New South Wales Court of Appeal CITATION: Noon v Bondi Beach Astra Retirement Village Pty Ltd [2010] NSWCA 202 HEARING DATE(S): 25 March 2010 JUDGMENT DATE: 19 August 2010 JUDGMENT OF: Giles JA at [1]; Macfarlan JA at [126]; Young JA at [127] (1) Appeal allowed. DECISION: (2) Orders of Smart AJ set aside. (3) Order that, in lieu, the proceedings be dismissed. (4) Order that the respondents pay the appellants' costs both of the trial and of the appeal. CATCHWORDS: Contracts- whether contract of sale under which on completion purchaser obtained fee simple of home unit can be a "Residence Contract" under Retirement Villages Act 1989- (by majority "No"). Contracts- Construction- how far may court construe a provision naming X as grantee to be a mistaken reference to a grant to Y. Conveyancing- Retirement Unit- provision in purchase contract that service company have right to "buy back" unit for original purchase price as adjusted- service company not a party to contract- service company purported to exercise option- submitted this was as agent for vendor- whether option enforceable ("No")- whether affected by Conveyancing Act 1919, s 66ZG (by majority, "Yes")- whether void as restraint on alienation ("No")- held option not exercised. Estoppel- Conventional Estoppel- conduct constituting alleged estoppel predating binding contract- vague representations in favour of non party to contract- no estoppel. Conveyancing Act 1919, ss 36C, 66ZC, 66ZE, 66ZG Conveyancing Amendment Act 1997 Conveyancing (Sale of Land) Amendment Act 1990 LEGISLATION CITED: Fair Trading Act 1987, s 75 Retirement Villages Act 1989, ss 3(1), 38 Retirement Villages Act 1999 Retirement Villages Code 1995, cll 2, 3, 13, 24, 27, 29 Quia Emptores 18 Ed 1, Ch 1 (1290) CATEGORY: Principal judgment Attorney-General (NSW) v Brewery Employees Union of New South Wales (1908) 6 CLR 469 Bache v Proctor (1780) 1 Doug 383; 99 ER 247 Ballas v Theophilos (No 2) (1957) 98 CLR 193 Bluebottle UK Ltd v Deputy Commissioner of Taxation [2007] HCA 54; 232 CLR 598 Bondi Beach Astra Retirement Village Pty Ltd v Gora [2010] NSWSC 10 Caboche & Bond v Ramsay (1993) 119 ALR 215 Chartbrook v Persimmon Homes Ltd [2009] UKHL 38; [2008] 1 AC 1101 Coles v Hulme (1828) 8 B & C 569; 108 ER 1153 Elton v Cavill (No 2) (1994) 34 NSWLR 289 Fitzgerald v Masters [1956] HCA 53; 95 CLR 420 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 264 ALR 15 George Hudson Ltd v The Australian Timber Workers' Union (1922) 32 CLR 413 Goldsbrough Mort & Co Ltd v Quinn (1910) 10 CLR 674 Hall v Buust [1960] HCA 84; 104 CLR 206 Hoare v McCarthy [1916] HCA 65; 22 CLR 296 CASES CITED: John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc (2004) 88 SASR 334 Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190 Lindsay v Balgi (1993) 30 NSWLR 244 Maxwell v Murphy (1957) 96 CLR 261 McHugh Holdings Pty Ltd v Newtown Colonial Hotels Pty Ltd [2008] NSWSC 542; 73 NSWLR 53 Moraitis Fresh Packing (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327; 14 BPR 26,339 Moratic Pty Ltd v Gordon [2007] NSWSC 5; 13 BPR 24,713 Nguyen v Taylor (1992) 27 NSWLR 48 Nittan (UK) Ltd v Solvent Steel Fabrications Ltd [1981] 1 Ll Rep 633 Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304 Pallos v Munro (1970) 72 SR (NSW) 507 Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 Reuthlinger v Macdonald (1976) 1 NSWLR 88 Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486 Wik Peoples v State of Queensland (1996) 187 CLR 1 Wilson v Wilson (1854) 5 HL Case 40; 10 ER 811 Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551 Gregory Brian Noon as Co-Executor of the Estate of the late Brian Robert Noon (First Appellant) PARTIES: Matthew Jack Noon as Co-Executor of the Estate of the late Brian Robert Noon (Second Appellant) Bondi Beach Astra Retirement Village Pty Ltd (First Respondent) CG Maloney Pty Ltd (Second Respondent) FILE NUMBER(S): CA 2009/298339 COUNSEL: A S Bell SC and C A Botsman (Appellants) M Leeming SC and R Brender (Respondents) SOLICITORS: Gilbert & Tobin (Appellants) Stephen Wawn & Associates (Respondents) LOWER COURT JURISDICTION: Supreme Court - Equity Division LOWER COURT FILE NUMBER(S): SC 5436/06 LOWER COURT JUDICIAL OFFICER: Smart AJ LOWER COURT DATE OF DECISION: 2 June 2009 LOWER COURT MEDIUM NEUTRAL CITATION: Bondi Beach Astra Retirement Village Pty Ltd v Noon [2009] NSWSC 461 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/298339 GILES JA MACFARLAN JA YOUNG JA Thursday 19 August 2010 NOON v BONDI BEACH ASTRA RETIREMENT VILLAGE PTY LTD Headnote The appellants were executors of the estate of the late Brian Noon who, with his late wife, purchased Unit 42 in a retirement village at Bondi Beach from the second respondent C G Maloney Pty Ltd ("Maloney"). Upon the passing away of Mr Noon (Mrs Noon having predeceased him), Maloney's wholly owned subsidiary, Bondi Beach Astra Retirement Village Pty Ltd ("Astra"), the first respondent, purported to assert a right in the way of a buyback "option" to purchase the unit for its original purchase price. The option asserted was pursuant to cl 15(1) of one of two disclosure statements, Disclosure Statement B ("DSB") contained in special conditions to an otherwise standard form real estate sale contract. DSB was framed in terms purporting to bind and confer benefits on "the Service Company", which was defined to mean Astra, even though Astra was not a party to the sale contract. At trial, the appellants denied that Astra had any contractual entitlement to acquire the unit because Astra was never a party to the Contract. Further, the option was not enlivened because it assumed the existence of a "Residence Contract" and there was no such contract with Astra. Smart AJ held that the definition of "Service Company" was an error based on the mistaken assumption in Disclosure Statement A that the vendor was Astra, and that the true intention of the parties was that "Service Company" referred to Maloney. He held that a solicitor's letter demonstrated that Maloney had authorised Astra to exercise the option as its agent. His Honour held that the sale contract and the documents included in it also served as a Residence Contract because they gave the Noons a right to occupy the unit as proprietors, however, if there were no Residence Contract then no right to exercise the option arose. The appellants put that as the option was not signed in duplicate, it was void under the 1996 version of Conveyancing Act 1919, s66ZG(1) and that the Conveyancing Amendment Act 1997 did not apply retrospectively such that an exchange of signed counterparts would be sufficient. Smart AJ accepted that the amendments were not retrospective, as they exhibited no intention contrary to the Interpretation Act 1987 s 30(1)(b). However, Smart AJ found that s 66ZG did not anticipate or apply to an option whereby ownership of residential premises in a retirement village would be subject to a buyback right. Specifically, ss 66ZG(2) and 66ZE, which provided for recovery of a forfeited percentage of the purchase price from the consideration paid were inapplicable as there was no consideration paid for the option. Smart AJ ordered specific performance of a contract arising from the option. Thus, he did not consider the respondents' contention that the appellants were estopped from denying the existence or efficacy of the option based on representations made by Mr Noon or a common assumption. On appeal, the appellants pressed the arguments above and also challenged that the option was void as against public policy because it sought to prevent the free alienation of land. By notice of contention the respondents put that the primary judge ought to have found that the appellants were estopped from denying the efficacy of the buyback provisions. The appeal raised five principal issues: (1) Whether there was a "Residence Contract" under Retirement Villages Act 1989 s 3(1). (2) Whether cl 15 option was exercisable or exercised by Maloney. (3) Whether the cl 15 option was void pursuant to Conveyancing Act 1919, s 66ZG. (4) Whether the option was void as a restraint on the free alienation of land. (5) Whether there was a promissory or conventional estoppel that the appellants were obliged to resell the unit to the respondents. (1) As to whether there was a "Residence Contract": Giles JA (Macfarlan JA, agreeing): The option was not exercisable by Maloney as there was no Residence Contract. As "Residence Contract" is used in the Retirement Villages Act 1989, the right to occupy residential premises in a retirement village must continue to be sourced in a contract giving a right of occupation. The Noons' right to occupy was by virtue of the their proprietorship, which was obtained upon completion of the sale contract, which was then spent as a source of the right to occupancy. In this context, the provisions dealing with termination of the Residence Contract by notice, abandonment or order were nonsense. Young JA, not deciding: The question of whether the contract of sale did not merge in the transfer, such that it continued to regulate the enjoyment of the contract and could constitute a Residence Contract was not fully argued by the appellants or addressed by the respondents' counsel. As to deficiencies of the form of the purported Residence Contract, the legislature does not intend an over-strict legalistic interpretation of the 1989 Act or the Code. Once a contract dealing with the matters referred to in the Code and the manager is clearly named, there is a Residence Contract. Pallos v Munro (1970) 72 SR (NSW) 507, considered (2) As to whether the cl 15 option was exercisable and exercised by Maloney: Giles JA (Macfarlan JA, agreeing): The option was also not exercisable by Maloney because, properly construed according to the plain intention of DSB and the defined meaning, "Service Company" in the cl 15 option should be understood as Astra. This accorded with both parties knowledge of the buyback provisions and the sales brochure, was largely practice, and was not commercially incongruent. Young JA: While the principle of mistake might apply so that a court would construe a document naming one company as if it named another, the court must be sure that a mistake has been made and what is required in order to give effect to the intention of the parties. There was not an obvious mistake and an obvious substitution for the mistake that would justify reading Maloney as the grantee of the option. Hence, the parties purported to grant an option to Astra, which was not a party to the contract and could not exercise the option. Fitzgerald v Masters [1956] HCA 53; 95 CLR 420, applied; Coles v Hulme (1828) 8 B & C 569; 108 ER 1153; Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1586; Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 30; 1 AC 1101, considered; Wilson v Wilson (1854) 5 HL Cas 40; McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd [2008] NSWSC 542; 73 NSWLR 53, referred to. Giles JA (Macfarlan JA, agreeing), Young JA: Further, Maloney did not exercise the option. When exercising an option the grantee must make it abundantly clear and unequivocal to the grantor that the grantee is exercising the option. The indication by the respondents' solicitors in the letter that they acted for both clients was insufficient to indicate that Astra exercised its rights as Maloney's agent. Rather, it was clear that Astra was exercising the option. Ballas v Theophilos (No 2) (1957) 98 CLR 193; Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673, applied; Hoare v McCarthy [1916] HCA 65; 22 CLR 296; Nguyen v Taylor (1992) 27 NSWLR 48 referred to. (3) As to whether the option was void under Conveyancing Act 1919, s 66ZG: Giles JA (Macfarlan JA, agreeing): The cl 15 option was not void because retrospective operation of the amended s 66ZG was clearly intended. The amended s 66ZG(1A) protected rights accrued through conformity with the old duplication requirements, by validating such options where, otherwise, the amended section would have rendered the options void. If the amendment were not retrospective there would be no need for s 66ZG(1A). Further, the amended s 66ZG applied to the cl 15 option because the consideration for the purpose of s 66ZE was identifiable as the price differential between the full price and the reduced price obtained by entering into the buyback provision. Young JA, dissenting: The Conveyancing Act is aimed at protecting holders of options and there is no reason why that protection should not apply to people purchasing retirement units. However, the application of s 66ZG when considered with s 66ZE to a buyback clause in an agreement to sell a unit to a purchaser is strained if not impossible. There was no consideration paid for the option and the whole purchase price has already been paid. Hence s 66ZG did not apply to render the option void. (4) As to free alienation of land: Young JA (Giles JA not deciding, Macfarlan JA agreeing): The buyback arrangement did not offend the rule against restraint on alienation. The restraint was not total, and the Noons appreciated that the buyback provision enabled them to receive a considerable discount on the purchase price and assured them a purchaser for the unit. Courts should be careful not to allow the doctrine to expand to invalidate perfectly proper commercial arrangements. Caboche & Bond v Ramsay (1993) 119 ALR 215; Elton v Cavill (No 2) (1994) 34 NSWLR 289, applied; John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc (2004) 88 SASR 334, considered; Bondi Beach Astra Retirement Village Pty Ltd v Gora [2010] NSWSC 10; Hall v Busst [1960] HCA 84; 104 CLR 206, referred to; (6) As to estoppel: Giles JA (Macfarlan JA, agreeing): The respondents' estoppel case as put on appeal related Astra and went beyond the pleaded estoppel that related to Maloney. It should not be permitted because the appellants could have conducted their case differently had the estoppel as now asserted been raised at trial. Giles JA (Macfarlan JA, agreeing), Young JA: The respondents did not establish an operative estoppel. The fact to be estopped from denying or the binding convention was hard to identify and based on utterances made by or to an estate agent which were imprecise. There was insufficient evidence of reliance or assumption by Astra. Rather, the dealings relied upon were with an agent of Maloney, and thus would not grant Astra any benefit. Finally, the parties reduced the arrangements to legal documentation of which the respondent was the proferens, and it is difficult if not impossible to get an estoppel out of pre-contractual negotiations. Moratic Pty Ltd v Gordon [2007] NSWSC 5; 13 BPR 24,713, applied; Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 264 ALR 15 referred to; Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190. IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/298339 GILES JA MACFARLAN JA YOUNG JA Thursday 19 August 2010 NOON v BONDI BEACH ASTRA RETIREMENT VILLAGE PTY LTD Judgment 1 GILES JA: The appellants are the executors of the estate of the late Brian Robert Noon ("Mr Noon"). In late 1996 Mr Noon and his wife, the late Jennifer Noon, purchased from the second respondent C G Maloney Pty Ltd ("Maloney") Unit 42 ("the unit") in a retirement village at Bondi Beach. The proceedings are concerned with a purported option to purchase the unit at the price paid by Mr and Mrs Noon ("the cl 15 option") granted under the contract by which they purchased the unit ("the sale contract"). 2 Smart AJ held that the cl 15 option was exercisable by Maloney and had been exercised by it, and that it was not void pursuant to s 66ZG of the Conveyancing Act 1919. He made a declaration that an enforceable agreement to purchase the unit existed, and an order in the nature of specific performance. 3 There were four issues on appeal. On those issues, for the reasons which follow in my opinion - (a) the cl 15 option was not exercisable by Maloney; (b) had it been exercisable, the cl 15 option was not exercised by Maloney; (c) the cl 15 option was not void pursuant to s 66ZG; I decline to decide whether it was void as a restraint on alienation; and (d) the respondents' estoppel case as put on appeal should not be permitted, and in any event would fail. 4 The appeal from the judge's declaration and order therefore succeeds. Background 5 The Astra at Bondi Beach, formerly an hotel, was a multi storey building with a basement car park. It was owned by Maloney. In the mid-1980's Maloney converted the premises to strata title units as the Bondi Beach Astra Retirement Village ("the village"). It was common ground that the village was a "retirement village" within the meaning of the Retirement Villages Act 1989 ("the Act") (since repealed and replaced by the Retirement Villages Act 1999). A wholly owned subsidiary of Maloney, Bondi Beach Astra Retirement Village Pty Ltd ("Astra") became what appears to have been the "administering authority" as defined in the Act, that is, "the person by or on whose behalf a retirement village is administered"; although it had further roles. 6 Upon creation of the village the strata title units were sold by Maloney to over 55's. Mr Karl Jaeger was the salesman for most of the units. A sales brochure used by him included - "Prices average 30%-40% below comparable Strata Title apartments because our unique 'buyback' option guarantees that at the time of your choice we will repurchase at the price you paid less selling expenses and the Deferred Management fee. Terms of Sale: All occupants are required to sign an Occupancy Agreement with The Bondi Astra Retirement Village Pty Limited who are the Service Company. The Occupancy Agreement is designed to preserve the integrity of The Bondi Astra Retirement Village. All residents must be fifty five years of age or over. Maintenance Costs: The amounts are variable dependent on client entitlement. Normal council and water rates are payable. The building is insured by the Body Corporate. Resale of Units: The Bondi Astra Service Company repurchases your unit deducting only its cost of resale and a deferred management fee." 7 The "'buyback' option" was not a case of buyback, because the purchaser was Astra, not Maloney. 8 For about three years from 1993 Mr Noon was the manager of the village. He and his wife lived in what was described as the caretakers unit. 9 The unit came on the market in late 1966. It had been sold by Maloney in 1987, and repurchased by it in August 1996. Why Maloney repurchased rather than Astra, was not disclosed. The seller was therefore Maloney, not Astra. 10 Mr Noon told Mr Jaeger that he was interested in buying the unit and was going to finish up as the manager. He asked the price of the unit. The judge accepted that Mr Jaeger replied to the effect - "We are looking for about $210,000 for it. Current market value is about $290,000. But we are prepared to sell it much cheaper than that because of the buy back provisions which you know about. You are guaranteed to get your money back when you wish to sell it." 11 As will later be seen, the cl 15 option was more than a guaranteed repurchase at the purchaser's time of choice, as referred to in the sales brochure and implicitly in this reply. The judge found, referring to Mr Noon's time as manager of the village, that Mr Noon knew "the buy-back arrangements and their likely effect" when purchasing the unit. It is not clear that what Mr Noon was found to know of extended to arrangements with the wider nature of the cl 15 option. 12 The grounds of appeal included that the judge was in error in accepting Mr Jaeger's evidence and in his finding as to Mr Noon's knowledge. Nothing was said in support of these grounds, and I take them to have been abandoned. 13 Mr Noon offered $197,000 for the unit. The offer may have been on the basis that a car space was included, but nothing turns on that. The offer was accepted. 14 In September-October 1996 the sale contract was prepared and contracts were exchanged. There was dispute at trial over the terms of the contract. The judge found that it included certain Special Conditions, a Disclosure Statement dated 20 September 1996 ("DSA") and a Disclosure Statement B ("DSB"). These are the documents particularly material to the cl 15 option, which is found in cl 15 of DSB. 15 In due course the purchase was completed. Mr and Mrs Noon became registered as proprietors of the unit. In March 1997 Mr Noon resigned as manager of the village. 16 Mrs Noon died in late 2001, and Mr Noon became the sole registered proprietor on registration of notice of her death. Mr Noon died on 28 October 2007. 17 By a letter dated 6 November 2007 Stephen Wawn & Associates Lawyers wrote to the appellants, by their solicitors, purporting to exercise the cl 15 option. I will set out the terms of the letter later in these reasons. 18 No point was taken that, as at 6 November 2007, probate of Mr Noon's estate had not been granted to the appellants and the unit was vested in the Public Trustee: Wills Probate and Administration Act 1898 (now Probate and Administration Act), s 61. The sale contract 19 The sale contract was in the 1988 form of the Law Society of New South Wales and the Real Estate Institute of New South Wales. The vendor was Maloney. The purchasers were Mr and Mrs Noon. The price was $197,000. Beneath the names of Mr and Mrs Noon in item C on the front page, the space for the purchaser, was "C1 Resident". 20 Special conditions 13 and 15 read - "13. The Purchaser acknowledges and the parties agree that the execution of this agreement shall be conclusive proof of the fact that prior to the date of this agreement the purchaser was handed a Disclosure Statement carrying the Heading 'Disclosure Prior to Contract' a copy of which is annexed hereto. The Purchaser states that s/he read and understood the said Disclosure Statement." "15. Annexed to this agreement is a further Disclosure Statement of matters required by the New South Wales Retirement Village Industry Code of Practice disclosed at the time of contract which statement sets out the further special conditions applicable to this contract." 21 The annexure referred to in Special Condition 13 was DSA. It was headed "Disclosure Statement – (Prior to Contract) pursuant to the New South Wales Retirement Village Industry Code of Practice ('the Code')". The Code was a prescribed code of practice under s 75 of the Fair Trading Act 1987 ( s 75 has since been repealed). 22 Clauses 21 to 23 of the Code provided that "management" must "make available to every prospective resident of the retirement village" certain information. From its content, DSA appears to have been intended to comply with these clauses. 23 Only paras (g) and (j) of DSA are presently relevant. 24 Paragraph (g) stated, in apparent compliance with cl 23 of the Code although the questions were not those in the then current Schedule A, that a copy of "Schedule A to the Code containing written answers to the questions set out in that Schedule" was annexed. The annexure, later in the sale contract, included - "11. Are there any restrictions on the resident on the sale of her/his unit? What happens if there is a dispute over the sale price? Yes. The Agreement for Sale of Land contains buy-back provisions whereby the owner of the unit is required to offer to sell the unit back to the Service Company. The sale price under the buy-back is the same as the original purchase price paid by the owner." 25 As later appears, "the Service Company" was a defined term, meaning Astra. 26 Paragraph (j) stated, in apparent compliance with cl 22 of the Code the requirement which was restated in the first sentence - "(j) A clear explanation of the refund entitlement, (if any), of a resident, if the resident or management terminates the residence contract. If the residence contract is terminated, the buy-back provisions set out in the Agreement for Sale of Land come into operation. The buy-back price of the unit is the price the resident paid for the unit when he bought the unit from Bondi Beach Astra Retirement Villages Pty Ltd. The fees or commissions charged by the management on termination of the residence contract and the method used to make such determinations are as follows: … " 27 It will be noted that para (j) referred to a purchase from Astra, when the purchase had been from Maloney. 28 The further annexure referred to in Special Condition 15 was DSB. Beneath the heading "Disclosure Statement B" was "Matters required to be disclosed at time of contract". 29 The perceived source of the requirement for disclosure at the time of contract is not entirely clear, but from their content a number of the clauses in DSB appear to have been intended to fulfil requirements in Div 4 of Pt 3 (cll 24 to 32) and Pt 4 (cll 33 to 38) of the Code. Clauses 24 to 32 required inclusion of "contract information" in what were variously described as the residence contracts (a defined term), contracts between management (also a defined term) and a resident (also a defined term) relating to a retirement village, and "any other associated contracts relating to a retirement village". Clauses 33 to 38 required inclusion in a residence contract of matters to do with termination of the residence contract. 30 A brief tally of the clauses in DSB, after definitions and an interpretation clause, with broadly corresponding clauses of the Code is as follows - DSB Code cl 3: disclosure of Code and Act cl 32 cl 4: cooling off period cl 25 cl 5: acknowledging the unit is a unit - in a retirement village cl 6: annexing plans and list of fixtures, cl 26 fittings and furnishings cl 7: accommodation charges and cl 28 refund provisions cl 8: recurrent maintenance and cl 29 service charges cl 9: right of Service Company to ? cl 27 provide service or perform functions cl 10: restrictions on use of unit/obligation - of purchaser and registered proprietor cl 11: deferred management fee cl 30 cl 12: use of communal areas - cl 13: residents committee - cl 14: termination of Residence Contract ? cl 24 cl 15: termination of the Residence ? cl 37 Contract by the resident/sale of the unit by the purchaser cl 16: sale or transfer of the unit - cl 17: termination of Residence cl 34 Contract by management cl 18: notices - 31 Possibly it was thought also that cl 13(1) of the Code had an effect, so far as it required that "[a]ll information and contracts relating to a retirement village … must fully disclose all of the arrangements which will apply in relation to a resident's occupation of the village". 32 DSB was in part framed appropriately for an annexure to the sale contract. The definition of "purchaser" referred to "the purchaser named in this Agreement", "unit" was defined as "the property hereby sold", and cl 3 began that "[t]he vendor draws the purchaser's and the resident's attention to the provisions of the Code and the Act". There were other such indicators. 33 However, as in cl 3 there was frequent reference in DSB to "the purchaser and the resident", "the purchaser and/or resident", or simply "the resident". In many of its provisions DSB was framed in terms purporting to bind the resident, separately from the purchaser, although a separate resident was not party to the sale contract. As an example, cl 10 provided that "[t]he purchaser and resident each agree with the Service Company" to make certain payments. To add to the confusion, the definition of "purchaser" in cl 1 was that it "means and includes … (i) the purchaser named in this Agreement … [and] (ii) where the purchaser is to be resident its word 'purchaser' shall be taken to incorporate the words 'the purchaser (as defined in (i) and resident". 34 "Resident" was not directly defined, but cl 1 included that terms defined or used in the Act or the Code "shall have the same meanings when used herein except to the extent that the context otherwise requires", and the definitions so imported included - "'resident' in relation to a retirement village, means a person who occupies residential premises in a retirement village under a residence contract, and includes a person who occupies such premises and who is or was the spouse or de facto partner [in the Code but not Act, (within the meaning of the De Facto Relationships Act 1984)] of such a person." (Act, s 3(1); Code, cl 2) "'residence contract' means a contract, agreement, scheme or arrangement by which a person obtains the right to occupy residential premises in a retirement village, and may take the form of a lease or licence.' (Act, s 3(1); Code, cl 2) 35 There was wholesale reference in DSB to "the Service Company", which was defined in cl 1 to mean Astra and its successors and assigns. As in the example last given, in many of its provisions DSB was framed in terms purporting to bind, or to confer benefits on, the Service Company, although Astra was not a party to the sale contract. 36 I will return to the provisions of DSB, but now go directly to cl 15 containing the cl 15 option. It relevantly provided - " Termination of Residence Contract by the Resident/Sale of the Unit by the Purchaser 15.(1) If: (i) the resident wishes to terminate the Residence Contract; (ii) the resident dies (in which case the Service Company may at any time thereafter deem the resident to have served upon the Service Company the notice referred to in paragraph (a)); (iii) the resident abandons the unit (in which case the Service Company may at any later time deem the resident to have served upon the Service Company the notice referred to in paragraph (a)); (iv) the purchases wishes to sell, or dispose of the unit; (v) the resident dies; or (vi) the Tribunal makes an order terminating the Residence Contract (in which case the resident shall be taken to have served upon the Service Company the notice referred to in paragraph (a)); the following procedure shall apply. (a) the resident or the resident's executors or administrators as the case may be shall immediately or as soon as possible thereafter, give to the Service Company one (1) month's written notice of termination of the residence contract or as appropriate the purchaser or her/his legal personal representative shall give to the Service Company one (1) month's notice of intention to sell or dispose of the unit. Each such notice once given shall not be withdrawn or revoked without the consent in writing of the Service Company. (Any notice or deemed notice by the resident or the resident's executors or administrators as the case may be to terminate the Residence Contract shall itself be taken as notice by the purchaser of intention to sell or dispose of the unit and any notice by the purchaser of her/his intention to sell the unit shall itself be taken as notice by the resident of termination of the Residence Contract); (b) upon the expiration of the period of one (1) month referred to in paragraph (a), the purchaser or the Service Company shall have the option by notice in writing (the 'Buyback Notice') served upon the other no later than a further twenty eight (28) days thereafter to require the transfer by the purchaser of the unit to the Service Company or its nominee for the price at which the purchaser bought the unit and the following conditions shall apply: (i) the relevant parties shall upon the service of the Buyback Notice by either or the other be taken to have entered into an agreement ('the Buyback Agreement') upon the same conditions as are contained in the standard Agreement for Sale of Land – 1988 Edition with the following alterations, omissions and additions thereto - [here various matters were stated] (ii) within fourteen (14) days of service of the Buyback Notice the parties shall exchange formal Buyback Agreements containing the above terms and conditions and annexures; and (c) should for any reason neither the purchaser nor the Service Company serve on the other the Buyback Notice referred to in clause 1(b) of this agreement then the purchaser may sell, transfer or dispose of the unit to any qualified occupant provided that the purchaser simultaneously causes such person to enter into an agreement with the Service Company incorporating the special conditions of this agreement with any necessary alterations to suit the circumstances. (2) The purchaser acknowledges and agrees that the rights conferred on the Service Company or its nominee pursuant to sub-clause (1) entitle the Service Company to register a caveat against the folio of the Register in the Land Titles Office relating to the unit." 37 Clause 16(1) went on to provide - "(1) Upon completion of the sale or transfer of the unit to the Service Company or its nominee by the purchaser or by any mortgagee thereof the following costs and expenses shall be paid by or on behalf of such purchaser to or deducted by the Service Company: (a) all costs fees and expenses paid or incurred by the Service Company in connection with the sale or transfer of the unit, being: (i) stamp duty payable on the Buyback Agreement; (ii) the Service Company's legal costs (in accordance with the scale fee) and disbursements paid or incurred by the Service Company in connection with the purchase of the unit pursuant to the Buyback Agreement; and (iii) If at the time of completion of the Buyback Agreement, the Service Company has exchanged contracts for the sale of the unit to a third party, the Service Company's legal costs (in accordance with the sale fee) agent's commission (in accordance with the scale fee) and expenses and disbursements paid or incurred by the Service Company in connection with the sale of the unit to such a third party; (b) any costs payable by the Service Company in relation to the repair and refurbishment of the unit so as to restore the unit to the condition it was in at the date of this agreement, evidenced by receipts for payment of accounts rendered by the tradesmen who did the repairs and refurbishment; and (c) the deferred management fee referred to in special condition 11 and any other moneys payable by the resident or the registered proprietor to the Service Company whether pursuant to this agreement or otherwise ... ". 38 The cl 15 option was part of the procedure initiated upon one of the events listed at the commencement of cl 15(1). It was a form of put and call option. As a put option, it may broadly have been the guaranteed buyback described in Mr Jaeger's brochure. It was much more, as a call option and by virtue of (for example) cl 16(1)(b). 39 The proceedings are concerned with the cl 15 option as a call option. Was the cl 15 option exercisable by Maloney? 40 There were two sub-issues, one as to the identity of the grantee of the cl 15 option (as a call option), and the other as to triggering the exercise of the option. 41 The grantee of the cl 15 option (as a call option) was the Service Company, according to the definition, Astra, unless the context otherwise required. Astra was not a party to the sale contract. The judge held that, as a matter of construction, the Service Company in cl 15(1)(b) should be understood as Maloney. The appellants submitted that the judge was in error. 42 The respondents sought to uphold the judge's decision. They had not claimed rectification of the sale contract. They did not submit that, if the grantee was Astra, it could exercise the cl 15 option as third party beneficiary of a contractual promise or as offeree notwithstanding that it was not a party to the sale contract. As the appeal was conducted, and subject to the respondents' estoppel case to which I will come, the first sub-issue turned upon the identity of the grantee of the cl 15 option as a matter of construction of the sale contract. 43 It had been disputed at trial whether, for the triggering events listed at the commencement of cl 15(1) operative on the death of Mr Noon, it was necessary that he was a resident and so, by the imported definition, an occupier under a residence contract. The judge held that it was necessary, and there was no notice of contention. The judge held that the sale contract was (also) a residence contract. The appellants submitted that the judge was in error in holding that the sale contract was a residence contract. The respondents sought to uphold his decision. 44 The first step in the procedure initiated upon one of the triggering events was giving a month's notice to the Service Company. There could be deemed notice. The complexities of cl 15(1) in relation to giving notice were not raised. However, the cl 15 option arose or was exercisable upon the expiration of the notice period, and giving notice could be important: see [71] below. We were not referred to notice given by the appellants, and it seems unlikely that they gave notice. Nor were we referred to a deeming by the Service Company, whichever of Maloney or Astra that may have been. Subject to the grantee being Maloney and there being a residence contract, as the appeal was conducted the option was exercisable by Maloney. (a) The identity of the grantee? 45 Principles of contract construction have recently been fully considered in Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407. The task is one of ascertaining the objective meaning by "an examination of the text of the document in the context of the surrounding circumstances known to the parties including the purpose and object of the transaction and by assessing how a reasonable person would have understood the language in that context" (at [13], per Allsop P). It is not necessary to find ambiguity before looking at the surrounding circumstances as an aid to construction. 46 The process of construction may bring a marked divergence from the text. In Wilson v Wilson (1854) 5 HL Cas 40 "John" was read as "Mary" in a will. In Fitzgerald v Masters (1956) 95 CLR 420 "inconsistent" was read as "consistent" in a contract for sale. As a recent illustration in McHugh Holdings Pty Ltd v Newtown Colonial Hotels Pty Ltd [2008] NSWSC 542; (2008) 73 NSWLR 53 "lessor" was read as "lessee" in a lease. This is often because a mistake is obvious on the face of the instrument and in Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38; (2009) 1 AC 1101 Lord Hoffmann, with whom Lords Hope, Rodger and Walker and Baroness Hale relevantly agreed, accepted that there must be a clear mistake on the face of the instrument and it must be clear what correction ought to be made in order to cure the mistake. But in Fitzgerald v Masters at 437 it was explained "the rejection of repugnant words, the transposition of words and the supplying of omitted words" is a consequence of "the rule that the intention of the parties is to be ascertained from the instrument as a whole and that this intention when ascertained will govern its construction". Ascertaining the intention of the parties, of course, is in accordance with the principles of contract construction abovementioned. 47 The judge accepted that, putting aside the cl 15 option, many references to the Service Company in DSB would appropriately have meant Astra had it been a party to the sale contract. He said that he hesitated to treat the words as meaning Astra in part of DSB and as matter of construction as a mistake in another part. He continued - "85 ... However, the vendor of unit 42 was CG Maloney Pty Limited and the draftsman has continued with the use of the words "Service Company", despite moving on to dealing with the buy back, although those words were inappropriate. 86 In my opinion, when the whole of the Agreement of 11 October 1996 is considered and attention is paid to the Disclosure Statement B, it is apparent that the references to the Service Company in Clauses 15 and 16 refer to the vendor, CG Maloney Pty Limited. I would so construe the agreement. It sold the unit to B & J Noon for the price of $197,000, executed the contract and also the transfer in which it acknowledged receipt of the consideration of $197,000. 87 The rot began with the use of Disclosure Statement A, probably prepared about February 1990 when clause (j) erroneously refers to "the buy back price of the unit is the price the resident paid for the unit when he bought the unit from Bondi Beach Astra Retirement Village Pty Limited". That was not the situation which prevailed in 1996. 88 The defendants contended that it was not unusual for one company to confer a right to exercise an option on a related company. That may be so but it is apparent that a false factual assumption was made as to the identity of the vendor in clause (j) of Disclosure Statement A and that in Disclosure Statement B when there was a shift from the provisions relating to the Service Company to the termination of the residence contract and the option, the references to the Service Company continued in clause 15, whereas the applicable reference was to the vendor, CG Maloney Pty Limited." 48 The reasoning was that there was a mistaken assumption, revealed in para (j) of DSA, carried through to the separate subject matter in cl 15(1)(b) of DSB. The respondents submitted that the reasoning was supported - by regard to the purpose and object of the buyback provision in accordance with Mr Noon's knowledge of such provisions as found by the judge, particularly when Mr and Mrs Noon had benefited from purchasing the unit at less than market price because of a buyback provision; by the description "Buyback notice" in cl 15(1)(b), which was appropriate only to an option granted to Maloney; and by the close relationship between Maloney and Astra, both controlled by Mr Maloney and his wife, such that "[w]hat mattered … [was becoming subject to] an obligation to sell back to one of the Maloney's companies". 49 I do not find this persuasive. 50 Even if Mr and Mrs Noon knew that the two companies had common control, that would not warrant substituting one of the companies for the other. And the last submission is not consistent with the two preceding submissions. 51 I have considerable reservations concerning reliance on the finding that Mr Noon knew "the buy-back arrangements and their likely effect" when purchasing the unit. It is imprecise. Mr and Mrs Noon knew (or must be taken to have known) of the terms of the sale contract, but that does not advance matters. Does it mean what was conveyed by Mr Jaeger's brochure, as generally applicable to purchasers? If not, what does it mean? A schedule of transfers of units in evidence shows initial transfers to purchasers by Maloney in and after 1987, subsequent transfers by the purchasers to third parties but mostly to Astra and occasionally to Maloney, and then further transfers by Astra or Maloney to fresh purchasers. How much of this course of buying back (but not really back) was known to Mr and Mrs Noon? When there was not a consistent pattern, what purpose and object should be found? 52 In the absence of more complete evidence, it seems to me that Mr and Mrs Noon's knowledge of the buyback provisions was probably that Astra would repurchase units, and would generally do so although the units were bought from Maloney. The judge noted that Mr Jaeger regarded the buyback option as an important sales feature, and according to his brochure (and largely in practice) the purchaser under the buyback provisions was Astra. That being so, the respondents' two earlier submissions lose force, and the judge's reasoning from a mistaken assumption loses considerable force, because the central purpose and object of the buyback provision was probably that Astra would be able to purchase the unit. The intention was not a buyback, and it was consistent with knowledge in both parties of the buyback provisions that the grantee of the cl 15 option (as a call option) would be a company other than the seller, and would be Astra or its nominee although the seller was Maloney. 53 The fact that Astra was not a party to the sale contract is not an indication that the cl 15 option was granted in favour of Maloney as the opposite party to the sale contract. Astra was plainly intended as the Service Company in a host of references to the Service Company in DSB, many purporting to impose obligations or confer benefits on the Service Company notwithstanding that it was not a party to the sale contract. There was fine disregard of privity of contract, and if that was a mistake it was not one to be remedied by construction of the sale contract. 54 Against the reference to Astra as the seller of the unit in para (j) of DSA is the comprehensive use of the defined term "the Service Company". The term "the vendor" or Maloney's name was not used in relation to the option in cl 15 and its consequences in para 16 of DSB. There is no commercial incongruity in an option in favour of Astra, see Mr Jaeger's brochure. The more likely mistake is in para (j) of DSA, uncorrected from a pro-forma used in the mid 1990's after Astra had acquired and was reselling units so as to refer to Maloney. In my opinion, on the proper construction of the sale contract the Service Company in the cl 15 option should be understood as Astra, according to the defined meaning. (b) A residence contract? 55 The defined terms "resident" and "residence contract" are wide, and encompass more than a formal contract or a separate contract in the nature of a lease. It is important, however, that for a residence contract the contract etc must be one "by which a person obtains the right to occupy residential premises in a retirement village". It is not enough that it regulates the occupation of residential premises in a retirement village. 56 The judge expressed his conclusion - "63 The Contract for Sale of Land was intended by the plaintiffs' then solicitors to serve as a residence contract. Under the contract B & J Noon obtained rights, upon completion, to occupy unit 42. Upon registration they became, as envisaged, strata title proprietors. Occupation as strata title proprietors is envisaged under the Code. Further, the definition of a retirement village includes the ownership of residential premises subject to a right or option of repurchase. 64 The Contract for Sale of Land and the documents included in it appear to include information required under the Code and the Act. It serves not only as a contract for the sale of strata title unit 42 but also as a residence contract. While the provisions of the Contract for Sale including the Disclosure Statements were less than watertight when Bondi Beach Astra Retirement Village Pty Limited was not jointed as a party, to the extent of being bound by Disclosure Statement B, I am of the opinion that there was a residence contract. B & J Noon were strata title proprietors and that gave them the right to occupy unit 42. However, Mr Noon stated in his affidavit (paragraph 13) that during his ownership of the unit he has never paid any service fee or recurrent charges to the first plaintiff, nor had he received any services from the first plaintiff. He also said that, with the exception of the purchase price, he has never paid any service fees or charges to the second plaintiff, nor had he received any services from the second plaintiff. Thus it would seem that many of the rights seemingly conferred on Bondi Beach Astra Retirement Village Pty Limited were never exercised." 57 I understand the judge to have considered that Mr and Mrs Noon's right to occupy the unit came from being proprietors, with the right to occupy enjoyed by the owners of a fee simple, and that they obtained that right by the sale contract. In the preceding paragraphs the judge referred to a number of clauses of DSB and a number of clauses of the Code, it seems for the proposition at [64] that the sale contract and the documents included in it "appear to include information required under the Code and the Act". It is not entirely clear, but I take the judge to have found support for his conclusion in the inclusion of information which, under the Code and the Act, was to be included in a residence contract. 58 A number of clauses in DSB are concerned with (as a general description) provision of services by and payment of charges and other imposts to the Service Company. In other ways the provisions of DSB purport to regulate, the purchaser's or resident's occupation; for example, cl 10 purports to restrict, by agreement with the Service Company, the use of the unit (only to use it for residential occupation, not to lease it, not to mortgage it without the Service Company's consent and so on). 59 Provisions of this kind are found in separate Occupancy Agreements entered into with purchasers in the 1980's, apparently as indicated in Mr Jaeger's brochure. But they are of little significance in the present case when the Service Company is not a party to the sale contract, and do not answer the question posed by the definition of a residence contract: by what contract etc did Mr and Mrs Noon obtain the right to occupy the unit? 60 Many of the clauses are concerned with matters required under the Code, see [24]-[25] above. Some were required as part of a residence contract, although the requirement for others could be satisfied by a management/resident contract or an associated contract. Apparently referable to a requirement that they be part of a residence contract are cll 3, 6, 7 and 11. 61 I refer separately to cl 7; the other clauses, however, presuppose a residence contract. The residence contract must otherwise be found. 62 Clause 14, reproducing s 15 of the Act, provided that "the right of the purchaser and/or resident to occupy the unit terminates only" when the resident dies or abandons the unit or the "Residence Contract" is terminated in accordance with cl 15 or by the Tribunal under the Act. The triggering events in cl 15(1) include termination of the Residence Contract, and it seems that termination in accordance with cl 15 is giving the one month's notice. Clause 17 provides for application by "Management" to the Tribunal to terminate the Residence Contract or Residence Rules. Again, such provisions presuppose a residence contract, and the question posed by the definition of a residence contract is not answered. 63 The respondents relied on cl 12, by which the Service Company purported to grant to "the purchaser and/or resident" the right to use communal areas. However, that had nothing to do with the right to occupy the unit. 64 I return to cl 7. It provided that "[t]he accommodation charge payable by the purchaser is the price set out in Item G which appears on the cover page of the agreement together with the adjustments for rates, taxes and levies which appear in clauses 13 and 14A of the agreement". This was the adjusted purchase price. It was treated as an "accommodation charge", apparently in compliance with cl 28 of the Code whereby "any accommodation charges (that is, any payments that are required to secure accommodation in the retirement village) must be fully specified in the residence contract … ". 65 Amidst the abysmal drafting and compilation of the sale contract, this could be the most direct indication that it was a residence contract. It could suggest that the sale contract, under which the adjusted purchase price was also payment to secure accommodation in the village, was also a residence contract. 66 However, there are considerable difficulties in that view. Mr and Mrs Noon (and later Mr Noon alone) had the right to occupy the unit by virtue of their proprietorship. Their proprietorship came about by offering a price, acceptance of the offer, entry into the sale contract and completion of the sale contract. Upon completion the sale contract, as a source of their right to occupy the unit, was spent. It does not seem to me that it was, within the definition of a residence contract, a contract "by which [Mr and Mrs Noon] obtain[ed] the right to occupy" the unit. They obtained the right by virtue of their proprietorship. 67 As "residence contract" is used in the Act, in my opinion the right to occupy residential premises in a retirement village must continue to be sourced in a contract etc giving a right of occupation. For example, s 15 of the Act (the terms of which were taken up in cl 14 of DSB) provided for termination of a residence contract if the resident abandoned the residential premises; but abandonment does not terminate proprietorship. Under the Act the Tribunal could make orders terminating the residence contract of a resident or restraining breach of a resident contract (ss 14, 16, 17, 20, 21); but it could not order that proprietorship be given up. Section 18 applied the laws relating to mitigation of loss to breach of residence contracts. 68 Again, with regard to cl 15 of DSB, the right of Mr and Mrs Noon to occupy the unit, enjoyed by virtue of proprietorship, was not something of which they could give written notice of termination. It would be nonsense to speak of giving notice of termination of their right to occupy as proprietor of the unit, at least otherwise than as notice of a sale which in cl 15(1)(a) was a different thing. They could not give written notice of termination of the sale contract. It was spent so far as it was the source of the right to occupy the unit. 69 The judge appears to have been influenced by the definition of "retirement village" in the Act. It referred to a complex of residential premises occupied by retired persons in pursuance of, inter alia, "the ownership of residential premises subject to a right or option of repurchase or conditions restricting the subsequent disposal of the premises". However, recognition of ownership as a basis of occupation did not equate the owner with a resident. Children of retired persons could purchase the residential premises in the retirement village, for occupation by the retired persons. There could then be a residence contract by which the retired persons obtained the right to occupy the residential premises. The retired persons would be residents. 70 In my opinion, the sale contract was not a residence contract. There was no other residence contract. 71 For two separate reasons, the cl 15 option was not exercisable by Maloney. Was the cl 15 option exercised by Maloney? 72 Whether or not the cl 15 option was void might be thought a prior question to whether it was exercised. It is convenient to deal with the latter question at this point. It does not arise, because the cl 15 option was not exercisable by Maloney. It is nonetheless appropriate that it be dealt with. 73 The letter purporting to exercise the cl 15 option was dated 6 November 2007, nine days after the death of Mr Noon. No point was taken that the cl 15 option was not validly exercised because it could not be exercised until a one month's notice period had expired. 74 The letter said - "Re: Estate late BRIAN NOON We are the solicitors who act on behalf of of the Bondi Beach Astra Retirement Village Pty Limited and CG Maloney Pty Ltd. We are instructed by our client that Mr Brian Noon passed away on or about 28th October 2007 and both our clients and our office wish to express our sympathy at this time. At the time of the deceased purchasing the property known as Unit 42 Bondi Beach Astra Retirement Village, the deceased entered into an Agreement with our client which provided that our client had the right to buy-back the unit for the original sale price from Mr Noon upon a number of events happening, one being upon the death of Mr Brian Noon. We are instructed by our client that Mr Brian Noon purchased the property from our client CG Maloney Pty Ltd for $197,000.00 and we hereby advise that our client Bondi Beach Astra Retirement Village Pty Ltd exercises its rights in respect of its Buy-Back Agreement with the deceased to purchase the unit for the sum of $197,000.00. As previously advised to Pike Pike & Fenwick, this notice is being given for the purpose of satisfying the machinery provisions of the Retirement Villages Act 1999. Should you have any queries in respect of this matter then please do not hesitate to contact Stephen Wawn from our office." 75 It was said in the first paragraph that the solicitors acted on behalf of Astra and Maloney. In the fourth paragraph purporting to exercise rights to purchase the unit, there was reference to instructions by "our client", distinct from "both our clients" in the second paragraph. The client was specifically identified in the fourth paragraph as Astra, and it was said that Astra "exercises its rights in respect of its Buy-Back Agreement with the deceased" (emphasis added). 76 In my opinion, the letter cannot be read as other than a purported exercise of the option by Astra. 77 The judge held that the cl 15 option was exercised by Astra as Maloney's agent. He said at [90] that "our client" in the first line of the fourth paragraph "appeared to be a reference to both companies". He explained his holding - "91 The plaintiffs submitted that I could safely proceed on the basis that CG Maloney Pty Limited was the nominee of Bondi Beach Astra Retirement Village Pty Limited and vice versa. The plaintiffs relied on both companies being owned and controlled by the same people. The letter of 6 November 2007 was written on behalf of both companies. The plaintiffs submitted the CG Maloney Pty Limited authorised the actions of Bondi Beach Astra Retirement Village Pty Limited. The companies, while separate legal entities, are closely linked. At the time the letter was written the Service Company was the vehicle which nominally had to exercise the option. By the letter CG Maloney Pty Limited adopted the actions of Bondi Beach Astra Retirement Village Pty Limited contained in the letter, that is, the exercise of the option. The letter does not expressly state that CG Maloney Pty Limited authorises and nominates Bondi Beach Astra Retirement Village Pty Limited to act as its agent to exercise the option on its behalf, but this is its effect. The solicitors state that they act on behalf of both companies and they did. The letter refers to the purchase by Mr Noon from CG Maloney Pty Limited and to the rights of Bondi Beach Astra Retirement Village Pty Limited in respect of the buy back agreements. As was pointed out by Brereton J in a different context in Mineaplenty Pty Ltd v Trek 31 Pty Ltd [2006] NSWSC 1203 at [37] – [38], notice of an exercise of an option may be given by and to the duly authorised agents of the parties to the agreement containing the option. 92 Although the matter is not free from doubt, the better view is that the option was exercised by Bondi Beach Astra Retirement Village Pty Limited as the duly authorised agent of CG Maloney Pty Limited and that this significantly appeared from the letter." 78 There may be some confusion in this between exercise in favour of a nominee and exercise as agent. I respectfully do not see why it was thought that exercise as Maloney's agent significantly appeared from the letter. If it was because the solicitors said that they acted for both companies, that is insufficient given the terms of the fourth paragraph, specifically referring to Astra's exercise of its rights. 79 The intention to exercise an option must be clearly and unequivocally communicated: Ballas v Theophilos (No 2) (1957) 98 CLR 193 at 205; Prudential Assurance Co Ltd v Health Minders Pty Ltd (1987) 9 NSWLR 673 at 677, 681, 683. Would a reasonable person receiving the letter fairly understand that the cl 15 option was being exercised? Correspondingly, if Maloney was exercising the cl 15 option, it had to be made clear by the letter that it, rather than Astra, was doing so. The clarity was the other way – in my view it was clear that Astra was purporting to exercise the option. 80 The respondents did not submit that agency was established outside the letter. In their written submissions they said that the solicitors sent the letter in the course of acting for both Astra and Maloney "and by doing so the latter authorised the exercise of the option by the former". I do not agree. In oral submissions they said that Astra was exercising its rights "as nominee", but there was no evidence of nomination and in any event it would be for Maloney to exercise the option in favour of Astra as its nominee. 81 In my opinion, Maloney did not exercise the cl 15 option. Was the cl 15 option void? 82 This doubly does not arise, since the cl 15 option was neither exercisable nor exercised by Maloney. It is appropriate that it be dealt with, but for reasons which will appear only as to the first of the sub-issues next mentioned. 83 There were two sub-issues, whether the cl 15 option was void under s 66ZG of the Conveyancing Act and whether it was void as a restraint on alienation. (a) Section 66ZG of the Conveyancing Act 84 Section 66ZG was inserted in the Conveyancing Act by the Conveyancing (Sale of Land) Amendment Act 1990. It was amended by the Conveyancing Amendment Act 1997. 85 As at October 1996 s 66ZG was in the terms - "Option void in certain circumstances (1) An option granted for the purchase of residential property is void if: (a) it is not signed in duplicate by both parties, or (b) it is exercisable within 42 days after it is granted or, if a different period is prescribed, within that period. (2) If an option is void under this section, section 66ZE applies as if an effective notice of rescission of the option had been served under this Division, except that: (a) the purchaser is not liable to the forfeiture provided for under that section, and (b) that section has effect as if it provided that the whole of the consideration paid in relation to the option and the whole of any deposit paid in relation to the purchase of the property are payable to the purchaser." 86 After the 1997 amendments it was in the terms - "Option void in certain circumstances (1) An option granted for the purchase of residential property is void: (a) unless it is granted by way of exchange of counterparts, one of which is signed by the purchaser and the other signed by the vendor, or (b) if it is exercisable within 42 days after it is granted or, if a different period is prescribed, within that period. (1A) Subsection (1)(a) does not render an option void if it is granted, without an exchange of counterparts, before the commencement of the amendment made to this section by the Conveyancing Amendment Act 1997 and it was signed in duplicate by both parties. (2) If an option is void under this section, section 66ZE applies as if an effective notice of rescission of the option had been served under this Division, except that: (a) the purchaser is not liable to the forfeiture provided for under that section, and (b) that section has effect as if it provided that the whole of the consideration paid in relation to the option and the whole of any deposit paid in relation to the purchase of the property are payable to the purchaser." 87 The references to s 66ZE require explanation. 88 Sections 66Z to 66ZK of the Conveyancing Act made up Div 9 of Pt 4, by the heading to the Division concerned with "Options for purchase of residential property". Section 66ZB provided for a cooling off period for an option to purchase residential property. By s 66ZD, during the cooling off period the purchaser under an option to purchase residential property could "serve a written notice to the effect that the purchaser rescinds the option" (s 66ZD(1)). Section 66ZE then provided, in the same terms before and after the 1997 amendments - "66ZE Consequences of rescission (1) On service of an effective notice of rescission in accordance with section 66ZD in relation to an option to purchase residential property, the option is to be taken to be rescinded ab initio, but subject to the rights and obligations conferred by this section. (2) The purchaser forfeits 0.25 per cent of the purchase price of the property to the vendor. (3) The amount forfeited may be recovered from any consideration paid in relation to the option or from any deposit paid in relation to the purchase of the property. (4) If the consideration or deposit is insufficient, the balance of any amount forfeited may be recovered from the purchaser as a debt in any court of competent jurisdiction. (5) The balance of the consideration or deposit remaining after deduction of any amount forfeited is payable to the purchaser. (6) Subject to subsection (7), neither the vendor nor the purchaser is liable to pay any other sum for damages, costs or expenses. (7) Either party is entitled to make a claim for: (a) such compensation, adjustment or accounting as is just and equitable between the vendor and purchaser where the purchaser has received the benefit of possession of the property, or (b) the payment of damages, costs or expenses arising out of a breach of any term, condition or warranty contained or implied in the option, but not so as to affect rights and obligations arising under this Division. (8) The vendor may agree to waive any rights regarding forfeiture under this section. (9) Stamp duty ceases to be payable on an option rescinded under this Division, and the provisions of the Stamp Duties Act 1920 relating to the refund of any stamp duty paid on a rescinded agreement for the sale of property apply in relation to any stamp duty already paid on the rescinded option. (10) In this section, deposit includes any amount paid by the purchaser in relation to the proposed contract attached to the option or on account of the purchase price of residential property." 89 Section 66ZG in its then terms was considered in Lindsay v Balgi (1993) 30 NSWLR 244. Counterpart option agreements had been exchanged. One agreement was signed by the grantors, the other was signed by the grantees. Hodgson J held that the purported option was void because it was not "signed in duplicate by both parties". His Honour said that those words in s 66ZG(1)(a) "clearly relate[d] the required duplication to the signatures, and not merely to the actual terms of the option", and were too clear to admit of any other interpretation (at 247). He suggested reconsideration of the section, because of the inconvenience in requiring more than an exchange of counterparts each signed by one of the parties as was established practice in the exchange of counterpart contracts. It is evident that the 1997 amendments met this suggestion. 90 In the present case, it was common ground that there was not the duplication of signatures necessary if s 66ZG(1) in its pre-amendment terms applied. The judge held that - the pre-amendment s 66ZG applied, not s 66ZG in its terms after the 1997 amendments; if the post-amendment s 66ZG applied, there had been an exchange of counterparts of the sale contract; and the cl 15 option was not exercisable within 42 days after it was granted. 91 It would have followed from the common ground and the holding that the pre-amendment s 66ZG applied that the cl 15 option was void, except that the judge also held that - the cl 15 option was not an option within either s 66ZG. 92 A ground of appeal challenged the holding that the cl 15 option was not exercisable within 42 days after it was granted, but neither the written nor the oral submissions addressed the ground and I take it to be abandoned. The appellants submitted that the cl 15 option was an option within s 66ZG. By a notice of contention, the respondents submitted that the post-amendment s 66ZG applied. 93 It is convenient to deal first with the applicable s 66ZG, on the assumption that the cl 15 option is an option within s 66ZG. 94 The judge said - "100 The plaintiffs placed much reliance on subsection (1A) which provides that that subsection (1)(a) does not render an option void if it was granted without an exchange of counterparts before the commencement of the amendment and it was signed in duplicate by both parties. In other words, if there was no exchange of counterparts but the option had been signed in duplicate by both parties, the option was not void. That expressly preserves the situation which existed under the previous s 66ZG(1)(a). It was the plaintiffs' point that there would have been no need for s 66ZG(1A) if s 66ZG(1) did not have a retrospective operation. That point has some force. The alternative view is that s 66ZG(1A) was confirmatory by stating that options were not void if there was no exchange of counterparts but the option was signed in duplicate by both parties, that is, there was compliance with s 66ZG(1) as it was formerly understood. 101 Options granted prior to the commencement of the 1997 amendment may well be exercised after the 1997 amendment commenced. In these circumstances a confirmatory statement was prudent, if not necessary. I think that the better view is that the original s 66ZG(1) applies to this option and that the provisions of the amending s 66ZG(1) and (1A) do not sufficiently indicate a contrary intention." 95 In my opinion, this gave too little force to s 66ZG(1A). Despite the "(1A)", subs (1) in its amended form and subs (1A) were both introduced by the 1997 amendments. Subsection (1A) operates to save options that were signed in duplicate by both parties, but without the exchange of counterparts, from being rendered void by the operation of the replacement subs (1). It validates options granted prior to the 1997 amendments, necessarily on the basis that they would otherwise be void pursuant to the replacement subs (1). It would have no operation unless it was intended that the replacement subs (1) apply to options granted prior to the 1997 amendments. 96 There is a presumption against statutes operating retrospectively, unless Parliamentary intent is expressly manifested or capable of clear implication (Interpretation Act 1987 s 30; Maxwell v Murphy (1957) 96 CLR 261 at 267; George Hudson Ltd v The Australian Timber Workers' Union(1922) 32 CLR 413 at 434). The presumption is relevantly based on the notion that Parliament would not normally intend to destroy accrued or vested rights. The Parliamentary intent is apparent in subs (1A), which honours the notion and is protective of accrued or vested rights – that is, options granted in conformity with the original subs (1). Subsection (1A) prevents them from being rendered void by the operation of the new regime. 97 With the protection of options granted in conformity with the original subs (1), there is every reason for the replacement subs (1), reflecting the then conveyancing practice, to apply to options granted prior to the 1997 amendments, so that it is sufficient if they were granted by exchange of counterparts. The appellants submitted that, if void options were to be resurrected, it should be clearly indicated. In my view, it was. 98 In my opinion, if the cl 15 option is an option within s 66ZG, it is not void. 99 This conclusion makes it moot, but I go to whether the cl 15 option is an option within s 66ZG. 100 Neither the word "option" nor the phrase "option granted for the purchase of residential property" was or is defined in the Conveyancing Act. The judge held that the cl 15 option was not an option within s 66ZG because - "109 In my opinion the difficulties in applying the provisions of s 66ZG(2) and s 66ZE to the buy back arrangements or their inaptness or non applicability to such arrangements exclude such arrangements from the operation of s 66ZG of the Conveyancing Act. 110 In assessing whether an option falls within s 66ZG it is important to analyse the options to which the section was directed and the applicability of the provisions of the Act to the buy back arrangements in the circumstance which exist. Retirement villages fall into a special category. Residents must be 55 years of age or over and there are extensive provisions and protections relating to their occupation and removal. Both the Retirement Villages Act and the Code contain provisions which envisage that the ownership of residential premises in a retirement village may be subject to a right or option of repurchase or conditions restricting the subsequent disposal of the premises. That is not envisaged in relation to options under s 66ZG of the Conveyancing Act . 111 Section 66ZA provides that a vendor under an option to purchase residential property shall be deemed to have included in the option such terms, conditions and warranties as may be prescribed. That is not apt to a buy back arrangement contained within a contract for sale of land in a retirement village from the vendor CG Maloney Pty Limited to B & J Noon. That falls under a different regulatory scheme. 112 I do not think that the provisions of clause 15 of Disclosure Statement B constitute an option within s 66ZG or within Division 9 of Part 4 of the Conveyancing Act. I have not overlooked the provisions of s 66ZK(4)." 101 The appellants submitted that words of a statute are presumed to have the same meaning as in the common law: Attorney-General (NSW) v Brewery Employees Union of New South Wales (1908) 6 CLR 469 at 531; Wik Peoples v State of Queensland (1996) 187 CLR 1 at 151 per Gaudron J. They submitted that, while an "option to purchase" may assume various forms, it - " … is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser". ( Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at 76) 102 Whether the juristic nature of an option is an irrevocable offer (see, eg Goldsburgh Mort & Co Ltd v Quinn (1910) 10 CLR 674 at 691) or a conditional contract does not arise. The appellants submitted that the cl 15 option fell within the common law construct, and that there was nothing about an option in relation to a retirement village to make the construct inapplicable in the present context. 103 The respondents placed some emphasis on observations of Hulme J in Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304 at [17]. His Honour said - "It seems to me that there is a general public policy apparent in s 66ZG and in the group of sections of which it forms part. The general policy is to provide protection to particularly purchasers of residential land by defining in some detail the steps to be taken, and the consequences if they are not, for there to be binding contracts relating to the sale of residential land. Section 66Z in part reproduces s 66U of the Conveyancing Act as introduced in 1987, and both in its reflection of that earlier section and in its further provision, it is a reflection of that policy." (emphasis added) 104 Hulme J had said at [11] that it was clear from the second reading speech that s 66ZG was "intended to provide protection for both grantors of, and grantees under, an option". If an option falls foul of s 66ZG there is nothing to prevent a vendor from relying on it, and a distinction between the vendor and the purchaser says nothing about whether an option to which they are reciprocal parties is within s 66ZG. 105 The respondents then submitted that s 66ZG had to be read with ss 66ZD and 66ZE. 106 Where an option is void under s 66ZG, s 66ZE applies (with certain exceptions) as if an effective notice of rescission of the option under s 66ZD has been served. Section 66ZE(1) provides that a void option is taken to be rescinded ab initio, but subject to the rights and obligations conferred by the section. Effectively, the grantor of the option will be made to restore the consideration paid for the option by the grantee, see in particular s 66ZE(5) and the modified effect under s 66ZG(2). 107 The respondents submitted that it would be difficult to ascertain the consideration that had to be repaid, because Maloney transferred the title to the unit to Mr and Mrs Noon in consideration of $197,000 plus a promise to resell the unit in certain circumstances. Looked at in reverse, the consideration for the promise to resell was the transfer of title, or if not that the consideration was not identifiable. On either alternative, s 66ZE could not be made to work. Restoration of the title to the unit was unrealistic and payment of an unidentifiable sum was impossible. The respondents suggested that s 66ZE, and so s 66ZG, were confined to "stand alone" options. 108 I do not accept this analysis. Mr and Mrs Noon purchased the property at a reduced price attributable to the buyback provisions in the contract. The consideration for the cl 15 option can be identified as the price differential, prima facie the difference between $290,000 and $197,000. The exercise may be more complex, for example if $290,000 was not in truth correct market value or a car space was involved, but it does not mean that the consideration can not be identified and returned as mandated by s 66ZE. 109 I do not think that s 66ZG should be interpreted so as to apply only to transactions where the consideration paid in relation to the option is easily and precisely identifiable. In my opinion, it could apply to the cl 15 option. (b) Restraint on alienation 110 This sub-issue was not pleaded or raised before the judge. 111 While the appeal was pending, it was held in Bondi Beach Astra Retirement Village Pty Ltd v Gora [2010] NSWSC 81 that buyback provisions in relation to another unit in the village were void as restraints on alienation. The appellants applied for leave to add a ground of appeal, to which the respondents consented. 112 Bondi Beach Astra Retirement Village Pty Ltd v Gora is under appeal. It may be distinguishable from the present case: for example, the provisions were different, particularly in the triggering events, and the beneficiary of the buyback provisions was Astra and not, as for present purposes must be assumed, Maloney. 113 In my opinion, it should not be decided whether the cl 15 option was void as a restraint on alienation. 114 At least in the case of contractual restraints, the basis of invalidity of a restraint on alienation is public policy, through "a principle of the law that private property should be fully alienable": Hall v Busst (1960) 104 CLR 206 at 218 per Dixon CJ; see also at 223-4 per Fullager J; 229 per Kitto J, 235-6 per Menzies J and 246 per Windeyer J. The basis of public policy means that some contractual restraints may not offend the principle, or their offence to the principle may be outweighed by other considerations (of which holding parties to their bargains may be one). In Caboche v Ramsay (1993) 119 ALR 215 at 232 Gummow J observed that in the case of contractual restraints "the question is one of degree". A similar approach can be seen in Reuthlinger v MacDonald (1976) 1 NSWLR 88, Wollondilly Shire Council v Picton Power Lines Pty Ltd (1994) 33 NSWLR 551; John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc (2004) 88 SASR 334 and Moraitis Fresh Packaging (NSW) Pty Ltd [2008] NSWCA 327. 115 In the present case it may be important that the Act appears to recognise and accept buyback provisions, as a worthy concept, in the part of the definition of "retirement village" earlier cited involving ownership "subject to a right or option of repurchase or conditions restricting the subsequent disposal of the premises". 116 Because the cl 15 option was neither exercisable nor exercised by Maloney, it is not necessary to decide whether the cl 15 option was void as a restraint on alienation. The result in the appeal will not be affected by decision. It would be unwise to attempt an unnecessary decision when, because it was not raised, there has not been the attention to evidence going to the public policy considerations which would have come had the matter been pleaded and raised below. Whatever decision was come to would suffer from a dubious factual foundation. Such precedential value, if any, as it had might be misleading. 117 Notwithstanding the respondents' consent to the new ground of appeal, I therefore do not decide this sub-issue. Estoppel 118 The respondents had pleaded assumptions and representations and reliance whereby Mr and Mrs Noon were "estopped (whether by promissory estoppel or an estoppel by convention) from denying the existence or efficacy of the buyback provisions" (Further Amended Statement of Claim, paras 15-23; the quoted words are from para 23). "The buyback provisions" meant "terms to the effect of those pleaded in paragraph 4" (para 16). Paragraph 4 pleaded a number of terms for which references were given to cll 11 and 15 of DSB and Schedule A. The terms included that "the second plaintiff [Maloney] had a right to issue a buyback notice … " (para 4(iii)) and that "the agreement contains buyback provisions to sell to the second plaintiff [Maloney] at the original sale price" (para 4(vii)). 119 Because he otherwise found for the respondents, the judge did not consider the case based on estoppel. By a notice of contention the respondents said that he ought to have found that the appellants "were estopped from denying the efficacy of the buyback provisions". 120 This was very vague. On appeal, the respondents' written submissions asserted an estoppel by convention from the parties "operating under the assumption that the sale was subject to buy-back provisions". The submission was not elaborated, and did not take matters very far. In oral submissions it was put as an estoppel "that prevents [the appellants] from denying that Bondi Beach Astra was able to exercise that option". That was not the pleaded estoppel, which was an estoppel whereby Maloney could exercise the cl 15 option. 121 Supplementary written submissions were requested, and were received. The respondents' submissions were directed to a common assumption that the "buyback obligation" was "efficacious", or to representations by Mr Noon that he would be obliged to sell the unit to Astra and was a resident. It is tolerably clear that the efficacy asserted was as an option exercisable by Astra, and the representational case was also one of an option exercisable by Astra. 122 This continued to be different from the pleaded estoppel, and brought understandable protest from the appellants that the respondents were travelling beyond their pleaded case. Indeed they were, not only in directing the estoppel to an option exercisable by Astra but also in relying on more than had been pleaded as the source of the assumption and as the representations. 123 Anticipation that the judge's conclusion as to exercise of the cl 15 option would not survive may have prompted a change of tack by the respondents. In my opinion, the change of tack should not be permitted. The appellants could have conducted their case differently had the estoppel now asserted been raised at trial. 124 In any event, for at least two reasons the estoppel case now asserted would fail. First, the estoppel was founded upon dealings with Mr Jaeger and entry into and matters concerning entry into the sale contract. The dealings were with Mr Jaeger as Maloney's agent, and the sale contract was with Maloney. Astra can not get the benefit of an estoppel, if there were one. Secondly, there was not a jot of evidence of assumption on Astra's part or reliance by Astra. Orders 125 I agree with the orders proposed by Young JA. 126 MACFARLAN JA: I agree with Giles JA. 127 YOUNG JA: This is an appeal from a decision of Smart AJ [2009] NSWSC 461 who ordered specific performance of a contract he found arose from the grant of an option to repurchase a retirement unit granted to a vendor on the death of its purchaser. 128 There have been a series of cases involving units in the same retirement village complex both at first instance and in the court of appeal, but, for the most part, the questions arising for decision in the instant case are different from those raised in the previous cases. Indeed, many of the problems arise from the execution of a standard contract that was not properly modified to deal with the transaction between the parties. 129 The background facts appear to be that a developer, CG Maloney Pty Ltd (CGM) was marketing retirement units in the building on the basis that they would be sold for a substantial discount if the purchaser agreed to a clause that the vendor could buy back the unit at the purchase price on the happening of certain events including the death of the purchaser or last to die of the purchasers. 130 The contract executed by the purchasers, the subject of the specific performance decree was in the 1988 edition of the standard NSW form. It was made on or about 11 October 1996. The vendor was CG Maloney Pty Ltd, the purchasers Brian and Jennifer Noon. The purchase price was $197,000. 131 In order to comply with the then legislation with respect to retirement villages, the contract contained two disclosure statements marked Disclosure Statement A and Disclosure Statement B. These disclosure statements contained further special conditions of the contract. 132 Disclosure Statement B (DSB) is the document that causes the problems in this case. The document in clause 1 contains a series of definitions. "Service Company" is defined as meaning and including "Bondi Beach Astra Retirement Village Pty Limited its successors and assigns." This company was referred to in argument and I will continue to refer to it in these reasons as "BBARV". 133 Clauses 14 of DSB deal with the termination of the residence contract and thus the purchasers' rights of residence. 134 Clause 15, which is headed "Termination of Residence Contract by the Purchaser/Sale of the Unit by the Purchaser" sets out that if certain events occur, the Service Company is to have the right to "buy back" the relevant unit at the original purchase price with some adjustments. I will set out the exact wording of the relevant part of cl 15 in due course. 135 Clause 15 is rather convoluted and, if I were to treat this judgment as a paper at a Law School seminar, I think I could find many parts of it which are of doubtful validity or enforceability. Indeed it is always difficult to draw up a contract which is to come to fruition after the death of one of the contracting parties with notices to be served before probate is granted. I will resist this temptation and confine myself to the key points raised by the parties. 136 Clause 15 of DSB essentially provides that on the happening of a relevant event, in the present case the death of the last of the residents to die, the resident's executors or administrators were to give the Service Company one month's notice of termination of residence and intention to sell. 137 DSB cl 15(b) is as follows: "Upon the expiration of the period of one (1) month … the purchaser or the Service Company shall have the option by notice in writing (the 'Buyback Notice') served upon the other no later than a further twenty eight (28) days thereafter to require the transfer by the purchaser of the unit to the Service Company or its nominee for the price at which the purchaser bought the unit and the following conditions shall apply …" 138 Clause 15 then set out in some detail the form of contract, the deposit and other essential matters. It further provided that should neither the purchaser's representative nor the Service Company serve a Buyback Notice, the unit could be sold to any qualified occupant provided that that purchaser signed an agreement with the Service Company incorporating the special conditions of the current agreement. 139 Clause 16 of DSB is also referred to in these reasons. However it is not necessary to set it out as it covered a situation which did not arise. 140 It will be observed that the Service Company, BBARV, was not a party to the contract for the sale of the unit. BBARV is a wholly owned subsidiary of CGM. I will use the word "respondent(s)" loosely in these reasons to refer to CGM or BBARV or both as the case may be and use the CGM or BBARV reference when I intend to refer only to one of them. 141 Mrs Noon died In 2001 and Mr Noon died on 28 October 2007. Probate of Mr Noon's will was obtained by the appellants on 12 February 2008. 142 On 6 November 2007, the respondents' solicitor sent a letter to the executors of Brian Noon care of a firm of solicitors (see Blue 1813). The key part of this letter is as follows: "We are instructed by our client that Mr Brian Noon purchased the property from our client CG Maloney Pty Ltd for $197,000.00 and we hereby advise that our client Bondi Beach Astra Retirement Village Pty Ltd exercises its rights in respect of its Buy-Back Agreement with the deceased to purchase the unit for the sum of $197,000.00" 143 Because the unit was part of a retirement village, it is necessary to take into consideration that requirements of the Retirement Villages Act 1989, the legislation in force as at the date of the contract for sale and the fact that that Act was repealed and replaced by the current legislation the Retirement Villages Act 1999. I will refer to this legislation respectively as the "1989 Act" and the "1999 Act." 144 In addition it is necessary to refer to the Retirement Villages Code 1995 ("the Code") which is expressed to be "complementary" to the 1989 Act. Formally this Code is the Retirement Village Industry Code of Practice Regulation 1995 made under the Fair Trading Act 1987. 145 The appellants, the executors of Brian Noon alleged that the respondents did not have a valid option capable of being exercised in the way it purportedly was exercised for a number of reasons which may be summarised as follows: (a) The option was only valid if there was a Residence Contract in existence and there was no such contract; (b) The buy back provisions were inapplicable where the vendor was not BBARV; (c) Clause 15 of DSB conferred no option on CGM; (d) If CGM was the grantee of an option it did not exercise it; (e) BBARV was given no contractual rights under the contract of sale; (f) Any option was void under s 66ZG of the Conveyancing Act 1919. 146 Subsequently, as a result of the decision of Bryson AJ in Bondi Beach Astra Retirement Village Pty Ltd v Gora [2010] NSWSC 10 ("Gora") and without opposition from the respondents, the appellants also: (g) challenge the option as being void as against public policy as an attempt to prevent the free alienation of land. 147 Smart AJ decided against the appellants on all of points (a) –(f). As to (a), his Honour held that there was a residence contract in existence, but, if there was not, he would not have held that the right to exercise the option arose. 148 As to (b)-(e), the primary judge held that on the true construction of cl 15, "Service Company" was "the vendor" or CGM, the option was exercised by CGM by BBARV, its duly authorised agent and the Buy Back Agreement was not an option within the meaning of s 66ZG of the Conveyancing Act. 149 Each of these findings is challenged in this appeal. 150 The appeal was heard on 25 March 2010, Dr A S Bell SC and Mr C A Botsman appeared for the appellants, and Dr M J Leeming SC and Mr R Brender appeared for the respondents. 151 Dr Leeming also put that, if the appellants succeeded on any of the submissions (a)-(g), then this Court should consider: (h) questions of estoppel. 152 After some discussion, the parties agreed that this court, should, if it were necessary to consider estoppel, to make the decision on the point rather than remit the point to the Equity Division. 153 It is convenient to consider the challenges made by the appellants under the heads (a)-(g) as outlined in [145] and [146]. (a) Was there a residence contract? 154 As the appellants note in their written submissions, the buyback rights in cl 15 are rights that spring up on the termination of the residence contract and thus such a contract must exist in the first place. 155 It is clear that there was no separate residence contract between the parties. The appellants submitted that that was necessary. The primary judge did not accept that submission. The respondents put that the contract for sale was also a residence contract and the primary judge agreed. 156 The appellants say that any residence contract would have to be between the resident and the manager, that is the Service Company. The contract for the sale of land could not suffice as the Service Company was not a party to it. The fact, if it be the fact, that DSB included most of the details that would have appeared in any residency contract is legally irrelevant. 157 The 1989 Act defines "residence contract" in s 3(1) as meaning "a contract, agreement, scheme or arrangement by which a person obtains the right to occupy residential premises in a retirement village, and may take the form of a lease or licence." The same definition appears in cl 2 of the Code. 158 Clause 13(1) of the Code requires all information and contracts relating to a retirement village to be written in clear, concise and plain English. Although the word "must" is used, it is much to be doubted as to whether a contract that is a little verbose or written in proper English or conveyancing style or even in a foreign language understood by the parties would be ruled to be invalid. 159 Clause 13(2) provides that "Management should provide a copy of the proposed residence contract to the resident promptly so that the resident has sufficient time to obtain legal advice before the contract is signed." Presumably "resident" here means "intended resident". 160 Dr Bell puts that clause 13(2) recognises that "management" must sign the residence contract. I cannot see that this is so. 161 Clause 13 does, however, seem to require that the residence contract be in writing even though s 38 of the 1989 Act gave the impression that it could be oral or partly oral and partly written. 162 Dr Bell conceded during argument that the residence contract could be constituted by two or more documents. 163 However, as I have indicated, I do not consider that non-compliance with Cl 13 was intended to make any contract invalid. 164 Clause 24 of the Code provides that "the residence contract must fully disclose the legal basis of occupancy and type and length of tenure secured in return for the payment for entry." 165 It is difficult to see how this clause can apply where the resident is to have a fee simple in the unit. However, it does give credibility to the submission that a contract dealing with the purchase of the fee simple in a retirement unit together with schedules of provisions as to the services that may be provided may constitute a residence contract provided, at least, that the provisions of the contract do not merge on completion. 166 Giles JA has taken up and developed this point and, as a result, has held that there is no residence contract. 167 With respect, I am reluctant to go as far. This is not because I quarrel with the reasoning by which it was reached, but because for some mysterious reason although the point was raised by the Bench, appellants' counsel shied away from it and thus respondents' counsel did not address it. 168 There may be considerations which would neutralise the point. Perhaps it is arguable that the contract for sale in this case does not merge in the transfer (see eg Pallos v Munro (1970) 72 SR (NSW) 507) and so long as that contract continues to regulate the enjoyment of the premises it could be said that there is a residence contract despite the fact that the right of occupation derives from the fact of the occupiers being the registered proprietors. 169 It would be difficult to run that argument: (a) in the light of s 3(1) of the Act requiring the residence contract be the document conferring the right to occupy; and (b) because one cannot terminate a fee simple by a mere notice. However, we have not had full argument on the point. 170 In view of other considerations dealt with in these reasons, whether Giles JA's conclusion is correct or not on this point cannot affect the result of the appeal. 171 Dr Bell then calls on cl 27(1) requiring contracts between management and a resident to detail all services and facilities as lending weight to the view that the manager must be a party to a residence contract. However, cl 27, in contradistinction to most of the other relevant clauses does not use the words "residence contract". 172 Dr Bell makes a similar submission with respect to cl 29. This clearly does apply to a residence contract. However, in my view cl 29 read with other provisions of the Code does not mandate that the manager must sign or necessarily be a person who could be sued at law as a party to the residence contract. 173 I consider that the legislature does not intend an overstrict legalistic interpretation of the 1989 Act or the Code. In my view, once one has a contract dealing with the matters referred to in the Code and the manager is clearly named, there is a residence contract. That contract will be policed, not in the courts, but by the disputes committee required to be set up under the 1989 Act and the Code or by the Residential Tenancies Tribunal. 174 Thus, although on shaky ground, I will proceed on the basis that there was a residence contract. (b) Do the buy back provisions apply where the vendor was not BBARV? (c) Did Clause 15 of DSB confer an option on CGM? (e) Was BBARV given contractual rights under the contract of sale? 175 These three matters may all be considered in conjunction with one another as they all depend on the proper construction of the contract for sale of land. 176 It is clear that the pro forma documents were drafted on the assumption that BBARV would be the vendor. 177 The evidence shows that CGM and BBARV were closely associated corporations. Furthermore, some of the units were being sold or resold by CGM and some sold or resold by BBARV. Whether some mistake was made in having the wrong set of documents signed or whether someone thought it did not matter which company in the group was named in and signed the documents was never explained. Indeed this was not relevant for, as Dr Bell said more than once, that the respondents never sought rectification: they claimed that any relevant mistake was so obvious on the documents themselves that a court of construction could deal with it. 178 Before dealing with that principle, I must note, lest any academic reading these reasons think I have overlooked these matters, that no submissions were made as to the operation of s 36C of the Conveyancing Act 1919 on the facts of this case, nor was there any reference to the esoteric learning as to when a third (non) party can be benefited by a contract. 179 The seminal case of this aspect of the law of mistake is the decision of the High Court in Fitzgerald v Masters [1956] HCA 53; 95 CLR 420. In that case, the parties used the word "inconsistent" which was absurd in the context and the High Court construed the document as though the word was "consistent". The mistake was obvious. A more recent example is the decision of Brereton J in Saxby Soft Drinks Pty Ltd v George Saxby Beverages Pty Ltd [2009] NSWSC 1486 where in a trust deed, with reference to a Royal Lives Clause the word "shorter" was read as "longer". 180 Lewison J deals with the principle in ch 9 of his "The Interpretation of Contracts" 4th ed (Sweet & Maxwell, 2007). He notes that the principle probably came about because people mistranslated common Latin provisions in standard forms when Latin ceased to be fashionable. The book demonstrates that the principle has been constantly applied at least since Bache v Proctor (1780) 1 Doug 383; 99 ER 247 and Wilson v Wilson (1854) 5 HLC 40, 66: 10 ER 811, 822. 181 There is no debate as to the existence of the principle. The argument is as to its ambit. 182 The principle can apply so that although a document states the name of one actual company the court may construe the document as if it named another actual company, see Nittan (UK) Ltd v Solent Steel Fabrications Ltd [1981] 1 Ll Rep 633. 183 However, Lewison J says at 4th ed [9.04] that "A mistake will not be corrected by the court unless the court is sure both that a mistake has been made, and also what is required in order to give effect to the intention of the parties." He cites Coles v Hulme (1828) 8 B & C 569; 108 ER 1153 where Lord Tenterden CJ said: "In every deed there must be such a degree of moral certainty as to leave in the mind of a reasonable person no doubt of the intent of the parties." 184 Dr Bell says that the principle does not apply where there is an alleged mistake about a term which the parties took the trouble to define. He says that the present is not a case of just a mistake in a clause or words in a clause, the parties took the trouble to define "Service Company" not as CGM but as BBARV. He does not say that the principle could never apply in such a case; rather that it needs a "particularly strong case" to satisfy the court. 185 Dr Bell further submits that there are at least two other explanations for why the clause was drawn as it was, one being that the parties might have been anticipating a supplementary document. 186 Again, assuming that there is a mistake somewhere in the documentation, is it abundantly clear that the mistake is in specifying BBARV as the grantee of the option or as describing CGM as the vendor or some combination of the two? 187 Dr Leeming puts that to apply a test like "strong case" is virtually meaningless. However, Dr Bell's submission gets very close to what Lord Tenterden said. 188 The primary judge appears not to have directed his mind to the degree of certainty required for the principle to be invoked. In [85] of his reasons he notes that it would be peculiar if the contact really meant BBARV as the Service Company in one part of the document and CGM as the Service Company for the purpose of clauses 15 and 16. However, he said at [86] when he looked at the whole contract, including the false statement in clause (j) of Disclosure Statement A that the Vendor was BBARV, it is apparent that the references to Service Company in clauses 15 and 16 were to CGM. 189 With respect, it is very hard to see how it could be said that the evidence was such that it did not leave in the mind of a reasonable person a doubt of the intent of the parties. 190 The primary facts are not in dispute, the primary judge did not appear to direct his mind as to the degree of certainty required, assuming that there was a mistake, there were other explanations as to its correction than the one advocated by the respondents. These factors lead me to say that I feel at liberty to analyse the primary facts anew and determine whether they meet the test. 191 I do not consider that there is an obvious mistake and an obvious substitution for the mistake that would justify the court in reading CGM as the grantee of the option. 192 It follows that the parties have purported to grant an option to BBARV which is not a party to the contract and so cannot avail itself of the option. 193 It also follows that the respondents' proceedings should have been dismissed. 194 It is unnecessary to deal in detail with the other problems that the respondents faced if I was wrong on the above. 195 It was submitted that the option was only to exist if the vendor was BBARV and that there was clear evidence as to the background of the contract. Further, the purchasers were clearly informed that the unit was available to them at a discount price provided that the buy back arrangement was in place and they purchased on that basis with their eyes open. 196 I do not accept that submission. It just does not gel with the agreement read as a whole. (d) If CGM was the grantee of an option it did not exercise it. 197 I have set out the rather equivocal terms of the respondents' solicitor's letter of 6 November 2007. The exercise was clearly by BBARV. The primary judge only was able to award specific performance to CGM by treating the exercise of the option by BBARV as its exercise as agent for CGM. 198 Dr Bell concedes that an option might be exercised by an agent. However, he says that there was no evidence to show that at the time of the exercise CGM had granted to BBARV its authority to act as agent on its behalf, he cited Hoare v McCarthy [1916] HCA 65; 22 CLR 296, 303. However, this submission must now be read in the light of this Court's decision in Nguyen v Taylor (1992) 27 NSWLR 48 at 59-60. 199 Furthermore, there is no indication in the exercise document that BBARV was intending to exercise the option as agent for CGM. 200 On first principles, when exercising an option, the grantee must make it abundantly clear to the grantor that the grantee is exercising the option. In appropriate cases, the grantee may nominate another to exercise the option on behalf of the nominee beneficially. I do not know of a case where the agent has purported to exercise the option on behalf of an unnamed principal where that unnamed principal is the grantee. 201 In the present case the letter of 6 November 2007 plainly referred to BBARV exercising its option not an option granted to CGM. 202 Were it necessary to decide, I would hold that the primary judge was in error in holding that CGM had exercised its option. (f) Any option was void under s 66ZG of the Conveyancing Act 1919. 203 Again, this matter is strictly speaking unnecessary to consider in view of my determination of the principal issue. 204 Section 66ZG of the Conveyancing Act 1919 in the form it was as at the date of the contract relevantly provided that an option granted for the purchase of residential property is void if: (a) it is not signed in duplicate by both parties; or (b) it is exercisable within 42 days after it is granted. 205 It is common ground that, if that section applies to the present case, the option is void. The primary judge held that the section did not apply to the present option. 206 The primary judge held that the term "option" was not defined in the Conveyancing Act and that a buy back arrangement under the Retirement Villages legislative scheme was not a traditional option. In particular, the "consideration paid in relation to the option" which would need to be returned could not be calculated as would be required by s 66ZG(2)(b). His Honour virtually said that although it could be termed an "option", the right under the buy back arrangement was really a species of right sui generis. 207 Dr Bell says that "option" is a word whose meaning is well understood by lawyers and the community generally. This is so, even though it may be that the precise juristic analysis of the rights under an option may be debateable. The Conveyancing Act is aimed at protecting holders of options. There is no reason why the protection given by the statute should not apply to people purchasing retirement units and, indeed, the 1989 Act and the 1999 Act reinforce that view. The primary judge's reasoning as to otherwise is said not to be convincing. 208 I would digress by saying that it is actually difficult to divine the raison d'etre for s 66ZC or the mischief at which it aimed, but that is by the bye. 209 Dr Leeming submits that the primary judge's ruling was correct. He says that one cannot view s 66ZG in isolation: one must also consider s 66ZE. Indeed, s 66ZG(2) specifically provides that if an option is void under s 66ZG, s 66ZE applies, with certain exceptions, as if an effective notice of "rescission of the option" had been served. 210 Section 66ZE provides that, in certain events an option is to be treated as rescinded ab initio. The notion of rescission of an option is a strange one, but the meaning is clear, the option must be considered as never having been brought into existence. 211 Section 66ZE then says that the purchaser is to forfeit a certain percentage of the purchase price of the property and that the vendor may recover that amount from any consideration paid in relation to the option. 212 Dr Leeming notes that the principal operation of s 66ZE is where, after the cooling off period allowed under s 66ZD, the purchaser of an option to buy property exercises its statutory rights. There s 66ZE makes perfect sense, the option is set at naught and the purchaser pays a small forfeit. 213 However, when one endeavours to apply s 66ZE to a right given to a vendor under a buy back clause in an agreement to sell a unit to a purchaser, if s 66ZE can be applied at all, it would be like squeezing the toothpaste back in the tube to use Dr Leeming's words. There was no consideration paid in relation to the option. Furthermore, the purchaser (ie the now freeholder) has already paid the whole of the purchase price to the vendor. Why should it now pay a further percentage of the purchase price? 214 In my view, although not free from doubt, Dr Leeming's submission should be accepted and the primary judge's finding on this ground upheld. 215 Thus, I would uphold the primary judge's finding on this ground. (g) Is the option void as against public policy being an impermissible restraint on the free alienation of land? 216 Again, the decision on this point is unnecessary in the light of the principal finding above. 217 The English gentry, particularly in the 17th and 18th centuries were extremely keen to keep their land in the family. The government and the courts were interested in seeing that land was freely alienable. As complements to the statute Quia Emptores 18 Ed 1 ch 1 (1290), rules were developed against perpetuities and also against conveyances where the conveyee was not able to transfer the land to whomsoever he or she wished. 218 In its starkest form, the rule is that an absolute restriction on conveying by the conveyee of a conveyance in fee simple is repugnant to the grant and void. The principle is of relatively ancient origin, but it is unnecessary to look earlier than where it was discussed and applied by the High Court in Hall v Busst [1960] HCA 84 ; 104 CLR 206. In Caboche & Bond v Ramsay (1993) 119 ALR 215, 226, Gummow J took the view that the principle applies to all real and personal property. However, that may well have been overtaken by the decision of the High Court in Bluebottle UK Ltd v Deputy Commissioner of Taxation [2007] HCA 54; 232 CLR 598, 21 [61]. 219 In Gora, Bryson AJ held that a provision in a buy back agreement in the same retirement village was void as infringing this principle. 220 Dr Bell puts that Bryson AJ's reasoning is directly applicable here and that if he does not succeed on any of his other submissions, this ground brings him success. 221 On the other hand, Dr Leeming says that Gora is distinguishable from the present case. He says that, although he submits that in Gora, Bryson AJ misread part of Hall v Busst and that Gora may be reversed on appeal, for present purposes, the Court can assume that it was correctly decided on this point. 222 Dr Leeming points out that in Gora, in contradistinction to the present case, may have dealt with a situation of total restraint on alienation. The vendor was given the prior right to buy back the unit at any time after the occurrence of any one of a series of events. The authorities make it clear that a total restraint is void, however, where there is not a total restraint it is a question of the degree of the restraint: Caboche v Ramsay at 232 recently applied in this court in Moraitis Fresh Packaging (NSW) Pty Ltd v Fresh Express (Australia) Pty Ltd [2008] NSWCA 327; 14 BPR 26,339 at [81] (26,354-5) per Giles JA and [144] (26.364) per Hodgson JA. Many partial restraints are valid. 223 Dr Leeming puts that where the restraint is of limited duration and compels the conveyee to retransfer to the vendor on certain events and then leaves the conveyee free to transfer generally, there is no rule of public policy striking down the arrangement. 224 When considering questions of degree, the court must bear in mind both the direct and collateral effects of the restraint: Elton v Cavill (No 2) (1994) 34 NSWLR 289, 300-1; John Nitschke Nominees Pty Ltd v Hahndorf Golf Club Inc (2004) 88 SASR 334, 372 at [129]. 225 In some cases, like Nitschke, the fact that under the buy back arrangement, the purchaser can only resell at a substantial discount, may lead to a finding that the restraint is against public policy. 226 Dr Leeming submits that on the facts of the present case where there was clear evidence that Mr and Mrs Noon appreciated that because of the buy back provision not only were they assured of having a purchaser for their unit, but also that that fact enabled them to get a considerable discount on the purchase price, there was no reason to set aside the contract on public policy grounds. 227 Although there was no actual finding on this matter, I would support the proposition by saying that it has not been demonstrated by the party relying on invalidity that this is a relevant factor and, indeed, the uncontradicted evidence tells against it. 228 As Dr Leeming says, courts have to be careful not to allow this ancient doctrine to expand to invalidate perfectly proper commercial arrangements between people under no disability. 229 In my view, the present buy back arrangement does not fall foul of the rule against restraint on alienation. 230 I should note in case this matter goes elsewhere that Dr Leeming formally submitted that Hall v Busst should be reconsidered and overruled on the present point. (h) Estoppel. 231 As the appellants otherwise succeed on the appeal, it is necessary to consider the submissions made on estoppel. 232 Although there were no findings made on the facts, the evidence appears to be uncontradicted that Mr Noon was a former caretaker of the village. He was aware of the buy back scheme. He was also aware at all relevant times that he and his wife were obtaining the unit at a discount and that they were able to compel the sale of the unit back to the vendor at the purchase price. 233 However, it is really unnecessary to deal with this matter of estoppel in detail because it was conceded by the respondents that if this court was of the view that even if the option was in favour of CGM, it was not properly exercised, the point led nowhere. I did so find, even though under a subsidiary heading. 234 In the circumstances, Dr Leeming puts that there is an estoppel by convention or, alternatively promissory estoppel that the Noons or their executors were obliged to resell the unit to the respondents or one of them. 235 In Moratic Pty Ltd v Gordon [2007] NSWSC 5; 13 BPR 24,713 [32], Brereton J said that there were five matters necessary to be established to prove a conventional estoppel, namely: (1) that [the plaintiff] has adopted an assumption as to the terms of its legal relationship to the defendant; (2) that the defendant has adopted the same assumption; (3) that both parties have conducted their relationship on the basis of that mutual assumption; (4) that each party knew or intended that the other act on that basis; (5) that any departure from the assumption will occasion detriment to the plaintiff. 236 That summary has at least twice been approved by this court, the most recent reported example being Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 264 ALR 15, 145 [573]. 237 Conventional estoppel is often taken as a common law rather than an equitable principle, but, in view of the comments of Allsop P in Franklins at [34] it is best to leave that point open unless it is essential to decide it. 238 The respondents put that the parties shared a common assumption that the buy back arrangement was efficacious. 239 This came about because: 1. Mr Noon had been the caretaker of the building; 2. Mr Jaeger properly assumed that Mr Noon knew all about buy back arrangements over the building; 3. The buyback scheme was prominent in advertisements; 4. The documents showed that the Noons and their solicitors were aware of the buyback scheme. 240 As to promissory estoppel, it is put that there were clear and unequivocal representations by Mr Noon that he would be obliged to resell the unit to BBARV and that Mr Maloney relied on that in deciding to sell the unit at a discount. 241 The respondents acknowledge that, at least technically, these submissions travel beyond the pleadings, but, they say, that their substance was ventilated at the trial. 242 The submissions that there is an operative estoppel face considerable difficulties. 243 First, it is rare for courts to favour finding an estoppel where the parties have reduced their arrangements to legal documentation. A fortiori where the person now seeking to rely of the estoppel is the proferens of that documentation. 244 Secondly, it is difficult to identify what is the precise fact that the appellants are to be estopped from denying or the convention to which they should be taken to be bound. 245 Thirdly, it is difficult if not impossible to get an estoppel out of pre contract negotiations: Johnson Matthey Ltd v AC Rochester Overseas Corp (1990) 23 NSWLR 190. 246 Fourthly, there was no evidence from Mr Maloney, the controller of both the respondent companies that he or the companies relied on an assumption generated as a result of what the Noons may have communicated to Mr Jaeger, CGM's estate agent. As to this, the respondents say that Mr Maloney is 90 years old and no longer a director of the respondents. 247 Fifthly, as Dr Bell points out, the estoppel is based on the utterances made by or to the estate agent Mr Jaeger and those utterances were rather vague and not stated with precision. 248 Sixthly, the estoppels appear to be pressed against the Noons in favour of BBARV, yet BBARV was not a party to the relevant contract. This difficulty is sometimes evaded by the respondents by looking at the matter through the eyes of CGM or Mr Maloney. 249 It seems to me that these six points mean that the respondents should be held not to have established a case for an operative estoppel. 250 In some ways this is a matter for regret first because the Noons knew that they were buying the unit at a discount price because of the buyback arrangement. Secondly, there is a lot of commercial sense in Dr Leeming's suggestion that laypeople would not be at all concerned that the contract provided benefits to two different arms of the CG Maloney group of companies. However, this arrangement was the respondents' conception and, if the documents they devised to put it into operation failed to do so, it is difficult for them to make a valid complaint. 251 In any event, as noted earlier, the matter is academic because of the way earlier points have been decided. 252 Thus, in my view, the appeal should be allowed with costs. 253 I would make the following orders: 1. Appeal allowed. 2. Orders of Smart AJ set aside. 3 Order that, in lieu, the proceedings be dismissed. 4. Order that the respondents pay the appellants' costs both of the trial and the appeal. ********************* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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