McNAMARA v FREEMAN SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL Hope, CLARKE and MEAGHER JJA 19 July 1989, 19 July 1989 [1989] NSWCA 143 COMMON LAW — OPTION TO PURCHASE — TERMS OF SETTLEMENT — AGENT'S AUTHORITY — BIAS. Meagher JA In this matter Mrs McNamara, the appellant/defendant signed a document which, on the fact of it, seems to be an option for the purchase of some land owned by her at 1 Rose Terrace, Paddington. The plaintiffs, a Mr Freeman and Mrs Pamela Freeman, sought specific performance of that option. Those proceedings were heard by Young J for a period of one day in the course of which his Honour had the affidavits read and heard a certain amount of oral evidence. At the conclusion of the day there was discussion about settlement of the matter between the parties. Those settlement discussions were protracted. They lasted from 4 o'clock to about 5.30. During the course of those settlement negotiations various offers were made by the plaintiffs to the defendants. The evidence which was accepted by his Honour is that eventually, at Mrs McNamara's suggestion, the figure of $115,000 should be put to the plaintiffs. It was put and it was accepted. The original contract price was formerly $95,000. After the parties had agreed as to the price the legal representatives went to a room, in which Mrs McNamara was not present, and drew up terms of settlement which are as follows: 1. Declaration and orders in terms of paragraphs 1, 2 and 3 of the plaintiffs summons filed 19th October, 1988. 2. Order that within 3 days of the defendants solicitors submitting to the plaintiffs solicitors a contract in the form of the 1988 edition of the Law Society and Real Estate Institute, the parties to execute and enter into the said contract. 3. Note the undertaking to the Court of the plaintiff and the defendant that they will do all such things and execute all such documents as may be necessary to give effects to the order made in paragraph 2 above. 4. Note the agreement of the parties that, in consideration of the defendant agreeing to the making of the orders herein, the plaintiff will upon completion of the said contract pay to the defendant's solicitors Messrs Carroll and O' Dea, the sum of $115,000 in full settlement of the purchaser's obligations as to price under that contract. 5. Note the further agreement of the parties that there being no orders as to costs. 6. Order that in default of the defendant complying with order two above, order in terms of paragraph 5 of the summons. They were signed by Mrs McNamara's solicitor. In due course Mrs McNamara made it manifest that she did not consider herself bound by those terms of settlement and the plaintiffs came again before Young J seeking specific performance of the compromise embodied in those terms of settlement. Mrs McNamara has now appealed. 2 UNREPORTED JUDGMENTS Mr Seton of counsel appeared for her today and put to us a number of submissions. At the outset I wish to make it clear that in my view the order of Young J, who found for the plaintiffs, is correct, and the appeal must therefore be dismissed, but I do wish to make it also plain that today Mr Seton has said, on behalf of Mrs McNamara, everything which could possibly be said, and, if I may say so without condescension, has done so extremely well. Nonetheless even with the skill with which he argued the matter I am afraid his submissions ought not be accepted. His first submission was a purely procedural one, namely that the second term in the terms of settlement was that the parties agreed that an order within three days of the defendant's solicitors submitting to the plaintiffs' solicitors a certain contract, the parties would execute that contract. In terms there was no express stipulation for the time within which the defendant's solicitors would submit the contract to the plaintiffs' solicitors. Therefore, there had been, so it was argued, no breach and the matter failed in limine. That submission is completely answered by the fact that before the defendant's solicitors had any opportunity to submit a contract to the solicitors for the other side Mrs McNamara repudiated the entire terms of settlement. Once an anticipatory breach amounting to a repudiation takes place the plaintiffs were in a position to bring the proceedings. The second argument depended on the same omission of a date but to the point that the result was, in law, that there could be no contract. In my view that is adequately answered by a consideration of term three of the terms of settlement which consisted of an agreement that both parties would do all such things and execute all such documents as may be necessary to give effect to the second term of the terms of settlement. I might add that even if that had not been made an express term of the contract it seems to me a term which the law would in any event, imply. Be that as it may it was an express term and that express term in my view carries an obligation on the defendant's solicitors to submit to contract within a reasonable time. So the submission that there was no contract between the parties disappears. The third and principal submission which was made to us was that whilst the parties agreed to the figure of $115,000, there was no agreement by Mrs McNamara personally to the terms of settlement as a whole, and clearly that was correct in the sense that she was not in the room and did not sign the document, but that her solicitor who did sign them on her behalf did not have authority to do so. Particularly it was said this was so because the terms of settlement involved not only a compromise of matters in dispute but also variations in a contract of sale, or perhaps an emergence of a new contract of sale. In my view Mr Crawford had ample authority to execute that document. The only matter which disturbed the parties, it is fairly clear from the evidence, was the question of price, and once that was agreed on the action of the parties in drawing the terms of settlement was simply giving effect to the mechanics whereby the agreed amount would eventually be paid to Mrs McNamara. The situation being litigious, Mr Crawford had ample authority in my view to negotiate, agree with and execute the document in question. The fact that the document may also operate as a new contract of sale, if it does so operate, seems to me to be beside the point. Either the document was a resolution of the parties' differences or it was not. If it was such a resolution it is beside the point that it may or may not have amounted to a contract for sale of land. URJ McNAMARA v FREEMAN (Clarke JA) 3 The next submission put by Mr Seton was that his Honour was in error in hearing the motion at all because of apprehended bias. It is not suggested and could not be suggested that there was any question of actual bias but as I take it Mr Seton's submission amounts to a suggestion that Young J, by embarking on a hearing of the motion, may have appeared to a reasonable outsider to have been biased by reason of his having heard part of the case already. This view of bias is, in my mind, purely fanciful. There is no reason why a judge who has embarked upon the hearing of a case may not hear a motion in that case. Whether or not he has some half-formed views on merits of the case already, no rational person in my view would have regarded his Honour's behaviour in this regard as being in any way tainted by bias. It was also submitted to us that his Honour was in error in failing to grant an adjournment. The decision whether an adjournment should or should not be granted is a purely discretionary decision and no sufficient ground has been shown to us as to why his Honour's discretion miscarried. Therefore in my view the appeal should be dismissed. Hope JA I agree. Clarke JA I also agree. The orders of the Court are that the appeal is dismissed with costs, including reserved costs. Counsel for the Appellant: RW Seton Solicitors for the Appellant: B Neill and Co Counsel for the Respondent: G Laughton Solicitors for the Respondent: PW Smyth King and Son