Petelin v Deger Investments Pty Ltd [1976] HCA 4

High Court of Australia Barwick C.J. McTiernan and Mason JJ. Petelin v Deger Investments Pty Ltd [1976] HCA 4

ORDER Appeal allowed with costs. Order of the Supreme Court of New South Wales set aside and in lieu thereof order that the suit be dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1976, Feb. 19 Barwick C.J.

The appellant, on 6th April 1971, signed what was described as an option agreement, whereby for consideration he granted to Liverpool Properties Pty. Ltd. or its nominee the sole and exclusive option of purchasing a described property "for an estate in fee simple in possession free of all mortgages charges and other encumbrances easements restrictions and covenants (except those referred to in the second schedule hereto)" for a stated price.

The manner of exercise of the option was specified. The third clause of the agreement was in the following terms:

3. Immediately upon the exercise of this option the Grantor and the Grantee or its nominee will execute a contract on the terms referred to above and containing the conditions of sale as approved by the Real Estate Institute of New South Wales and the Law Society of New South Wales together with such conditions (if any) as appear in the Third Schedule hereto.

The second schedule to the option agreement contained the following statement: "The grantees are aware of the proposed roadway intended for this land by Liverpool City Council."

Liverpool Properties Pty. Ltd. duly nominated the respondent as its nominee and the respondent duly exercised the option.

The form of contract approved by the Real Estate Institute and the Law Society of New South Wales in current use at the time of the grant of the option to purchase contained the following condition:

10. Should it be established prior to completion that at the date of this Agreement the property was affected by any town and country planning Scheme or interim development prepared or prescribed under the provisions of the State Planning Authority Act or Pt XIIA of the Local Government Act 1919 as amended otherwise than as stated in the fourth schedule hereto or was affected by any Residential District Proclamation under s. 309 of the Local Government Act 1919, or by any existing proposals for re-alignment widening or siting of a road by any competent authority otherwise than as disclosed in the said fourth schedule, either party shall be entitled to rescind this Agreement by notice in writing to the other.