Black & Ors v Australand Holdings Pty Ltd [2000] NSWCA 15

New South Wales Court of Appeal

CITATION : Black & Ors v Australand Holdings Pty Ltd [2000] NSWCA 15 revised - 26/04/2007 FILE NUMBER(S) : CA 40803/98 HEARING DATE(S) : 8/02/00 JUDGMENT DATE : 24 February 2000

PARTIES : Richard Black, Sciara Holdings Pty Limited, Johneen De Groot-Black (Nee Brazier) (Appellants) v Australand Holdings Pty Ltd (Respondent) JUDGMENT OF : Mason P at 1; Priestley JA at 2; Fitzgerald JA at 3

LOWER COURT JURISDICTION : Supreme Court - Equity Division LOWER COURT 2045/98 FILE NUMBER(S) : LOWER COURT Einstein J JUDICIAL OFFICER :

COUNSEL : P.E. King / M.J. Watts (Appellant) P. Greenwood SC / A. Ridley (Respondent) SOLICITORS : Forshaws Neill (Appellant) Colin Biggers & Paisley (Respondent) CATCHWORDS : Contract for sale of residential unit - "Right of First Refusal" clause - whether there was a breach of the contract - whether conduct amounted to a breach of s52 of the Trade Practices Act - whether the trial judge erred in preferring the evidence of one witness over another - whether a new trial should be ordered. - ND LEGISLATION CITED : Trade Practices Act 1974 (Cth) CASES CITED: Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 Stead v State Government Insurance Commission (1986) 161 CLR 141 DECISION : Appeal dismissed with costs

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40803/98 ED 2045/98

MASON P PRIESTLEY JA FITZGERALD JA Thursday, 24 February 2000

BLACK & ORS v AUSTRALAND HOLDINGS PTY LTD

JUDGMENT

1 MASON P: I agree with Fitzgerald JA. 2 PRIESTLEY JA: I agree with Fitzgerald JA. 3 FITZGERALD JA: In late 1996 or early 1997, the respondent purchased all the units in a building at 11 Gerrale Street, Cronulla (the "old building") by contracts in identical terms. The appellants were vendors of some of the units in the old building. The respondent subsequently demolished the old building and erected a new block of residential units (the "new building") on a site comprising 7, 9 and 11 Gerrale Street. 4 Each contract for the sale of a unit in the old building to the respondent contained the following clause 24: "RIGHT OF FIRST REFUSAL 24. (a) The parties hereto acknowledge that it is proposed that the [respondent] will construct on the development site a 56 unit development ("the proposed development"). (b) The [respondent] is to give to the Vendor a right of first refusal to purchase a unit in the proposed development contemporaneously providing a similar right of first refusal to each of the other Vendors of a lot in the strata plan of which the property is comprised. (c) The [respondent] shall serve on the Vendor a price list together with approximate details of the size, location, layout and finishes of the units in the proposed development. (d) The Vendor or its nominee shall, within seven days, in conjunction with the other Vendors of units in the current strata plan or their nominees ('the other Vendors"), be exclusively entitled to nominate a unit in the proposed development which the Vendor or its nominee intends to purchase ("the nominated unit"). (e) If the nominated unit has previously been nominated by one of the other Vendors, the Vendor shall have a further 2 business days of being notified of such other nomination to make a further nomination. If such further nomination has also been previously nominated by one of the other Vendors, the Vendor shall have a further 2 business days in which to make another nomination. (f) The [respondent] shall serve a Contract for such unit on the Vendor. (g) Should the Vendor not exchange Contracts with the [respondent] within seven days of service of such Contract, the Vendors right of first refusal shall lapse and the [respondent] shall be entitled to sell the nominated unit to another person." 5 In their proceeding against the respondent in the Equity Division, the appellants alleged that clause 24 had been orally varied after the contracts for the sale of units in the old building had been entered into and that, as vendors of some of the units in the old building and assignees of the rights of other vendors in units in that building,[1] the appellants became entitled in the events which occurred to options to purchase a number of units in the new building. 6 Paragraph 17 of the appellants' Amended Statement of Claim was as follows: 17. On or prior to 5 September 1997 the [respondent] entered into an agreement with the [appellants] to amend Special Condition 24 of the Sale Contracts to provide that the Right of First Refusal would be exercised by entering into an option instead of a contract, and in consideration thereof each of the [appellants] agreed to refrain from rescinding any Sale Contracts. The terms of the option were as follows: a) option fee of 10% of the purchase price of the unit with the option fee to be non-refundable; b) the First [appellant] to draft the call-option and forward same in due course to Colin Biggers & Paisley for their client's approval. Particulars: On or about 1 May 1997 Mr. De Souza representing the [respondent], and the First [appellant] representing the [appellants] entered into an oral agreement to vary Special Condition 24 of the Sale Contracts to provide for an option in substitution for a sale contract. A further oral agreement to the same effect was entered into on or about for the 30 August 1997 between Mr. Kalaf representing the [respondent], and the First [appellant] representing the [appellants]. The terms of the agreement of 1 May 1997 and of 30 August 1997 were set out in the letter dated 5 September 1997 sent to the First [appellant] by Colin Biggers & Paisley representing the [respondent].