MacDonald v Robins [1954] HCA 5

High Court of Australia Dixon C.J. Webb and Taylor JJ. MacDonald v Robins [1954] HCA 5

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

March 4, 1954 Dixon C.J.

This is an appeal from a judgment of Virtue J. decreeing that a contract formed by the exercise of an option be specifically performed. The option is contained in an unregistered lease in which the plaintiff respondent and his brother are lessees and the defendant appellant is the lessor. The subject of the lease and the option is a station called "Lochada" at Perenjori in the Bowgada District of Western Australia, an area of about 302,987 acres held by the defendant under three pastoral leases.

The defendant appellant relies upon two grounds for her contention that she is not bound to sell and transfer the property as a result of the purported exercise by the plaintiff respondent of the option. The first is that the option is subject to the due observance of the covenants of the lease and that this condition precedent to its exercise was not satisfied because the plaintiff's brother transferred his interest as co-tenant to the plaintiff, a thing which, according to the defendant's contention, was a breach of covenant. The second ground is that the purported exercise of the option was not in accordance with the requirements of the provision conferring the option because the notice was not given by both brothers as lessees. The defendant is a widow who, with the help of a son, was attempting in 1945 amid the difficulties of the time to carry on Lochada station; she resolved to dispose of it as a going concern. The plaintiff and his brother were desirous of buying it but they were unable at the time to find sufficient money. In these circumstances it was arranged that they should lease the property from the defendant for six years with an option of purchase exercisable during the lease. It was anticipated by both parties that the option would be exercised. The price was fixed at £8,000. The parties executed a lease dated 14th March 1946. The term was six years from 1st March 1946 expiring on 29th February 1952, and it contained an option of purchase exercisable at any time during the term on one month's notice in writing. The instrument was not registered under s. 151 of the Land Act 1933-1948 W.A. nor was it submitted to the Department of Lands and Surveys for approval under s. 143. The two lessees, however, went into possession, worked the property, paid the rent reserved to the defendant as lessor and discharged her obligations for rent under the pastoral leases to the department, which, in at least one receipt for rent, described them as "unregistered holders for" the defendant.