Eamon Pty Ltd, Rador Pty Ltd & Blackedged Pty Ltd v Sanwa Home Australia Pty Ltd [1993] QCA 270

IN THE COURT OF APPEAL [1993] QCA 270 SUPREME COURT OF QUEENSLAND Appeal No. 238 of 1992 Brisbane [Sanwa Home v. Eamon Pty. Ltd.] BETWEEN: EAMON PTY. LTD. (First Plaintiff) First Respondent - and - RADOR PTY. LTD. (Second Plaintiff) Second Respondent - and - BLACKEDGED PTY. LTD. (Third Plaintiff) Third Respondent - and - SANWA HOME AUSTRALIA PTY. LTD. (Defendant) Appellant Appeal No. 239 of 1992 BETWEEN: EAMON PTY. LTD., RADOR PTY. LTD. and BLACKEDGED PTY. LTD. (Applicants) Respondents - and - SANWA HOME AUSTRALIA PTY. LTD. (First Respondent)Appellant - and - PRIMROSE COUPER CRONIN RUDKIN (Second Respondent) The President Mr Justice Pincus Mr Justice de Jersey Judgment delivered 02/08/93 Judgment of the Court -- 1 of 29 -- 2 APPEAL NUMBER 238 OF 1992 ALLOWED WITH COSTS. SET ASIDE THE FIRST ORDER MADE ON 16 OCTOBER 1992 ON THE MOTION IN THE ACTION. IN LIEU THEREOF, ORDER THAT THE APPELLANT PAY TO THE RESPONDENTS BY WAY OF INTEREST ON THE BALANCE PURCHASE PRICES FOR THE PERIOD FROM AND INCLUDING 10 MARCH 1992 UNTIL AND INCLUDING 25 MARCH 1992 THE FOLLOWING SUMS: (a) TO THE FIRST RESPONDENT, THE SUM OF $104,161.03; (b) TO THE SECOND RESPONDENT, THE SUM OF $21,004.42; (c) TO THE THIRD RESPONDENT, THE SUM OF $54,300.76. APPEAL NUMBER 239 OF 1992 DISMISSED WITH COSTS. CATCHWORDS: JUDGMENTS AND ORDERS - Appeal from - whether order requiring parties to do all things necessary to enable contracts to be specifically performed required delivery of documents free of charge or encumbrance. Counsel: Mr W. Sofronoff Q.C. with him Mr S. Doyle for the appellant Mr P. O'Shea for the respondents Solicitors: Messrs. Sly & Weigall Cannan & Peterson for the appellant Messrs. Corrs Chambers Westgarth for the respondents Hearing Date(s): 20/04/93 -- 2 of 29 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 238 of 1992 Brisbane Before The President Mr Justice Pincus Mr Justice de Jersey [Sanwa Home v. Eamon Pty. Ltd.] BETWEEN: EAMON PTY. LTD. (First Plaintiff) First Respondent - and - RADOR PTY. LTD. (Second Plaintiff) Second Respondent - and - BLACKEDGED PTY. LTD. (Third Plaintiff) Third Respondent - and - SANWA HOME AUSTRALIA PTY. LTD. (Defendant) Appellant Appeal No. 239 of 1992 BETWEEN: EAMON PTY. LTD., RADOR PTY. LTD. and BLACKEDGED PTY. LTD. (Applicants) Respondents - and - SANWA HOME AUSTRALIA PTY. LTD. (First Respondent)Appellant - and - PRIMROSE COUPER CRONIN RUDKIN (Second Respondent) REASONS FOR JUDGMENT - THE COURT -- 3 of 29 -- 2 Judgment delivered 02/08/93 These are appeals from orders made by Byrne J. on 16 October 1992. The appellant, Sanwa Home Australia Pty. Ltd., is the purchaser under three interdependent contracts of sale dated 23 June 1990, by which the respective respondents agreed to sell to the appellant land at the Gold Coast for a total price exceeding $26 million. The contracts were subject to a number of special conditions which were required to be satisfied by the date of completion. By sub-clause 4(a), each was subject to and conditional upon gazettal of the rezoning of the land (with the exception of a section of Labrador Street). By clause 5, each was subject to and conditional upon the permanent closure of the section of Labrador Street and gazettal of its rezoning to the same zone as the other land sold. Neither of these requirements had been satisfied by 29 March 1991, the original date for completion according to the contracts. However, on 4 October 1991, Robin AJ. adjudged and declared in action 690 of 1991 that the contracts were valid and subsisting and ought to be specifically performed and carried into execution, and ordered that the parties to the action which had been commenced by the respondents against the appellants "be at liberty to apply for further orders or directions relating to the matters herein and ... that leave be reserved to all parties to move for the making of such further orders for the purpose of specifically performing the said agreement as circumstances may require ...". His Honour held that the effect of correspondence between the parties prior to 29 March 1991 was that completion was no longer required to be effected that day and that the contracts had become "open ones in which completion is due within a reasonable time." His Honour continued: -- 4 of 29 -- 2 "The conclusion that the time for completion of the contracts has become `within a reasonable time' is sufficient to dispose of the action. No party has taken steps to nominate a date for completion. Only when a date is fixed will it be possible to say whether by reason of circumstances existing then, or perhaps at an earlier time, any right to terminate any of the contracts arises. As things stand, it is only the defendant which has evinced any interest in terminating. On the basis that the date for completion is some uncertain date in the future, it is impossible to say that the plaintiffs collectively or individually have repudiated their obligations or are precluded from due performance of all relevant obligations when the time comes. Each of the plaintiffs is entitled to the order for specific performance which it seeks. Since no date for settlement has been fixed by the procedure set out in the March variation or by action of the plaintiff or otherwise, there is no completion date which the defendant has failed to meet, not withstanding its repudiatory attitude. ... . It is open to the court to fix a date for completion. The parties will have an opportunity to be heard in respect of that date and any appropriate directions." Although the requirements relating to rezoning and road closure had not been satisfied prior to 29 March 1991, the section of Labrador street had been closed and Orders in Council with respect to rezoning had been gazetted prior to the trial of the action before Robin AJ. One such Order in Council was gazetted on 27 April and the other was gazetted on 11 June 1991. Before Robin AJ. the appellant contended in the alternative that, if completion of the contracts was no longer required to be effected on 29 March 1991, 11 June, 1991 had been fixed as the date for completion, with time being of the essence, and that the requirements of special conditions 4 and 5 had not been satisfied by that date because of the alleged invalidity and inefficacy of the Orders in Council. Although he had concluded not only that completion of the contracts was no longer required to be effected on 29 March 1991 but that the contracts had become "open ones in which completion is due within a reasonable time", Robin AJ went on to deal with the appellant's alternative argument. He said: -- 5 of 29 -- 3 "Other points were argued upon which I consider I ought to express a view in case my interpretation of the variation agreement is in error, and to obviate certain disputes which may otherwise arise when completion is due." His Honour then went on to uphold the legality and efficacy of the Order in Council gazetted in April 1991 and later said: "In light of my determination that the contracts remain on foot, that the date of completion is yet to arrive, and that the original Order in Council approving rezoning constitutes compliance by the plaintiff with their contractual obligations in this respect, this question of the validity of the second Order in Council relating to rezoning of the road area is entirely hypothetical. I consider I ought to refrain from pronouncing upon it finally. ..." An appeal by the appellant to the Full Court of the Supreme Court of Queensland from the judgment of Robin AJ. was dismissed on 11 December 1991 and a subsequent application for special leave to appeal to the High Court of Australia was refused on 10 April 1992. Although the various matters decided against it by Robin AJ. were raised by the appellant in its notice of appeal to the Full Court, its appeal was conducted on a more limited basis. As a corollary to its submission that completion of the contracts was required on 29 March 1991, the appellant by its counsel accepted before the Full Court that, if completion on that date was not required, the appellant could not succeed in its appeal. The appellant did not contend in the alternative before the Full Court that 11 June 1991 had been fixed as the date of completion. It apparently accepted that, if completion of the contracts was not required to be effected on 29 March 1991, the contracts had become "open ones in which completion is due within a reasonable time", in which event, even if the existing Orders in Council and Gazette Notices were invalid, the respondents might obtain the gazettal of a further Order in Council prior to any date for completion which was -- 6 of 29 -- 4 subsequently fixed. Although it later sought an adjournment to consider its position further, during the course of the hearing the appellant by its counsel informed the Full Court that it did not wish to argue matters relating to the validity of the Orders in Council on that appeal. The Full Court agreed with Robin AJ. that there is "... now no contractually fixed date for completion, and no operative provision for arriving at any such date," and that, accordingly, "... the contracts have ... become `open' contracts in which the law implies an obligation on the part of vendors and purchaser to complete within a reasonable time." The Full Court also held that "... his Honour was correct in declaring that the contracts ought to be specifically performed and carried into execution. Until a date for completion is fixed pursuant to the decree a final order for specific performance is inappropriate ... . To this end the formal judgment appropriately confers liberty to apply for further orders for the purpose of specifically performing the contract." The reasons for judgment of the Full Court then continued: "In the meantime, the vendors on 15 April 1991 succeeded in effecting closure of Labrador Street. At the trial they claimed to have secured the requisite rezoning of the subject land by virtue of Orders in Council dated 27 April 1991 and 11 June 1991. An attack on the legal validity of those instruments was rejected by his Honour. ... The purchaser was consequently not itself in any position to determine the contract by reason of breach on the part of the purchaser ... . But in any event these obligations, if that is what they really are, are expressed in cll. 4(a) and 26 in terms that require their performance either `by the date for completion' or `prior to completion' of the relevant contracts. Until, therefore, a fresh date for completion is fixed and has arrived, it is not in law possible for the purchaser to assert that the vendors are in breach, or that they are unwilling, unable, or not ready to perform the contracts in accordance with their terms." According to the notice of appeal which it proposed if -- 7 of 29 -- 5 granted special leave to appeal to the High Court, the appellant sought to argue in the High Court not that the date for completion of the contracts was 29 March 1991, the point upon which it relied in the Full Court, but instead that 11 June 1991 was fixed for completion and the conditions had not been fulfilled and that, accordingly, the appellant was entitled to terminate the contracts. This was the point which the appellant did not argue in the Full Court. As stated, the High Court refused special leave to appeal. Meanwhile, prior to the appellant filing its application for special leave to appeal to the High Court, the parties appeared before Byrne J. on 19 December 1991, on an application by the respondents for the Court to fix a date for completion and to make further orders for the performance of the contracts. Many of the orders including the date for completion (3 February 1992) were agreed, but other matters were disputed. The appellant sought to have its obligation to make payments under the contract to the respondent made conditional upon satisfaction by the respondents of the requirements specified in clauses 4 and 5 of the contracts. The respondents opposed the insertion of such a condition in the order, which Byrne J. refused. However, in accordance with a direction by Byrne J. the respondents' solicitors wrote a letter dated 19 December 1991 to the appellant's solicitors in the following terms: "The plaintiffs acknowledge that the defendant's rights pursuant to special conditions 4 and 5 of each of the contracts are unaffected by the absence of any express reference to the plaintiffs' obligations thereunder in the order of Byrne J. made 19 December 1991". In the same letter, the respondents went on to state: "The plaintiffs, of course, assert: (a) that they have complied with special conditions 4 and 5 of the said contract; and (b) that your client is estopped from disputing such compliance." No appeal was brought by the appellant from the orders made by Byrne J. on 19 December 1991. On 31 January 1992, this Court dismissed an application -- 8 of 29 -- 6 by the appellant for a stay of execution of the Full Court's judgment pending the determination of the appellant's application for special leave to appeal to the High Court of Australia. On 3 February 1992, representatives of the parties met at the offices of the solicitors for the respondents. The respondents tendered performance of the contracts. The appellant raised no objection to the performance tendered by the respondents but did not itself seek to complete. Instead, a letter was delivered pointing out that time had not been made of the essence as required by Byrne J.'s order. On 19 February 1992, the appellant gave the respondents notice to complete on the following day, with time expressed to be of the essence. Representatives of the parties met at the offices of the solicitors for the respondents in accordance with that notice on 20 February 1992, and the respondents offered to tender performance. The appellant refused performance, basing its refusal upon its insistence, as a prerequisite of performance, that the respondents accepted that time was of the essence of the obligation to complete. Neither on 3 nor 20 February, 1992, did the appellant assert that its non-completion of the contracts was based upon the respondents' omission to satisfy the requirements stated in clauses 4 and 5 of the contracts. Nor did the appellant take any further step to establish that those requirements had not been satisfied. On the following day, 21 February 1992, the appellant served further notices to complete requiring completion on 10 March 1992 with time expressed to be of the essence. On 10 March 1992, representatives of the parties attended at the office of the solicitors for the respondents and the respondents again tendered performance. The appellant again did not complete. It refused to complete on the basis that the requirements of conditions 4 and 5 of the contracts had not been satisfied. -- 9 of 29 -- 7 Although it had given notice to complete on 10 March 1992 and made time of the essence, the appellant did not have the necessary money available and was not in a position to perform the contracts. Meanwhile, on 4th March 1992, the respondents had filed an application which initially came before de Jersey J. on 9 March 1992, when he adjourned it to 11 March to await the outcome of the appellant's notice to the respondents requiring completion on 10 March. On 11 March, the appellant also filed an application, returnable that day, for an order that the appellant be granted leave to terminate the contracts of sale. That application was based upon the appellant's contention, supported by an affidavit by a Town Planner, that the requirements of conditions 4 and 5 of the contracts had not been satisfied. de Jersey J. dismissed the appellant's application. He said that "... the three town planning points ... relied upon ... for the purchaser raised ... very complicated factual and legal considerations inappropriate for resolution in a summary way here. I have not, though, found it necessary to go into those in any great depth, because to my mind there is an ultimate answer to the purchaser's claim ... ". That answer, his Honour said, was that the appellant had not demonstrated "... any ability - or willingness, for that matter -" to make the payments required of it under the contracts in the event that the respondents properly performed their part. His Honour considered that it was necessary for the appellant, in seeking rescission with the Court's sanction to show that, had the respondents tendered proper performance on their part, then the appellant would have been in a position to complete. No appeal was brought by the appellant from the order of de Jersey J. dismissing its application for termination of the contracts. de Jersey J. then considered the respondents' application and again referred to the "... three town -- 10 of 29 -- 8 planning-type points" as the only matters which the appellant was able to assert to resist the orders sought by the respondents. His Honour continued: "They were the points dealt with by Judge Robin when he was an Acting Judge of this Court, adversely to the purchaser, when he decreed that there be specific performance. As I have said earlier, it may have been strictly unnecessary for him to do that, but his determination on that point is useful to me. I have already said that I could not now reach a view by my own process of reasoning on those points because they are of a complicated factual and legal nature, but I am content to rely on Judge Robin's assessment to help me determine now whether I should conclude that a Morgan v. Brisco order be made. I have a discretion, of course, whether or not to make such an order ... . Mr Sofronoff, who appears for the purchaser, sought to distinguish this case from the situation which confronted the court in Morgan v. Brisco by pointing out that here the town planning points are still in the nature of outstanding questions, but I think they have been determined sufficiently to enable me to conclude whether the purchaser probably believed that there was nothing in them. I think that this purchaser could not have had any substantial belief in the validity of those points and I think that the purchaser, if not evading its obligation to settle in this case, is certainly playing, if I may be pardoned for resorting to the vernacular, a game of ducks and drakes which the court should not countenance. I will therefore make an order of the character of that made in Morgan v. Brisco". On 13 March, after further argument concerning the form of the orders to be made on the respondents' application, de Jersey J. made orders which enabled the respondents to deposit to the credit of the action the documents which they were required to provide to the appellant to complete the contracts and obliged the appellant, upon service of a copy of the order of de Jersey J. and an affidavit verifying that the documents had been deposited, to pay the balance purchase price and other monies (including interest) payable under the contracts. His Honour refused to condition his Order upon the respondents otherwise having complied with the contracts. On 19 March 1992, the appellant appealed to this Court. Before this Court, the respondents submitted that, -- 11 of 29 -- 9 subject to the outcome of the proceedings in the High Court which the appellant had initiated, the appellant was estopped from relitigating the validity and efficacy of the Order in Council of April 1991, which it was said had been established by the judgment of Robin A.J. which was affirmed by the Full Court. According to the respondents, His Honour determined not only that there was no date for completion fixed but that, in any event, the requirements imposed by conditions 4 and 5 of the contracts had been satisfied. However, the Court found it unnecessary to decide the point in dismissing the appellant's appeal, saying:- "It is unnecessary to determine whether or not the appellant is estopped as the respondents contend. There is another ground upon which this appeal must fail. Irrespective of whether or not any particular issue has been finally determined against the appellant (subject to the ultimate disposition of the proceedings in the High Court), the Court has ordered that the contracts be specifically performed and carried into execution. The orders of Byrne J. on 19 December 1991 and de Jersey on 13 March 1992 are merely ancillary orders to give effect to that decree in the changing circumstances which have emerged. Those circumstances do not include any change in the position with respect to the validity and efficacy of the Order in Council. Whether or not any particular issue has been decided in favour of the respondents so that the appellant cannot again raise it, (subject to the outcome of the proceeding in the High Court) the Court has ordered both parties to perform the contract under its control. Its power includes power to make an order dissolving the decree of specific performance and terminating the contract at the instance of either party if it is established that it would be just to do so in the circumstances. Unless that is established, it has power to make such orders to carry the contracts to completion as are just in all the circumstances: cf. Johnson v. Agnew (1980) AC 367. That was the power which Byrne J. exercised when he fixed a date for completion and made orders with respect to the exchange of documents and money. As has been noted, there was no appeal from his orders. That was also the power which fell for exercise by de Jersey J. in the different circumstances which were established before him. At no time in the period between the initial judgment delivered by Robin A.J. and the orders made by de Jersey J. on 13 March 1992, did either party establish -- 12 of 29 -- 10 a basis for the Court to dissolve the decree and terminate the contracts. The appellant's only attempt at such an exercise, the application which it made to de Jersey J. on 11 March 1992, failed and there has been no appeal. The only remaining question is whether the particular orders made by de Jersey J. were just in all the circumstances. As His Honour recognised, his power was discretionary. The appellant relied only upon its assertion that the Orders in Council are invalid and inefficacious and upon the circumstance that that was an issue remaining to be determined and sought to be raised in its application for special leave to appeal to the High Court. While that circumstance may appropriately be brought to account in assessing what is just between the parties, it is not an absolute bar: see the final paragraph in the statement of the facts in the report of the second judgment in Morgan v. Brisco (1886) 32 Ch.D. 192, 193. Given the history of the litigation, it is not surprising that de Jersey J. exercised his discretion in the way in which he did. The conclusion that the appeal should be dismissed has been reached without consideration of the validity and efficacy of the Order in Council which Robin A.J. found satisfied the rezoning requirements in the contracts. The respondents sought to have the Court rule that conditions 4 and 5 of the contracts had been satisfied. The appellant was opposed to such a course although, if it had succeeded in persuading the Court that Robin A.J. was wrong, it would have considerably improved its claim to have the order of de Jersey J. from which the appeal is brought set aside. The appeal is dismissed with costs and the stay of execution is discharged. Subject to any further written submissions by either party prior to 10.00 a.m. on Monday, 6 April 1992, the appellant should be provided with a further opportunity to perform the contracts and, for that purpose, the formal orders will include a provision extending the time for payment and compliance with the appellant's other obligations under the order of de Jersey J. to 4.00 p.m. on Monday 6 April, 1992." The appellant then provided a further written submission and, on 6 April 1992, this Court said: "The appellant has now provided a written submission seeking to argue that the contractual conditions with respect to rezoning were not satisfied, that is to argue substantive questions not argued on the appeal. -- 13 of 29 -- 11 The appellant formerly had the opportunity to argue those matters but did not avail itself of the opportunity. As Mr Sofronoff for the appellant has fairly acknowledged today, when the matter was previously before the court and the respondents sought to have the validity of the Orders-in-Council on which they relied determined, the appellant not only sought further time to present its arguments if those matters were to be decided, but preferred them not be decided at all. As Mr Sofronoff also fairly acknowledged, subject at least to any question of estoppel, it was apparent, as is pointed out in the Court's reasons for judgment, that if the appellant had succeeded in persuading the Court that Robin AJ was wrong, it would have considerably improved its claim to have the order of de Jersey J. from which the appeal is brought set aside. In these circumstances, particularly when regard is had to the history of the litigation which is recounted in the judgment, including the absence of any appeal from the order of Byrne J. on 19 December or from the other order of de Jersey J. on 11 March, the Court considers that it should not now permit the appellant a further opportunity to raise these matters which it previously did not wish to argue, and that it should not allow it to use these matters as a basis for varying the orders under appeal in a manner which might deprive them of much of their practical content. The appellant also sought further time in which to comply with the contracts, and in particular, until its application for special leave to appeal to the High Court has been decided. This submission raises no new matter which was not previously considered in the orders proposed by the Court which accordingly should stand." An application for special leave to appeal from the dismissal of the appeal from the orders of de Jersey J. by this Court was refused by the High Court on 10 April, 1992. Subject only to the effect of the letter from the respondent's solicitors dated 19 December, 1991, and to the matters referred to below, the position after the High Court refused special leave to appeal from the decisions of the Full Court and this Court on 10 April 1992 was that the respondents had deposited the documents referred to in the Order of de Jersey J. of 13 March 1992 into Court and notified the appellant accordingly and the appellant was required to act in accordance with that Order including -- 14 of 29 -- 12 paragraph 2(b), which provided: "(b) The defendant shall, within seven days after such service upon it of this Order and the Affidavit Verifying, pay by cash or bank cheque to the plaintiffs by paying to Westpac Banking Corporation on account of the plaintiffs at 18th floor, 260 Queen Street, Brisbane:- (i) To the first plaintiff, Eamon Pty. Ltd., the sum of TWELVE MILLION ONE HUNDRED AND TWENTY EIGHT THOUSAND SIX HUNDRED AND TWENTY TWO DOLLARS AND SEVENTY CENTS ($12,128,622.70) in respect of purchase money, together with interest at the rate of twenty (20) per centum per annum on that sum from the seventh day after such service upon the defendant of this Order and the Affidavit Verifying to the day of payment; (ii) To the second plaintiff, Rador Pty. Ltd., the sum of FOUR MILLION TWENTY FIVE THOUSAND FOUR HUNDRED AND FIFTY NINE DOLLARS AND THIRTY THREE CENTS ($4,025,459.33) in respect of purchase money, together with interest at the rate of twelve (12) per centum per annum on the said sum from the seventh day after such service upon the defendant of this Order and the Affidavit Verifying to the day of payment; (iii) To the third plaintiff, Blackedged Pty. Ltd., the sum of TEN MILLION THREE HUNDRED AND SEVENTY EIGHT THOUSAND EIGHT HUNDRED AND THIRTY FIVE DOLLARS AND NINETY FIVE CENTS ($10,378,835.95) in respect of purchase money together with interest at the rate of TWELVE (12) per centum per annum on the said sum from the seventh day after such service upon the defendant of this Order and the Affidavit Verifying to the day of payment." It was accepted in this Court that these orders entitled the respondents to interest on the balance purchase monies after 25 March, 1992. Further, paragraph 4 of de Jersey J's Order provided: "4. This Order shall neither affect nor preclude the right of the plaintiffs to claim interest of the kind referred to in paragraph 2(b) of this Order from the third day of February 1992 to the day of payment." Meanwhile, by Originating Summons number 171 of 1992, filed on 18 February 1992, the respondents sought against the appellant and the firm of solicitors to whom the deposits under the contracts had been paid as stakeholder orders that the stakeholder pay to the solicitors for the -- 15 of 29 -- 13 respondents the deposit monies and all interest thereon or alternatively that any such monies paid into Court by the stakeholder be paid to the solicitors for the respondents. The money was paid into Court in that application by the stakeholder and the application was adjourned to the Civil List. Next, by notice of motion filed in action 690 of 1991 on 28 April, 1991, the respondents sought the following orders: "1. the defendant pay to the plaintiffs interest on the following sums (or such other sums as the Court thinks fit) at the rates specified below from and including 4 February 1992 or such other date as the Court thinks fit until and including 25 March 1992: (a) to Eamon Pty. Ltd. - interest at the rate of 20% per annum on the sum of $11,913,417.5, such interest amounting to $332,013.28; (b) to Rador Pty. Ltd. - interest at the rate of 12% per annum on the sum of $4,003,967.28, such interest amounting to $66,951.58; (c) to Blackedged Pty. Ltd. - interest at the rate of 12% per annum on the sum of $10,351,982.44, such interest amounting to $173,083.67. 2. the moneys paid into court by the second respondent to Originating Summons No. 171 of 1992, such moneys being paid into Court to the credit of those proceedings, be paid out, together with all accretions thereon, to the solicitors for the plaintiffs, Messrs. Corrs Chambers Westgarth. 3. the interest to be paid by the defendant to the plaintiffs pursuant to paragraphs 2(b)(ii) and 2(b)(iii) of the Order of the Honourable Mr Justice de Jersey made the 13th day of March 1992 be calculated as interest payable from and including the 26th day of March 1992 until the day of payment. 4. any party be at liberty to apply on one day's notice in writing. 5. the defendant pay the plaintiffs' costs of and incidental to the application, to be taxed." On that motion, Byrne J. made the following orders on 8 May, 1992: "IT IS ORDERED that:- 1. The moneys paid into Court by the Second Respondent in the proceedings commenced by Originating Summons No. 171 of 1992, such moneys being paid into Court to the credit of -- 16 of 29 -- 14 those proceedings, be paid out, together with all accretions thereon, to the solicitors for the Plaintiffs, Messrs. Corrs Chambers Westgarth. 2. The interest to be paid by the Defendant to the Plaintiffs pursuant to paragraphs 2(b)(i), 2(b)(iii), of the Order of the Honourable Mr Justice de Jersey made the 13th day of March, 1992 be calculated as interest payable from and including the 26th day of March, 1992 until the day of payment. 3. The matter be reserved for further consideration." No appeal was brought from those orders, and the money in question was paid out of Court to the respondents' solicitors. Finally, the orders from which the present appeals were brought were made on 16 October, 1992. On Originating Summons No. 171 of 1992, it was adjudged and declared that: "1. The Applicants are entitled, pursuant to Clause 26(h) of each of the three contracts of sale dated 23 June 1990 between the Applicants and the First Respondent, to the payment to them of the deposit held by the Second Respondent as stakeholder pursuant to the said contracts and all interest earned thereon. 2. The First Respondent pay to the Applicants their costs of and incidental to this Application to be taxed." No reasons were given for these Orders, nor was it explained why the Order numbered 1 was necessary notwithstanding the Orders made on the motion on 8 May 1992. However, the reason was that the applicant did not dispute that the respondents were entitled to the money, only the character in which the money was received by the respondent, ie., whether in satisfaction of the Morgan v. Brisco order or pursuant to clause 26(h) of the contracts. On the adjourned motion in action 690 of 1991 it was ordered that: "1. the defendant pay to the plaintiffs the following sums by way of interest on the balance purchase price payable under the respective contracts between each of the plaintiffs and the defendant -- 17 of 29 -- 15 for the period from and including 4th day of February 1992 until and including 25th day of March 1992: (a) to the first plaintiff, the sum of $332,013.28; (b) to the second plaintiff, the sum of $66,951.58; (c) to the third plaintiff, the sum of $173,083.67. 2. The defendant pay the plaintiffs' costs of and incidental to the application, to be taxed." The only reasons for judgment given in connexion with the Orders of 16 October 1992 related to the interest ordered to be paid on the originating summons. Although it has appealed against the orders of 16 October, 1992, the appellant has not applied to rescind the contracts and has not sought to establish that it is, or at any time was, ready willing and able to perform its contractual obligations. Nor have the respondents sought leave of the Court to terminate the contracts. Under the Orders of Byrne J. of 8 May and 16 October 1992 (and arguably implicit in the Orders of de Jersey J. of 13 March 1992), the respondents are entitled to the deposits, together with interest accrued prior to the date of payment to the respondents' solicitors. Further, under the Orders of de Jersey J. of 13 March 1992, they are entitled to the balance purchase monies and interest from 26 March 1992. Under one of the Orders of Byrne J. of 16 October 1992, they are also entitled to interest on the balance purchase monies between 4 February and 25 March 1992. It is that interest which provides the primary focus of dispute on this appeal. The grounds of that appeal, which are also relied on as grounds of appeal in respect of the other Orders of 16 October 1992, are as follows: "(a) His Honour erred in finding that the Respondents were not bound, pursuant to his Order of 19 December 1991, to deliver to the Solicitors for the Appellant a Memorandum of Partial Satisfaction of Charge releasing the Plans (described in the Amended Points of Objection) from the Charge (described in the Amended Points of Objection); (b) His Honour erred in finding that the Appellant was -- 18 of 29 -- 16 precluded by its failure to raise the issue on 19 December 1991, from relying upon the failure of Respondents to deliver to the Solicitors for the Appellant that Memorandum of Partial Satisfaction of Charge; (c) His Honour erred in construing Special Conditions 4 and 5 of the Contracts between the Appellant and the Respondents as not requiring the rezonings gazetted to be valid rezonings; (d) His Honour erred in finding that the gazettal of 24 April 1991 was a gazettal in accordance with Special Condition 4(a) of a rezoning to "Special Facilities (Tourist and Residential Resort)" Zone, the gazettal not being expressed in those terms; (e) His Honour erred in not determining that the Respondent at no material time had complied with their obligations under Special Conditions 4 and 5; (f) His Honour erred in determining that the Appellant had failed to complete the Contracts, having regard to the failure by the Respondents to comply with their obligations - (a) under Special Conditions 4 and 5 of the Contracts; (b) to produce the said Memorandum of Partial Satisfaction of Charge." If the appellant succeeds on all grounds or by reference to the grounds related to Special Conditions 4 and 5 of the contracts, it asks that the respondent's notice of motion and originating summons be dismissed with costs. It was not explained how this could occur notwithstanding the appellants' omission to appeal from the orders made on the motion on 8 May 1992. If the appellant succeeds only on the other grounds (related to Special Condition 18 of the contracts), it asks for a reduction in the interest ordered on the notice of motion to be paid on the balance purchase price. It is convenient to consider the appeal under two headings which reflect the appellant's approach. 1. Special Conditions 4 and 5 So far as presently material, the Special Conditions of the contracts provided: "... 2. Rezoning of land sold The Vendor warrants that:- -- 19 of 29 -- 17 (a) An application (hereinafter called "the said application") has been made to the Gold Coast City Council (hereinafter called "the said Council") by or on behalf of the Vendor seeking rezoning of the property hereby sold and other property to a Special Facilities (Tourist and Residential Resort) Zone pursuant to the Town Planning Scheme for the City of the Gold Coast. (b) On the 1st day of December, 1989 the said Council resolved to approve the said application subject to certain conditions (hereinafter called "the said approval"); (c) The Vendor caused an appeal to be lodged at the Local Government Court at Brisbane being Appeal No.12 of the 1990 appealing against some of the conditions imposed by the said Council in the said approval; (d) The Vendor and the said Council agreed on the terms of a Consent Order made in the said Court by his Honour Judge Row on the 18th day of May, 1990, a copy of which Consent Order is attached hereto and marked "Agreed Conditions of Rezoning" which exhibit comprises thirty-six (36) pages. ... 4. Gazettal of Rezoning (a) This content is subject to and conditional upon the Vendor at its cost in all things obtaining gazettal in the Queensland Government Gazette of the rezoning of all of the land sold including the property hereby sold and all other property the subject of the said application from its current zoning to a Special Facilities (Tourist and Residential Resort) Zone pursuant to the Town Planning Scheme of the City of the Gold Coast on terms and conditions substantially in accordance with the terms and conditions set out in the exhibit hereto marked "Agreed Conditions of Rezoning" by the 30th April, 1991. If the said rezoning is not gazetted by the said date or if it is gazetted and the terms and conditions of the gazetted rezoning are not substantially in accordance with the Agreed Conditions of Rezoning this contract shall be at an end and all moneys paid by the Purchaser hereunder including all interest earned thereon shall be refunded to the Purchaser in full. ... -- 20 of 29 -- 18 (d) For the purposes of this contract the property hereby sold shall be deemed to have been rezoned on the date that the rezoning is gazetted in the Queensland Government Gazette. The Vendor warrants and it is agreed that the said application relates to the property hereby sold together with ... that part of Labrador Street which is referred to in Special Condition 5(a) hereof (hereinafter called "all of the land sold"). ... 5. Road Closure This contract is subject to and conditional upon the Vendor at its sole cost in all things, obtaining by 30th April, 1991. (a) the permanent closure of that part of Labrador Street comprising approximately 1,261 square metres (herein called "the said road") as is shown in the documents and plans associated with the Agreed Conditions of Rezoning and as illustrated in the plan attached hereto and marked "Proposed Road Closure" in compliance with the requirements of the Land Administration Commission and any other authority having jurisdiction in relation to the same; and (b) gazettal of rezoning of the said road to the same zoning (Special Facilities (Tourist and Residential Resort) Zone) as the balance of the land the subject of the said application including the property hereby sold; ... The parties hereto acknowledge that the said road shall comprise part of the property hereby sold AND the road closure shall be deemed to satisfy the terms of this Contract if the area of the closed road is such as to allow the development of the said land substantially in accordance with the gazetted rezoning of the said land." An Order-in-Council dated 24 April 1991 and published in the Queensland Government Gazette on 27 April stated that the Governor-in-Council had approved an amendment to the City of Gold Coast Planning Scheme to exclude the subject land from zones described as "Partly Unzoned, Partly Residential "D" Zone and Partly Special Facilities Zone as shown on Sheet 10" and to include it in a zone described as "Special Facilities Zone as shown on Sheet 10/15". -- 21 of 29 -- 19 By that time, the part of Labrador Street referred to in Special Condition 5 had been closed and one or other of the respondents was the owner of that land, which was the "Unzoned" land referred to in the Order-in-Council gazetted on 27 April. The appellant submitted that that Order-in-Council did not satisfy Special Conditions 4 and 5 of the contracts because: (a) the Order-in-Council was invalid because a private citizen such as the vendor of the area of Labrador Street which was closed was not authorised to apply to include unzoned land in a zone; (b) unzoned land included in a zone for the first time was not "rezoned" as required by the contract; and (c) "Sheet 10/15" referred to in the Order-in-Council contained "terms and conditions substantially in accordance with the terms and conditions set out in the exhibit [to the contract] marked `Agreed Conditions of Rezoning'." Further, the incorporation of the agreed terms and conditions in the Order in Council to "Sheet 10/15" did not affect the validity of the Order-in-Council. However, the incorporation by reference did not satisfy the contracts which required that the terms and conditions be published in the gazette. Submissions (b) and (c) are wholly without substance or merit. It is sufficient to say little more than that both arguments are based upon misinterpretation of the contract. As to the former, it is manifest that the parties used the word "rezoning" as apposite to include the inclusion of unzoned land (the closed portion of Labrador Street) in a zone for the first time. Their concern was with the zoning of the land the subject of the contracts after, not before, "rezoning". Similarly, there is nothing in either the terms of the contracts or the purpose of the material contractual provisions to suggest that the parties required or intended -- 22 of 29 -- 20 that the agreed terms and conditions of rezoning be set out in full in the Order-in-Council which was gazetted. It was not suggested that such a step would have had any benefit for the appellant or any other purpose. The contract provided that the rezoning was (i) to be published in the gazette and (ii) to be on the agreed terms and conditions, but did not require that the terms and conditions, as well as the rezoning, be gazetted. The other argument, (a), was grounded upon the circumstance that, under the material legislation at the time of the re-zoning application, the Local Government Act, 1936 as amended, power to apply for the inclusion of unzoned land in a zone was given to a local authority ( subsection 33(5)) and the Minister (subsection 33(6)) but not to a private citizen (subsection 33(6A)). The incompatibility of this argument with the intent of the parties' bargain is manifest from a reading of Special Condition 2, but it is unnecessary to explore this further because the argument is based on a fallacy. The Order-in-Council of 27 April resulted from an application by the local authority under subsection 33(5). True it is that that application was preceded by an application to the local authority by or on behalf of the respondents under subsection 33(6A) which in part may not have been authorised by the Local Government Act. However, even if the respondents' application under section 33(6A) was wholly or partially invalid, no satisfactory explanation was ever offered as to why that would affect the validity of the subsequent application which the local authority made or the Order-in-Council made on that application. In particular, while an application under the Local Government Act to include land in a new or different zone by a local authority without prior application to the local authority by a private citizen required additional steps to those required when a local authority applied for rezoning consequent upon an application from a citizen, the appellant did not assert or seek to establish that requisite -- 23 of 29 -- 21 procedural steps had not been taken by the local authority. Prior to the Order-in-Council, the Local Government Act was repealed by subsection 8.8(1) and the First Schedule to the Local Government (Planning and Environment) Act, 1990 as amended. However, either subsection (9) or subsection 10 of section 8.10 of the later Act provided for the completion of the process which had been initiated under the prior legislation. These provisions respectively provided: "8.10(9) [Applications] (a) Where, prior to the commencement of this Act, an application of any kind to which this Act refers was duly made to a Local authority (but was not finally approved by the Local Authority or the Governor in Council, as the case may be, prior to the commencement of this Act), the application is to be dealt with as if this Act had not commenced. (b) If that application is subsequently approved it is to have force and effect as if it were approved pursuant to this Act (but any conditions attaching thereto are still to apply as if this act had not commenced), 8.10(10) [Proposals] (a) Where, prior to the commencement of this Act, a proposal (other than an application referred to in subsection (9)) to obtain an approval to amend a town planning scheme was instituted (but was not approved by the Governor in Council prior to the commencement of this Act), the Minister is to recommend to the Governor in Council modifications to the proposals which will ensure that the proposals conforms in all respects with this Act and the proposals is to be dealt with as if this Act had not commenced (and any conditions attaching to the proposals are still to apply as if this Act had not commenced). If the appellant is incorrect and the respondent's application was "duly made", then subsection 8.10(9) applied. If the respondents' application was not "duly made", then subsection 8.10(10) applied. Neither alternative affords any support to the appellant's argument. In these circumstances, it is unnecessary to deal with additional points raised by the respondents based on subsections 4(4)(v) and (vi) of the Local Government Act and section 4 of the Constitution (Executive Actions Validity) Act, 1988. -- 24 of 29 -- 22 The trial judge found against the appellant in relation to Special Conditions 4 and 5 on the basis that, on their proper construction, the contracts required only the fact of gazettal and were not concerned with whether or not the Order-in-Council gazetted was valid. In view of the conclusion reached that the invalidity of the Order-in- Council has not been established by the appellant, it is unnecessary to pursue this question. However, it is perhaps to say much the same thing somewhat differently to note that Special Condition 2 strongly suggests that the respondents' contractual obligations were met by the gazettal of a "rezoning" which was based on the application and consent order which were there referred to. The respondents also argued that the appellant was estopped from disputing the validity of the Order-in-Council by the course of the litigation including the issues which had been decided adversely to the appellant. Because of the conclusions otherwise arrived at, it is unnecessary to discuss this question or a subsequent Order-in-Council which was gazetted on 11 June 1991. 2. Special Condition 18 As noted above, the orders of de Jersey J. of 13 March 1992 and Byrne J. of 8 May 1992 entitled the respondents to interest on the unpaid balance purchase prices from and including 26 March 1992 and left it open to the respondents to claim interest from 3 February. No appeal was brought from those orders. On the adjourned motion in the action, Byrne J. on 16 October 1992 ordered that the appellant pay such interest "from and including 4th day of February 1992 until and including 25th day of March 1992". The appellant contended, by reference to Special Condition 18 of the contracts, that interest was payable only from 10th March, not 4th February. The basis for this contention was that interest is only payable under the contracts (clause 9 or 14) in respect of monies "not paid when payable", and that, notwithstanding the orders of 16 December 1991, the balance purchase prices were not payable on 3 February or until 10 -- 25 of 29 -- 23 March. At the date of the contracts, documents referred to in Special Condition 18 were subject to a registered charge granted to a bank by one of the respondents, Eamon Pty. Ltd., and a partial release was not obtained until 10 March after objection on this basis was first raised by the appellant. Special Condition 18 of the contracts provided: "18. Plans, Drawing and Documents etc. Included in the property hereby sold are all permits, approvals, agreements, consultants' reports, plans, specifications, paperwritings, consents and other documentation held by or on behalf of the Vendor in relation to all of the land sold or the said application and in any way connected with the proposed rezoning or development of the said property. The Vendor shall on completion of this contract deliver all such documentation to the Purchaser free of charge or encumbrance with the effect that the Purchaser shall have in its unfettered control all such material of any nature whatsoever previously held by or on behalf of the Vendor in connection with all the land sold." The order made by Byrne J. on 19 December 1991 which fixed 3 February as the date for completion required the appellant to pay the balance purchase prices and the respondents to deliver to the appellant at the same time the following documents: "(i) the Certificate of Title or Deeds of Grant to the said land; (ii) the said memoranda of transfer; (iii) such other documents necessary to enable the defendant to become registered as proprietor of an estate in fee simple in the said land free of all encumbrances, save for easements G872293, G872294 and G872295, such requirement to be satisfied by delivering: (a) in the case of any Bill of Mortgage registered over the said land: - the relevant duplicate Bill of Mortgage; - where required, a completed declaration in form G for the purposes of stamp duty in relation to said Bill of Mortgage; and - a Release of Mortgage in Form 7. (b) in the case of any caveat: - a withdrawal of caveat in Form 22 signed by the caveator and certified by such caveator as being correct for the purposes of registration. -- 26 of 29 -- 24 (c) in the case of any charge over the said land registered under the Corporations Law: - a Form 312 under the Corporations Regulations notifying the release of the said land from such charge, signed by the person entitled to benefit from the charge; (iv) any document necessary for the plaintiffs either to obtain the approval of any authority or body to the assignment to the defendant of all the development agreements relating to the said land entered into between the plaintiffs and any such authority or body, or to perfect any such assignment, signed by all parties thereto; (iv) the said deed of assignment between the plaintiffs and the defendant relating to the relocation of Easements Nos. G872293 and G872294 signed by all parties thereto; (vi) Duplicate Tavern License No. 2020 issued under the provisions of the Liquor Acts 1912; (vii) the said notification of change in proprietorship in favour of the defendant of the business name "The Grand Tavern" signed by the proprietor thereof; (viii) the plans, drawings and other documents referred to in special condition 18 of the said contracts." The argument whether delivery of the documents which the respondents had available on 3 February 1992 satisfied the orders of 19 December 1991 proceeded from the premise that Special Condition 18 of the contracts required the respondents to deliver the documents there referred to and a release, or partial release, of the charge. While the appellant accepts that delivery of the documents and such a release would have satisfied Special Condition 18, (and did so on 10 March 1992), Special Condition 18 did not require delivery of any document other than those there referred to, which were to be "free of charge or encumbrance" when delivered. The respondents' deficiency under Special Condition on 3 February was not the absence of a document, the release or partial release of the charge, but the quality of the documents which they had for delivery, which were subject to, not free of, "charge or encumbrance". Nonetheless, the respondents submitted that what they had available satisfied the orders of 19 December 1991 so that the balance purchase prices thereupon became "payable but unpaid" pursuant to those orders. -- 27 of 29 -- 25 The determination of this issue requires the interpretation of the orders of 19 December 1991. The respondents' argument, which found favour with Byrne J. who made the orders, was that the order (viii), set out above, was concerned with the delivery of documents as chattels, not with the title to the documents which the respondents had and were able to pass at the time. Reliance was placed on the absence of any reference to "charge or encumbrance", in order (viii), which was contrasted with other orders which provided for the release of securities. The appellant, on the other hand, favoured a construction of order (viii) which was concerned not only with the delivery of the documents physically but with the title which was passed, asserting that the order should be read, by implication if necessary, as conforming with Special Condition 18 to which it made reference. The resolution of this dispute is to be found in another of the orders made on 19 December, 1991, paragraph 11 of which required the parties to "execute all such documents and do all such things necessary in order to enable the said contracts to be specifically performed"; that is, specifically performed on 3 February 1992, the date for completion fixed by the order. Paragraph 11 of the Orders required the respondents to have the documents referred to in Special Condition 18 of the contracts "free of charge or encumbrance" by, that is, before or on, 3 February, 1992, which it omitted to do. The significance of paragraph 11 in this respect appears unfortunately not to have been raised before Byrne J., but should be regarded as determinative of this appeal. The respondents did not argue that, in such circumstances, the balance purchase prices were nonetheless payable but, by their argument, accepted, at least implicitly, that prior or contemporaneous performance of their obligations under the orders of 19 December 1991 was a prerequisite to the appellant's obligation under the orders to pay the balance purchase prices. -- 28 of 29 -- 26 It follows that the appellant's Special Condition 18 point succeeds as does the appeal to that extent. It was not disputed that, in such circumstances, Appeal Number 238 of 1992 should be allowed with costs, the first order made on 16 October 1992 on the motion in the action should be set aside and, in lieu thereof, the appellant should be ordered to pay to the respondents by way of interest on the balance purchase prices for the period from and including 10 March 1992 until and including 25 March 1992 the following sums: (a) to the first respondent, the sum of $104,161.03; (b) to the second respondent, the sum of $21,004.42; and (c) to the third respondent, the sum of $54,300.76. Appeal number 239 of 1992 is dismissed with costs. -- 29 of 29 --