Thomas Developments v Setlee [2002] NSWSC 816

Reported Decision : (2003) NSW ConvR 56-032

New South Wales Supreme Court

CITATION : Thomas Developments v Setlee [2002] NSWSC 816 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2688 of 2002 HEARING DATE(S) : 4 July 2002 JUDGMENT DATE : 4 July 2002

PARTIES : Thomas Developments Pty Ltd (Plaintiff/Cross Defendant) Setlee Pty Ltd (Defendant/Cross Claimant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr M W Young (Plaintiff/Cross Defendant) Mr J A Trebeck (Defendant/Cross Claimant) SOLICITORS : Peter Chamberlain & Co (Plaintiff/Cross Defendant) B E McCann & Co (Defendant/Cross Claimant) CATCHWORDS : CONTRACTS - option agreement - whether an extension of the call option period was granted - whether silence amounted to the granting of the extension DECISION : See paragraphs 28 to 34

- 6 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

WINDEYER J

THURSDAY 4 JULY 2002

2688/02 THOMAS DEVELOPMENTS PTY LIMITED v SETLEE PTY LIMITED

JUDGMENT

1 HIS HONOUR: The plaintiff, Thomas Developments Pty Limited, is the owner of land at Colyton. The particular land in question has now been sub-divided into 23 lots. 2 The defendant company, Setlee Pty Limited, entered into separate option agreements with the plaintiff company on 9 October 2001, each of which gave it, as grantee or its nominee, the option to purchase from the plaintiff/grantors one of the lots. The option was to be exercised within five business days after advice was given by the plaintiff's solicitor to the defendant's solicitor of registration of the plan of subdivision. Notification of registration was given on 12 April 2002. It is accepted, therefore, that the expiry date for the exercise of the options was 19 April 2002. 3 On Tuesday 16 April Mr McCann, solicitor, a sole practitioner, but with one client only, Wincrest Homes Pty Limited, contacted Mr Li, the solicitor for Thomas Developments Pty Limited. Setlee Pty Ltd, is a company associated with Wincrest and Mr Li knew that Mr McCann was authorized to deal with him direct on the options. Mr Li and his wife are directors of Thomas Developments Pty Ltd, as is Mr Li senior, the father of the solicitor. 4 According to Mr McCann, he said to Mr Li, the solicitor: "Can we have an extension of the call option period to allow as many of the nominees as possible to purchase? They are awaiting finance approval and understandably their solicitors will not exchange without finance approval. An extension to 3 May 2002 will be enough time." 5 To which he said that Mr Li said: "Put the request in writing. I want to speak to the directors. One is on holidays. I can't see it being a problem." 6 To which Mr McCann said: "Thank you I will send a letter." 7 Mr Li accepts this evidence, apart from the sentence "I can't see it being a problem" which he denies. Mr McCann made a contemporaneous note of their conversation which supported his evidence. I have no doubt that his evidence is correct and I accept it. In other words, I find that the statement, "I can't see it being a problem" was made. 8 The statement made by Mr Li was, in itself, misleading. His reference to a director being on holidays, was to his father who was playing golf either at Cypress Lakes at Pokolbin or at Horizons at Port Stephens. To suggest, as he did in cross-examination, that his father could not be contacted is ridiculous. 9 Mr McCann immediately put his request in writing, stating, inter alia: "We request you seek further instructions for an extension of the call option expiry to 3 May 2002. … the extension period. … We look forward to advice on your instructions herein." 10 Mr Li did speak to his father on that day but nothing came of that. It was apparently accepted they would meet again on 19 April. 11 On 18 April, by a facsimile which was sent about 7 o'clock at night to Mr McCann, Mr Li sent a copy of the registered plan and then in the letter said: "Would you please advise what your clients intentions are with respect to the other lots not mentioned in your facsimile? Does your client intend to exchange these other lots if the call option expiry date is extended two weeks to 3 May 2002?