Adamson v Hayes [1973] HCA 6

High Court of Australia Barwick C.J. Menzies, Walsh, Gibbs and Stephen JJ. Adamson v Hayes [1973] HCA 6

ORDER Appeal allowed with costs. Order of the Supreme Court of Western Australia set aside and in lieu thereof order that judgment be entered for the defendants upon the plaintiffs' claims for specific performance. Action remitted to the Supreme Court for consideration of any other issue in this action upon the application of either party.

Cur. adv. vult.

The following written judgments were delivered:—

1973, April 9 Barwick C.J.

In an action in the Supreme Court of Western Australia for specific performance of oral agreements between the respondents who were plaintiffs in the suit and the appellants who were defendants, the Supreme Court found that it was orally agreed on 3rd December 1970 between the first and second-named respondents on the one hand and the first, second, third and fourth-named appellants on the other:

(a) that as between themselves certain mineral claims should be held by them in the following shares, namely, as to forty-four per centum for the first and second respondents and as to fifty-six per centum for the appellants; (b) that subject to sub-par. (c) the appellants out of their interest in the said mineral claims should offer to Western Titanium N.L. an option to acquire a fifty per centum interest in the said claims upon the following terms: (i) the option period to extend from 1st January 1971 until 30th April 1971; (ii) the consideration for the option to be the sum of $60,000; (iii) all information gained by Western Titanium N.L. in relation to the said claims during the option period to be made available to the first and second respondents monthly; (iv) the purchase price to be $500,000 payable upon the exercise of the option together with one half of one per centum of the f.o.b. value of all ore produced from the said claims (by which all parties meant, and all parties understood to mean one half of one per centum of the f.o.b. value of all minerals produced from the claims). (c) that the terms of the said option save and except those referred to in sub-par. (b) (i) to (iv) should be subject to the prior approval thereof by the first and second respondents and further subject to prior agreement being reached between Western Titanium N.L. and the first and second respondents for the exploration and, if warranted, development of the said claims, such agreement to be upon such terms as the first and second respondents might require; (d) that if no agreement as referred to in sub-par. (c) was concluded between Western Titanium N.L. and the first and second respondents then the appellants would grant to the first and second respondents or to their nominees an option to acquire the said fifty per centum interest in the claims on the same terms as the offer to Western Titanium N.L. set out in sub-par. (b) (i) to (iv) hereof provided however that if within fourteen days from 3rd December 1970 the first and second respondents or the persons nominated by them did not enter into an option on the foregoing terms then the first and second respondents would be required to reach an agreement with Western Titanium N.L. for the exploration and development of the claims and to consent to an option being granted to that company by the appellants upon the terms of the offer set out in sub-par. (b) (i) to (iv); (e) that the first and second respondents should have an option exercisable within fourteen days of the exercise of the option by Western Titanium N.L. (or by such other party as the option might be granted to) of acquiring from the appellants for the purchase price of $70,000 their remaining six per centum interest in the said claims thereby increasing the first and second respondents' interests in the said claims to fifty per centum; (f) that in the event of the respondents' nominee not exercising the option lastly mentioned, the appellants were to have an unrestricted right to sell their interest to whomsoever they pleased.