that nonetheless the western knoll contained economic deposits (p.61); (c) That the western knoll contained rhyolite; (d) That the eastern knoll contained diorite; (e) That the diorite was a much more marketable and valuable hard rock material than rhyolite; that both the deposits i.e. the rhyolite and the diorite were useful and economically viable, leaving aside environmental objections, the rhyolite being a substance to be extracted "in the very long term". Because all of Lot 3 is not rezoned extractive industry, one result is that economic deposits of rhyolite in the western knoll (on the land rezoned "Special Facilities") cannot be lawfully quarried. It seems to me to be quite obvious that since under s.15 the lessee may bring the lease to an end for the reasons I have already mentioned, the rezoning of the whole of Lot 3 to extractive industry, was important to the lessor under the lease. The present rezoning of Lot 3 into two different zones would make it easier for the lessee to determine the lease at cost to the intending lessor than if the whole of Lot 3 had been rezoned to Extractive Industry. In my view, s.15 discloses an added reason for deciding that cl.2(a) is not solely for the benefit of the intending lessee. It is I think important to note that under cl.15 of the deed of 4 October 1989, the intending lessor consented to the rezoning application. In fact they did sign consents on the actual application to rezone as I have already mentioned and that rezoning application was in respect of the whole of Lot 3. At the time they signed the application form they must be taken to have been aware of s.15 of the lease in the Second Schedule. Further, it is in my view important to bear in mind that the deed of 4 October 1989, was not a contract for the sale of land; it was a deed concerning a lease of land and reversionary interests in -- 23 of 37 -- 23 the land must have been affected by the rezoning application envisaged by cl.2(a). This in my view is a relevant consideration in deciding whether or not cl.2(a) was not solely for the benefit of the intending lessee (see. Sandra Investments v. Booth (supra) at pp.165-6 in the judgment of Wilson J.). In summary then, for the foregoing reasons, I reject Mr Hanger's submissions that the condition in cl.2(a) was solely for the intending lessee's benefit. I come now to the defendant's point that the gazettal did not occur within the time stipulated for in the deed of 4 October 1989. I am dealing with this point only if I should be held wrong on the basic point in which I have already found in favour of the defendant. Clause 2(a) of the deed fixed a time limit within which the gazettal of rezoning was to occur namely - "within six (6) months of the date of application referred to in clause 1 or such extended time as permitted by clauses 4(b) and 4A(a) hereof." Clause 4(b) is relevant. I have already set out the provisions of this clause. I note that in the letter dated 24 June 1994, written to the defendant (ex.DJG10) the plaintiff's solicitors said:- "The gazettal to (sic) the rezoning in respect of the land the subject of the Agreement to Lease was made later than one month after the date of the next meeting of the Maroochy Shire Council held after the date of the handing down by the last Court of Appeal of judgment in relation to any appeal against the decision of the Maroochy Shire Council." The deed of 4 October 1989 is silent as to the consequences of gazettal of rezoning not occurring within the time stipulated by cl.4(b). The gazettal occurred many months after a meeting of the Maroochy Shire Council on 25 August 1993 (see. ex.17). At that meeting the council resolved (inter alia) that the application to rezone the land from the Rural A Zone to the Extractive Industry Zone be approved in accordance with the list of conditions that appears attached and marked "A" to the order of Her Honour Judge O'Sullivan date 7 October 1992. If I assume that that was the meeting referred to in cl.4(b) the rezoning was to be gazetted -- 24 of 37 -- 24 within one month of 25 August 1993. In fact it was gazetted on 25 March 1994. The gazettal operates on Lot 3 and has wrought changes in the zoning of Lot 3. It is said that the defendant took no step to seek a declaration that her obligation to execute the lease in the form in the Second Schedule of the deed was at an end because the condition precedent in cl.2(a) had not been complied with. As will later appear in these reasons I find that it was not until 1 or 2 days after 25 May 1994, that the defendant first became aware that lot 3 was rezoned into 2 zones and in one of these quarrying was not lawful. By 7 October 1992, the final order of the Planning and Environment Court was known to the plaintiff although the formal order appears not to have been perfected until about 18 March 1993 (see. para.13 of Mr Grace's affidavit). I am satisfied that by the end of January 1992, the defendant knew that the appeal had succeeded in the sense that the decision of Maroochy Shire Council had been overturned. In my view she should therefore have been aware of the time limits in the deed for the gazettal to occur. The defendant did not take any steps to try to ensure that the gazettal occurred within the time stipulated for in cl.4(b). She left matters in the plaintiff's hands and I would be reluctant to decide this case in favour of the defendant solely on the ground that the gazettal was out of time. When a party to a contract has justiciable rights under the contract and does not exercise them but instead stands by and allows another party to proceed on the basis that the contract remains on foot - to a point where an event such as the gazettal in this case occurs, out of time - that party cannot rely on a time provision which it has so far ignored in order to defeat a claim by the other party. The plaintiff in its reply has relied on alleged conduct of the defendant and, (before his death) her husband which it is said amounted to estoppel by conduct, and also waiver and election. The estoppel is said to prevent the defendant from exercising any rights she might have to terminate the -- 25 of 37 -- 25 contract. As to estoppel by conduct I take the law to be as stated by Mason CJ. in The Commonwealth v, Verwayen (1990) 170 CLR 394 at p.413 when he said:- "... it should be accepted that there is but one doctrine of estoppel, which provides that a court of common law or equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness." The plaintiff has argued that the defendant and her husband by their conduct have caused the plaintiff to assume that she and her husband intended to and did desire to affirm the lease from and after late January 1992. Mr Hanger, in his address, conceded that, in respect of the pleas of estoppel, waiver, and election he must base his argument initially upon the defendant and her husband knowing, on receipt of the reasons for judgment dated 23 January 1992, that Lot 3 was to have two different zonings. I find that the defendant and her husband did receive the letter dated 28 January 1992 from Cooper Grace and Ward (ex.DJG2) which letter enclosed the reasons for judgment from Judge O'Sullivan dated 23 January 1992. I shall repeat its contents:- "Re: Coolum Quarry Site We are pleased to advise that last week the Planning and Environment Court adjudged that the Council's decision be overturned and that an approval be given upon terms and conditions to be negotiated. We attach a copy of the judgment for your information. You will note that the matter is returnable before the Court in April, by which time, the conditions should have been agreed upon or, in default of agreement, the matter will have to be resolved by the Court. We will keep you informed." -- 26 of 37 -- 26 Mr Grace, in his evidence, acknowledged an error in describing the reasons for judgment as a "judgment" but this is of no moment. The letter did not refer to the passage on p.2 of her Honours reasons which read:- "The appellant proposes to quarry the eastern knoll on the subject land, in accordance with the plans prepared by Mr David Kershaw. Prior plans to quarry the western knoll have been abandoned and that area is not included in the land now sought to be rezoned." Mr Grace did not speak to the defendant or her husband about his letter dated 28 January 1992 and its enclosure. He did speak to the defendant in May 1994 - after her husband had died and I shall mention this conversation later. In her evidence the defendant admitted receipt of the letter of 28 January 1992 and the enclosure. She has sworn that that letter "conveyed to both of us that the appeal had been successful and that the rezoning was going ahead". She swore she had no recollection of herself reading the judgment that came with the letter and that she thought that "the only thing she saw was the Council's decision had been overturned". She spoke of her husband and her celebrating a little. When asked specifically whether she herself saw the reasons for judgment she replied:- "I don't recall ever reading them. My husband had a habit of taking those sort of - anything in relation to that into his own room and it got squirrelled away in his little filing system. He maintained he was reading these things but whether he ever did or not I don't know." She was asked what state she found his affairs to be in after he died and she replied:- "Well, I had to get all the documents and things out from his room. They were stacked in heaps under the bed and all sorts of places. He wouldn't allow me in to clean up the room. He wouldn't allow me to touch the papers and things in his room. I ended up with five years of tax to go through. That was all jumbled up together." She further said that in January 1992, she was under the impression that "it was mainly the conditions they had to agree on with the Council, those conditions I've previously mentioned". When asked whether she was kept informed of "those sort of things" she replied:- -- 27 of 37 -- 27 "We would ring at times and ask what was going on. Mr Johnson would occasionally drop in and have a chat to Alistair when he was alive." Mr Hanger asked me to find that the defendant was astute but not honest and to reject her evidence. I watched and listened carefully to the defendant. I am satisfied that she was a truthful and honest witness. I find that she did not know of the above passage on p.2 of the reasons for judgment. I find she did not read the reasons. I also find the probabilities are that her husband also had no such knowledge. I find that all that she and her husband knew as a result of the letter from Cooper Grace and Ward dated 28 January 1992, was that the appeal had been won and that to the defendant and her husband, this meant that the whole of Lot 3 was to be rezoned Extractive Industry in accordance with the application to the Maroochy Shire Council she and her husband had earlier signed. I accept her evidence that she and her husband signed that application believing that Lot 3 would, as time went on, all be mined. I should at this stage say that I have found the conduct of the plaintiff and its solicitors surprising in that at no stage did either of them inform the defendant or her husband that the plaintiff's attitude to rezoning the whole of Lot 3 to Extractive Industry might change. In fact, what happened after 23 January 1992, was, as I have already found, that the appellant made further submissions to Judge O'Sullivan arguing that she had no jurisdiction to amend the application and rezone Lot 3 into two different zones and further that Lot 3 should be all rezoned Extractive Industry. Correspondence between the appellant's solicitors and Maroochy Shire Council in June 1992 (see ex.8) and September 1992 indicates this approach. Mr Grace, the solicitor for the appellant in the Planning and Environment Court said, and I accept that at the hearing on 6 October 1992 the appellant was pressing to have the whole of Lot 3 zoned to extractive industry without any duality of zoning. This attitude by the appellant may be thought inconsistent with its decision in or -- 28 of 37 -- 28 about June 1991 not to quarry the western knoll of Lot 3. Given the appellant's attitude to the Planning and Environment Court's power to order different rezonings in respect of Lot 3, that attitude being evinced after 23 January 1992, it is rather surprising that the plaintiff should now assert that there was on the part of the defendant and her husband clear and unambiguous representations as to their knowledge of two different rezonings after receipt of the reasons for judgment. As to the need for the plaintiff to prove that a representation said to found an estoppel be clear and unambiguous see Legione v. Hateley (1983) 152 CLR 406 at pp.435-7. The plaintiff has failed to satisfy me that there was any conduct by the defendant and her husband or either of them after receipt of the reasons for judgment in January 1992 capable of amounting to a representation on which an estoppel can be founded. Mr Hanger has argued that the second point of time at which waiver and estoppel are established was on 25 May 1994, when, on the evidence, the defendant received from Mr Grace of Hunt and Hunt Solicitors (the successors to Cooper Grace and Ward) the conditions which had been finally imposed by Judge O'Sullivan. Mr Grace's affidavit evidence shows that in early May 1994, he caused to be prepared a lease from the defendant to the plaintiff in the form of the lease document in the Second Schedule to the deed of 4 October 1989, and that he forwarded that lease in triplicate to Mr Johnson the plaintiff's General Manager. In his affidavit he has sworn that on 23 May 1994, he had received a message from Johnson to the effect that he had visited the defendant and delivered the lease to her for signing and that he had asked her to grant an option for an additional 21 year term. In paragraph 24 of his affidavit Mr Grace has sworn:- "On 25 May 1994, Mrs Payne called into my office and asked for copies of the conditions relating to the rehabilitation of the site, which I gave her. I asked her -- 29 of 37 -- 29 whether she had executed the lease and also raised the question of the further 21 year option which Mr Johnson had referred to. Mrs Payne told me she had not yet signed the lease and that as she was to depart for overseas in a few days she would consider the option for the additional term when she returned. During the conversation we also discussed in general terms the decision of the Planning and Environment Court and more particularly the conditions relating to the rezoning to both Extractive Industry and Special Facilities (ancillary quarry operations) Zones. Mrs Payne did not express any concern about the nature of the rezoning or suggest that she might not sign the lease." At this stage I should say that I find that Mr Johnson did attend the defendant at her home on 23 May 1994, taking with him the lease agreement for her to sign. On this occasion I am satisfied the defendant said in effect "I don't have any trouble with it but I would like to read it and understand it and then I will be in contact." I do not regard this statement as an agreement by the defendant to sign the lease which Johnson had given her. Nor do I find that the defendant represented to Johnson that she would sign the lease. I find that Johnson did not at any stage tell the defendant that there were two zones for Lot 3. I find that soon after receiving this lease the defendant spoke to Mr Ian Pepper a man who she believed was a solicitor and to whom she had been introduced by her son. As a result of speaking with Pepper the defendant telephoned Grace asking for the conditions imposed by the Local Government Court. I am satisfied Pepper was to see these conditions in order to advise the defendant before she signed the lease Johnson had given her. The defendant said that in her conversation with Grace on 25 May, Grace did not talk about a dual zoning. She claimed that she was not aware of a dual zoning until after she had taken the conditions to Pepper and Pepper had advised her to that effect. I am satisfied Grace gave the defendant a copy of the conditions. I am satisfied that within a day or so of seeing Grace the defendant left Australia on an overseas trip. There is a dispute between Grace and the defendant as to whether or not he did explain to her -- 30 of 37 -- 30 the conditions imposed by Judge O'Sullivan and more particularly that there were two zones in respect of Lot 3. When giving his oral evidence Mr Grace was not confident and exhibited some uncertainty as to exactly what he had told the defendant when she called at his office. A diary note called a file note (part of ex.11) was produced but this note does not help resolve the dispute. I thought Grace did not properly prepare himself for his oral evidence at trial knowing as he must have that the affidavits of the defendant and himself earlier filed and read on an application for summary judgment showed a conflict as to whether or not he had told the defendant of the dual rezoning of Lot 3. Initially he did not recall whether he made a diary note of his discussion with the defendant on 25 May but later a diary note was produced. One thing was clear from his evidence and that was that the defendant told him she was about to leave for overseas and she may not have time to attend to a consideration of the lease prior to her leaving. At the end of the day I find that Grace did not tell the defendant words to the effect "that the rezoning had been done in such a way that there were two zones in respect of Lot 3." I find that the conversation between Grace and the defendant on 25 May 1994, lasted about 10 minutes; that Grace showed the defendant the terms and conditions and said that part of the quarry area being the operational area was zoned extractive industry and the balance area was zoned as a special facility. I find Grace did not explain to the defendant that there could be no quarrying in the Special Facility zone and did not tell her that one of the two knolls was in a zone in which there could be no quarrying. I find that what Grace did tell the defendant who was a layman was insufficient to enable her to understand that the whole of the land had not been rezoned to Extractive Industry. I thought the defendant was telling me the truth as to her belief when she said Mr Grace did not talk about a dual zoning. I am satisfied that when the defendant later spoke to Mr Pepper she for the first time became -- 31 of 37 -- 31 aware that Lot 3 had been rezoned into two different zones and that quarrying could not lawfully be conducted on one of those zones. Indeed, the letter (ex.DJG8) dated 7 June 1994, written by Mr Pepper to Mr Grace specifically points out that condition 2(a) had not been complied with and that Lot 3 had not been rezoned from Rural A to Extractive Industry but has been rezoned in part to Extractive Industry and the other part to Special Facilities (ancillary quarry operations). This letter points out that quarrying or processing cannot be lawfully conducted in the Special Facilities Zone. On the evidence, I find that the plaintiff has not made out its claim of estoppel. So far as waiver is concerned, the plaintiff must prove that the defendant knew of her right and knowingly abstained from exercising it (The Commonwealth v. Verwayen (supra) at pp.427, 473, 484 and 496). As to the claim of election the same issue of knowledge arises. In Sargent v. ASL Developments (1974) 131 CLR 634 the requirements of election were identified as:- (a) An element of knowledge on the part of the elector being knowledge of the facts that gave rise to the inconsistent legal rights (see pp.642 and 645 in the judgment of Stephen J. with whom McTiernan ACJ agreed); (b) Conduct sufficient to amount to an election between the two inconsistent legal rights which the elector possesses (see p. 642) being words or conduct which is unequivocal in the sense that it is consistent only with the exercise of one of the two sets of legal rights and inconsistent with the exercise of the other (per Stephen J. at p.646) or conduct which is justifiable only if an election had been made one way or the other (per Mason J. (as he then was) at p.656). As to these issues of knowledge, I have found that it was after the defendant had spoken to Mr Pepper following her conversation with Mr Grace on 25 May 1994 that she first became aware -- 32 of 37 -- 32 that Lot 3 had been rezoned into two different zones and that quarrying could not be lawfully carried on in one of these zones and that the requirements of cl.2(a) had not been fulfilled. It was then that the right in the defendant to claim that a condition precedent to her obligation to execute the lease in the form in the Second Schedule arose. She also thereafter possessed the right to decide to execute the lease with the leased land then in two different zones. The writ of summons in this action was issued on 9 August 1994. The defence and counterclaim was delivered on 31 August 1994. In it the defendant pleaded (inter alia) that the conditions prescribed by cl.2 of the contract (i.e. the deed of 1989) had not been fulfilled. The defendant also sought by counterclaim a declaration that the Planning and Environment Court acted without jurisdiction in ordering approval of the application to rezone and that the purported rezoning of Lot 3 into two zones was null and void. Damages for breach of contract were also claimed. This claim for damages may be viewed as an election to keep the contract on foot. However, in a letter, (ex. DJG8) dated 7 June 1994, from Environmental Solutions and Investigations (signed by Pepper) and addressed to Hunt and Hunt (for attention of Grace). Pepper wrote on behalf of the defendant. He made certain requests of Grace concerning operating costs, rent and royalty but went on to say it was his general submission that the agreement to lease (sic) dated 4 October 1989 was not applicable any longer, due as he said, to nonfulfilment of certain conditions of the agreement which he specified later in the letter. One of these conditions was the failure to rezone Lot 3 from Rural A to Extractive Industry as required by cl.2(a). The letter contained Pepper's apparent advices to the defendant on what were fair and reasonable bases for calculation of rent and royalty. It is apparent from a reading of this letter that it was written on behalf of the defendant and that the defendant in that letter regarded herself as open to negotiate fresh rent and royalty payments -- 33 of 37 -- 33 because the 1989 deed was no longer applicable. Grace replied (ex.DJG9) on 9 June 1994 in a letter addressed to Pepper in which he said (inter alia):- "We note your advice that you have not said that Mrs Payne will repudiate the lease ..." I pause to say that I view this statement as a misreading of Peppers' letter of 7 June (ex. DJG8). In my view ex.DJG8 makes it perfectly clear that Pepper acting on behalf of the defendant, was saying that the agreement dated 4 October 1989 is no longer applicable for the reasons given in the letter, one of which was failure to rezone as required by cl.2(a). I consider this letter was an election by the defendant to treat as at an end the obligation to sign the lease in the form in the Second Schedule by reason of non performance of the condition precedent in cl.2(a). Grace in his letter DJG9 has used the word "repudiate". True it is Pepper did not use this word but the effect was as I have set out. In my view, "repudiate" was an inappropriate choice of word. Non-performance of the condition precedent and knowledge of it gave the defendant the legal right to treat her obligation under the 1989 deed to sign the lease as at an end. Grace then wrote direct to the defendant a letter dated 24 June 1994 (ex. DJG10). He said he did so because he could not correspond "with a company as a legal representative on your behalf." He said that "Pepper did not hold a Practising Certificate as a solicitor in Queensland and accordingly we must deal with you." This letter enclosed the lease in duplicate and asked that the defendant sign it. The letter also dealt with clauses 2(a) and 2(c) calling them Condition 2(a) and 2(c). In dealing with the first of these clauses, Grace claimed:- "The appeal was upheld in October 1991 (sic). You were advised of this in January 1992 and you have done nothing to protest about the zoning and you have therefore waived your rights to do so now." -- 34 of 37 -- 34 This passage contains statements not supported by the evidence before me and was erroneous. A further claim of waiver in respect of cl.2(a) is made in ex.DJG10 based on other matters which, again, are not supported by the evidence before me. The defendant declined to sign the lease enclosed with ex.DJG10. In the light of the letter of 7 June 1994 (ex.DJG8) this action is further confirmation of the election made on 7 June 1994. I find that on 6 July 1994 Johnson visited the defendant about a week after she had returned from her overseas trip and she told him that the plaintiff had contravened the conditions of the agreement to lease by not rezoning the total site. I interpret that as meaning not rezoning to Extractive Industry the whole of Lot 3. As to the conduct alleged against the defendant and said to amount to election, I am concerned only with such conduct after the defendant first became aware that Lot 3 had been rezoned into two different zones and that quarrying could not lawfully be carried out on one of these zones. The conduct of the defendant thereafter is, I find consistent only with her exercising her right to treat as at an end the obligation to execute the lease in the form in the Second Schedule - and that attitude was adopted by reason of the failure of the condition precedent in cl.2(a). If I should be wrong in this view, then I consider it impossible to say that the defendant's conduct was unequivocally consistent only with an election to keep the contract on foot including her obligation to execute the lease in the form in the Second Schedule. The plaintiff's strongest point on this aspect of the case is the counterclaim for damages, which claim has not been pursued at trial. A reading of the defence and counterclaim discloses (inter alia) the following:- (a) an allegation that the plaintiff applied in the Planning and Environment Court to -- 35 of 37 -- 35 rezone part only of Lot 3; (b) an allegation that the balance of Lot 3 for which it was alleged the plaintiff did not apply for rezoning to Extractive Industry, contained material suitable for quarrying; (c) an allegation that the defendant and her husband did not authorise the application which the plaintiff advanced in the Planning and Environment Court; (d) an allegation that the defendant has been unlawfully deprived of the ability to quarry the land rezoned Special Facilities Zone. These are some of the matters pleaded. Some are incorrect e.g. (a) and (c). All arise out of the contract and all seem to me to be directed to the non-fulfilment of the condition precedent in cl.2(a) and what were said to be the plaintiff's actions leading to that failure. The defence and counterclaim, as I read it is directed to having the two zonings declared null and void and if that fails, to recovering damages for alleged breaches of contract by the plaintiff which it is said resulted in the two zonings, one of which has caused the defendant's inability to quarry land in that zone. I do not regard the claim for damages for breach of contract as an unequivocal act amounting to an election to keep the 1989 deed on foot and execute the lease as required by cl. 5 of the 1989 Deed. In my view, neither of the claims for waiver and election is made out. I mention only one other matter relied on by the defendant - it is really not necessary to do so, - it is that there has been a failure to comply with clause 2(c) of the 1989 deed. This condition was inserted because of the clauses 6.06 and 6.07 in the Second Schedule form of lease. In light of the rezoning to Special Facilities the evidence before me shows the use proposed in cl.6.06 and 6.07 is now prohibited and the Maroochy Shire Council cannot consent to it. Thus, it -- 36 of 37 -- 36 is not open to the defendant to rely on alleged failure to comply with clause 2(c). In the result, I conclude that for the foregoing reasons, the plaintiff's case fails. The defendant is under no legal obligation to execute the lease in the form in the Second Schedule. I would add one further comment. The plaintiff has brought this result upon itself by failing to consult with and properly inform the defendant and her husband on and after 23 January 1992. On the original application to rezone to Extractive Industry the whole of Lot 3, the defendant and her husband signed their consents. When Suncoast Quarries Pty Ltd executed the assignment to Exsell Quarries Pty Ltd on 4 February 1991 the defendant and her husband were parties to the agreement for assignment (ex.DRK5) - their consent was strictly not necessary - see clause 13 of the 1989 deed. Thereafter the defendant and her husband were not properly informed of what was happening in the appeal to the Planning and Environment Court, especially when they were not told of the statement on page 2 of Judge O'Sullivans' 23 January 1992 reasons referring to abandonment of plans to quarry the western knoll and not include that area in the rezoning [to Extractive Industry]. Mr Johnson conceded that after the plaintiff decided on or about June 1991 not to quarry the western knoll, that the Paynes may not have been told of this. The result may seem harsh in the sense that the defendant is now enabled to quarry part of Lot 3 and the plaintiff has no right to quarry there. As against that, the rezoning of the western knoll to Special Facilities has prevented the defendant from quarrying in that area. I order that the plaintiff's claim be dismissed. I give judgment for the defendant against the plaintiff on the plaintiff's claim against her. I dismiss the defendant's counter claim. I shall hear from the parties on costs. -- 37 of 37 --