Hayward & Anor v Planet Projects Pty Limited & Anor [2000] NSWSC 1105

New South Wales Supreme Court

CITATION : Hayward & Anor v Planet Projects Pty Limited & Anor [2000] NSWSC 1105 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1978/2000 HEARING DATE(S) : 16-20/10/00; 8/11/00 JUDGMENT DATE : 1 December 2000

PARTIES : Max Hayward and Helen Hayward v Planet Projects Pty Limited and Hugh Aitken JUDGMENT OF : Simos J at 1

COUNSEL : M. Tyson (Plaintiff) P. Menadue (Defendant) SOLICITORS : Stidwell Solicitors (Plaintiff) Anne Gillin (Defendant) CATCHWORDS : Vendor and purchaser - Exchange of non-identical counterpart contracts - Claim for rectification - HELD: Rectification granted LEGISLATION CITED : Contracts Review Act Sindel v Georgiou (1984) 154 CLR 661 CASES CITED : Longpocket Investments Pty Limited v Hoadley (1985) NSW Conv R 55-244 Domb v Isoz (1980) Ch 548 L'Estrange v Graucob (1934) 2 KB 394 DECISION : Rectification granted

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

SIMOS J

Friday 1 December 2000

1978/2000 - MAX HAYWARD and HELEN HAYWARD v PLANET PROJECTS PTY LIMITED and HUGH AITKEN

JUDGMENT HIS HONOUR : THE PROCEEDINGS STATEMENT OF CLAIM 1 By their further amended statement of claim filed in Court on 16 October 2000, the plaintiffs allege that on or about 12 March 1998 the defendants purported to enter into a contract with the plaintiffs, whereby the defendants agreed to sell to the plaintiffs, and the plaintiffs agreed to purchase from the defendants "the business located on the land known as 'Burrapine Lodge' located at Sheet-O-Bark Road, Taylor's Arm, New South Wales, and also the said land" for the sum of $780,000. The plaintiffs further allege that in fact no contract was concluded between the plaintiffs and the defendants. 2 The plaintiffs particularized this latter allegation as follows:- " PARTICULARS (a) The Vendor Counterpart Contract provides that out of the $166,000.00 payable shortly after exchange: (i) $50,000 is apportioned to the purchase of cattle; (ii) $50,000 is apportioned to the purchase of plant and equipment; and (iii) The remainder is apportioned to the freehold land, structural improvements, milk quota and chattels. (b) The Purchase Counterpart apportions:- (i) $27,900 towards the purchase of cattle; (ii) does not identify an amount apportioned to the purchase of plant and equipment; and (iii) apportions the remainder to the freehold land, structural improvements, milk quota and chattels as well as machinery and equipment. (c) At all material times the Plaintiffs believed they would own the livestock and plant and equipment on exchange of Contracts. (d) At all times the Plaintiffs were under the belief that the Licence payments were coming off the purchase price; (e) At all material times the Defendant was under the belief that the Licence payments were not coming off the purchase price." 3 The plaintiffs further allege that in performance of the purported contract, the plaintiffs paid the defendant the sum of $78,000 on 5 February 1998, the sum of $88,000 on 4 March 1998 and the sum of $30,000 on 10 March 1999. 4 The plaintiffs further allege in the alternative, that if there was a concluded contract (which was denied) the contract was unjust in the circumstances relating to the contract at the time it was made, having regard to various matters which were particularized. 5 The plaintiffs claim a declaration that there was no binding contract between the plaintiffs and the defendant, judgment in the sum of $196,000 and further in the alternative, relief under sections 7 and 8 of the Contracts Review Act and certain other relief. DEFENCE 6 By his amended defence to the further amended statement of claim the defendant alleges that the parties did enter into a binding contract for the sale and purchase of Burrapine Lodge and that a contract was in fact concluded between the plaintiffs and the defendant. 7 The defendant further alleges that there was such a concluded and binding contract between the parties because any differences between the counterparts were not material or substantial. 8 The defendant further alleges in the alternative that at the time of exchange of counterparts it was the intention of the plaintiffs and the defendant that there be a concluded and binding agreement in the same terms as the Vendor's Counterpart, and further in the alternative, that at the time of exchange of counterparts, it was the intention of the defendant known to the plaintiffs that their agreement would be in the same terms as the Vendor's Counterpart. 9 Further, or in the alternative, the defendant alleges that by signing a counterpart of the contract the plaintiffs represented that there was a binding contract between the parties, that immediately upon exchange of contracts on 12 March 1998 the plaintiffs took possession of the property and still have possession of it, that on or about 23 April 1999 the parties entered into an agreement to extend the time for completion of the said contract by a year, and that accordingly, in the premises the plaintiffs had represented that there was a binding contract between the parties, in terms of the Vendor's Counterpart, and that they would pay the balance of the purchase price upon settlement. 10 The defendant also alleges that in reliance upon this representation and induced thereby the defendant assumed that there was a binding contract between the parties, gave possession of Burrapine Lodge to the plaintiffs on the terms set out in the Licence Agreement, spent the deposit released under the contract and incurred the loss and damage referred to in the amended cross claim. 11 The defendant further alleges that in the premises the plaintiffs are estopped from denying that there was a concluded and binding agreement between the parties in the same terms as the Vendor's Counterpart and further that the plaintiffs had waived their entitlement to rely upon the position that there was no binding and concluded contract between the parties. 12 The defendant further alleges that if there was no contract (which was denied) between the parties, that any payments which the plaintiffs made to the defendant should not be returned to the plaintiffs because the defendant provided consideration for those payments, the defendant has not been incontrovertibly benefited or unjustly enriched, and it would be unjust in the circumstances to order the return of the money. 13 The defendants also deny that the contract was unjust in the circumstances in which it was made within the meaning of the Contracts Review Act. CROSS CLAIM 14 By his amended cross claim the defendant alleges that on or about 12 March 1998 the defendant (cross-claimant) and the plaintiffs (cross- defendants) entered into a contract for sale of Burrapine Lodge and a Licence Agreement with respect to Burrapine Lodge for the sum of $780,000, the contract providing, inter alia, that the subject of the contract was not only the land but also the current milk quota and all structural improvements, furnishings, chattels, machinery, equipment and livestock listed in the schedule to the contract. The defendant (cross-claimant) alleges that the contract provided that the plaintiffs (cross-defendants) would pay a deposit of $166,000, leaving a balance of $614,000 payable on completion. The defendant (cross-claimant) also pleads that the plaintiffs (cross-defendants) were required to pay certain amounts pursuant to the Licence Agreement. 15 The amended cross claim also alleges that on or about 23 April 1999 the defendant (cross-claimant) and the plaintiffs (cross-defendants) agreed to extend the time for completion of the contract to 22 April 2000 and to reduce the licence fee to $3,600 per annum, inter alia, on condition that the plaintiffs (cross-defendants) paid to the defendant (cross-claimant) the sum of $30,000. 16 The defendant (cross-claimant) further alleges that although the plaintiffs (cross-defendants) paid to the defendant (cross- claimant) the further sum of $30,000, they the plaintiffs (cross- defendants) were in breach of the Licence Agreement in failing to pay certain licence fees and other amounts, and further that the plaintiffs (cross-defendants) did not complete the contract on 22 April 2000 as agreed, by reason whereof, on 1 May 2000 the defendant (cross-claimant) served upon the plaintiffs (cross-defendants) a notice to complete on or before 3 pm on 16 May 2000. 17 It is further alleged in the cross claim that in breach of the contract the plaintiffs (cross-defendants) failed to complete the contract in accordance with the terms of the notice to complete, whereupon on 17 May 2000 the defendant (cross- claimant) served upon the plaintiffs (cross-defendants) a notice of termination of the Licence Agreement, a notice of termination of the contract and a notice to vacate the land within seven days. It is further alleged that the sale contract and licence agreement were thereby validly terminated but that the plaintiffs (cross-defendants) continued to retain possession of the land. 18 By his cross claim the defendant (cross-claimant) also claims a declaration that the contract was (originally) a binding contract between the parties, and further that it was the common intention of the defendant (cross-claimant) and the plaintiffs (cross-defendants) to enter into a contract in the same terms as the "vendor's counterpart" or alternatively that it was the intention of the defendant (cross-claimant) known to the plaintiffs (cross-defendants) to enter into a contract in the same terms as the "vendor's counterpart" and that further or in the alternative, an order that the contract be rectified to give effect to such intention. 19 The defendant (cross-claimant) also claims a declaration that the contract and the licence agreement had been validly terminated by the defendant (cross-claimant) as a result of the default by the plaintiffs (cross-defendants) and that in the circumstances the defendant (cross-claimant) was entitled to retain all monies which the plaintiffs (cross-defendants) had paid to the defendant (cross-claimant). The defendant (cross- claimant) also seeks judgment for possession of the land, damages and other relief. 20 By their defence to the amended cross claim the plaintiffs deny, inter alia, that there was any concluded contract for the sale of the land between the parties, deny that there was any breach of such contract if such contract, if such contract did come into existence and deny that there was any valid termination by the defendant of the contract. The plaintiffs also deny that the differences between the counterparts were not material or substantial, and deny that it was the intention of the parties that there be a concluded and binding agreement in the same terms as the Vendor's Counterpart, or that at the time of exchange it was the intention of the defendant, and known to the plaintiffs, that the agreement would be on the same terms as the Vendor's Counterpart. The plaintiffs also deny that they represented that there was a binding contract between the parties in the terms of the Vendor's Counterpart, deny that the defendant relied upon any representations made to him by the plaintiffs, and deny any estoppel or waiver as pleaded. THE ISSUES 21 In general terms it may be said that proceedings were conducted by the parties on the basis that the plaintiffs claimed that there was no binding contract between the parties; the defendant claimed that a binding contract between the parties had come into existence, or alternatively that the plaintiffs were estopped from denying that such a binding contract had come into existence; that the plaintiffs committed breaches of that contract, inter alia, by failing to complete, which breaches entitled the defendant to rescind and to claim damages; the plaintiffs denied that they were estopped from denying the existence of a contract between the parties, but that if a contract was held to exist, then it was unjust in the circumstances in which it was made, within the meaning of the Contracts Review Act, and that they were entitled to relief under that Act; both the plaintiffs and the defendant acknowledged that if no binding contract had ever come into existence, then the Court should make some appropriate order with a view to restoring the parties to their original positions. THE FACTS 22 By letter dated 21 January 1998 Anne Gillin, the solicitor for the defendant (vendor) forwarded to Mr Lindsay Moore of Messrs G.P. Evans & Englert, solicitors of West Wyalong, the solicitor for the plaintiffs (purchasers) what she described as "Purchaser's Counterpart Contract". The letter continued as follows:- "Neither the submission of this contract nor this correspondence is meant to be an agreement or offer to sell. No contractual agreement or obligation shall arise as a result of this letter, or submission of the contract. No contractual obligation shall be created until a formal exchange of contract has occurred. Please note that on exchange of the Contracts I shall require all annexures to be initialled or signed by the Purchaser indicating that these were attached to the Contract at the time of signing as evidence of the Vendor's compliance with statutory obligations." 23 By letter dated 25 February 1998 Ms Gillin wrote to Mr Moore in the following terms:- "In respect of the above matter, I am instructed that the parties have agreed to the following arrangements: (1) Deposit to be reduced to $187,000.00. I note your clients have already paid $78,000.00 direct to my client. (2) The parties will be in a position to exchange contracts within seven days. (3) Your clients will lease the property for 12 months between exchange and settlement. In that regard I shall forward lease documents for your approval as soon as possible. (4) You may wish to have a further breakdown of the purchase price in respect of plant and equipment, stock and goodwill." 24 By letter dated 26 February 1998, from Mr Moore to Ms Gillin, it was stated, inter alia, as follows:- "Our clients will require a breakdown of the purchase price. However, we understand that our clients have retained your clients' accountant as theirs. We are instructed that he is able to settle this issue without disadvantage to Vendor and Purchaser. We will await the submission of new documents." 25 On 2 March 1998 Ms Gillin rang Rhonda from the office of Mr Moore and said to her, words to the following effect:- "The parties are to enter into a Licence Agreement. They will pay a licence fee and will be able to take over the farm from the date of exchange. The licence agreement will continue for 12 months until settlement. Otherwise the only change in the contract at this stage is that I understand that your clients want the deposit to be reduced to $166,000.00." Rhonda replied that that was correct, to which Ms Gillin responded that she would be sending a copy of the licence agreement that day for her client's approval. 26 On 2 March 1998 Ms Gillin wrote a letter dated 2 March 1998 to Mr Moore enclosing "copy of Licence Agreement" and stating, "Please advise if you require the original Licence Agreement to be forwarded directly to your clients". 27 On 4 March 1998 Ms Gillin sent to Mr Moore by facsimile an amended Licence Agreement. 28 A final draft of the licence agreement was faxed to Mr Moore on 5 March 1998. 29 On 5 March 1998 Mr Moore wrote a letter dated 5 March, 2000 to Ms Gillin, which letter included the following passages:- "… our clients have instructed us that they have agreed with your clients to revert to the earlier proposal as follows: Our clients to pay to your clients $166,000 immediately made up as follows:- Deposit on purchase of land $66,000.00 Purchase of plant and equipment $50,000.00 Purchase of livestock $50,000.00 Total: $166,000.00 As indicated we have fully presented our clients in writing with the issues confronting them and the attendant risks. They are confident that they will be able to complete the purchase within 12 months. As we see it this will require our clients to raise $614,000.00 to complete the purchase. This is calculated as follows:- Purchase of property $482,000.00 Purchase of milk quota $111,000.00 Purchase of 'goodwill' $87,000.00 Total $680,000.00 Less deposit paid as above $166,000.00 $614,000.00 Subject to your clients' instructions to you we are willing to amend the draft document to accord with these changes and submit them to you. Our clients have now moved to Taylor's Arm, and if approved we will have no objection to them attending your office to exchange contracts." 30 By letter dated 6 March 1998 Ms Gillin wrote to Mr Moore as follows:- "I refer to your facsimile of 5 March, 1998. My client does not agree with your proposal that your clients purchase the plant and equipment separately from the rest of the property. My client wishes the matter to proceed in accordance with the contract submitted to you originally incorporating the amended Special Conditions provided to you yesterday AND amending the deposit to read $166,000.00 and the balance to read $614,000.00. My client believes that your clients are agreeable with this proposal. Please confirm that the matter can exchange as outlined above. My client is happy for your clients to attend my office to exchange contracts." (underlining supplied). 31 It appears from the letter dated 5 March 1998 from Mr Moore to Ms Gillin that the plaintiffs did wish to apportion the sum of $50,000 to the plant and equipment and a further sum of $50,000 to the livestock and they also had intended that the property in each of those items would pass to them upon payment of the deposit. At least it appears that that is how the letter was regarded by Ms Gillin who replied on 6 March 1998 by saying that "my client does not agree with your proposal that your clients purchase the plant and equipment separate from the rest of the property ". In other words, it appears that at this time, the plaintiffs wanted the property in the plant and equipment and in the livestock to be transferred to them immediately upon payment of the deposit as to $50,000 for the livestock and a further $50,000 for the plant and equipment, but, although the defendant was agreeable to the apportionment of those two sums of $50,000, he was not agreeable to the transfer of the property in those items passing upon payment of the deposit. As will appear hereafter, however, the defendant later made it clear to the plaintiffs - that he was not agreeable to the property in the livestock and the plant and equipment passing to the plaintiffs prior to completion. 32 The letter dated 5 March 1998 from Mr Moore to Ms Gillin does however, support the conclusion that at the time of exchange the plaintiffs had agreed as to the apportionment of the purchase price as indicated in that letter. It is also the case that the counterpart contract that the plaintiffs did sign made it expressly clear that the property in the livestock would not pass until completion (see Special Condition 6(b)). 33 I note also that Ms Gillin's letter dated 6 March 1998 to Mr Moore states, inter alia, that " my client wishes the matter to proceed in accordance with the contract submitted to you originally incorporating the amended Special Conditions provided to you yesterday …". 34 It is not clear whether Ms Gillin intended to convey that what she provided to Mr Moore the previous day (5 March 1998), was a complete copy of "the contract submitted to you originally incorporating the amended Special Conditions" or merely "the amended Special Conditions". Either way there is no evidence that Mr Moore received either a complete copy of "the contract submitted to you originally incorporating the amended Special Conditions" or only "the amended Special Conditions", and there is nothing in Mr Moore's file to suggest that he received either. Moreover, there is nothing is Ms Gillin's file, other than the letter of 6 March 1998, to suggest that either was actually sent by Ms Gillin to Mr Moore and Ms Gillin was unable to say whether either had been sent. 35 Be that as it may, what is clear is that the counterpart contract which Mr Moore returned to Ms Gillin, which was given by Ms Gillin's clerk, Ms Legend to the plaintiffs to sign on 12 March 1998, was the original unamended contract forwarded by Ms Gillin to Mr Moore on 21 January 1998, and not that original contract incorporating the amended special conditions referred to in Ms Gillin's letter of 6 March 1998 to Mr Moore in which she stated that that copy with the amended special conditions or the amended special conditions alone had been sent to Mr Moore the previous day, namely 5 March 1998. 36 This letter of 6 March 1998 is also of particular importance in relation to at least two matters, namely, firstly, that it plainly states that Ms Gillin's client, the vendor, did not agree with the proposal that the purchasers should purchase the plant and equipment separately from the rest of the property, and secondly, that the vendor wished to proceed "in accordance with the contract submitted to you originally" but "incorporating the amended Special Conditions provided to you yesterday". 37 In relation to the first of these matters, it is plain, in my opinion, that the defendant (vendor) did not prior to exchange of counterparts, or at any relevant time, depart from his disagreement with the proposal that the purchasers should purchase the plant and equipment separately from the rest of the property. Moreover, I find as a fact in this connection, that, prior to exchange of counterparts, the defendant discussed this matter with the plaintiffs and informed the plaintiffs that he was of this view and the plaintiffs did not disagree or express any objection (see later). 38 I note in passing that no reference was made in the letter of 6 March 1998 from Ms Gillin to Mr Moore to the proposal contained in the letter dated 5 March 1998 from Mr Moore to Ms Gillin to the effect that the livestock also should be purchased separately from the rest of the property but I find that this matter was also discussed by the defendant with the plaintiffs (see later). 39 It is plain, in my opinion, as a result of these discussions, that, as at the time of exchange of the contracts on 12 March 1998, both the plaintiffs were aware of the position of the defendant as expressed to them in relation to these matters and that they had not disagreed. 40 Nor in my opinion did anything pass between the solicitor for the defendant and the solicitor for the plaintiffs prior to exchange which would produce any different result, for example, there was no suggestion in any correspondence between the solicitors that the solicitor for the defendant had agreed (short of a binding contract) on behalf of his client that there would be a separate purchase of the livestock and plant and equipment on exchange of counterparts. 41 I would only add that because the letter dated 6 March 1998 from Ms Gillin to Mr Moore expressly stated that her client did "not agree with your proposal that your clients purchase the plant and equipment separately from the rest of the property", in my opinion for present purposes, notice to that effect to the plaintiffs' solicitor must be deemed to be equivalent to notice to the plaintiffs direct. (see later). 42 Although Ms Gillin was only able to say that the counterpart contract signed by the defendant was signed by the defendant prior to 12 March 1998, Ms Gillin, whose evidence I accept, gave evidence that she believed that it was on or about 3 March 1998 that the defendant attended her office to review the contract and licence agreement, and that she believed that he may have signed the contract on that day or a later day. Ms Gillin also stated that on whatever day that was, she was instructed by the defendant to change the value of the livestock to $50,000 and also to put $50,000 in as the value for the plant and equipment. Ms Gillin gave evidence that following those instructions she amended her copy of the contract (signed by the defendant) as forwarded by her to Mr Moore on 21 January 1998, as follows:- (1) By deleting special condition 7 because it was redundant. (2) By substituting $50,000 for $27,900 and adding the words "and a further sum of $50,000 is for plant and equipment" to special condition 9. (3) By deleting and changing the dollar amounts in the annexure (schedule) so they reflected the figures in the previous paragraph. (4) By adding the words "enter into a Licence Agreement, a copy of which is annexed hereto and marked 'B' to special condition 12(a)". EXCHANGE OF CONTRACTS 43 On 12 March 1998 the plaintiffs went to the office of Ms Gillin and signed both the counterpart contract to be signed by them as well as the licence agreement pursuant to which they were to be entitled to possession of the property after exchange for a period of twelve months, on the terms and conditions of the licence agreement. 44 Prior to the plaintiffs signing the documents Ms Gillin's clerk, Ms Jennifer Legend, whose evidence I accept, asked them whether they wished to telephone their solicitor before signing, to which Mr Hayward replied that he would, following which Mrs Hayward spoke to Mr Moore and asked him whether it was in order for them to sign the contract to which Mr Moore replied to the effect that it should be okay. After the telephone call had concluded the plaintiffs signed the documents. 45 According to Mrs Hayward in her affidavit of 25 July 2000 the contract she signed was no more than 13 to 15 pages long "at most". Having since been shown a copy of the contract signed by the defendant held by her solicitor, she says that she was surprised to see how thick it was (68 pages) and did not recall the contract she signed having so many pages, and, in particular, did not recall seeing any of the diagrams and copies of title deeds attached. Mrs Hayward said in her affidavit that when she signed the contract she believed "we were getting the stock and equipment outright and leaving the remainder as the actual deposit for the land". She also said "I quickly flicked through the other pages without reading them. The wording was confusing and I had faith that Anne Gillin had made the changes I had asked for. I had no reason to believe otherwise. Max and I then signed the contract and handed it back to the female at the reception". 46 When the purchasers signed the counterpart contract in Mr Gillin's office the counterpart contract which they signed contained a copy of the licence agreement but a separate licence agreement document was signed by them. 47 It appears that the defendant was present for at least part of the time when the plaintiffs were in the office of Ms Gillin because Mrs Hayward says that on this occasion the defendant asked her whether she had received legal advice in relation to the licence to which she replied in the affirmative, after which the defendant asked her to write on the last page of the licence agreement that she had been legally advised by her solicitor. Mrs Hayward then wrote the following words on the last page of the licence agreement:- "We, Edward and Helen Hayward have been legally advised by our solicitor Mr Lindsay Moore in respect to this Licence Agreement." 48 Ms Legend gave evidence which I accept as probable to the effect that she produced a "complete Contract, consisting of approximately 68 pages, to Mr and Mrs Hayward." 49 Ms Legend further stated in her affidavit that "the Purchasers' Contract which the Haywards signed (was) the same document which was sent to Lindsay Moore for his perusal (in January) and was then returned (in March) to this office by Lindsay Moore so that the Haywards could sign it." If this is correct as it appears to be, it seems that the copy sent back by Mr Moore to Ms Gillin contained the original special conditions and did not contain the amended special conditions said by Ms Gillin in her letter of 6 March 1998 to have been provided to Mr Lindsay Moore "yesterday" and this is, of course, confirmed by the fact that the counterpart contract actually signed by the plaintiffs contained the original special conditions but not the amended special conditions. This is also further evidence to suggest that Mr Moore did not receive the amended Special Conditions. 50 Mrs Legend also said in her affidavit that the defendant had signed the counterpart copy signed by him prior to 12 March 1998 and that when she "carried out the exchange of Contracts, I added no extra documents to the Purchasers' Contract nor were there any alterations made to the Purchasers' Contract after Mr and Mrs Hayward signed it. Upon exchange I dated both Contracts." She was unable to explain the differences between the two contracts. 51 It does appear, however, that originally both Ms Gillin and Mr Moore had identical counterpart contracts in the form, a copy of which was sent by Ms Gillin to Mr Moore on 21 January 1998. Thereafter on or about 3 March 1998, or perhaps later, but in any event prior to 12 March 1998, as a result of a conference between the defendant and Ms Gillin, Ms Gillin altered the special conditions contained in the copy of the counterpart contract signed by the defendant, but apparently failed to send a copy of those amended special conditions to Mr Moore, although she intended to do so. The result was that the copy of the contract which Mr Moore returned to Ms Gillin in March 1998 for the purpose of it being signed by the plaintiffs in Ms Gillin's office, was the original counterpart contract sent by Ms Gillin to Mr Moore containing the original and unamended special conditions, and it was this counterpart contract which the plaintiffs signed in Ms Gillin's office. The contract which was signed by the defendant, and which Ms Gillin sent to Mr Moore by way of exchange under cover of her letter dated 12 March 1998 contained the amended special conditions, not the original special conditions. 52 By letter dated 12 March 1998 from Ms Gillin to Mr Moore, Ms Gillin forwarded to Mr Moore the copy of the contract signed by the defendant. The letter was in the following terms, inter alia:- "In respect of the above matter please find herewith the Vendor's counterpart of the Contract, duly signed, to complete the exchange. Both Contracts have been dated 12 March, 1998. I also enclose a copy annexing the Licence Agreement for your records." THE COUNTERPARTS AS EXCHANGED 53 The counterpart contract signed by the plaintiffs on 12 March 1998 in Ms Gillin's office did not reflect in its terms the knowledge of the plaintiffs as referred to above in that the counterpart contract signed by the plaintiffs did not provide for the livestock and the plant and equipment to become the property of the plaintiffs on exchange, but merely apportioned $27,900 of the sale price to "the livestock referred to in the schedule". The relevant special condition also provided that the balance was apportioned to the freehold lands and the structural improvements thereon and the milk quota for 185,916 litres per annum, the furnishings and chattels referred to in the schedule and machinery and equipment also as set out in the schedule. 54 The relevant special condition was Special Condition 9 which was in the following terms:- "9. The Vendor is selling the land and improvements, furnishing and chattels, machinery and equipment together with certain livestock as set out in the schedule and the current milk quota attaching to the property on a walk-in walk-out basis. It is expressly agreed that of the sale price, the $27,900.00 is for the livestock referred to in the schedule; and the balance is apportioned to the freehold lands and the structural improvements thereon, the milk quota for 185,916 litres per annum, the furnishings and chattels referred to in the schedule and machinery and equipment as also set out in the schedule." 55 The schedule did list, inter alia, items under the headings of "STRUCTURAL IMPROVEMENTS", "FURNISHINGS AND CHATTELS", "MACHINERY AND EQUIPMENT" and "LIVESTOCK". At the end of the schedule was typed "Total value $50,000.00". 56 It should be noted that in relation to these matters the copy of the contract signed by the defendant, which the defendant claims accorded in this respect with the common intention and/or agreement of the parties at the time of exchange, provided that out of the $166,000.00 "deposit", $50,000.00 was apportioned to the purchase of cattle, $50,000.00 was apportioned to the purchase of plant and equipment and the balance was apportioned to the freehold land, structural improvements, milk quota and chattels. 57 Although this counterpart (signed by the defendant) provided for apportionment of the "deposit" in the manner just mentioned, that counterpart did not make any provision for the passing of any of the property the subject of the purchase and including the cattle and the plant and equipment on payment of the "deposit". 58 I note that Special Condition 6 of the counterpart signed by the plaintiffs also included the following provision: "6. With respect to the livestock included in the sale … (b) Delivery of the livestock and title thereto shall be given and taken on completion following a mustering of the land (unless the parties otherwise agree) and the sale price shall not be adjusted as a result of any increase or decrease for natural reasons in the number of the livestock and the Purchaser shall not be entitled to raise any objection should the number of livestock be different on delivery from those indicated in the said schedule as a consequence of such natural reason." (underlining supplied). 59 Special condition 6(b) was the same in the counterpart signed by the defendant as in the counterpart signed by the plaintiffs. 60 Special condition 7 as contained in the counterpart signed by the plaintiffs was omitted from the counterpart contract signed by the defendant but this does not appear to have been regarded as significant by either party. As a result of this, however, special condition 8 in the counterpart contract signed by the purchasers is numbered 7 in the counterpart contract signed by the defendant and so on with the final special condition in the counterpart contract signed by the vendors being numbered 12 and the final special condition in the counterpart contract signed by the defendant being numbered 11. 61 Special condition 8 in the counterpart contract signed by the defendant was different from its counterpart being special condition 9 in the counterpart contract signed by the purchasers and was in the following terms:- "8. The Vendor is selling the land and improvements, furnishing and chattels, machinery and equipment together with certain livestock as set out in the schedule and the current milk quota attaching to the property on a walk-in walk-out basis. It is expressly agreed that of the sale price the sum of $50,000.00 is for the livestock referred to in the schedule and a further sum of $50,000.00 is for plant and equipment; and the balance is apportioned to the freehold lands, and the structural improvements thereon, the milk quota for 185,916 litres per annum, the furnishings and chattels referred to in the schedule and machinery and equipment also as set out in the schedule." 62 The schedule in the counterpart contract signed by the defendant appears to have been in the same terms as the schedule in the counterpart contract signed by the plaintiffs, in that in the schedule to each of the contracts it is expressed that the total value of the machinery and equipment is $50,000.00 and the total value of the livestock is also $50,000.00. 63 Both counterparts provided, as stated above, that "Delivery of the livestock and title thereto shall be given and taken on completion" and although nothing specifically was provided for in the contracts as to when title to the plant and equipment would pass, there can be no doubt, in my opinion, that on the true construction of the contract title to the plant and equipment would also pass on completion, and not before. 64 The nett result of the differences between special condition 9 in the counterpart contract signed by the plaintiffs and special condition 8 of the counterpart contract signed by the defendant is that special condition 9 of the counterpart contract signed by the plaintiffs provided that $27,900.00 was apportioned to the livestock and the balance to the other items included in the sale including the land, whereas in special condition 8 of the counterpart contract signed by the defendant the sum of $50,000.00 is apportioned to the livestock and a further sum of $50,000.00 is apportioned to the plant and equipment with the balance being apportioned to the other items, the subject of the sale, including the land. CONSTRUCTION OF THE CONTRACT 65 So far as the counterpart contract signed by the plaintiffs is concerned, it is submitted on behalf of the defendant that, inter alia, special condition 9 in the counterpart contract signed by the plaintiffs should be construed as apportioning $50,000.00 to the livestock and $50,000.00 to the plant and equipment (as was done expressly in clause 8 of the counterpart contract signed by the defendant) by reason of the fact that in the schedule to the contract it is stated, in effect, that the total value of the machinery and equipment is $50,000.00 and that the total value of the livestock is also $50,000.00. 66 In my opinion there is no warrant for construing special condition 9 in the counterpart contract signed by the plaintiffs in this way. In my opinion special condition 9 in the counterpart contract signed by the plaintiffs must prevail principally because, in my opinion, the schedule must be construed simply as a convenient place to record details of the livestock and other items referred to in special condition 9 notwithstanding the references to "total value of $50,000.00". 67 In other words, in my opinion, special condition 9 should be construed on the basis that its contractual words should be given effect to and prevail over what is a mere reference to the two sums of $50,000.00 contained in a schedule whose primary purpose, in my opinion, is to identify items referred to in the special condition 9, thereby shortening and simplifying that special condition. Such a construction on one view could also involve the notion that although the true value of the livestock is $50,000.00 the purchasers are fortunate in getting them for $27,900.00. Be that as it may, I am of the opinion, as stated above, that special condition 9 of the counterpart contract signed by the purchasers cannot be construed as if it provided that $50,000.00 of the purchase price was to be apportioned to livestock and $50,000.00 apportioned to plant and equipment. It follows that, in my opinion, the counterpart contract signed by the plaintiffs, is different from the counterpart contract signed by the defendant, at least in this respect. THE DIFFERENCES BETWEEN THE COUNTERPARTS ARE SUBSTANTIAL 68 It was then submitted on behalf of the defendant that the difference between special condition 9 in the counterpart contract signed by the purchasers and special condition 8 in the contract signed by the defendant is not substantial within the meaning of the English Court of Appeal case of Domb v Isoz (1980) Ch 548, with the result that on the authority of that case the counterpart contract signed by the plaintiffs on the one hand, and the defendant on the other hand, may be regarded as relevantly identical, with the result that a binding contract came into existence between the parties on exchange notwithstanding that the counterparts were not in fact identical. 69 In my opinion, as observed in the High Court in the case of Sindel v Georgiou , ibid , the case of Domb v Isoz was a case in which the remedy of rectification would have been available so that the true ratio of that case is not that exchange of counterparts with differences which are not substantial will bring into existence a binding contract, but rather that where the differences between the counterparts are not substantial and are such that rectification may be granted, then a binding contract will have come into existence on exchange. 70 In any event, in my opinion, the differences between special condition 9 in the counterpart contract signed by the plaintiffs, and special condition 8 in the counterpart contract signed by the defendant are not relevantly insubstantial. 71 In the first place, both special conditions, when dealing with the question of apportionment use the words "it is expressly agreed" and this, in my opinion, lends some support to the view that the parties considered the question of apportionment of the purchase price was significant. Moreover, in my opinion, it would have been known to both parties, or certainly their solicitors, that the apportionment of purchase price can have consequences for the purposes of the Commonwealth Income Tax Act and may result in liability of one or other or both of the parties for income tax. The fact that the question of the apportionment of the purchase price is relevant in relation to financial matters of this kind is further evidence, in my view, to support the view that a clause relating to apportionment of a purchase price cannot be regarded as unimportant or insignificant. 72 Relevant also, in my opinion, is the fact that the defendant stated in his affidavit of 16 September 2000 that at some time shortly before the exchange of contracts on 12 March 1998 he spoke to his solicitor Ms Gillin and told her that it would be necessary to change the apportionment in the contract for plant and equipment and stock up from $27,000 to $50,000 each which would make it look more realistic for tax purposes. Moreover, Ms Gillin stated under cross-examination that there was always "toing and froing" between purchasers and vendors in conveyances about the apportionment clause. She also expressed the view that vendors had more power than purchasers in such transactions and usually got their way in relation to the apportionment clause. 73 The letter dated 25 February 1998 from Ms Gillin to Mr Moore stated, inter alia, that "you may wish to have a further breakdown of the purchase price in respect of plant and equipment; stock and goodwill". This, in my opinion, is another indication of the importance to the parties of the relevant provision relating to apportionment of the purchase price. 74 A further indication that the parties did not regard the apportionment clause as insubstantial or insignificant is the very fact that it was included among the special conditions in the contracts additional the standard conditions contained in the normal printed form of contract. 75 Accordingly, in all the circumstances, I am of the opinion that the differences between the apportionment clauses contained in each of the counterpart contracts cannot be regarded as insubstantial or insignificant.