Eamon Pty Ltd, Re; Re Rador Pty Ltd & Blackedged Pty Ltd v Re Sanwa Home Australia Pty Ltd & Anor [1992] QSC 264

TRANSCRIPT OF PROCEEDINGS / State Reporting Bureau, 4th F1oor, The Law Courts, George Street, IDUSBANE. 0. 4000 Tel. (07) 2Z7 .4360 (Copyright in this t:ra.nscript is vested in the Crown. Copjes thereof must not be made or sold without the· written authority of the Director, State Reporting Bureau.) ! .. ::··,- REViSED COPIES !SSUED. State f1sp:,rt!ng Bureau SUPREME COURT OF QUEENSLAND · Date 3 1 ~ 1 '7 ;{! ("I ' · CIVIL JURISDICTION /\ ( / BYRNE J os No 171 of 1992 EAMON PTY LTD and RADOR PTY LTD and BLACKEDGED PTY LTD and SANWA HOME AUSTRALIA PTY LTD and PRIMROSE COUPER CRONIN RUDKIN BRISBANE .. DATE 28/07/92 ,JUDGMENT - First Applicant ~ fY , Second Applicant Third Applicant First Respondent Second Respondent 1 -- 1 of 32 -- f ... i 280792 HIS HONOUR: The entitlement to interest is established and I publish my reasons. JUDGMENT 2 -~- -1 10 0 30 0 40 0 50 60 -- 2 of 32 -- n c IN THE SUPREME COURT OF QUEENSLAND O.S. No. 171 of 1992 Before Mr Justice Byrne CATCHWORDS: IN THE MATTER OF AN APPLICATION FOR RECOVERY OF DEPOSIT MONIES under contracts between EAMON PTY LTD, First Applicant, RADOR PTY LTD, Second Applicant and BLACKEDGED PTY LTD, Third Applicant as vendors and SANWA HOME AUSTRALIA PTY LTD, First Respondent as purchaser and PRIMROSE COUPER CRONIN RUDKIN (a firm) Second Respondent as stakeholder JUDGMENT - BYRNE J. Delivered the 28th day of July, 1992 Estoppel ~ issue estoppel - application to orders implementing specific performance decree. Contract interpretation obligations conditional on "gazettal of rezoning" whether gazettal enough or else rezoning must also be effective and valid. Vendor and purchaser - interest on unpaid purchase price. Counsel: Solicitors: P.A. Keane Q.C. and with him P.L. O' Shea for applicant S.L. Doyle for respondents Corrs Chambers Westgarth for applicant Thynne & Macartney for respondents Hearing dates: 30th April to 1st May; 4th May to 8th May, 1992 -- 3 of 32 -- ' ' (~) c; IN THE SUPREME COURT OF QUEENSLAND O.S. No. 171 of 1992 IN THE MATTER OF AN APPLICATIONFOR RECOVERY OF DEPOSIT MONIES under contracts between EAMON PTY LTD, First Applicant, RADOR PTY LTD, Second Applicant and BLACKEDGED PTY LTD, ThirdApplicant as vendors and SANWAHOME AUSTRALIA PTY LTD, First Respondent as purchaser and PRIMROSE COUPER CRONIN RUDKIN (afirm) Second Respondent as stakeholder JUDGMENT - BYRNE J. Delivered the 28th day of July, 1992 Contracts and Decree By three interdependent contracts dated 23 June 1990 the applicants agreed to sell land at the Gold Coast to the first respondent ("the respondent"). The price exceeded $26M. In October last year, in an action brought by the applicants, Robin A.J. declared that the contracts ought to _be specifically performed. The contracts fixed 29 March 1991 for their completion. Robin A.J. held that, in the events which occurred, the contracts were "open" contracts, with completion due in a reasonable time. His Honour's order conferred "liberty to apply for further orders or directions"· and reserved "leave 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. 11 An appeal to the Full Court was dismissed on 11 December. -- 4 of 32 -- 2 The contracts contained several special conditions to be satisfied by the date of completion. Clauses 4 and 5 are among them. Under cl. 4 the "contract is subject to . Gazettal ... of the rezoning" of all the land sold, except for a section of Labrador Street. By cl. 5, the "contract" was "subject to 11 the closure of that section of Labrador Street and the "Gazettal of (its) rezoning (sic)" to the same zone as ·the balance of the property. 0 Neither condition had been met by 29 March. However, Orders in Council gazetted on 27 April and 11 June 1991 provided for the rezonings. At the trial, as well as 0 contending that the contracts required completion on 29 March, the respondent argued that the Orders in Council were ineffective. Specific performance, it was said, should have been refused on the footing that conditions precedent to the respondent's obligation to complete were not satisfied. In 0 view of his decision that the completion date had not arrived, it was not necessary for Robin A. J. to consider whether the Orders in Coun6il satisfied cls. 4 and 5. Nonetheless, as his u Honour said, "to obviate certain disputes which may otherwise arise when completion is due", Robin A.J. examined the respondent's contentions concerning the Orders in Council. He found the 27 April gazettal sufficient. The notice of appeal challenged the validity of the Orders in Council. When the appeal was heard the point was not raised. Orders implementing the Decree On 19 December the parties obtained from· the Chamber Judge (me) orders anticipated by Robin A.J. 's decree "for the -- 5 of 32 -- 3 purpose of specifically performing" the contracts. Obviously, ·the object of the application was to obtain directions prescribing the things to be done on both sides under the decree. Most of the many steps mentioned in the order to achieve settlement were agreed,_ including the completion time: 2 p.m. on 3 February . Only three matters were raised for decision. One concerned cls . 4 and 5 . The respondent sought an order ~" (_) that, by no later than the time fixed for completion, the (\ ( applicants "shall have obtained gazettal of the rezoning referred to in special conditions 4 and 5." · This·· was opposed. I thought its inclusion might be taken as implying, contrary to the view of Robin A.J., that the applicants had not already satisfied these conditions. The matter came before me late on a Chamber day, and it was not possible to resolve either the applicants' contention that the trial Judge's order gave rise to an estoppel precluding further argument about the Orders in Council or the respondent's contentions. My concern was to preserve any right the respondent may have retained to challenge Robin A.J. Is views about these issues. The applicants' senior counsel was asked whether, if ·the insertion were refused, the applicants would acknowledge that the respondent's rights pursuant to special conditions 4 and 5 remained unaffected by the absence of reference to them in the· order. This was agreed and the respondent's solicitors were informed that: "The plaintiffs . acknowledge that the defendant's rights pursuant to special conditions 4 and 5 ofeach of the contracts are unaffected by the absence of any express reference to the plaintiffs' -- 6 of 32 -- 4 obligations thereunder in the order of Byrne J. made 19 December 1991." The letter continued: "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." Before 3 February there was no attempt to have the Court determine whether Robin A.J.'s decision gave rise to an estoppel precluding a claim that the Orders in Council did not satisfy cls. 4 and 5 or the merits of the contention that the Orders in Council were invalid. Nor was there any appeal from my order nominating the steps to achieve completion. Attempted completion Representatives of the parties met at the applicants' solicitors' office on 3 February. No objection was voiced to the performance offered by the applicants. However, the respondent did not complete. Instead a letter was delivered on behalf of the respondent suggesting that the applicants had not made time of the essence. On 19 February the respondent gave notice to complete on the following day. On 20 February representatives of the parties met again. Once more, the respondent refused performance. Next day, the respondent gave yet another notice to complete. It required completion on 10 March. Representatives attended on 10 March. The applicants tendered performance. Again, the respondent did not complete. ... 0 0 0 -- 7 of 32 -- 5 Morgan v. Brisco order In the meantime, on 9 March, the applicants ·had sought from the Chamber Judge (de Jersey J. ) an order of the kind envisaged by Morgan v. Brisco (1886) 32 Ch.D. 192. The application was adjourned to 11 March to await the outcome of the notice requiring completion on 1 0 March. After the respondent did not complete, on 11 March de Jersey J. made a Morgan v. Brisco order, refusing to condition it upon the () applicants' otherwise having complied with the contracts. Under the order the respondent was to pay the balance of the ('\ purchase price in late March plus interest on any part of that amount not paid on time. The respondent resisted the order, submitting that such an order should only be made where there was no doubt that all conditions precedent to its. obligation to perform had been met. This was coupled with a contention that the dispute ( about satisfaction of cls. 4 and 5 had not been determined. Some, but not all, of its arguments were acknowledged to have been dealt with by Robin A.J. but his opinion was said to be obiter. de Jersey J. did not find it necessary to consider the merits of these "three town planning-type points" which, he said, were "of a complicated factual and legal nature". But, said his Honour, in view of the decision of Robin A.J., "this purchaser could n·ot have had any substantial belief in the validity of those points". The second appeal Before the Court of Appeal the respondent argued (i) that the Morgan v. Brisco order should not have been made without a -- 8 of 32 -- I 6 determination J:hat. :-. the "town '·· planning . poin~s'' lacked substance; and· (ii) that their .·merits were yet to be determined and would be ventilated in an application for· special leave to appe.al to the. High Court against the Full Court's decision. The Court pf Appeal held that the pending challenge was. not an absolute bar, adding "given the history A. . • ~. . • • • of. the.. litigation,. it is not surprising_, that de Jersey J .. exe7cised his discretion in the way which he did." The Court also ~,aid: . 0 "The conclusion that the appeal should be dismissed - has been reached without consideration of the ,yalidity and efficacy of the Order in Council whichRobin A.J. found satisfied the rezoning requirements in the contracts. The-respondent sought to have the Court rule that conditions 4 and 5 of the contracts had been satisfied. The appellant (the purchaser) was opposed to such a course although, if it had succeeded in persuading the Court that Robin A.J. was wrong, it ~ould have considerably improved its claim to have the order of de Jersey J. from which the appeal is brought set aside." ·• The respondent was given a further opportunity complete. The· Court of Appeal extended the time to for compliance with the order of de Jersey J. to 4 p.m. on 6 April~ 0~ 6 April the respondent sought to argue the planning. points.· The Court of Appeal declined to permit this. dn· 1 0 April the High Court refused special leave to appeal from the Full Court's · dismissal of the appeal against the decree orde~ ~nd against the Court of Appeal Is dismissal of the appeal from de Jersey J. 's order. The present claim de Jersey J. 's order established the applicant's entitlement to interest on the balance purchase price after 25 March. The order also provided: "this order shall neither 0 0 u -- 9 of 32 -- ( 7 affect nor' preclude the right of the (applicants) to claim interest (on the purchase price) from 3 February to payment". The applicants now seek to show an entitlement to such interest from 3 February, when completion was due under my order of 19 December, until 25 March. The special provision in de Jersey J.'s order concerning interest from 3 February is explained by other events. By 11 March the respondent had advanced an excuse for not completing on 3 February. On 21 February,. Mr Anderson, an employee of the respondent's solicitors, swore to having attended on 3 February, checking the documents proffered by the applicants' solicitors, and discovering a defect: that, contrary to the Power of Attorney, the discharge of mortgage K390125D had been executed by one_attorney, not two. On 26 February Mr Anderson's affidavit was used to oppose an application 1 to recover interest on the price from ( 3 February. The applicants challenged the alleged deficiency. Because the issue involved disputed questions of fact and the respondent wanted, its senior Counsel said, "the critical / document examined", the application was adjourned to the civil list. Directions required the respondent to deliver points of objection for the applicants to answer. This outstanding dispute explains why de Jersey J. reserved the applicants' entitlement to interest from 3 February. Basis of the Claim The right to interest is sourced in cl. 26(h) of the contracts which provides: brought before me as the Chamber Judge. -- 10 of 32 -- ---------- 8 " if the Purchaser fails to complete this contract due to its own default and not due to any breach or default on the part of the Vendor, the I Purchaser hereby acknowledges that the Vendor shall be entitled to in that event call on the Stakeholder to pay to the Vendor the deposit held by the Stakeholder and all interest earned thereon by giving the Stakeholder fourteen (14) days' notice in writing of the Vendor's requirements in this regard and the Stakeholder in those circumstances is authorised and shall immediately pay the deposit and all interest earned thereon to the Vendor". Grounds of opposition When the point~ of objection were delivered, two issues Q were raised. One was that the release was not signed by two attorneys. The other was that the moneys now claimed are "irrecoverable ... being penalties". The pen~lty contention 0 was abandoned at the outset of the hearing of this application when Mr Doyle sought to raise two other defences. Both concerned the applicants' capacity to satisfy their obligations under my order of 19 December when completion fell due on 3 February. One is that the applicants did not then proffer a memorandum of partial satisfaction needed to 0 discharge from encumbrance permits, plans and other papers relating to the development of the property: documents subject u to a registered charge granted by Eamon Pty Ltd to The Commercial Bank of Australia Limited. The second is that old contention . that the Orders-in-Council did not satisfy cls. 4 and 5. I allowed these extra points to be agitated. Did two attorneys sign? Mr Anderson became a solicitor in 1988. He has been employed by the same Brisbane solicitors for about six years. Banking and finance is his special area. To prepare for completion, on Sunday 2 February Mr ~nderson compiled a sheet -- 11 of 32 -- 9 setting out-details of the documents the applicants were to produce in compliance with the 19 December order~ The sheet contained headed .columns. In some Mr Anderson listed the certificates of title and other documents he- expected to receive. His sheet also noted whether he was to get complete or only partial discharges of ·securities. That column was headed "Form 7 Release". Another, headed "Attorney" , was blank. Its purpose was to record, at settlement, details of C_) those persons who had executed discharges on behalf of the secured creditor, Westpac Banking Corporation. c\. Mr Anderson took the sheet to the offices of the applicants' solicitors at about 2 p.m. next day. By that time he had a copy of the relevant Power of Attorney. He knew that two persons were required to sign. Three solicitors represented the applicants: Mr Bickley, Mr Dann and Mr Johnson. Miss Winterflood, a bank officer, was there too. Mr Anderson was handed bundles of documents: certificates of title, mortgages, releases of the mortgages and withdrawals of caveats. He had many documents to examine, including eight I \. / mortgage releases. Mr Anderson looked at the releases. He checked to see that they were executed by persons authorised to do so under the Power, progressively writing into the "Attorney" column the names and offices of those signing for the Bank. He came to the Form 7 Release of Mortgage K390125D (which related to land described in two separate certificates of title). Mr Anderson deposes: "When examining the Release produced with respect toMortgage K390125D, I noted that it had been signedby L J Mitchell, Assistant to the Manager, Legal, as Attorney of Westpac but had not been countersigned -- 12 of 32 -- 10 by another Attorney of Westpac. This was obvious because the document had been prepared on the basis that Mr McAnally as Manager, Corporate Banking, was to execute the document as attorney of Westpac but there was a blank space where he was required to sign. I was particularly surprised by this omission because I was aware of the background litigation and therefore thought the documents would have been more carefully checked to ensure that such an omission did not occur. I looked from the documents and decided to re-check all the details. I then reviewed each of the details again such as the Volume and Folio references, the Mortgage Number and the Mortgagee. I confirmed these to be correct according to the information recorded on the specific settlement sheet and then in the column headed "Attorney" wrote the following words: 1 P R McAnally L J Mitchell Manager Corporate Banking NOTE PRM Did notexecute. As above 1 • 11 Mr Anderson left without mentioning his discovery; and he did not ask for a copy of the release. Of course, he was not there to complete. Mr Anderson had no money. He checked the documents to find any deficiency in them and to report back "errors". A copy of the release is attached. It contains Mr McAnally 1 s signature above "Manager, Corporate Banking". It is plai~ to see, 2 or 3 ems to the left of Mr Mitchell 1 s signature: a signature Mr Anderson observed. It is hard to imagine how Mr Anderson could have missed Mr McAnally 1 s signature if it were there. Yet bank officers involved in the execution of that release present a plausible, quite different, account. If they are right, Mr McAnally 1 s . ' 0 0 0 0 -- 13 of 32 -- 1 1 signature was there when the document was handed to Mr Anderson. Miss Winterflood is the Manager's Assistant, Legal. She prepared the releases on Friday, 31 January. Mid-morning on 3 February she took a bundle of about 30 documents to Mr Mitchell. The bundle included certificates of title, mortgages and the several Forms 7 • Miss Winterflood watched as Mr Mitchell signed the releases. Next she went to Mr McAnally. She handed the bundle to him. She says she stood nea;rby as he signed all the releases and initialled 1 ~-, references to them in the bank's register of "Deeds Executed \ ) by Bank's Attorneys". Despite the assertion in her affidavit that "I saw him ( Mr McAnally) sign the release", in cross-examination Miss Winterflood agreed with the suggestion that she "can't actually say you watched him sign the release". And she was ( \ I not confident in her recollection concerning the sequence in which Mr McAnally initialled the register. She said "I think he signed all the documents first and then went back and ( \ initialled them in the register". After she left Mr McAnally's office, Miss Winterflood carried the documents to her office where she took out the releases. On every one she signed her name as the "witness" to the Attorneys' execution. On the Form 7 in question her signature appears very close to Mr McAnally's signature. Had Mr McAnally not signed, it is difficult to conceive that she would not have noticed the failure. -- 14 of 32 -- 12 In one respect Miss Winterflood's memory is faulty: as to whether Mr McAnally initialled the Attorney's Register in bulk. I am persuaded by Mr McAnally' s evidence that he did not. Nevertheless, Miss Winterflood impressed me as an honest and generally reliable witness. Although her affidavit overstates her recollection about Mr McAnally 's signing the form, this is not her fault. When she made her affidavit, she explained the true position to Mr Dann. He told her that her affidavit bore an "interpretation" consistent with what she 0 said she remembered. It was not unreasonable for her to rely on Mr Dann. Her overstatement does not reflect adversely on Miss Winterflood. In para. 9 of her affidavit Miss Winterflood deposes: "I attended settlement at the Corrs Chambers Westgarth on 3 2 p. m. The Release bore theMitchell and ... McAnally at that offices of Messrs February 1992 at signatures oftime." In her re-examination, this exchange occurred: "In relation to para. 9 of your affidavit, your evidence is that after Mr Mi tchell and Mr McAnally had signed, ·you went back and you witnessed thesignatures in your own office?-- That's right. You had exhibited or attached to your affidavit the document which contains your signature underneath the two signatures that appear above it?-- That's right. And does that document appear apart from thereference to 'certified correct registration', does that document appear as it appeared to you when you signed the document?-- Yes, it does." In short, Miss Winterflood is sure that Mr McAnally' s signature was on the release when it was given to Mr Anderson. After the attempt at completion failed, Miss Winterflood returned to the bank. She took the documents (including the 0 0 u -- 15 of 32 -- 13 material release) into the strongroom. Mr McAnally has access to it when accompanied by a legal officer. Miss Winterflood learned of a suggestion that Mr McAnally had not signed when Mr Smith, another bank officer, was told of it by telephone. Miss Winterflood and Mr Smith worked in the same room. After the call, Mr Smith immediately told her its topic. Next, Miss Winterflood testified, he "got the document out", and "the document was signed" by Mr ('J ,_ ~~ McAnally. Mr Smith testified that it was not until 21 February c-) that he became aware of a contention that Mr McAnally had not signed. This was when he received the telephone call. (It was from Mr Bickley). Mr Smith, whose evidence I accept, said that he went into the security room and "checked the document in question" (the mortgage number had been quoted in the conversation). He found "two attorney signatures" on the release, just as Miss Winterflood said. Mr Smith revealed in cross-examination that he saw the release on 20 February when he took the documents out for the ( settlement convened for that day. He ensured that the certificates of title and other needed papers were there. He checked the releases to see that they were properly executed. All were, he testified, "signed by two attorneys". Next day, when Mr Smith heard from Mr Bickley that one of the releases might not have been executed, he checked again because, as he acknowledged, he was not "a hundred per cent sure" that he had seen two signatures on all the releases the day before. -- 16 of 32 -- 14 Mr Bickley has been a solicitor for about five years. On 21 February he first heard that the release might not have been executed by Mr McAnally. (Mr Dann gave him a copy of Mr Anderson's affidavit). He then telephoned Mr Smith. Mr McAnally had the opportunity to alter the release after Miss Winterflood returned the documents to the strongroom. Yet there was no occasion for him to have done so. Not until after Mr Anderson's affidavit was delivered to the applicants' solicitors could Mr McAnally have heard it 0 said that he had not signed a release, and he had no reason to anticipate such an assertion. Dann from the witness box The unexplained absence of Mr prompted a submission that the applicants had not excluded the possibility that Mr Dann may have spoken to Mr McAnally before Mr Bickley spoke to Mr Smith; but this is fanciful. The first Mr McAnally knew of the idea was, I am satisfied, when another bank officer, 0 Mr Young, mentioned it. This was not until after Mr Smith had Q twice checked the releases (that day and the day before), both times finding Mr McAnally's signature on all of them. Mr McAnally insists that he signed ·the release on ~) 3 February. It was said for the respondent that his dogmatic assertions in this respect that he recalled signing the particular release - were improbable and that Mr McAnally was eager to advance the applicants' case at the expense of frankness. This is not my impression. Mr McAnally explained that, as was.his usual practice, he initialled the bank's register after signing the release to which the particular entry in the register related. After testifying that he could -- 17 of 32 -- 15 recall signing the release, he gave a reason for his confidence: "it is not the case that I believe there is one that has been missed". Nothing in Mr McAnally' s demeanour supports a conclusion that he altered the document after 3 February and falsely gave evidence that he had not. My estimate of him supports a contrary view. When Mr Anderson checked the documents on 3 February he was, he said, "hoping" to "find an error." That his anxiety to detect a mistake may have influenced his perceptions to the point of missing Mr McAnally's signature was explored in cross-examination. Mr Anderson accepted that it was "a possibility" that he was "so keen to see a deficiency in performance" that he "may have made a mistake", adding "I don't believe I made a mistake." When all the facts are considered, however, it is probable that Mr Anderson is mistaken. Unlikely though at first it seems that Mr Anderson ( could have allowed his appreciation of what he saw to be so affected by what he hoped to see, the evidence of Miss Winterflood, Mr Smith and Mr McAnally shows that the release was duly executed. The first ground of opposition fails. Absence of partial discharge for plans Special Condition 18 provided: "Included in the property hereby sold are all permits, approvals, agreements, consultants' reports, plans, specifications, paper writings,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 re-zoning 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 -- 18 of 32 -- 16. 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." Th~ 19 December order required_the applicants to deliver the plans and other writings described .. These documents were the subject of a regist~red charge. . ' My order, however, did . ; . . ;. . not mention a memorandum of partial satisfaction of . the charge: something essential for the property in the documents . '. . .. to pa~s, as cl. 18 required, "free from charge or encumbrance". Nei th,er side applied to rectify the omission 2 , and, by 3 February the order had t>,een . passed and entered. Theref9re, in performing their obligations at completion in accordance with the order, the applicants were not bound to produce,an instrument releasing the plans from the charge. So it is not surprising that no such release was to hand when the applicants' representatives attended on 3 February. But its . .r. 0 0 absence i~ now relied on to show that the applicants cannot Q establish that the respondent failed "to complete . . . due to . its own default and not due to any default" by.them. The deta,iled: stipulations. of. the 19 December order were (J mostly agreed. The ramifications of the charge for the applicants' duties under cl. 18 were not adverted to before me when the 1 9 December order was made. In this hard-fought campaign, it cannot be ~upposed that the respondent intended to waive the benefit of the partial release of the charge. So 2' As might.have been done under the slip rule if the omission ' resul tE~d from inadvertence: · see Storey & Keers Pty Ltd v. Johnstone (1987) 9 N.S.W.L.R. 446; Gould v. Vaggelas (1985) 157 C.L.R. 215, 271 ff. •; -- 19 of 32 -- (_) 17 there seem to be three possible explanations for ignoring it. The respondent either overlooked the point or decided to hold it in reserve or mistakenly assumed that my order qid require a memorandum of partial satisfaction. For reasons explained shortly, it does not matter which. As I have said, the applicants' right to interest between 3 February and 2 6 March depends on cl. 2 6 (h) . It is not enough that on 3 February they offered performance of all the 19 December order required. The parties' rights under cl. 26(h) did not merge in the decree or in my order. 3 Accordingly, unless for some special reason my order precludes the respondent's setting up that the absence of a release of the charge over the plans and related documents involved a failure to satisfy cl. 26(h), the inability to produce them "free from charge" spells the applicants' defeat. 4 In my opinion, the respondent is precluded by its failure ( ) to raise the issue on 19 December from now relying on the point. The directions in the 19 December order were made in implementation of a specific performance decree. Such a consequential "order is made, of course, by reference to the 3 4 J.A.G. Investment Pty Ltd v. Strati [1981] 2 N.S.W.L.R. 600, 603; Sunbird Plaza Pty Ltd v. Maloney (1988) 166 C.L.R. 245, 273. At least as the case was conducted. It was not suggested, for example, that time was not of the essence or that the respondent could only raise this defence if it had complained of the deficiency at completion, affording the applicants an opportunity to remedy the matter ... -- 20 of 32 -- 18 rights of' the·. parti·es under the· contract". 5 ··The ·object of the orders is that "the parties are put in the relation contemplated by their agreement". 6 As Vaisey J. said: 7 "The court follows up its decree for the specific performance of the contract with directions framed mn the assumption'th~t both parties are going to carry it out. The directions are given impartially; each · part~ is told what to' do, no favour being shown to either." Sometimes directions implementing a decree will not accord with the letter of the contract. A completion date may pass before litigation concludes. Other 9ircumstances since a contract was made, altho~gh not justifying refusal of ~ decree, may require the imposition of terms modifying rights and duties stated or implied in the contract. Judicious variations can often be accommodated. The Court, said Lord Redesdale 8 , "will execute the covenant, according to a conscientious modification of it, to do justice as far as circumstances will admit". Morgan v Brisco orders, providing as they do for substituted terms where exact enforcement. is ::... impracticable, are examples. 9 Nevertheless the Court does not amend the spirit and substance of the bargain. Orders implementing the decree are fashioned by reference to the 5 6 7 8 9 Singh (Sudagar) v. Nazeer [1979] Ch. 474, 481. J.C. Williamson Ltd v. Lukey and Mulholland (1931) 45 C.L.R. 282, .. 297 (Di_xon J.). in Palfuer v. Lark [1945] Ch .. 182, 184. ·in DavisR.R. 89, 358(1). v. Hone (1805) 2 Sch. 95; cf .. Restatement, & Lef. 341, 348; 9 Contracts (2d.) s. For others, . see· Robert . J. Sharpe, Injunctions and Specific Performance, (1983) pp. 390, 419; 81A Corpus Juris Secundam, Spedific Performance, s. 191-193, pp. 148, 149, 151; 71 American Jurisprudence 2d., Specific Performance, s. 211, p. 270. 0 0 0 0 -- 21 of 32 -- 19 obligations the contract creates. For this reason, directions as to completion presume a concluded view about the parties' responsibilities under their agreement. Where, as here, title to a material part of the subject matter of the sale is to pass "free of charge", the ordered mode of performance should not oblige the purchaser. to pay the price for an encumbered title. That orders regulating completion may need modification in adaptation to changed circumstances does not affect their character. They are not provisional or tentative. Rather ( ~ they presume adjudicated facts and law and in this respect are unlike interlocutory injunctions or interim orders for the preservation of property: decisions made without determining substantive rights. The implementing order is interlocutory in the sense that it works out rights given by the decree. 10 However, estoppels may arise under such an order. The form of (-~~ the decision and of the process which led to it are not ( decisive. Substance matters: relevantly, that regulating completion depends on a concluded view about the substantive rights of the contracting parties. 11 Susceptibility to variation in changed circumstances does not deny to such 10 11 cf. Blakey v. Latham (1889~ 43 Ch.D~· 23. see Bannon v. Bannon 1 N.E. 2d. 975 (1936); Lummus Co. v. Commonwealth Oil Refining Co. 297 F. 2d. 80,89 (1961); Peareth v. Marriott (1882) 22 Ch.D. 182;Diamond v. The Western Realty Company [1924] S.C.R. 308, 315-316; Halsbury's Laws of England 4th ed. reissue vol. 16 para. 982 fn 3; cf. Ex parte Edwards [1989] 1 Qd.R. 139, 142. -- 22 of 32 -- 20 orders the finality needed to attract the principles of issue estoppel. 12 The point . about the release not.· having been taken on 19,December, no issue. estoppel (strictly so called) arises against it. . urn the case .of· .... 'issue-estoppel' it must appear that the prec·ise issue was .previously taken". 13 Nonetheless if the· respondent defeats the claim on this ground it will be because.· the partial . release was required by the coptracts. 14 My J9 December order, however, proceeds on the basis that the applicants were ·not contractually obliged to pro~uce .the release, The prospect of such a conflict makes it necessary · to decide whether the extended principles of estoppel by judgment stated in Henderson v. Henderson, 15 as explained fn Port of Melbourne Authority v. Anshun Pty Ltd (1981).147.C.L.R. 589, preclude the defence. ,TJ::lat., the parties' rights must be determined 0 0 inconsistently!,,if the respondent succeeds for the reason th_at 0 12. 13 14 15 Restatement, Judgments 2d. s. 13c, pp. 133, 138-139; cf. Somodai v. Australian Iron and Steel Ltd (1963) 109 C.L~R. 285, 297-298; Kroll v. Zimmerman 96 N.Y.S. 2d. 369 (1950); United States v. Swift & Co. 286 U.S. 106, 114-115, 119 (1932); System Federation No. 91 v. Wright 364 U.S. 642, 647-648 (1961). Hoystead v. F.C.T. (1921) 29 C.L.R. 537, 561 (per Eiggins J. whose dissenting judgment was approved by the: Privy Council, [1925] A.C. 155, 172; cf. Spencer-.,.Bower and Turner, Res Judicata, 2nd. ed. (1969) p. 131; Halsbury op cit. para. 977; Brewer v. Brewer (1953) 88 C.L.R. l, 14; Milojevic v. ROH Industries (1991) 56 S.A.S~R. 78, 83. ~ ' As I have said, there is no reason to suppose that the respondent intended to relieve the applicants of this burden. (1843) .J Hare 100, ·1.14.-115;_ 67 E.R. 313, 319. -- 23 of 32 -- 21 the applicants did not produce· the release is. a material, 16 although not decisive, 17 consideration in favour of the estoppel. The estoppel depends on an additional conclusion: that this defence was so relevant to the order implementing the decree that it was unreasonable for the respondent not to have relied on it~ 18 That condition is also satisfied. It should have been ap·parent to the respondent's advisers that the omission might contribute to· a conflict with a later determination: for example, in proceedings like the· present. For that reason, and because the omission had every po~ential ("l for last-minute objections likely ' to disrupt completion, ··the 16 17 ~ ) 18 In Chamberlain Dawson J. said ought not circumstances." v. D.F.C.T. (1988) 164 C.L.R. 502, (at 512) :· "contradictory judgments to be pe~mitted save in special In Anshun Gibbs C.J., Mason and Aickin JJ. sai~ (at' 608) that "it has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment".' H·owever, their Honours had previously said that the extension of Henderson to issue estoppel "is to be treated with caution" (at 598-599) and drew attention_to "a variety of circumstances why a party may justifiably refrain from litigating an issue in one proceeding yet with to litigate the issue in otherproceedings eg. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few": at 602-603; cf. Cromwell v. County of Sac 94 u.s. 351, 356 (1876), to which approving reference is made . in Anshun at 603; Arnold v. National Westminster Bank P.L.C.[1991] 2 A.C. 93, 107 where Lord Keith of Kinkel (with whom Lord Griffiths, Lord Oliver of Aylmerton and Lord Jauncey of-·. Tallichettle agreed) mentions remarks of Lord Reid and Lord · Upjohn more than 20 years ago pointing to difficulties in the extension of Henderson beyond cause of action estoppel; and Boles v. Esanda Finance Corporation Ltd ( 1989) 18 N.S.W.L.R. 666; 673-674. Anshun at 602; cf. Brisbane City Council v. Attorney-General (Old) [1979] A.C. 411, 425. -- 24 of 32 -- r·-- ! 22 release issue should have. beeq d~alt with~ No- additional expense would ~ave been incur~ed. The r~spondent had only to raise the·. point. Success .would have been immediate. No evidence was adduced to show why the matter was not raised. Nor did Mr Doyle.offer ari,excuse, except perhaps inferentially by his .submission. thett, prope:r;ly construed, my,. order required the part~al release. On 19.December the parties asked the Court.to decide what t~ey wer.e <;>b;tig~d. to do . to complete. The partial release issue could and plainly should have been dealt with then. ThE!;:r;e. w;.as no. ju?.tJficatiol:l for. not ad.verting. to the matter. The .failure WetS so unreasonable as to sustain the estoppel. 19 No estoppel against town planning issues Mr Keane. Q. C. submitted that the respondent. is . estopped u~der Anshun principles from raising the planning points. There were several limbs to. the contention. First, that 0 0 de Jersey . J. 1 s. order was not conditional on the applicants 1 Q' '• .' ·~ ' "' ' \.. ' . tc:tking. some new step to satisfy cls. 4. anq 5. Secondly, because nothing relevant occurred after 11 June 1991, a determination .in. this + ~ 1\ application that those special copditions had. n9t been satisf~ed by 3 February would conflict with de Jersey.~. 1 s order. Thirdly, it was said, the points should.have been.argued in the Court of Appeal. ' 4 ' • • ' Contrary decisions are not produced it: the respondent succeeds 19 on the planl).ing points!· It is true that Whether the omission. resulted from inadvertence or from some other cause is not germane on the facts of this case: cf. Fidelitas Shipping eo. Ltd v. v/o Exportchleb (1966] 1 Q.B. 630, 640. -- 25 of 32 -- 23 de Jersey J.'s order required completion despite the reSpOndent IS perSiSting in a COntentiOn. that ClS o 4 and 5 remained unsatisfied. "His Honour nevertheless held that these arguments, the correctness of which he found · it unnecessary to decide, should rtot bar the relief. Were I to determine the merits of these points, there would not be any inconsistency with his Honour's reasons. Nor would success by the respondent involve a conflict with the terms of the order, (-; \ which expressly reserved from its operation the present claim i I \_ ) for interest. That this interest dispute was left to be determined later also matters to the submission that the points should· have been raised on appeal. - In the Court of Appeal the respondent was at first content to argue · that, pending a decision -that its planning points had no ~ubstance, the Morgan v. Brisco order should have been refused. The election not to argue the planning points led the Court on ~'April to. refuse to allow the merits to be advanced after the appeal was dismissed. ·It is one thing for the Court of Appeal to shut out debate on issues the respondent initially declined to raise on appeal. It is another to hold that the choice prevents reliance on those matters now.· It may, I accept, have been more efficient had the Court of Appeal decided them. A decision by a single judge is unlikely to end the contest, with the inconvenient result that the points will, almost certainly, -be argued- twice~ Even so, the _points ·_took some time to develop before me, and considerable expense would have -- 26 of 32 -- 24 attended argument about them in the Court of Appeal. A more signific~nt matter is that the interest claim was always to be decided subsequently. Vis-a-vis the present application, it was reasonable for the respondent not to rely on the planning points in the Court of Appeal. So I must turn to them. Incide11tally, they. are not the -same as those raised before Robin A.J. Special conditions 4 and 5 The material provisions of cls. 4 and 5 are: "4. Gazettal of Rezoning Thi~ contract is subject to and conditional upon the Vendor at its cost ,in all thingsobtaining gazettal in the Queensland Government Gazette of the rezoning of all the land sold inclQding the· property hereby. sold and all other property the subject of the said appl~cation from its current zoning .to a Special Facilities (Tourist and Residential Resort) Zone pursuant to the Town Planning Scheme of 'the City of Gold Coast on terms and condi~ions substantially in accordance with the terms and conditions set out in the exhibit hereto .. marked .'Agreed Conditions of Rezoning' by. th~ date for completion. 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. (b) (i) The Vendor shall keep the Purchaser through its -Solicitors fully informed as to and if appropriate, allow the Purchaserthrough its Solicitors and consultants to become involved in all discussions and negotiations between the Vendor and the Gold Coast City Council or between the Vendor. and any other fully empowered authority or body in relation to theRezqning Deed, any agreement relating toforeshore beautification development and/or maintenance, road closure, installation of traffic lights or any ·'' 0 0 0 () -- 27 of 32 -- (ii) (c) 25 other document relating t6 · the proposed development of the subject property (hereinafter called 'the Development Agreements'); (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 (e) 11 11 5. Road Closure This contract is subject to and conditional upon the. Vendor at its sole cost in all things) obtaining by· the date for completion:- (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 iri the plan attached hereto andmarked ' Proposed Road Closure' in compliance with the requirements of · the Land Administration Commission and any other authority havirig jurisdiction in relation tothe same; and (b) gazet tal 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 ·applicationincluding 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 theterms of this· Contract if' the area of the closedroad is such as to allow the development of the saidland substantially in accordance with the gazettedrezoning of the said land. For the purpose of this contract the said. road shall be. deemed to have been permanently closed once its closure has been approved by the Governor-in-Counciland such approval has been notified in theGovernment Gazette. ll· -- 28 of 32 -- 26 The efficacy of the Orders in Council is disputed; The respondent accepts that in terms they stipulate for the zoning required by cls. 4 and 5. It is said, however, that (i) the Orders in Council are, in a phrase, ultra vires; and (ii) accordingly, the gazettals did not satisfy the conditions. The objection assumes that the conditions were satisfied only if the rezonings 20 were both gazetted and valid. The assumption is unwarranted. Clause 4, headed 11 Gazettal of Rezoning 11 , does not speak of 11 rezoning 11 as the relevant condition. Instead the respondent's duty to complete depends upon 11 gazettal of the rezoning 11 • This choice of words is apt to signify that the condition is met by gazettal of a suitably framed Order in Council. Such a construction accords with the expectations the parties may reasonably be supposed to have held when the contracts were made. 0 0 The steps to achieve the rezonings were not simple and, Q as the parties would have appreciated when . entering into the contracts, there was potential for many a slip. The legislation had its complexities; and so there was a chance that an essential preliminary to the rezonings or road closure might be missed by the applicants' solicitors or town planning consultants. Quite a few matters involved the Council and the Minister's office where decisions were beyond the applicants' direct control. The contracts 21 also envisaged 11 discussions 20 21 or, in the case of the cl. 5 road closure, thezoning. Clause 4 (b) ( i) . -- 29 of 32 -- 27 and negotiations" with the local ·authority. and other emanations of government · touching a range of matters, including a rezoning deed and agreements relating to the road closure. Here too was scope for an error which a purchaser anxious to avoid its obligations might seize upon as ~ pretext· not to complete. 22 Accepting gazettal as sufficiently establishing the rezonings largely obviated the prospect of dispute about satisfaction of the conditions. From the ' \. applicants' point of view, this had much to commend it. From the respondent's · perspective there was no ( 1 appreciable risk in resting content with a gazetted Order in ' Council which on its face effected the rezonings. It must have seemed improbable that anyone would attack the efficacy of such an Order in Council. For one thing, s. 4(4) of the Local Government Act 1936 23 and s. 4 ( 1 ) of the Constitution (Executive Actions Validity) Act 1988 presented formidable obstacles. Moreover, the slight risk of challenge was diminished by cl. 4(b)(i). This sub-clause allowed the respondent to monitor progress of, and to become involved in, "discussions and negotiations" with the Council or any other "body" "in relation to the Rezoning Deed or any other document relating to the proposed development." Matters could be checked as they progressed. A purchaser would want such a safeguard if obliged to complete after publication of an Order in Council approving rezonings. 22 23 for example, consent to an illegal condition of rezoning. · relevant because of s. 8.10 of the Local Government (Planning and Environment) Act 1990. -- 30 of 32 -- 28 Other words suppo~t an interpretation which is at odds '{"' I • with the assumption that the contracts required more than an· appropriately worded Order in Council published in the Gazette. The last sentence of cl. 4(a) attaches consequence~ "if the said rezoning is not gazetted 11 and mentions "conditions of ·the gazetted rezoning". Clause 4 (d) provides that the property "shall be deemed to have been rezoned on the date that the rezoning is gazetted 11 . . . . This relates to more than date. In context, the words indicate that gazettal deems () the property to have been rezoned "for the purposes of this ~~ ' contract". The sub-clause has much the same effect as the slightly differently expressed final paragraph of cl. 5. 0 Clause 5 is to be similarly interpreted: see particularly the opening words of sub-cl. (b), "gazettal of rezoning ... ". \ On the contracts' proper construction, the planning points do not matter, which makes it unnecessary to consider them. 0 .The entitlement to interest is proved. I will hear submissions as to the appropriate orders. l; -- 31 of 32 -- Dealing Numb!i!r of Instrument being released:r MORTGAGEE * (Deletl! as necessary) (MORTGAGOR) (Full Name) ~- \ ·'- ·note below FULL RELEASE (2) (3) SUPREME COURT OF QUEENSLAND 4 MAR 1992 K390125D "A" FORM 7 Queensland Real Property Act 1861 - 1985 Real Property Regulations 1986 RELEASE BILL OF MORTGAGE * WESTPAC BANKING CORPORATION ARBN007457141 * WE9Tii;" e s "'ltle9 BAtJff±fMffEil· 'CHI 9994&1 m BLACKEDGED PrY LTD (Complete A or B and rule up inapplicable panel) A. THE MORTGAGEE HEREBY FULLY DISCHARGES FROM THE SAID MORTGAGE THE LAND DESCRIBED IN: (4) I ( -~ VOLUME: 8124 !tRENT REFERENCE . ·'TITLE FOLIO: 32 5428 244 PARTIAL RELEASE DESCRIPTION OF LAND (Current reference to title) f ll whole ofand In title then only Voi/Fol need be shown) (\ \ _;' ~--------------------------------------------------------------------~ E.-SAID- M 0 RTGAG E-+HE-l.AN D-.0 ESCR IBiio....Mtt (5) DESCRIPTION (6) SIGNED THIS 31st DAY OF January, 19 92 ( CUTION (7) BY MORTGAGEE \ telele as necessary) WESTPAC BANKING CORPORATION /\\fi8TP!:e 81i'/111~8 B~ttMITED *PETER nOW·.l.O ;,;c;I'J~AU:i WITNESS T10 l?f)J1 tt·~IIUil by its Attorneys 'PHOO-I:;EB-MQRE'I' and LE:SLIE JOHN MI'ICHELL ---:-:; . < _-}nder Power of Attorney N~. ~921L I ·/;~~- ((,"'le-; -/ ~ r_,..,-"J-:·--:-c . X I ' f../r r· · ({.. t: .. ~ " - £ (... MANAGER.CQRPORATE 7 ~ING // ASSISTAI'IT TO MANAGER,LEl3AL (Signature and Des1gn~tipny ...... :--' . . (Signature and Oes1gnat•on) · .. . c I ;\ >.._ 1 . . , .~ . , I , (O) IN MY PRESENCE (SiQnature) ·· ·' ". 'd " 1 ' \ ·\ ''· 1 .'. l • •· -·· ·A .Just•ce o) the Peace ' MNELLE lJETH \VlNTERFLOOn (Full Name to be printed) -------------------------- (9) CERTIFIED CORRECT FOR THE PURPOSE OF REGISTRATION BY MORTGAGOR (S•gnalure) OR HIS/HER SOLICITOR (Sinncttuw) (Full Name ol Solic•lor to be pr~ntcd) NOTE: 11 ~ lesser estate than an estale in lee simple is being discharged that esJate should be •den11!1ed m A or El. as the case may be. by the interlineal Ion immediately before the words "THE LAND" lhe words e.g. "OF LEASE NO ...... OVER" WF"TPfl(' JH~fi(IWC: f't"\t:lDI"Ir:>A T"'"' nn • .,,..,, GHO!JP Tfllll\1<::; Ml\l\TI\C::F'MRI\1'1' 1\TC:::!•I 01?-Qf.:l': -- 32 of 32 --