Eamon Pty Ltd, Rador Pty Ltd & Blackedged Pty Ltd v Sanwa Home Australia (formerly Balfield) Pty Ltd [1991] QSC 317

'· ..., . ·. .•• ... .. •·,• .,.,. :~~ ' 1·(i·: ~ \' '.fl. ~ .... '.·. ~~ ,'\~ TRANSCRIPT OF Sv q,/311 PROCEEDINGS State Reporting Buteau, 4th F1oor, The Law Courts. George Street, BRISBANE, Q. 4000 Tel. (07) 227.4360 (Copyright in this transcript is vested in the Cro"Wn. Copies thereof must not .be made or sold without the written authority · of the Director, State Reporting Bureau.) ·, SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION ROBIN. AJ No 690 of 1991 EAMON PTY LTD and RADOR PTY LTD and BLACKEDGED PTY LTD and SANWA HOME AUSTRALIA (Formerly Balfield Pty Ltd) BRISBANE .. DATE 27/09/91 JUDGMENT 10.00 A.M . 1 REVISED COPIES ISSUED Court Reporting Bureau Date, I? I / ~ I .19 ~ I' First Plaintiff Second Plaintiff Third Plaintiff Defendant a· -- 1 of 72 -- ( 10 20 30 40 50 60 270991 JUDGMENT HIS HONOUR: I publish my reasons tor concluding that the plaintiffs succeed in this action. The conclusion appears at page 46 of the -reasons whi~h I publish. Govt. Printer, Old. 2 10 30 40 50 60 -- 2 of 72 -- IN THE SUPREME COURT OF QUEENSLAND Before Acting Mr. Justice Robin BETWEEN: EAMON PTY. LTD. RADOR PTY. LTD. No. 690 of 1991 First Plaintiff Second Plaintiff BLACKEDGED PTY. LTD. Third Plaintiff SANWA HOME AUSTRALIA (FORMERLY BALFIELD) PTY. LTD. REASONS FOR JUDGMENT - ROBIN A.J. ,.:l7ft--.. Defendant Delivered ·the 2-6-th day of September, 1991. CATCHWORDS: Vendor and purchaser - specific performance - variation agreement - whether time for completion extended - whether completion due in a reasonable time - rezoning condition - satisfaction of 'purchaser's solicitors - reasonable satisfaction of purchaser - whether a closed road effectively rezoned - condition of demolition of improvements prior to completion whether purchaser intimated demolition a useless act. Local Government Act 1936-1990 s. 4(4), s. 33(5)(6A). Local Government (Planning and Environment) Act 1990 s. 2.21 (3). Counsel: Solicitors: Mr. Keane Q.C. with him O'Shea for Plaintiffs. Mr. Chesterman Q.C. with him Quinn for Defendant. Corrs Chambers Westgarth for Plaintiffs. Gilshenan & Luton for Defendant. Hearing dates: 2-6, 9 September, 1991. -- 3 of 72 -- IN THE SUPREME COURT OF QUEENSLAND BETWEEN: EAMON PTY. LTD. RADOR PTY. LTD. BLACKEDGED PTY. LTD. No. 690 of 1991 First Plaintiff Second Plaintiff Third Plaintiff SANWA HOME AUSTRALIA (FORMERLY BALFIELD) PTY. LTD. Defendant REASONS FOR JUDGMENT - ROBIN A.J. Delivered the 26th day of September, 1991. The Grand Hotel at the intersection of Marine Parade and Labrador Streets, Labrador has been a Gold Coast landmark for many years. It has come into the ownership of the first plaintiff, which is a member of a group of companies associated with the Beaumont family, described as the "Billabong Group". The second and third plaintiffs are other members of the group; they own various pieces of land in the vicinity of the hotel site, in particular adjacent and directly across Labrador Street. The idea was conceived of obtaining the closure of the northern end of Labrador Street and its being acquired from the Crown to produce a large redevelopment site which would enjoy -- 4 of 72 -- IN THE SUPREME COURT OF QUEENSLAND Before Acting Mr. Justice Robin BETWEEN: EAMON PTY. LTD. RADOR PTY. LTD. No. 690 of 1991 First Plaintiff Second Plaintiff BLACKEDGED PTY. LTD. Third Plaintiff SANWA HOME AUSTRALIA (FORMERLY BALFIELD) PTY. LTD. REASONS FOR JUDGMENT - ROBIN A.J. s'27fl,,-, Defendant Delivered ·the 2-e-th day of September, 1991. CATCHWORDS: Vendor and purchaser - specific performance - variation agreement - whether time for completion extended - whether completion due in a reasonable time - rezoning condition - satisfaction of 'purchaser's solicitors - reasonable satisfaction of purchaser - whether a closed road effectively rezoned - condition of demolition of improvements prior to completion whether purchaser intimated demolition a useless act. Local Government Act 1936-1990 s. 4(4), s. 33(5)(6A). Local Government (Planning and Environment) Act 1990 s. 2.21(3). Counsel: Solicitors: Mr. Keane Q.C. with him O'Shea for Plaintiffs. Mr. Chesterman Q.C. with him Quinn for Defendant. Corrs Chambers Westgarth for Plaintiffs. Gilshenan & Luton for Defendant. Hearing dates: 2-6, 9 September, 1991. -- 5 of 72 -- 2 indestructible views in a generally northerly direction across the Broadwater. On 26th April, 1989 an application authorised by the plaintiffs was made to the Gold Coast City Council for rezoning of the plaintiffs' land and also the area of proposed road closure from various existing zonings (and none in the case of the road area) to Special Facilities (Tourist & Residential Resort) under s. 33 ( 6A) of the Local Government Act 1936 as amended. Advertisement of the application (which I presume was undertaken as required by law) attracted a number of objections. Not everybody favoured further high-rise development. The application was approved by the Gold Coast City Council, but Quantum Property Group Pty. Ltd., in whose name the application had been made, appealed to the Local Government Court in respect of conditions imposed. On 22nd May, 1990 a consent order was made in that court embodying a set of revised conditions. The evidence shows there are other interests than the plaintiffs' which will be benefited by development or sale consequent upon the rezoning. The defendant company, incorporated in Australia, is a wholly owned subsidiary of a Japanese corporation, Sanwa Home Inc. , whose shareholders include a number of Japanese banks, some major. That corporation is and has at material times been possessed of very large cash resources; the defendant itself is entitled to make calls on issued partly paid shares up to $48 million. It became interested in acquiring a development site on the Gold Coast and entered into three contracts dated 23rd June, 1990, one with each of the plaintiffs, for purchase of its particular land holdings at Labrador. The contracts (in -- 6 of 72 -- 3 respect of which the plaintiffs are seeking specific performance) were made interdependent and their contemporaneous completion was provided for. Time was expressed to be of the essence in each of the contracts and the date for completion was fixed and defined as 29th March, 1991. Each contract was expressly subject to and conditional upon advice by the Australian Foreign Investment Review Board of its not objecting to the acquisition within 90 days. In the end, that date was not met, but the parties agreed to extend times, and the requisite favourable intimation from the F.I.R.B. was forthcoming in December, 1990. Each of the contracts contained special conditions of which the following, taken from the third plaintiff's, are typical: "4.' Gazettal of Rezoning (a) This contract 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 it 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 conditions substantially in accordance with the terms and conditions set out in the exhibit hereto marked 'Agreed Conditions of Rezoning' by the 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 wit 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. (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 the property referred to in the Contracts of Sale referred to in Special -- 7 of 72 -- 4 Conditions 7 (a) , 7 ( b) hereof and also to that part of Labrador Street which is referred to in Special Condition S(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 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 withthe Agreed Conditions of Rezoning and as illustrated in the plan attached hereto and marked 'Proposed Road Closure' in compliance withthe 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. 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-Council and such approval has been notified in the Government Gazette. 26. Demolition of Improvements (a) The parties acknowledge that the improvements on the subject properties referred to in this Contract and the two interdependent Contracts referred to in Special Condition 7 hereof are generally in two categories namely:- (i) The hotel (hereinafter called 'the hotel') comprising all the improvements situated on the property described in the Contract in which Eamon Pty Ltd is the Vendor (hereinafter called 'the hotel improvements'); and -- 8 of 72 -- 5 (ii) All buildings other than the hotel comprising all the improvements situated on the properties described in the Contracts in which the Vendors are Blackedged Pty Ltd and Rador Pty Ltd (hereinafter called 'the flats and houses'). (b) This Contract of Sale is subject to and conditional upon, subject to sub-clause (c) of this Special Condition, the Vendor at its cost demolishing and removing from the relevant properties the flats and houses prior to completion of this contract and in so doing shall comply with sub-clause (f) of this Clause; (c) (no paragraph (c)) (d) (i) This contract is subject to and conditional upon, subject to sub-sub-clause (ii) hereof, the Vendor at its cost demolishing and removing from the relevant properties the hotel improvements prior to completion of this contract but not before the 31st day of December, 1990 (hereinafter called the demolition commencement date) and in so doing shall comply with sub-clause (f) of this Clause; (ii) If the Purchaser does not want the Vendor to demolish and remove the hotel improvements the Purchaser shall give the Vendor a notice in writing to this effect by the demolition commencement date failing which the Vendor shall proceed to demolish the hotel improvements. (e) The cost of demolition of the hotel improvements shall be borne by the Purchaser which amount shall in all the circumstances, be reasonable and which shall not in any circumstances exceed ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000.00). Upon receipt by the Purchaser of a satisfactory invoice for the said demolition works and upon the satisfactory completion of the said works, the Purchaser shall pay the appropriate amount to the Vendor for the said demolition on completion of this contract. Notwithstanding the demolition of the hotel improvements the Vendor acknowledges that any liquor licence attaching to the hotel premises shall become and remain the property of the Purchaser as from the date for completion of the Eamon Contract; (f) Any demolition to be carried out by the Vendor pursuant to this Special Condition shall be performed in a good and workmanlike manner and -- 9 of 72 -- ,, ' 6 shall not damage the land on which the relevant improvements are situated and shall not interfere with any services supplied to or over the subject properties. In carrying out the demolition works the Vendor shall obtain all necessary permits for such works and shall ensure that the requirements of the Gold Coast City Council and any other duly empowered authority or body relating to the demolition and removal of the said improvements are complied with. After demolition and removal of demolished improvements the Vendor shall cause the property hereby sold to be left in a clean and tidy condition by the date for completion hereof; and (g) (no paragraph (g)) (h) If the Vendor has demolished the improvements as is provided for in this Special Condition and 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 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 authorized and shall immediately pay the deposit and all interest earned thereon to the Vendor." The difference between the temporal element in Special Condition 26(b) and (more to the point in this litigation) (d)(i) which refer to "prior to completion" and Special Conditions 4(a) and 5, which use the expression "by the date for completion" is to be noted. The former is apt to describe the event of completion or settlement if and when it actually occurs, rather than a date nominated in advance as one on which the event ought to happen. See Dainford Limited v. Smith (1985) 155 C.L.R. 342, 365, per Brennan J. See also per Gibbs C.J. (with whom Dawson J. agreed) at 349-50. Mason J. agreed generally with Brennan J. The consequence is that the plaintiffs' compliance with Special Condition 26(d) does not fall to be tested until the event of -- 10 of 72 -- 7 completion, which requires co-operation by attendance and tender of both vendor and purchaser, occurs. Without the purchaser's attendance the moment at which the vendors would have to perform is not reached. (Cf. Dainford Ltd. v. Juana Pty. Ltd. (1986) 1 Qd. R. 396, 401.) These considerations are of importance, as the Grand Hotel is standing to this day. THE PARTIES AND THEIR AGENTS; MR. NOMURA The plaintiffs' principal witness was Mr. G.F. Smith, who described himself as Chief Executive of the Billabong Group, to which each plaintiff belonged. Mr. Smith has a substantial interest in a company which had the plaintiffs' properties under option; he was instrumental in assembling the large redevelopment site and obtaining planning approvals, with a view to locating a purchaser, such as the defendant. The company holding the option, which has lodged a caveat over the properties, stands to profit substantially if the contracts sued upon in this action are performed. The caveat will be removed to permit completion. Mr. Smith's brother-in-law and neighbour, Mr. P.L. Bond is a principal of Resort Investments Services Pty. Ltd., which is shown as the plaintiffs' real estate agent in the contracts. The plaintiffs' solicitors, as shown in the contract, are Chambers McNab Tully & Wilson, the successor firm of which has become Corrs Chambers Westgarth. Mr. Smith executed the contracts in the plaintiffs' interest. The defendant, incorporated under the name Balfield Pty. Ltd., which it had at the date of the contract, has as its directors a number of Japanese gentlemen, one of whom, Mr. Matsui, (through an interpreter) gave evidence, and -- 11 of 72 -- '' 8 Mr. Rudkin, a partner in the defendant's solicitors shown in the contracts, Primrose Couper Cronin.Rudkin. On about 9th April, 1991, Mr. Rudkin's firm ceased to act for the defendant for some purposes, and were replaced by Gilshenan & Luton. Mr. Rudkin continued to be a director of the defendant, and it seems clear from the claim for privilege he made in the defendant's discovery that he continued to act as its solicitor for some purposes. None of its Japanese directors speaks any useful English; neither Mr. Rudkin nor anyone connected with the plaintiffs speaks Japanese. While the plaintiffs and the defendant could make contact through Mr. Rudkin, if direct contact were required, a bilingual intermediary was necessary. Mr. Rudkin and his client and co-directors needed such an intermediary to communicate as well. That function was served by a Mr. Don Nomura, who was not called to give evidence, although a statement of his was admitted (as ex. 114) under s. 92 of the Evidence Act 1977. His office is in Tokyo, and there he met Mr. Bond in September 1989. Mr. Nomura arrived on the Gold Coast with Japanese representatives of the defendant or its holding company within the next couple of months, looking for a suitable development site. From those contacts the contracts eventually resulted. The evidence shows Mr. Nomura to be an entrepreneur in his own right and indicates that some substantial consideration will go to him from the plaintiffs' side ( through their agent, Resort Investment Services Pty. Ltd.) if the contracts are completed. The plaintiffs were at pains to establish that Mr. Nomura was the defendant's agent generally in what he said and did, with a view to making the most -- 12 of 72 -- 9 of various statements of his suggesting that the defendant wished to delay progress on the contracts, if not defeat them at various times. The basis of the claim was that Mr. Nomura was the point of contact for the defendant. Much was made of the defendant's having in its possession documents addressed to Mr. Nomura by the plaintiffs' side. It was the defendant which tendered ex. 114. Communications passing between Mr. Nomura and Mr. Rudkin are in evidence. It is plain that Mr. Nomura was the defendant's agent, but he was not necessarily acting as its agent in everything he did, particular given his pecuniary interest in achieving completion of the contracts. His position was often pivotal, as in the case of meetings of directors of the defendant held in Tokyo with Mr. Bond (on 5th February, 1991) and Mr. Smith (on 7th February, 1991). On those occasions, the accuracy of Messrs. Bond and Smith's accounts of what was said (and likewise Mr. Matsui's) depends crucially upon Mr. Nomura having communicated fully and accurately what was said. The participants were entirely in his hands, as to whether their statements were effectively translated. The plaintiffs were resistant to suggestions that Mr. Nomura was their agent, but it seems to me he was necessarily that for some purposes . He was certainly used (as an alternative to Mr. Rudkin) when the plaintiffs wished to communicate with the defendant. On 8th April, 1991, at a time when Mr. Smith says he knew that the defendant was not going to complete, Mr. Smith wrote to Mr. Nomura: "I am still of the opinion Don that you are acting for both ourselves and Sanwa which I must add is an unenviable position, however if you should decide that you are no longer able to represent both parties I -- 13 of 72 -- 10 would appreciate your early advice as I believe it is in our best interests to very quickly appoint a Japanese firm to assist us." In my view, Mr. Nomura was acting as the agent of both sides, and, additionally, as a "free agent" looking after his own interests. Such a situation calls for careful scrutiny of his actions and statements, which should not uncritically be used against either side in this case. There are, however, documents including communications from Mr. Rudkin to Mr. Nomura (such as exs. 106 and 107) which are sufficiently within the defendant's circle to establish that statements of Mr. Nomura to the effect that the defendant was anxious to avoid or delay performance of its obligations under the contracts are wholly reliable. THE DEFENDANT'S UNWILLINGNESS TO COMPLETE The defendant became ambivalent in its attitude to the contracts at an early stage. However, it did not avail itself of the opportunity to defeat them by relying upon failure of the provision in Special Condition 15 subjecting each contract to approval by the Foreign Investment Review Board on terms and conditions reasonably satisfactory to it within 90 days. That time limit was not met, but the defendant kept the contract on foot. On 26th December, 1990, Mr. Nomura wrote to Mr. Rudkin: "1) FIRB: Thank you very much for your work to successfully obtain the permit for the project by FIRB. Sanwa was hoping to delay the timing of the approval but I explained there was no choice but to accept it as it was. They originally requested to delay the payment of $700,000 but I persuaded to pay it promptly. -- 14 of 72 -- 11 2) Because of the tight funding situation in Japan where the funding environment had been completely changed by the governmental guideline put on financial houses in recent months, Sanwa will be struggling to raise $28 million for the overseas development project even though they have more than sufficient securities. Therefore, they are asking us to extension of the settlement timing as possible say minimum 6 months or so. arrange long as I would like to discuss how we should approach the Vendor in beginning of the new year. I have told Sanwa that this is a contract and they are unable to pull out just because of the funding difficulties." Mr. Rudkin's response is instructive. A long letter of advice (a copy of which was made available to Mr. Bond) contains the following: "Generally a purchaser can only rely on a breach by a vendor if the purchaser should be an 'innocent' party by being willing at the time for completion to perform the contract. In this case this would mean that Sanwa would have to put us in a position to be able to tender the balance to the vendors on the due date for completion. In other words, Sanwa would need to provide us with $26,460,000.00 (assuming the full deposit of $1,540,000.00 has been paid) to allow us to make a tender. We would then show the vendors that we had the ability to complete (i.e. we have the money) and if the vendors cannot show us that the road closure condition has been satisfied we can refuse to settle and terminate the contract. We would then send the money back to Sanwa and take necessary steps to enforce Sanwa's rights. The danger in the approach outlined above is that if we make a tender and the vendors had satisfied the road closure condition then if we did not pay the purchase price to the vendors Sanwa would be in breach, the consequences of which we shall refer to later. At this stage the vendors' representative has indicated to us that the vendors may well not have road closure finalized by the 29th March, 1991. However, we assume that if the vendors noticed that Sanwa was reluctant to consider a proposed extension then the vendors would try very hard to at tempt to obtain satisfaction of the relevant conditions by the date for completion. We do not know enough about the vendors' situation to give Sanwa any clear guideline -- 15 of 72 -- 12 as to whether or not the vendors would meet the said deadline. There is therefore a substantial element of uncertainty applying in this regard. Therefore the alternatives available to Sanwa are:- 1. Wait and see if the vendors will be ready on the 29th March; or 2. Agree to an extension of time with the vendors in the near future. We note that Sanwa would seek an extension of six months yet we understand that the vendors would probably only require an extension of one or two months. If eventually Sanwa did agree to an extension with the vendors then the agreed extended time limit would replace the previous time limit." Mr. Rudkin also made available to Mr. Bond a copy of his following letter to Mr. Nomura of 21st January, 1991, which reads inter alia: "We confirm Paul Bond's advise that Sanwa is in a position to settle the said transaction on the due date from its own resources but that it would prefer to resort to bank funding in Japan for this purpose. We understand from yourself and Mr. Bond that in order for Sanwa to finalize matters with its bankers in an orderly fashion it seeks a variation of contract whereby it will have a period of sixty days from the granting of the last of either Local Government consent (rezoning) or Land Administration Commission consent (road closure) within which to settle. As you know, time is of the essence in this contract and would, as we understand it, remain of the essence if a variation is agreed to. The contract documentation is subject to and conditional upon the vendor obtaining gazettal in the Queensland Government Gazette of the rezoning of all of the land sold to a 'Special Facilities (Tourist and Residential Resort) ' Zone. We understand from the vendors' Solicitors that a great deal of the work relating to the proposed rezoning has been attended to and they anticipate rezoning matters being finalized in the near future. The contract also provides for the vendors to obtain the permanent closure of that part of Labrador Street as defined in the contract prior to the date for completion. The relevant clause in the contract provides for gazettal of rezoning of the said road to the same zoning as the balance of the land. We -- 16 of 72 -- 13 understand from the vendors' Solicitors that they anticipate it may take approximately a further six weeks (i.e. early March) within which to finalize these matters . We should point out, however, that the said time estimate is only an indication of the time involved as one can never be sure of these things. If the parties did agree to the sixty day variation and if road closure and rezoning were finalized say in early March, this would then require settlement from Sanwa in early May, 1991. Could you please check with Sanwa that it does require us to attempt to negotiate such a variation to the contract. As we understand it, the variation would allow for settlement within sixty days after satisfaction of rezoning and road closure and not sixty days from the current date for completion namely March, 1991. In other words, if the vendors obtain satisfaction of rezoning and road closure by say early February in that case settlement would be required by early April. We anticipate also that if we do formally seek such a variation to the contract that the vendors' Solicitors will seek some written confirmation from Sanwa's bankers that they are ready to fund the purchase of the said property subject only to rezoning and road closure being satisfied. We suggest you warn Sanwa of this possible requirement. Also for our benefit only, could you please advise whether the proposed funding would involve the bankers taking any security over the property in question or would the transaction be funded entirely on Sanwa's Japanese assets. As stated previously, we believe that it may well be in Sanwa's best interests to retain the hotel for as long as possible because:- 1. It could product income for Sanwa. 2. It could assist in the licensing process. 3. Public interest. We comment on each of these points as follows:- II Mr. Matsui (pp. 229-230) clearly stated that the defendant wished to delay the commencement of actual development of the site, which the F.I.R.B. approval required to be underway by 30th -- 17 of 72 -- 14 June, 1992. His evidence (p. 235) suggested the defendant had not given up all interest in the site. He explained the defendant's desire to delay construction as follows: "The reason is because I heard·from many people about the situation in Australia, the fact that we were in a recession and that - the fact that in Australia a law exists which says that when you erect condominiums half of the units have to be sold to Australians, and so if we had to sell in this time of depression - recession, then it would be best to delay." He denied (p. 246) at least in respect of 9th April, 1991, that he hoped to be able to acquire the plaintiffs' properties at a cheaper price. There was no valuation evidence given in the case, but Mr. Rudkin' s, from the standpoint of a solicitor practising on the Gold Coast, confirmed that from the date of the contracts, the market had fallen. The size and location of the properties means that only a purchaser with a very long pocket would be interested. The conclusion is inescapable that by the end of 1990, the defendant wished to be free of the contracts if possible, or alternatively, to delay completion, and an outlay of $26 million or thereabouts as long as might be done. In my view, the defendant was particularly concerned to ensure that it did not have to complete on 29th March, 1991, and did not wish to take the risk that it might be put in default then by a tender of due performance by the plaintiffs. The evidence suggests that if it had wished to complete on that date, the defendant could have found the money from its own resources. THE PLAINTIFFS' ABILITY TO COMPLETE The plaintiffs have all along been willing and anxious to complete. They had committed themselves to perform a contract -- 18 of 72 -- l 15 which contained a number of difficulties arising from the need for government action to close off part of Labrador Street bordered by their properties and to obtain rezoning of the lands they had agreed to sell, which included the road. The road was, of course, Crown land, and not theirs. Mr. Smith appreciated the extent to which his interests were in the hands of the government, and as early as 1st November, 1990 was writing to Ministers seeking assistance to ensure that the indicated 7-11 months period required for all the necessary "procedures" be reduced. (See ex. 56.) I regard the writing of letters at this time as a precautionary measure, and something designed to open channels of communication, rather than as an indication of Mr. Smith believing the plaintiffs could not get ready. Mr. Smith clearly enough recognised the risk, and indeed, on 19th October, 1990 (ex. 58) the plaintiffs' solicitors formally wrote requesting an extension of the date of completion by one month. No extension resulted. As Mr. Smith said more than once, the timing was always going to be "tight", and to an extent, the plaintiffs were not in control. The plaintiffs did delay matters in some respects once appearances were that completion would be delayed beyond 29th March, 1991. This happened in respect of the payment of $1.3 million to acquire part of Labrador Street from the Crown and in respect of the demolition of the Grand Hotel, which, of course, was operating licensed premises. It is easy enough to understand that weighty practical considerations would militate against rushing in too early in either respect. The defendant has not persuaded me that the plaintiffs could never have completed on 29th March. In the events which happened, they -- 19 of 72 -- 16 were allowed extra time. If those events had not happened, it is simply impossible to say whether or not governmental actions necessary would have been achieved in time. The evidence does show that over the Queen's birthday weekend, the plaintiffs were able to secure extraordinary co-operation from officers of the government, culminating in publication of an extraordinary Government Gazette on 11th June, 1991. The situation of the hotel requires special mention. With the wisdom of hindsight, the plaintiffs' agreement to demolish without any assurance that the defendant would complete, without even the provision of some kind of adequate security to cover loss flowing from the destruction of an income producing chattel, appears unwise. The property was mortgaged to Westpac, which had an obvious concern with the fate of the contracts, the subject properties, and the hotel in particular. The plaintiffs were under considerable financial pressure from Westpac. Common sense indicates, and I accept that both were anxious to collect the sale proceeds, but not to destroy the hotel unless assured of completion. The trial proceeded without evidence of the terms of the Westpac mortgage, the defendant abandoning an attempt to get a document into evidence as Westpac' s usual security. I nevertheless proceeded on the basis that Westpac' s mortgage would preclude demolition of improvements without its consent (indeed I conceive that the general law would work in the same way) but that Westpac would all along have consented to demolition without ceremony to allow completion to occur, once completion was a realistic prospect. Exhibit 59 (dated 26th August, 1991) confirms this as Westpac's current stance. -- 20 of 72 -- 17 The plaintiffs were active before the end of 1990 in attempting to persuade the defendant to retain the hotel. The arguments in favour of doing so certainly persuaded Mr. Rudkin, who was quite active in attempting to influence the defendant along the same lines. His efforts were to no avail, the defendant throughout adhering to its contractual right to have a site cleared of the hotel. It did agree to an extension of the date when it was to indicate its attitude to demolition. Not until after 11th June, 1991 did the defendant first indicate in a pleading any dissatisfaction on account of non-demolition of the hotel (all other improvements on the properties having been demolished) . In correspondence passing between solicitors between March and June 1991, the matter of demolition of the hotel was barely mentioned. The correspondence focussed on issues of road closure and rezoning. The plaintiffs contend the defendant has set out to trap them in this respect. Ultimately, should they succeed, they are going to have to take the risk and demolish the hotel, if they are to be able to complete themselves, in terms of the contract. The plaintiffs had made a contract with Carvel Constructions Pty. Ltd. for demolition of the Grand Hotel by early February 1991 . Exhibit 65 is its contractor's subcontract with the company of Mr. Patterson (who gave evidence) for the actual work. I am satisfied that formalities preceding demolition (such as disconnection of power and obtaining of permits) could be expedited and achieved within a day or so, but that physical demolition thereafter would require about a week. Mr. Smith countermanded any demolition work on the hotel, for the weighty -- 21 of 72 -- 18 practical considerations alluded to above, whose appropriateness has been borne· out in practice by subsequent events. The evidence reveals various proposals put forward from time to time for the involvement of Mr. Smith or Mr. Bond or associates of theirs in operating the hotel. The defendant suggested that these people or the plaintiffs as well were actuated by motives of money-making in this way to seek to avoid the carrying out of the plaintiffs' obligation of demolition. I reject any contention along those lines, and accept Mr. Smith's evidence that whatever might have been made out of operating the hotel would be of no significance alongside the prospect of receiving the $28 million sale price of the properties. Mr. Smith was party to a news item published in the Gold Coast Bulletin which mentioned the hotel continuing in business for years. In my view this is satisfactorily explained in terms of protecting the hotel's goodwill, retention of the staff's loyalty, and, generally, promotion of the "Australis Point" development. It happened at a time when the plaintiffs were (as they probably still are) hopeful of persuading the defendant of the wisdom of retaining the hotel (whose demolition is, of course, at the defendant's expense under the contracts). I do not consider it in the least evidence of the plaintiffs' repudiating their contractual obligations. I find the plaintiffs are and have always been ready, willing and able to demolish the Grand Hotel so as to be in a position to provide a site cleared of it by any date on which they believe completion will take place, or any date upon which they decide or are required to tender performance. -- 22 of 72 -- . ' 19 While the plaintiffs might have harboured misgivings internally as to their ability to complete by the original date for completion ( 29th March according to the contracts but extended, by reason of that day's being Good Friday to 2nd April, 1991 by condition 2 in respect of the Rador Pty. Ltd. and Blackedged Pty. Ltd. contracts, and under s. 61 ( 3) of the Property Law Act 1974 as amended in respect of the Eamon Pty. Ltd. contract), the plaintiffs' representatives did not reveal any concern to the defendant. Mr. Matsui agreed that at the Tokyo meeting on 7th February, 1991, Mr. Smith had sought no extension of time; he was intimating that the plaintiffs would be ready to complete on the due date. VARIATION OF THE CONTRACTS It matters little what led to the variation of the contracts which the parties agreed to by solicitors' letters on 8th and 11th March, 1991, although I have no difficulty in concluding that it was the defendant's interest in delaying completion. In my view, it also matters little what was said at the meetings held in Tokyo on 5th and 7th February, 1991, although the second (or both) constituted a step in the process of variation. It is common ground between Mr. Smith and Mr. Matsui that the Japanese directors present alluded to an edict of the Bank of Japan which imposed restrictions on the borrowing of funds for investment in real estate outside Japan. I am at a loss to understand why this subject should have been raised, except in the context of justifying a request by the defendant for further time to complete, in line with its attitude from, the latest, December 1990. Again, it seems immaterial whether the defendant's -- 23 of 72 -- 20 attitude was brought about by a desire to comply with the spirit of that edict (because it was ultimately owned by a number of responsible Japanese banks), notwithstanding that it may have been free to use its own resources to complete, or by taxation or other reasons for preferring to utilise borrowed funds or by a hope of acquiring the plaintiffs' properties more cheaply. Mr. Rudkin' s firm put forward the following "without prejudice" offer on 8th March, 1991: "We have received instructions from our client to the effect that it will agree to a variation of the contracts in this matter as follows:- 1. Your clients are to satisfy the purchaser's Solicitors that the vendors have attended to and finalized all outstanding matters within their control in relation to the rezoning of the subject properties and the road closure by 5 p.m. the 28th day of March, 1991. This will include the payment of all monies required by the relevant government departments including the purchase price of that part of Labraqor Street to be closed and the payment of all relevant fees. 2. Once the matters referred to in Item 1 have been attended to you are to provide us with a notification of the same and also provide letters from the Local Government Department and the Land Administration Commission confirming that all matters relating to rezoning and road closure within the control of the vendors have been attended to and finalized. 3. Upon receipt by us of the notification referred to in Item 2 Sanwa will have fourteen days within which to satisfy itself that the material provided by you in connection with the obligation of the vendors under Item 1 satisfies Item 1 . Sanwa will then notify the vendors of its attitude under this i tern by a further notice through this firm to yourselves within the said period of fourteen days. 4. Completion of the contract will occur sixty days from the date on which we give you the notice under Item 3 confirming Sanwa's satisfaction with the matters referred to therein. -- 24 of 72 -- 21 5. (a) The deposit monies paid to date including half of the interest will be paid to your client after satisfaction of Items 1, 2, 3 and 4 and once Deeds have issued from the Department of Freehold Land Titles relating to all of the properties sold including the Deeds relating to the area previously comprising part of Labrador Street. This will also involve the issue of new Deeds relating to cancelled Lots 98 to 102 and 113 to 115 on R. P. 28583 which we understand will be cancelled on registration of R.P. 810218; (b) The deposit monies will only be released on the basis that the securities and charges affecting both the properties sold and the assets and undertakings of vendor companies will as at the date of the payment of the deposit apply to an extent no greater than the extent of those securities and charges as at the date hereof. We will require a certificate from each mortgagee and charge holder confirming the total amount due and payable to that mortgagee and charge holder as at the settlement date. The deposit monies will only be released if there is no chance of the secured debts exceeding the balance payable pursuant to the contract on settlement. We require a further acknowledgment from each mortgagee or charge holder that the mortgagors are not in breach of the mortgages as at the date of payment of the deposit and that the mortgagees and charge holders are aware of the general terms of the sales and will not make any move to enforce their securities before the date for completion of the contract. (c) Our client will take one half of the interest earned on the deposit monies and the other half will be paid to your client with the deposit. (d) We will require an acknowledgment from the vendors that the deposit monies will only be used to reduce the debts secured in favour of the principal mortgagee which we understand is the Westpac Banking Corporation. (e) We will require a certificate from each of the vendors that there is no current application for winding up any of the vendors; that the vendors have not entered into any Scheme of Arrangement for the -- 25 of 72 -- 22 benefit of their creditors; that the vendors have not resolved to go into liquidation and that the vendors have not been put in the control of a liquidator, receiver or official manager. (f) We will require an acknowledgment from each director of each vendor company and from Geoffrey Smith that the information supplied to us under Items S(b), S(d) and S(e) are true and correct. (g) Simultaneously with the payment of the deposit monies we will require a withdrawal of. the Consent Caveat K59331C by Beechbank Investments Pty Ltd and also of any other caveat or dealing applying to any of the properties hereby sold other than mortgage securities referred to. 6. The terms of this variation shall be recorded by way of an exchange of correspondence between the Solicitors for the vendors and the Solicitors for the purchaser which shall include an acknowledgment that all parties will do all things reasonably necessary to give effect to the terms of the agreed variation. 7. It will be acknowledged that Sanwa requires demolition of the hotel improvements by the date for completion of the contract. 8. Time shall remain of the essence. The offer contained herein remains open for acceptance until 4 p.m. this afternoon 8th March, 1991. We would be grateful if you could consider the proposition contained herein and telephone the writer to discuss the same as soon as possible." The reply, by facsimile transmission the same day was: "We refer to your 'without prejudice' date and confirm that the vendors variation of the contracts proposed following: letter of even agree to the subject to the 1. It must be clear that the reference to matters 'within the control of the vendors' relates to documents and information required to be submitted or other acts to be done directly by the vendors. Obviously, to a certain extent it could be said that the obligation to obtain the rezoning is, ultimately, in the control of the -- 26 of 72 -- 23 vendor. Therefore it should be understood that, provided it is only the internal mechanisms of the relevant departments outstanding, the requirement that our clients have done all within its control is fulfilled. 2. In paragraph 3 of your letter the word 'reasonably' should be inserted before the word 'satisfies' in the 6th line. 3. In paragraph S(a) the deposits should be released after satisfaction of items 1, 2 and 3 only. 4. Paragraph S(b) should be deleted and substituted by the following:- The deposit monies will only be released upon receipt from the vendors of a letter from its mortgagees and secured charge holders that:- (i) the total amount secured by the mortgages and charges does not at that date, and will not at the date for completion, exceed the balance purchase price payable under the contracts; (ii) the mortgagees and secured charge holders will not make any move whatsoever to enforce their securities before the date for completion of the contracts. As we understand it, upon release of the deposit you will be immediately lodging a caveat on behalf of your client. Obviously, no mortgagee would ever advance any monies until suitable arrangements had been made with any caveatee of the property. Accordingly, your client will have ample protection in this regard. 5. The caveat referred to in paragraph 5 ( g) is lodged to secure certain rights under a separate agreement. Accordingly, Beechbank Investments Pty Ltd, for whom we also act, does not wish to release the caveat until completion. However Beechbank Investments acknowledges your client's interest in the lands sold pursuant to the contracts and agrees to do nothing inconsistent therewith. In addition it agrees to deliver a withdrawal of the caveat upon completion. Please advise if the above is acceptable to your client." Mr. Rudkin's firm replied on 11th March, 1991: -- 27 of 72 -- 24 "We refer to our correspondence of the 8th March and confirm that the matters referred to therein have been agreed on the basis of the said correspondence. Could you please remind the vendors that it is very important to Sanwa that all possible steps are taken by the vendors to finalize matters in relation to rezoning and road closure by the end of this month. We would appreciate it if you could provide us with reports detailing any developments in this regard. In particular, we look forward to the receipt of a letter from the relevant departments once the matters referred to in Item 1 of the said correspondence have been attended to." SATISFACTION OF PURCHASER'S SOLICITORS Letters from the relevant departments, as requested, were made available. The first was of 20th March, 1991, from the Department of Lands, which advised in relation to road closure that "all requirements of this Department in this matter have been satisfied. 11 Gazettal on 16th March, 1991 of permanent closure of the road was reported, as well as lodgment of surrenders of the first and third plaintiffs' certificates of title in the Division of Titles five days earlier. It was anticipated that on 5th April, 1991 new deeds of grant in favour of those plaintiffs would be forwarded to the Registrar of Titles for enrolment. Mr. Rudkin pronounced himself satisfied with that letter. On 26th March, 1991 he was provided with a copy of the Department of Housing and Local Government's letter to the plaintiffs' town planning consultants of the previous day. The letter read: "Following local authority. approval to the above rezoning, the application has now been received by the Department for the decision of the Governor-in-Council. This Department is presently assessing the application and will notify the Governor-in-Council's decision in due course. -- 28 of 72 -- 25 I wish to confirm that there are no further requirements to be satisfied by the proprietors of the land being rezoned." Mr. Rudkin sent Chambers McNab Tully & Wilson the following communication on 27th March, 1991: "We thank you for your letter of the 26th instant in which you enclosed a copy letter from the Department of Housing and Local Government. Both from the terms of the said letter and from our enquiries it is clear that all the vendors have achieved with the Department is the lodgement of the application for rezoning. It is therefore possible that the Department may have various requisitions and requirements of the vendors before all requirements of the Department have been satisfied. We are therefore not satisfied that your clients have attended to and finalized all outstanding matters within their control as it is quite clear that further matters may need to be attended to by your client. We are not in a position to make a decision on this point on behalf of our client but thought we should point out to you in view of the current time limits that we have written to our client today making observations similar to those contained in this letter." The enquiries referred to were of Mr. McDonnell, a town planning officer, who had in fact completed his assessment of the rezoning application on 25th March, 1991, and so marked the file. He then had no further requirements of the vendors, and indeed, as a matter of history, there have been none since. Mr. Rudkin said his enquiries were made on 27th March, 1991, and that Mr. McDonnell on that day spoke in terms of the application still being assessed. Mr. McDonnell was not disposed to dispute that, and it would be surprising in the extreme for a public servant in his position to pre-empt what his Minister and the Governor in Council might ultimately do. Mr. Rudkin, in giving evidence, maintained that he honestly held the attitude of non-satisfaction mentioned in his letter. He laid much emphasis on the -- 29 of 72 -- 26 inconsistency between that part of the Department's letter under review which referred to the application being in the course of assessment and that part which referred to there being no further requirements to be satisfied by the proprietors. The parties agreed that the obligation of Mr. Rudkin was to act honestly in assessing his state of satisfaction, in reliance on Meehan v. Jones (1982) 149 C.L.R. 571, and I will say straight away that the plaintiffs have not satisfied any onus which may lie upon them to persuade me that Mr. Rudkin acted otherwise than honestly. If he was required to act reasonably, I do not think he did that. An objective assessment of the Department's letter of 25th March, 1991 would be that the letter established that the vendors by its date had attended to and finalised all outstanding matters within their control in relation to the rezoning. Mr. Rudkin' s close association with the defendant, the presumed value of his firm's retaining it as a client and his appreciation that it might be a party to a contract for a price which exceeded the declining market value of the land were made much of by Mr. Keane Q.C., the plaintiffs' counsel, doubtless to make out the plaintiffs' plea that his ( and his client's subsequent) determination of the question of satisfaction was vitiated by some collateral motive, but it is clear that situations may often arise in which a party to a contract, or his solicitor is made the judge of some matter seriously affecting parties' contractual position. Meehan v. Jones was such a case, likewise Powell v. Jones (1968) S.A.S.R. 394, of which much use was made by Walsh J. (Mason J. agreeing) in Godecke v. Kirwan (1973) 129 C.L.R. 629, 641-2. While the honesty of an assessment -- 30 of 72 -- 27 which is unduly influenced by collateral considerations may be questionable, it is, in my view, unrealistic to expect a person in the position of Mr. Rudkin to put such considerations out of mind absolutely and deny them any influence at all. From the first, he has given the same justification for his lack of satisfaction. It is not to the point that a more "robust" or "independent" conveyancer might have formed a different opinion. Mr. Johnson and Mr. Bickley, of the plaintiffs' solicitors, attempted to get Mr. Rudkin to identify any further matters which their clients should or could attend to, but there was no response other than that departmental assessment might lead to some further unspecifiable requisition issuing. There was talk of the letter of 25th March being replaced by another following the language of the Department of Lands' letter; however, the plaintiffs' solicitors considered they would be hard pressed to obtain any further letter, and Mr. Rudkin was careful not to commit himself or the defendant to accepting such a letter if it should be obtained. Ultimately, it was, when the Director of Local Government on 9th April, 1991 advised the town planning consultants: "I wish to confirm that this Department has made a recommendation to the Minister for Housing and Local Government on the above rezoning, but the ultimate decision will be made by the Governor in Council in due course. I also wish to confirm that, as from the date of my last letter there have been no further rezoning requirements, nor will there be any in the future, that need to be satisfied by the proprietors of the land being rezoned. Indeed, the only outstanding rezoning matters relate to the decision of the Governor in Council and the gazettal of that decision." -- 31 of 72 -- 28 Mr. Rudkin's office received a copy of that letter by facsimile transmission at 5.00 p.m. that day. Mr. Keane got Mr. Rudkin to agree that no reasonable person possessed of that information from the Department of Housing and Local Government could have the view that there were outstanding requirements to be finalised by the vendors within their power in relation to the rezoning. Nothing came of Corrs Chambers Westgarth' s attempts to persuade Mr. Rudkin to revise his opinion; indeed, access to him was unavailable; in part or in whole this was attributable to his taking an extended Easter break. On 5th April, 1991 his secretary in his absence signed a letter advising the defendant's intention to apply to the court under s. 70 of the Property Law Act the following week. The day before, Corrs Chambers Westgarth had written a letter, not transmitted until the Department of Housing and Local Government's letter of 9th April, 1991 was available, which concluded: "If we do not receive your advice that you are satisfied in terms of the exchange of correspondence of 8th March, 1991 and that your client is to give notice of same, our client proposes to initiate an application to determine the matter." THE DEFENDANT'S SATISFACTION Before transmission of that letter (which enclosed a copy of the Department's improved letter) the directors of the defendant had held a meeting in Tokyo that same day to resolve: "To instruct Gilshenan & Luton as Sanwa was not satisfied that the material provided by the vendors in connection with the obligation of the vendors under Item 1 of the correspondence of the 8th March, 1991, satisfied the said Item 1." That decision was never in doubt. Minutes recording it had been prepared by Mr. Rudkin in advance, and transmitted to Japan, -- 32 of 72 -- 29 together with other documents appropriate to engaging Gilshenan & Luton and instituting proceedings in this Court. The directors present in Tokyo were Mr. Matsui, Mr. Yamanaka, Mr. Inoue and Mr. Tamao. Mr. Nomura was present in Tokyo, acting as an interpreter. At times, Mr. Rudkin was "present" by means of a telephone link. He took no part in the meeting, other than to receive Mr. Nomura's account of what was going on. Those in Tokyo had available to them, so far as Mr. Nomura provided adequate translations, a letter of advice from Gilshenan & Luton of 9th April, 1991 and a report dated the previous day addressed to that firm by Mr. Peter Bell, a town planning and development consultant. The report dealt in a theoretical way with everything which might go wrong for the rezoning application pending final approval by the Governor in Council and gazettal. The report outlined scenarios which could happen, for example, if some environmental issue arose. Mr. Bell gave evidence. He had no reason to think that any misfortune might befall the application in respect of the plaintiffs' land and, indeed, admitted he had provided a report of 11th May, 1990 (ex. 108) in respect of the development. That report concluded: "As rezoning agreements are quite often prepared, the procedures associated with their implementation are well established and should not lead to inordinate delays. CONCLUSION Having regard to the above point, we have formed the opinion that the proposed development as depicted on the amended plans, does comply with Council's requirement and is capable of implementation in that form. . .. " Gilshenan & Luton's letter (ex. 29) stated: -- 33 of 72 -- 30 "We understand that Messrs Primrose Couper Cronin Rudkin have already advised that they are notsatisfied as provided under paragraph numbered 1 of that letter as qualified by the response thereto. It may be that in unnecessary for yourparagraph 3. However think it ought. those circumstances it is company to further deal withfor the sake of completion we In our view where the Minister has yet to examine the rezoning application and make his recommendation to the Governor-in-Council it cannot be said that all outstanding matters within the Vendor's control as explained in the Vendors ' solicitor's letter of 8 March, 1991 in relation to the rezoning were attended to by 5.00 p.m. on 28 March, 1991. As a matter of both theory and practice there are very substantial discretions yet to be exercised in relation to the rezoning application. A departmentalreport upon the application is apparently presently being prepared for the Minister. The Minister will then proceed to consider the application and make a recommendation to the Governor- in-Council. The Governor-in-Council will then exercise a judgment. In the course of any one or more of those processes there may be a requirement for the provision of further information or material in relation to the application the provision of which is likely to fall upon the Vendor. This view is based upon town planners advice which is that in practice very substantial further requirements may be imposed upon the Vendors as a result of Ministerial and/or departmental consideration. Inthat regard we attach* a copy of the report we have obtained from Mr. Peter Bell, Town Planner with the firm of Dredge & Bell. It seems to us that the Vendor's attitude seems to treat the process of consideration by firstly the Minster and thereafter by the Governor-in-Council to that of a 'rubber stamp' process. Whatever may have been the Minister's practice in earlier times is no longer relevant particularly when the statutory provisions clearly require a clearly identifiable process of examination and recommendation by the Minister prior to the function of the Governor-in- Council arising. -- 34 of 72 -- ,, 31 In the circumstances it seems to us that it cannot besaid in terms of paragraph 1 of the Vendor'ssolicitors letter to Primrose Couper Cronin Rudkin, 8March, 1991 that all that remained outstanding was ' the internal mechanisms of the relevant departments ' and accordingly, it is reasonably open to your company to declare that it is notsatisfied as provided for in paragraph 3 of the letter primrose Couper Cronin Rudkin to the Vendor's solicitors, 8 March, 1991." Mr. Nomura's statement, which could not be tested by any cross-examination, is astute to record a careful consideration of all of the material which was before the meeting. Mr. Matsui gave his evidence in chief to similar effect (pp. 226-27 of the transcript) but in cross-examination he identified Mr. Rudkin's decision as the most important factor. Mr. Rudkin had not transmitted to Tokyo any form of minutes appropriate to a decision by the defendant that it was satisfied. I do not consider the defendant's decision of 9th April, 1991 is any more open to successful attack for want of honesty than Mr. Rudkin's. Indeed, given the heavily slanted nature of the material before the meeting, it is difficult to see how following Mr. Rudkin's line could be found dishonest, so as to vitiate the decision. The Japanese directors would lack Mr. Rudkin's feeling for what would get through the Queensland bureaucracy, developed after many years in practice. Mr. Chesterman Q.C., appearing for the defendant, contended that the requirement in the variation agreement of reasonableness in relation to a defendant's satisfaction or otherwise was necessarily satisfied, where the defendant acted in accordance with the views of its Australian director, and solicitors - and others, such as Mr. Bell, although in truth he expressed no view at all. The defendant asks what could be more reasonable than -- 35 of 72 -- '' 32 accepting Mr. Rudkin' s view. The fallacy of this beguiling argument is that the reasonableness required in this context is not mere rationality, but reasonableness vis-a-vis the other contracting party. To adopt Walsh J. 's words in Godecke v. Kirwan at 642, "What is required must be reasonable in an objective sense, and in case of dispute this is a matter which the court can decide." Further, Mr. Rudkin's view was one supported on the basis of its being honestly held. Mr. Chesterman did not contend that it was reasonably held. One whose satisfaction or dissatisfaction is required to be "reasonable" may not meet that requirement by uncritically adopting the dissatisfaction of another whose only obligation is to act honestly. Thus, while I would not gainsay a general proposition that it was prima facie reasonable for the defendant's directors to follow Mr. Rudkin, that says no more than that it is "reasonable" to follow your solicitor's advice. Applying an objective test of what constitutes a reasonable demand or requirement as between contracting parties, I conclude that the defendant did not act reasonably in its resolution of 9th April, 1991. It cannot improve the defendant's situation that it acted on the basis of inadequate and one-sided material. Mr. Keane submitted that the defendant was under an obligation to give fair consideration to the Department of Housing and Local Government's letter of 9th April. This involves the proposition that the defendant had to wait until the last moment on April 9th, being 14 days after transmission of the plaintiffs' solicitors' letter of 26th March, before determining -- 36 of 72 -- 33 its attitude finally; Mr. Rudkin has indicated the compelling nature of that letter. I do not agree with that proposition. Item 3 in the variation agreement allows the defendant 14 days within which to satisfy itself, but in no way indicates an obligation in the defendant to wait for 14 days before satisfying itself. There is a cost flowing from reliance upon incomplete information, which the defendant bears here, as indicated above, namely, that its determinations may be held not reasonable, objectively. Such is the outcome in this trial. I reach this conclusion without resort to another consideration which tends to confirm it. That is, satisfaction by the defendant, as opposed to the dissatisfaction which it found itself to feel, had no final consequences. If the defendant's satisfaction had been notified, the result would have been to identify a date for completion of the contract, 60 days on. The defendant would not be bound at completion to accept anything less than full performance of their obligations by the plaintiffs. Any deficiencies, in relation to a clear title, road closure, rezoning, demolition of the hotel or any other subject would leave the defendant with its ordinary rights under the contracts, which might well entitle the defendant to treat them as discharged for breach by the plaintiffs. THE TRUE CONSTRUCTION OF THE VARIATION AGREEMENT The defendant's submission was that each of the contracts by the variation made in March this year became subject to an extension of the date for completion upon the double (cumulative) conditions of: -- 37 of 72 -- ' ' 34 ( a) Mr. Rudkin's being satisfied on or before 5.00 p.m. on 28th March, 1991 in terms of Item 1; and (b) The defendant's being similarly satisfied in terms of Item 1 by a date which events fixed as 9th June, 1991. The defendant's obligation was to act reasonably and honestly, Mr. Rudkin' s to act honestly only. Unless both conditions were satisfied, ran the defendant's argument, no extended date for completion could be fixed; there being no general extension of time for completion, without the cumulative states of satisfaction of Mr. Rudkin and the defendant, there was nothing capable of extending the date for completion past that fixed by the contract, 29th March, 1991. Mr. Chesterman explained the variation as being in the vendors' interest. They had to obtain road closure and rezoning by the date for completion; with only three weeks to go he asserted there was real doubt as to whether the vendors could get ready, so that the question arose for them whether they should carry on or give up; the outcome was a variation whereby the purchaser said, in effect, "If you cannot satisfy us by 5.00 p.m. on 28th March, the settlement date remains the same." As at 29th March, 1991, or 2nd April, 1991, the plaintiffs were not able to complete. It is unnecessary to say more than that their ability to convey title to the closed road did not arise until 15th April, 1991 and that there was no purported gazettal of the requisite rezoning until 27th April, 1991. In accordance with the findings of fact, condition (a) was not satisfied. Condition (b) was not satisfied either, as a matter of fact, but would have been, if the defendant had acted -- 38 of 72 -- 35 reasonably. It appears to me that by embarking upon consideration of its own satisfaction, the defendant probably waived any right it might have had to defeat the contract on the basis of Mr. Rudkin's attitude. Mr. Chesterman did not concede this. I doubt whether the variation, properly construed, confers any function on Mr. Rudkin beyond determining an appropriate form in which material might be transmitted to Japan and indicating the matters that were to be dealt with. However, the parties seemed content to adopt the approach of a double satisfaction being required. The plaintiffs' criticisms of Mr. Rudkin were, firstly, that he did not act honestly, and, secondly, that he did not ask himself the right question. There is considerable curiosity in an arrangement which has the defendant determining, probably after the date for completion fixed by the unvaried contracts, whether that date was extended or not. Timely completion could not occur if the defendant decided (as it did) that the condition of its satisfaction upon which any extension was asserted to depend was not met. It would be too late. I have already rejected the defendant's explanation of the genesis of the variation, which, if true at all, leaves out of account the major factor, which was the defendant's desire to be freed of any possibility of having to complete on the date fixed by the original contracts. In my opinion, as Mr. Keane submitted, the true effect of the variation was to confer on the defendant a power of extension of the time for completion, and there is no basis for any implication that the power to proceed in a way which would lead -- 39 of 72 -- 36 to a new date for completion being fixed included, as an alternative, a power to bring the contract to an end. I am unable to discern from the terms of the variation any express or implied term that if the procedures set out should not lead to a new date for completion being fixed, completion was never to occur. The relevant exchange of letters suggests to my mind that it was envisaged completion would occur (assuming the parties were able to complete) but on some occasion after the date fixed by the original contracts. If the defendant and its solicitors failed to pronounce themselves satisfied, the potential for 10th June, 1991 to become the date for completion would not be realised. The result is that a reasonable time is allowed for completion. See Sandra Investments Pty. Ltd. v. Booth (1983) 153 C.L.R. 153, 158-59, 164. For the defendant, it was said that Sandra Investments Pty. Ltd. v. Booth and Perri v. Coolangatta Investments Proprietary Limited (1982) 149 C.L.R. 537 on which the plaintiffs relied as showing that completion in the present case was required in a reasonable time were cases in which (unlike the present) no time for completion was fixed by the relevant agreements; the contention seemed to be that there was no "fallback" date for completion other than 29th March, 1991 if the variation of the contracts failed to lead to a later date's being fixed. I am unable to accept such an approach. The question whether there is under a contract a date fixed for completion which is essential in the sense that a blameworthy failure to complete may give the innocent party a right to terminate the contract may be answered differently from time to time under the particular -- 40 of 72 -- 37 circumstances. Time, originally of the essence, may cease to be so by reason of the conduct of the parties, and then become so again, for example, by the giving of a suitable notice to complete. See Voumard, The Sale of Land ( 4 th) 3 3 4, citing Louinder v. Leis (1982) 149 C.L.R. 509. It is a general rule that wherever no time is fixed for performance of an obligation under a contract which is, or which becomes an open contract, the obligation is to be performed within a reasonable time in all the circumstances: ibid 272 (6). Examples may readily be found of time originally of the essence in respect of a defined completion date ceasing to be such, and then being made essential again (perhaps in respect of a later date). See, for example possibilities discussed in Holland v. Wiltshire (1954) 90 C.L.R. 409, 413-4, 418-421 and Green v. Somerville (1979) 141 C.L.R. 594, 599-600, 609-610. They reinforce the view that the present contracts have become open ones in which completion is due within a reasonable time. The plaintiffs' submission, that, if the defendant was entitled to terminate the contract by reason of non-satisfaction on 28th March or 9th April, it did not do so, appears to be made out on the facts. The defendant did not purport to terminate the contract on the basis of Mr. Rudkin's reported non-satisfaction, and when Gilshenan & Luton on 9th April, 1991 gave advice of the defendant's own determination made on that day, the communication was in terms of the defendant reserving its rights and in particular its "rights of election". Two days later, Gilshenan & Luton wrote:- "We note that in yesterday's telephone conversation your Mr Dan enquired as to whether or not we would -- 41 of 72 -- 38 provide reasons why our client was not satisfied as to the matters referred to in the exchange of correspondence between your firm and Primrose CouperCronin Rudkin of 8 March, 1991 ( "The Correspondence"). Our response to that enquiry is that a decision was taken by the Board of Directors of our client Companyand we are instructed that our client was not so satisfied. No member of this firm was present at the Board meeting and therefore, for us to attempt to distil the reasoning process of such a meeting wouldbe inappropriate, particularly in view of the fact that litigation is foreshadowed. To deal with your request in any other way would be to allow a processof informal interrogation which is not appropriate,particularly in view of the fact that the Contract itself imposes no obligation to give reasons. It seems to us that the position has now been reached where the Purchaser has the right to terminate the Contract as a result of:- 1. The rezoning Application not having sufficiently progressed to satisfy the Vendor's obligations under the correspondence; 2. The further non-satisfaction of the Purchaser's Solicitor; 3. The further non-satisfaction of the Purchaser itself. In those circumstances, if the Vendor does not accept the Purchaser's entitlement to terminate the Contract, we intend to make, as earlier foreshadowed by Primrose Couper Cronin & Rudkin, an Application to the Court under Section 70 of the Property Law Act to establish the true position. In the meantime our client againadvises that it expressly reserves its rights of election consequent upon the above." This was followed up four days later by advice that:- "Unless we receive your response by 4.00 p.m. today we will assume that your client does not acknowledge our client's right to terminate and will proceed with the application as previously foreshadowed and which we intend to make returnable next Monday, 22 April at 10.00 a.m." The plaintiffs' solicitors countered with the contention that disputed matters of fact connected with the "satisfaction" issue rendered application under s. 70 inappropriate. They threatened proceedings by the plaintiffs unless provided with the -- 42 of 72 -- 39 defendant's unequivocal acknowledgment that it was willing to complete the contracts in accordance with their terms. The writ was issued on 19th April, 1991. Exhibit 35 is the original defence, delivered on 7th May. That pleading was, inter alia:- "1 3. No notice as provided for by para. Defendant's Solicitors' variation letter given. 4 of the has been 14. Accordingly no date for completion of the contracts has arrived or been fixed. 15. Accordingly on the proper construction of the contracts as varied by the letters ... the Defendant is not bound to complete the contracts." On 24th May, 1991 Gilshenan & Luton wrote:- "As your clients are aware the defendant's view as to the proper construction of the terms of the contracts as varied by the exchange of correspondence referred to in the pleadings is that the plaintiffs failed to satisfy either the purchaser's solicitors or the purchaser itself as referred to in the letters of variation. The plaintiffs however contend that the time for completion is running and claim specific performance of the contracts. Would you please advise the date, time and place for completion as alleged by the plaintiffs and your calculation of the balance purchase price claimed by the plaintiffs due on that date. The defendant reserves its position in reliance upon the matters set out in the defence." By now the respective solicitors were even more deeply engaged in a war of correspondence, and zealously striving to avoid any false steps which might prejudice their clients' positions. Corrs Chambers Westgarth replied on 27th May, 1991 :- "We are surprised by the terms of the request in view of your client's assertion in the present litigation that it has not been bound to complete. We take it, however, that the defendant now intends to complete -- 43 of 72 -- 40 the contracts since there can be no other purpose in seeking the information requested by you. We · are of the view that the date provided by the contract for completion is 60 days from the date by which the defendant ought to have notified of its satisfaction conformably with the terms of the correspondence of 8 March, 1991 or 74 days after 28 March, 1991 namely, 10 June, 1991. However, we recognise that another construction of the correspondence of 8 March, 1991 might be advanced by the defendant, and our view as to the date for completion is therefore not immutable. Our client is willing to perform the contract according to its tenor, and we are willing to give consideration to any view which your client may wish to advance as to the proper construction of the contract with respect to the date for completion. Indeed, we invite you to do so now because it may involve some variation to calculation of the balance purchase price. Would you please let us have a response by 4. 00pm tomorrow. If we do not receive a response, we will proceed upon the assumption that there is no controversy as to 10 June, 1991 being the date of completion." A response followed on 28th May, 1991 contending that discovery of documents in the action and further investigation had created a strong suspicion that the plaintiffs were not ready willing and able to perform the contracts according to their terms and requesting unambiguous advice as to the plaintiffs' view of the date for completion and their calculation of the balance purchase price payable on that date. Corrs Chambers Westgarth countered that the plaintiffs' willingness and ability to complete was not in issue on the pleadings (doubtless invoking Baird v. Magripilis ( 1925) 37 C.L.R. 321, 330-31) but nevertheless sought particulars of the obligations it was said the plaintiffs were not ready willing and able to perform. The defendant was invited to "state unambiguously whether (it intended) to complete the contracts". -- 44 of 72 -- 41 It might have been as well that no more was said regarding the date for completion. Just as our local Christian sensibilities had led to an extension of the original date for completion from 29th March, so our royalist sensibilities apparently led to extension in honour of another public holiday from 10th June to 11th June, 1991. It is convenient at this point to continue the review of the solicitors' correspondence. Corrs Chambers Westgarth wrote on 31st May, 1991 (ex. 41) :- "As your client is aware, the contracts provide that the hotel on the land be demolished at completion. Our clients remain willing and able to perform their obligations in this respect; however, demolition of the hotel premises will expose our client to substantial losses which would flow from what would be, because of your client's attitude, a perfectly nugatory act. We therefore require you to inform us by 4 pm today that your client will complete the contracts. As we have previously informed you, in our view, the date for completion is 10th June 1991 and as you have not asserted to the contrary, we take it there is no controversy as to that date. Upon receipt of your client's assurance that the purchaser will complete, we will submit settlement figures and appoint the time and place for completion and attend to the demolition of the hotel. A failure by your client to respond to our reasonable requests coupled with the continued assertion in the defence that it is not bound to complete the contract will be treated as a clear intim.ation that it is useless for our client to put itself in a position to perform its part of the contract without the benefit of an order requiring your client to complete and that it is useless for our clients to proceed to put themselves in a position to complete." Gilshenan & Luton replied the same day (ex. 42):- "A review of the history of the transaction discloses that the vendors appear to have been determined from the start to seek to avoid their obligations with respect to demolition. We are instructed that Mr Smith on behalf of the vendors has on numerous previous occasions attempted -- 45 of 72 -- 42 to make evidence that the purchaser has repudiated the contract and/or will repudiate the contract in an apparent attempt to create in advance a justification for the vendors themselves not performing the contracts on time or escaping the consequence of failure of conditions subsequent. May our client proceed on the basis as appears clear from your letters that your clients intend only to perform the contracts if our client will waive its rights under the terms and conditions of the contract? Our client continues to hold the view that on the proper construction of the contracts it is not bound to complete, by reason of your clients' failure to satisfy items 1 and 3 of the letters of 8 March 1990, but seeks an expeditious determination by the court of that point. We certainly do not therefore intend to make any response on behalf of the purchaser which might be construed as a repudiation of any contractual obligation which might be regarded as continuing to bind it. If your client wishes to put an end to their obligations to comply with the terms of the contract then your clients may elect to terminate the contract in reliance upon failure of the conditions subsequent with respect to the satisfaction of our client and our client's solicitor as required by the letters of 8 March 1991. Your assertion of your clients' readiness willingness and ability to perform is hardly consistent with continued evasion of provision of the calculation of settlement figures applicable as at 10 June 1991, being the date for completion as recognised by your clients, which our client accepts would be the date for settlement if our client is held bound to complete. We had thought that clause 26(h) of the special conditions adequately protected your clients' position in circumstances such as the present, but if you disagree with that could you please advise in what respect you consider your clients to be inadequately protected so that we can give the matter further consideration." More of the same fallowed, including an apparent confirmation of 10th June as an appropriate settlement date. Gilshenan & Luton wrote on 6th June, 1991:- -- 46 of 72 -- 43 "We are instructed to repeat once again the reservation of our client's rights under the contracts including our client's rights of election. So far as the matter of the obligation under the contract on the part of your clients to secure an appropriate zoning of the area of road closure is concerned please advise whether your are instructed that your client will take any further steps towards securing the appropriate zoning for the road area or whether your clients' position is that it will not take any further step in that regard and relies upon the Order in Council of 24th April 1991 as effective to zone the road area as required by the contract." Their next letter, of 12th June, 1991 was:- "We received no reply to that letter and by the 11th June 1991 (being the date for completion alleged on behalf of the plaintiffs) there had not been a zoning of the land the subject of the contracts, as required by special condition 5. Accordingly our client became entitled to terminate the contracts for failure of those special conditions. We are instructed to give, and hereby give notice of termination on behalf of the purchaser to each of the vendor companies through you as their solicitors." An amended defence and counterclaim was delivered on 12th June, 1991. It is ex. 46. The new allegations, in summary, were that the plaintiffs were not ready willing and able to complete, because of non-demolition of the hotel in breach of special condition 26(d) and the lack of a Special Facilities (Tourist and Residential Resort) Zoning of the Labrador Street land by 10th June, 1991 . The counterclaim sought a declaration that the defendant had terminated the contracts and a declaration that the defendant was entitled to a return of the deposit moneys. The next edition of the pleading attributed the deficiencies in the plaintiffs' ability to perform to 11th June, 1991 as well as the preceding day, and also pleaded, alternatively to para. 14, that "the date for completion", if there was one binding the defendant, was 10th June. -- 47 of 72 -- 44 The next version of the pleading was presented at the beginning of the trial on 2nd September, 1991. Paragraphs 13 and 14, as set out above, were replaced with the following:- "13. Pursuant to Item 3 of the letter referred to ... the defendant by its Solicitors' letter dated 9th April, 1991 gave notice to the plaintiffs that it was not satisfied as provided for in the aforesaid Item 3. 14. In the premises the date for completion was not extended beyond the date for completion fixed by the contracts, the 29th day of March, 1991 and the contracts were at an end." Other amendments allowed for the possibility of the date for completion being 29th March, 1991, 10th June, 1991 or 11th June, 1991, in all of which cases, the plaintiffs were alleged to be in difficulties by reason of non-demolition of the hotel and the zoning of the road area. This lengthy review of the correspondence and the defendant's pleadings establishes that the defendant did not, by the earliest of those dates which it asserts was the completion date, purport to terminate. Nor did it do so promptly after 9th April, 1991. The consequence was said to be that the contracts continued on foot, with completion to take place within a reasonable time. Mr. Keane relied on Perri v. Coolangatta Investments Pty. Ltd. (1982) 149 C.L.R. 537, 553-54. In my opinion, the proper analysis is that the variation effected by the March correspondence made no provision for any party to bring the contract to an end; it simply provided a method by which the date for completion, inevitably extended, might be fixed, as opposed to becoming a date within a reasonable time, which was the alternative. That procedure failed, because as a matter of fact, the facts of satisfaction upon which it -- 48 of 72 -- 45 depended were never achieved, and the defendant sent no notice, as contemplated. The plaintiffs submitted that 10th June, or 11 th June became the date for completion by a procedure of my disbelieving Mr. Rudkin and Mr. Matsui and finding the facts to be the opposite of those sworn to (Steinberg v. The Commissioner of Taxation (1975) 134 C.L.R. 640, 694 was relied upon) and regarding as done what ought to have been done, in which connection reliance was placed upon Meagher, Gummow and Lehane, Equity - Doctrines and Remedies (2nd) 339, and the doctrine of Walsh v. Lonsdale (1882) 21 Ch. D. 9. Such a course flies in the face of the facts, and it is too artificial to have any attraction. 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. There is no entitlement to damages in addition to specific performance. Exhibit 64 is a -- 49 of 72 -- 46 letter from Westpac indicating the cost to the plaintiffs in money terms of being kept out of that part of the balance of the purchase moneys which Westpac was entitled to receive to discharge the indebtedness. Since no date for settlement has been fixed by the procedure set out in the March variation or by action of the plaintiffs or otherwise, there is no completion date which the defendant has failed to meet, notwithstanding its repudiatory attitude. Reference to the hotel's still standing is enough to show that the plaintiffs have yet to get themselves into a position of being entitled to require completion. 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. 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. RE-ZONING OF THE CLOSED ROAD The defendant submits that the plaintiff has yet to achieve gazettal of rezoning of all the land sold. Its point relates to the area of closed road. In evidence are Government Gazettes of 27th April, 1991 and 11th June, 1991. The plaintiffs contend that the former effectively rezoned all of the land. The later Gazette purports to include the road area (and no other land) in the appropriate zone; the power relied upon is to be found in s. 2.21 (3) of the Local Government (Planning and Environment) Act 1990. The defendant's point is that the provision is available only in respect of land which is Crown land at the time of the -- 50 of 72 -- 47 zoning by the Governor in Council and that the land in question had ceased to be Crown land in April this year. Gazette (ex. 30) shows as follows:- The earlier "His Excellency the Governor, acting by and with the advice of the Executive Council and in pursuance of the provisions of the Local Government (Planning and Environment) Act 1990-1991 and the Local Government Act 1936-1990, in relation to applications to amend the planning schemes referred to in the Schedule made by the relevant Local Authorities under the Local Government Act 1936-1990 (being matters that under s. 8.10 of the Local Government (Planning and Environment) Act 1990-1991 are to be dealt with as if that last-mentioned Act had not commenced), hereby notifies the approvals of the amendments of the Town Planning Schemes set out in the Schedule." The Schedule consists of five columns. Their headings are:- Planning Scheme; Date of Notification of Approval of Planning Scheme; Description of Land Rezoned; Zone from which said Land Excluded and Zoning Maps Affected; Zone in which said Land Included and Zoning Maps Affected. The first column relevantly identifies "The City of Gold Coast" as the planning scheme, the second column 27th March, 1982 as the date of notification of approval. The description of land rezoned is:- "Lots 1 and 2 on RP185150, Lots 93 2102, 108, 109 and 112 to 120 on RP28583, Lots 1 and 2 on RP91144, Lots 1 and 2 on RP87016 and subdivisions 103 to 105 of subdivisions 67 to 69 of Portion 14, Parish of Nerang, County of Ward." At the trial it was common ground that the parcels so described corresponded with the plaintiffs' land which was sold by the three contracts. -- 51 of 72 -- 48 It is also common ground that the correct description of the first plaintiffs' land after the middle of April, 1991 was Lot 1 on Plan WD810218 and the correct description of the third plaintiff's land Lot 2 on that same plan. In both cases this included the relevant part of the closed road. Those plaintiffs had surrendered their former holdings to the Crown by instruments dated 17th January, 1991 which were registered on the 21 st March, 1991 and 10th April, 1991 respectively. See exs. 96 and 94. I reject the defendant's argument that the description appearing in the Order in Council refers to no land at all. There is no legal or practical difficulty in identifying the land referred to, although it may on amalgamation with other land have acquired a new description. The plaintiffs submitted that the third column ought to be read as referring to whatever land was comprehended in the new description, so that, although the column contains nothing capable of referring to the closed road, the area of the closed road is necessarily referred to. The plaintiffs want the column entry read as if it referred to Lots 1 and 2 on Plan WD810218 in the County of Ward in the Parish of Nerang. I have grave misgivings as to whether such a benevolent interpretation is open. The defendant claims that the Order in Council simply has no operation on the area of the closed road. The matter is complicated by the entry in the next column, which is: "PARTLY UNZONED, PARTLY RESIDENTIAL "B" ZONE AND PARTLY SPECIAL FACILITIES ZONE AS SHOWN ON SHEET 10." The only unzoned land which plays any part is the closed off area of Labrador Street. There is an indication here that more was being dealt with than just the land described in column -- 52 of 72 -- 49 three. As the road had no zoning of its own, it was technically inappropriate to include it in a list of land "rezoned". The entry in the final column ( "zone in which said Land Included and Zoning Maps Affected") is "Special Facilities Zone as shown on Sheet 10/15". That sheet is in evidence, as part of ex. 85, the Department of Housing and Local Government's file in respect of the rezoning. The sheet bears the stamp of the Executive Council, putting it beyond doubt that it constituted the scheme map forming part of the town planning scheme for the City of Gold Coast which the Governor in Council considered on 24th April, 1991. The evidence showed that another copy of the sheet, similarly stamped, was returned to the Local Authority. No doubt in one or both places sheet 10/15 is available for public search. Sheet 10 covers the general area of Labrador and the Broadwater and the significance of the "15" is that the map shows the 15th proposed (or adopted) amendment to the Scheme as it governs that general locality. The area dealt with is plainly highlighted (it is the only area highlighted) and it plainly includes that part of Labrador Street where it enters Marine Parade (which other evidence shows was the subject of a road closure gazetted on 16th March, 1991 (ex. 16)). For purposes of considering the efficacy of the gazettal of 27th April, 1991, it is appropriate to disregard the subsequent affixing to the document in evidence at some later date of a copy of the Order in Council of 11th June, 1991 and of Plan WD810218. If the incorporation of sheet 10/15 by reference in the Order in Council gazetted on 27th April, 1991 is permitted, I am satisfied that there is no difficulty attending identification -- 53 of 72 -- 50 of the land to be placed in the Special Facilities Zone as including the area of the closed road. Section 33 ( 5) ( 1) of the Local Government Act 1936 ( as amended) is:- " ( 1) Where the Governor in Council approves of any amendment of a town planning scheme applied for by a Local Authority, he shall notify such approval by Order in Council. Such Order in Council shall describe so as to identify every amendment of the scheme thereby notified. Upon the publication of such Order in Council the scheme as amended thereby for the time being shall become and be the town planning scheme for the Area or part of the Area and shall have the force of law and be binding upon and obeyed by the Local Authority and all persons whomsoever accordingly." The defendant relied upon Arnold v. Hunt (1943) 67 C.L.R. 429 as establishing that incorporation by reference of sheet 10/15 ( to overcome the omission of reference to the road in column three) is impermissible. In that case a lady avoided conviction for selling a bottle of whiskey above a fixed price. The National Security (Prices) Regulations empowered the Commonwealth Prices Commissioner with respect to any declared goods by order published in the Gazette to fix and to declare the maximum price at which any such goods might be sold. By a gazetted Prices Regulation Order, the Commissioner fixed maximum retail prices as those set out in the amended retail price List issued by the Victorian Associated Brewers as operating on and after 1st December, 1942. Rich J. said at 432:- "This is not in my opinion compliance with the regulation. The regulation requires that the price shall be fixed and declared by an order which is published in the Gazette. The Order published in the Gazette in the present case does not fix or declare any price. The price is fixed and declared by the list issued by the Victorian Associated Brewers. I -- 54 of 72 -- 51 consider that the price must be fixed and declared in the body of the Order itself or in a Schedule to the Order and cannot be fixed by some extraneous document which is not part and parcel of the Order." Arnold v. Hunt was distinguished by Gibbs J. in Sobania v. Nitsche (1969) 16 F.L.R. 329, 340 as depending upon the words of the regulation conferring the power. At 342, his Honour said:- "There is no general principle that a power to make regulations, rules or by-laws may be not exercised by referring to some other document and incorporating or applying it, provided that what is referred to is sufficiently certain. In the present case the rules which were applied by reference, although no longer in force, were readily identifiable, since they had been published in the Commonwealth Gazette." His Honour placed reliance upon Wright v~ T.I.L. Services Pty. Ltd. (1956) 56 S.R. (N.S.W.) 413, 421-22. The plaintiffs claim further support from Dainford Limited v. Smith (1985) 155 C.L.R. 342, 348, 362, where those decisions were approved. I doubt that Dainford is itself a relevant authority, since it upheld incorporation by reference in the special context of private by-laws applicable to a building units plan. I am satisfied that incorporation by reference is appropriate in this case. The relevant discretion of the Governor in Council under s. 33(5)(k) is to reject the application or to approve of it wholly or in part, after considering it, and other materials. It is the Governor in Council's approval which is significant; no good reason occurs to me why that approval or gazettal should take any particular form. I consider that nothing turns on the particular form of Schedule adopted or on grammatical niceties which may make reference in column headings to "said Land" technically inappropriate. There is no warrant for the approach that the -- 55 of 72 -- 52 Order in Council ought to be complete within itself. As a matter of practicality, anyone wishing to ascertain the implications of such an Order in Council is less likely to search in the Titles Office to identify land referred to in column 3 than to consult the Sheets identified in column 5. Other gazettals occurring at the same time indicate that where parts only of parcels of land are rezoned, reference to the Sheets would be necessary to identify the parts affected. Accordingly, I reject the defendant's submission that the Order in Council of 24th April, 1991, gazetted three days later failed to notify the requisite approval to amendment of the town planning scheme for the City of Gold Coast in respect of that part of Labrador Street which had been closed. The defendants had other criticisms of this Order in Council referrable to alleged defects in the procedure leading to it. As ex. 85 shows, and as I recorded above, the application for rezoning began as one by a citizen under s. 33(6A), as opposed to one initiated by the Local Authority under subs. (5) or by the Minister under subs. (6). It was made on 26th April, 1989. By the consent order made by his Honour Judge Row in the Local Government Court on 22nd May 1990, copies of which may be found in ex. 85 and also ex. 5, the Local Authority became bound to make application to the Minister. This it did by a letter dated 7th March, 1991 which was received in the Department of Local Government on 12th March, 1991 . The letter is in form an application under s. 33(5) and it relies upon advertisement in the press and by sign on the land from dates in May 1989. -- 56 of 72 -- 53 Mr. Chesterman submitted that the procedure was vitiated by non-compliance with the 90 day time limit set out in s. 33(5)(m)(ii), and it is claimed that the Local Authority did not apply within 90 days of his Honour Judge Row's order. Submissions were made as to the appropriateness of further advertising, given the lapse of time, to permit objection by persons now interested who might not have been able to respond to advertisements in 1989. The Minister had power to extend time, but Mr. McDonnell swore that he did not do this. Next, the defendant submitted that subs. (6A) did not permit application to be made in respect of the zoning of the road at all. Yet, unlike subss. ( 5) and ( 6) it does not ref er to amendments to town planning schemes, but only to applications "to exclude land from any zone and to include the land so excluded in another zone", an inappropriate description for an application to have a road included in a zone for the first time. Since the road (as appears elsewhere) was Crown land, if any private person was entitled to apply for its rezoning, the application under subs. ( 6A) (b) (iii) (A) required the consent of the Minister of the Crown charged with responsibility for that land See para. (h)(iii). Even if Mr. Rowell, who gave evidence that he was the delegate of the relevant Minister, was able to give the necessary consent, he had not done so (nor had any Minister) in writing. Further, in respect of the paragraph last referred to, it was argued that there was no "Crown land proposed to be sold" until 5th May, 1990 (ex. 110) when advertisement appeared in the Gazette of intention to close the road: indeed, Mr. Chesterman -- 57 of 72 -- 54 submitted there was no proposal for sale of the road land until November, 1990 when the Crown invited the first and third plaintiffs to sign an acceptance of offer to purchase the road land for $1 .3 million. See ex. 57, which those plaintiffs signed on 7th December, 1990, by Mr. L. Beaumont. Thus, the argument ran, it was premature for anyone to apply under s.33(6A) in respect of the road on 26th April, 1989. Gagliardi v. Lamont ( 1976) Qd. R. 52, 53-54 was referred to as indicating what constituted a "proposal", and reference was made to s. 363 and following of the Land Act to demonstrate that the road had to be permanently closed before the Crown could sell. Permanent closure occurred only on 16th March, 1991. No Crown land proposed to be sold could be identified before that date. Mr. Chesterman submitted that it was not possible to start with the premise that there was an application by the Local Authority under s. 33(5). Sub-paragraph (b) requires compliance with (c) or (d); (c)(ii) could not be complied with. Further reference was made to the following paragraphs, including (j) in particular, when the impermissibili ty of relying upon advertising almost two years before in connection with a subs. (6A) application was asserted. Mr. Chesterman conceded, on the basis of Pioneer Concrete (Old.) Pty. Ltd. v. Brisbane City Council (1980) 145 C.L.R. 485 that there was no necessity for land whose rezoning was applied for to correspond with the whole of the land in particular titles, but he submitted there must be land answering the description which the Gazette gives and that this was not the -- 58 of 72 -- 55 case on 27th April, the land described in the Gazette had by then been surrendered. In my opinion, all such objections are answered by reference to s. 4(4) of the Local Government Act 1936-1990. Paragraph (v) is: "No Proclamation or Order in Council purporting to be made under this Act, and being within the powers conferred on the Governor in Council, shall be deemed invalid on account of any non-compliance with any of the matters required by this Act as preliminary to the same." Section 31(27)(ix) has an analogue ins. 4(4)(vi). The defendant submitted that the decision in Concore Pty. Ltd. v. Mulgrave Shire Council (1988) 2 Qd.R. 395 precludes reliance on para. (vi). Whether or not that is so, the decision says nothing about sub-para. (v). Nor is there anything of present relevance in the reference made in the reasons for judgment at p. 403 to sub-para. (iv) which, in my view, overcomes any deficiencies in the description of the land in column three. Sub-para. (iv) is:- "No misnomer or inaccurate description or omission contained in any such Proclamation or Order in Council shall in any wise prevent or abridge the operation of this Act with respect to the subject of such description, provided the same is designated so as to be understood." Concore was a very different case from the present. It involved a contest, not between citizens, but between a citizen and a Local Authority, whose attempts at compliance with the Act left much to be desired; there were serious deficiencies in the substance and duration of advertising; a certificate of compliance submitted to the Governor in Council did not meet statutory requirements; indeed, the Local Authority's purported by-law, which sought to impose a general restriction on building -- 59 of 72 -- 56 heights, was held not authorised by the section of the Local Government Act relied upon or any other section. Mr. Chesterman submitted that there was repugnance or inconsistency between the provisions in s. 4(4) now under discussion and the rest of the Local Government Act, so that s. 4(4) ought to be limited to directory requirements or (alternatively) the powers of the Governor in Council to make Orders in Council should be construed so as not to extend to cases where an application has not been in accord with all statutory requirements. I am unable to reads. 4(4) in that way. In my opinion, para. (iii) in particular provides a strong indication that the approach is to render Orders in Council immune from attack for non-compliance with machinery provisions, or technicalities of the kind Mr. Chesterman has relied upon. In those cases where the protective provisions are thought to work an unjust or wrong result, the remedy whereby correction is achieved is by further Proclamation or Order in Council. Mr. Quinn presented the address in reply on behalf of the defendant. He submitted that ifs. 4(4) were allowed to have effect as contended for by the plaintiffs, s. 33(18C) of the Local Government Act would be rendered nugatory. In my view that is not correct. Subsection (18C) deals with the case where the Governor in Council (or the Local Government Court, which the reference to "Court" then indicated) becomes aware of some "non-compliance with procedure" to quote the marginal note, in the course of deliberations; authority to proceed in the face of such non-compliance is conferred. Where non-compliance is not -- 60 of 72 -- 57 noticed and a determination is made, then, in my opinion, the determination has the full force and effect which the Act, including s. 4(4), allocates to it. EFFICACY OF ORDER IN COUNCIL OF 11TH JUNE, 1991 The Local Government (Planning and Environment) Act 1990 came into force on 15th April, 1991. It contains no equivalent of s. 4(4), but the case was argued before me on the basis that transitional provisions preserve any applications. 4(4) would otherwise have had to the Order in Council of 24th April, 1991. Section 8.10 of the new Act is not without its complexities but no-one sought to argue that the procedures culminating in that Order in Council were required to satisfy anything more than the Local Government Act provisions. The plaintiffs' advisers apparently came to entertain some doubts as to the efficacy of the April Order in Council to deal with zoning of the closed road and after a legal opinion had been obtained from senior counsel prevailed upon officers of the Department of Housing and Local Government to take further steps with respect to the road. On 11th June, 1991 there was a further Order in Council, published in an Extraordinary Gazette that same day. It is ex. 31. The Order in Council: "notifies that, acting upon the recommendation of the Deputy Premier, Minister for Housing and Local Government (His Excellency the Governor in Council) has approved that the land described in the Schedule ... being land comprising a closed road, be zoned by being included in the zone described in the Schedule, being a zone consistent with the zoning of adjoining lands situated within the planning scheme area for the City of Gold Coast." It was conceded by Mr. Chesterman that the metes and bounds description of the land zoned which appeared in the Schedule -- 61 of 72 -- 58 correctly described the road. The Schedule identified the "Zone in which Land Included and Zoning Maps Affected" as: "Special Facilities (Tourist and Residential Resort as defined on Plan Numbers B7-86, 1 to 14 and B849, L1A to L4A) Zone as shown on Sheet 10/15." Section 2.21 of the Local Government (Planning and Environment) Act 1990 is: "Planning scheme may include Crown land. planning scheme may include Crown land. ( 1 ) A (2) Notwithstanding subsection (1)- (a) a planning scheme made or continued in force under this Act does not bind the Crown; (b) where any premises included in a planning scheme is or becomes Crown land ( i) (ii) (iii) the planning scheme; any agreement made between the relevant Local Authority and any person who previously held an interest in the premises and that is in force at the time when the premises is or becomes Crown land; any condition imposed by the Local Authority in respect of the use of those premises and that is in force at the time when those premises is or becomes Crown land, · is not to operate or, as the case may be~ ceases to operate in respect of those premises for as long as those premises remain Crown land; (c) where any premises to which paragraph (b) applies cease to be Crown land, the matters and things specified in subparagraphs (ii) and (iii) of that paragraph together with the current planning scheme are (subject to such directions, modifications or exceptions as may be declared by the Governor in Council by Order in Council) to operate as if the premises had never been Crown land. -- 62 of 72 -- 59 ( 3) (a) Where a road is closed or proposed to be closed and the Minister is of the opinion - (i) that the land comprising the closed road or the ~oad proposed to be closed should be included in a zone or zones consistent with the zoning of adjoining lands; and (ii) that the proposed zoning would not substantially affect the public in an adverse manner, the Minister may, notwithstanding that the public notice provisions of section 2. 18 have not been complied with, recommend to the Governor in Council that upon the road being closed, if not already closed, the land be so zoned. (b) Where the Governor in Council approves the recommendation an Order in Council notifying that approval is to be published in the Gazette." "Road" is defined to m~an a street or road dedicated to the public. The evidence in the case established that Labrador Street in the relevant locality was a road. If not already Crown land, it would appear to have become such when s. 369 of the Land Act 1962 came into force on 1st January, 1963. Section 196 of The Land Act of 1910 made no reference to land dedicated to public use as a road being vested in the Crown. Whether or not Mr. Chesterman is right in his submission that a distinguishing feature of a road is that it is Crown land, I think he is probably correct in his submission that s. 2.21(3)(a) in referring to closed roads contemplates land which is Crown land. The circumstances required for dedication of a road at common law are discussed by Herron J. in Commissioner for Railways v. Dangar (1943) 15 L.G.R. 101, 103ff. Assuming that the land, dedicated -- 63 of 72 -- 60 as a road, became Crown land by virtue of s. 369, it ceased to be Crown land by 15th April, 1991 when the new deeds of grant in favour of the first and third plaintiffs including it were registered. While there may be nothing about a "closed road" which requires that it be Crown land, and while it may be convenient if the Minister is able to use the simple procedure in s. 2. 21 ( 3) to include a closed road in a zone consistent with the zoning of adjoining lands, in cases where that procedure has not been carried out, it would be a radical thing to permit a ministerial rezoning of privately owned land simply on the basis that it could be described as a "closed road". The minister is required to consult the public interest by subpara. (a)(ii) but not the interest of the owner which one would expect to be of paramount importance. I am unable to see how the line could be drawn between a road closed very recently so that a ministerial rezoning under this provision could in practical terms be regarded as part of a single transaction including the Crown's disposal of the land, and a case where the road had been closed and the land disposed of years before, and perhaps had more than one private owner. Mr. Keane' s submission was in essence that s. 2. 21 ( 3) provided a procedure standing on its own, not to be read down by reference to its context or any section heading. It is nowhere provided that the Minister's powers are restricted to land which remains Crown land. He submitted that the intention of the provision is to enable the zoning of land so that upon alienation by the Crown it is included in a town planning scheme and that -- 64 of 72 -- 61 such a purpose could equally be achieved by zoning while the land remained Crown land or by its zoning after such land ceased to be Crown land. 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 plaintiffs 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. Indeed, Mr. Keane addressed on this matter perfunctorily, leaving me with written submissions to digest. One of the great difficulties he faces in establishing that the Minister has powers in relation to privately owned land is lack of any requirement to give notice to the owner. The contrast with s. 2.18(5) is glaring. SIGNIFICANCE OF THE PLAINTIFFS' FAILURE TO DEMOLISH THE HOTEL Demolition had to be achieved prior to completion of the contract (see special condition 26(d)(i) and (f)) and it is plainly a condition of the defendant's being obliged to complete. Demolition work is to be paid for by a separate consideration not specified, except for an upper limit of $150,000.00, to be paid on completion: special condition 26(e). I am unable to read special condition 26(d)(ii) as requiring the plaintiffs to commence actual demolition, or preparatory work at any particular time. As I have determined that no date for completion under the contracts was ever fixed apart from the original date, which was -- 65 of 72 -- 62 effectively vacated by 11th March, 1991, the plaintiffs cannot be said to be in breach in respect of non-demolition. The importance to the defendant of having the properties cleared of improvements at completion is obvious. Questions of the parties' legal rights and obligations aside, in every practical sense the proposition that demolition ought not to occur unless there is some reasonable assurance of completion is compelling. That comment applies not only to the plaintiffs' interest, and Westpac's, but also to the position of the hotel staff and its patrons; the evidence even suggests a public interest on the Gold Coast in avoiding the razing of another "development site" which might remain vacant and an eyesore for years. The case is far more extreme than the usual one which faces a contracting party attempting to decide whether it is necessary to get ready to complete. If tenants have to be thrown out, there is always the possibility of finding new tenants if need be; if a very large sum of money has to be made available, in many cases, that will involve merely the financing of provision of the necessary sum for as short a period as will enable tender to be made. Demolition of the hotel unnecessarily would be costly in the short and long term, and irrevocable. Much time at the trial was spent exploring the plaintiffs' justification or lack of justification for leaving the Grand Hotel intact. While it is unnecessary for me in the circumstances to make any finding on this subject, it is probably appropriate that I do so, in case my interpretation of the variation agreement and conclusion that the contracts became and -- 66 of 72 -- 63 remained contracts requiring completion within a reasonable time is in error. The plaintiffs contended, in reliance upon cases such as Foram v. Wight (1989) 168 C.L.R. 385, Mahoney v. Lindsay (1980) 55 A.L.J.R. 118 and Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. (1954) 90 C.L.R. 235 that the defendant had sufficiently intimated that it would not complete, or not complete on 10th or 11th June, 1991 to relieve them from having to attend to performance generally, and attend to demolition of the hotel in particular. It will be recalled that they had demolished other improvements. Mr. Smith, speaking of Mr. Nomura in Tokyo on 6th February said: "He suggested that the meeting tomorrow, the next day obviously, of a delayed settlement would be came of little surprise '. .. " - at the meeting that the suggestion put forward, which There is ample evidence to show the defendant's interest in delaying completion. The meeting was held, as set up by Mr. Nomura, on 7th February, 1991. Mr. Smith's examination-in- chief proceeded: "Can you tell us, please, how that meeting proceeded?- In the usual fashion. There was a lot of dialogue between Nomura and the other parties in Japanese. On completion of that I was informed that it looked - Nomura informed me that the Sanwa people had serious reservations about completing the contract. Can you please, as well as you can, tell us what Nomura actually said to you?-- He said that as a result of the Bank of Japan's restrictions on expatriating funds, that Sanwa were not able to, or are unwilling to settle the property. I said, 'Well, we have a conditional contract. We believe we can meet those conditions. We have a legal impasse here.', and that we have to find some common ground. It was then that we discussed just how long the -- 67 of 72 -- 64 impositions of the government, Japanese government, may exist. Can you tell us, please, what was said to you and by whom in relation to that?-- Well, always by Nomura, notwithstanding the fact that I was getting perhaps five to ten per cent of what the discussion was. Then the suggestion was that perhaps they could settle but they would have to - it would have to be a lot later than the March date and the September date was mentioned." In cross-examination the following occurred: "Isn't that the reason you went to Tokyo, to see if you could get the extension from the directors in Japan?-- No, that's not quite correct. Not quite correct. Is there some truth in it?-- Of course. We discussed it when I was there. Your question was: Is that the reason that I went? Well, do you accept that it was a reason for going?-- No. You said before it's not quite true, which suggests to me there is some truth in it. What element of truth is there in the proposition that you went to Japan to speak to the Japanese directors of the defendant about your need for an extension of time?-- When I went to Japan it was on - it was simply to find out how serious Sanwa really were about settling because we had to pay, at that time, $1.3 million for the road. I had to convince Westpac, who were going to provide the money, that this was good sound commercial judgment. We were going to pay $1.3 million for the road and they were going to settle. At that point in time I was - I had serious reservations about their completing and I wanted to be sure that they were going to do that, as I say, before paying that 1.3 million. That was the main reason, but the others that came up were as you mentioned." And the following: "In your discussions in Tokyo in February of this year, you asked Sanwa or the directors, to pay an amount equal to twice the deposit allowed by the contract, and to pay those moneys to the vendor companies?-- It was in the context of negotiating a deferred settlement from the March date. Is it right that .you raised with them the prospect that they should pay an amount equal to twice the deposit to the vendors?-- For consideration of us granting an extension to the settlement, yes. -- 68 of 72 -- 65 Did you in fact, that evening - the evening of the meeting - suggest to the directors in Japan that they should pay as much as half the purchase price?-- I don't recall that. Certainly my letter that has been tabled here today spelled out what my belief was, which is as you say, release of the deposit; 20 per cent of the purchase price; and then pay some interest. On that basis I was confident that I would be able to convince Westpac to agree for an extension of the settlement. The extension of time was wanted by your side, wasn't it - by the vendors?-- No, that's not what instigated it. The extension of time wasn't instigated by us, it was post our visit to Tokyo in February. Forgetting about that, whether that is right or wrong, it was the vendors who needed the extra time to obtain the re-zoning, wasn't it?-- I have never stated that. Whether you have or not, it is true, isn't it?-- The time would have been handy. I have said that we were push going to shove. We may well have made that March date, but when the requested for the settlement - sorry, the request for the, yes, the settlement date was made in February, I seized upon that as being an opportunity to just try and tie the whole thing up together, but it wasn't instigated by us. We were still trying to push as hard as we could. You may have misunderstood me. I am talking about the re-zoning. You couldn't get the re-zoning in place by the end of March, could you?-- It would have been very, very difficult. I take it you were trying?-- We were trying, but the payment of the 1.3 million was the thing that slowed it up. Did you have to negotiate with the bank for the payment for the 1.3 million?-- Of course. Was the bank reluctant to part with a further 1 . 3 million?-- They had to be convinced." The account given in evidence-in-chief was not really the subject of challenge by the defendant. I accept it as reliable. There was some questioning of Mr. Matsui at p. 217 of the transcript, which is unsatisfactory. He denied that he had said to Mr. Bond on 5th February that Sanwa could not settle the -- 69 of 72 -- 66 contracts or required six months to complete the settlement of the purchase and he denied that Mr. Yamanaka said to Mr. Bond that Sanwa could not or would not settle the contracts or required an extension of six months to do so. As to the meeting on 7th February, 1991, he said "No" to the question:- "During the meeting, did anyone say from Sanwa that Sanwa did not see its way clear to settling the contract to buy the land at Australis Point?" The questioning continued:- "Tell us, please, what was said by Mr. Smith and by those on behalf of Sanwa at the meeting?-- Mr. Smith said that the rezoning approval would be again this month or February and he also made requests to - of Sanwa - to settle. What did Sanwa say in reply?-- Sanwa replied that if Mr. Smith could properly confirm that approval, the rezoning would be gained. Then, they would pay the money and they also - I also asked Mr. Smith to consider the fact that there are various regulations being imposed by Japanese banks on Sanwa." Solicitors' correspondence set out already indicates that the defendant and its solicitors were astute, with the single exception of ex. 42, sent on 31st May, 1991 at a time when I consider demolition by 11th June was still possible, (and which in my view has no effect on the general picture) to avoid reference to the matter of demolition. They made no response to the plaintiffs' request for some indication to be given that demolition was required or appropriate. No point was taken about non-demolition until 11th June, 1991 was past. Of course, no intimation in terms was forthcoming that demolition of the hotel was not required. I find that justifiable apprehension on the plaintiffs' part that the defendant would not settle was the sole reason for non-demolition of the hotel. -- 70 of 72 -- 67 Mr. Chesterman contended that the non-demolition was fatal to success of the plaintiffs' claim. He correctly pointed out that demolition could not occur simultaneously with settlement. He submitted that the promise to demolish could not be regarded as mutual or concurrent or interdependent with the defendant's promise to pay the purchase price, even though the time for performance might be the same. As to the promises being independent he cited Halsbury (4th) vol. 9, paras. 515-16, laying emphasis on the separate consideration payable for the demolition: The Mersey Steel & Iron Co. (Limited) v. Naylor, Benzon & Co. [1884] 9 A.C. 434, 443. I was also referred to Corbin on Contracts vol. 3A paras. 65-67 and Williston on Contracts (3rd ed.) vol. 6, para. 829 at p. 80, and Stoljar's article, Dependent and Independent Promises (1957) Sydney Law Review, vol. 2, 217, 244 ff and his discussion of Sergeant Williams' Rules including in the report of Pordage v. Cole ( 1669) 1 Wms. Saund. 31 9. An analogy was drawn with employment contracts, whereby a person employed must perform extensive services prior to any entitlement to payment. It was contended that where, as here, the plaintiffs seek to enforce the contracts, they must have performed all of their own promises. In the special circumstances of this case, I do not accept .the defendant's argument. It is a close question, but if the matter has to be decided, I would find that at all times since, at the latest, the beginning of 1991, the defendant has evinced a lack of disposition to complete the contracts at an early date, if at all, and that the plaintiffs have been absolved from having actually to carry out their promise to demolish throughout this -- 71 of 72 -- 68 period. In my opinion, the special circumstances alluded to above require rather less by way of intimation that performance by the plaintiffs of their promise would be useless than might be required in an ordinary case. (although it is not part of A further comment might be made the foregoing reasoning) that reasonable expectations of co-operation between purchaser would tend to further strengthen the position. vendor and plaintiffs' The defendant claimed a right to rescind as at 12th June, 1991. Rescission being the act of "an innocent party" I view the defendant as not entitled to rescind. I do not accept that for present purposes demolition of the hotel, which I regard as constituting a special definition of what was required by way of the giving of vacant possession in this case, is to be treated as other than a concurrent obligation with the others which represented part of completion, for purposes of the limitation of the class of those who may rescind, as discussed in cases such as Ireland v. Leigh (1982) Qd. R. 145 and Segacious Pty. Ltd. v. Fabrellas (1991) 1 Qd. R. 471. -- 72 of 72 --