New South Wales Supreme Court CITATION : Bondi Beach Astra Retirement Village Pty Ltd v Noon [2009] NSWSC 461 HEARING DATE(S) : 20 & 21 May 2009 JUDGMENT DATE : 2 June 2009 JUDGMENT OF : Smart AJ DECISION : Order in the nature of specific performance of the agreement between CG Maloney Pty Ltd and the late Brian and Jennifer Noon requiring the defendants to convey Unit 42, 34 Campbell Parade to CG Maloney Pty Ltd or its nominee for $197,000. CATCHWORDS : Unit in retirement village - terms of initial contract for sale resolved - contract for sale also serving as a residence contract under Retirement Villages Act 1989 and mandatory Code of Practice - Contract containing Disclosure Statements under Code and necessity therefor - whether buy back arrangement amounted to an option within s 66ZG of the Conveyancing Act - exercise of option by agent - construction of s 66ZG including amending legislation - correction of mistakes by construction not rectification Conveyancing Act 1919 (as amended) Conveyancing (Sale of Land) Amendment Act 1990 Conveyancing Amendment Act 1997 LEGISLATION CITED : Interpretation Act 1987 Retirement Villages Act 1989 Retirement Villages Act 1999 Retirement Village Industry Code of Practice Regulation 1995 (under Fair Trading Act 1987) Strata Titles Act 1973 CATEGORY : Principal judgment Lindsay v Balgi (1993) 30 NSWLR 244 McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd [2008] NSWSC 542 CASES CITED : Mineaplenty Pty Ltd v Trek 31 Pty Ltd [2006] NSWSC 1203 Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304 Player & Ors v Isenberg & Ors [2002] NSWCA 186 PARTIES : Bondi Beach Astra Retirement Village Pty Ltd & CG Maloney Pty Ltd (Plaintiffs) GB and MJ Noon as Co-Executors of the Estate of the late BR Noon (Defendants) FILE NUMBER(S) : SC 5436/06 COUNSEL : M Leeming SC (Plaintiffs) S Donaldson SC / DA Moujalli (Defendants) SOLICITORS : Stephen Wawn & Associates (Plaintiffs) Pike, Pike & Fenwick (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION Smart AJ Tuesday 2 June 2009 5436/06 Bondi Beach Astra Retirement Village Pty Ltd & CG Maloney Pty Ltd v GB and MJ Noon as Co-Executors of the Estate of the late BR Noon JUDGMENT 1 This suit concerns a strata title unit in a Retirement Village in a premier position overlooking Bondi Beach. Unit 42 was formerly owned and occupied by the late BR Noon and his late wife who predeceased him. They bought the unit from CG Maloney Pty Limited in October 1996. Part of the contract for sale contained "buy back" provisions which are sought to be enforced by the plaintiffs. The contract for sale originally signed is convoluted and requires careful navigation and assessment. Regard has to be had to the mandatory Code of Practice applying to Retirement Villages and residents thereof and the Retirement Villages Act 1989. The plaintiffs claim: 1. A declaration that there exists a specifically enforceable agreement between the plaintiffs, or one of them, and the defendants entitling the plaintiffs, or one of them, to repurchase the property known as unit 42/34 Campbell Parade, Bondi Beach (the unit) for a consideration equal to the price at which the late Brian and Jennifer Noon purchased the unit. 2. Alternatively, a declaration that the defendants are estopped from denying the existence of the Agreement for Sale of Land incorporating the terms of the Disclosure Statements annexed thereto. 2B. Alternatively, a declaration that the defendants are bound by the terms set out in the Disclosure Statements as to the rights of repurchase and the obligation to pay recurrent and deferred fees. 3. Alternatively, damages or equitable compensation. 4. An order in the nature of specific performance of the agreement between the second plaintiff or its nominee and the late Brian and Jennifer Noon requiring the defendants to sell and convey the title of the unit to the first plaintiff or its nominee for the price of $197,000.00. Background 2 The premises at 34 Campbell Parade have enjoyed a number of lives. In the mid 1980s they were converted to, and became, the "Bondi Beach Astra Retirement Village". The residents were confined to those aged 55 and over. At some stage an additional wing was added to the premises. 3 After the conversion had been effected, the process began of selling the units. Mr Karl Jaeger acted as the real estate salesman for the vendor, CG Maloney Pty Limited on the sale of most of the units in the Bondi Beach Astra Retirement Village. The first plaintiff was described as the service company. 4 For about three years prior to 1996, Mr Brian Noon was the manager of the Astra. He and his wife lived at the Village in what was described as the caretaker's unit. 5 Mr Jaeger said that during 1996 Mr Noon told him that he was interested in buying Unit 41-42 (now known as Unit 42) and that he was going to finish up as the manager. Mr Noon asked the price of the unit. Mr Jaeger replied in words to this effect: "We are looking for about $210,00 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." 6 In an affidavit sworn before his death Mr Noon denied that Mr Jaeger told him that the current market value of the property was $290,000, but I think that Mr Jaeger probably made the statement mentioned, or one to similar effect. 7 Mr Jaeger said that shortly thereafter he again had a discussion with Mr Noon concerning the unit and that Mr Noon said, "I am prepared to pay $197,000". 8 The late Mr Brian Noon, in his affidavit of 8 March 2007, stated that the strata complex was comprised of 56 residential units, 3 commercial premises, a car park and common areas. Mr Noon said that in the early part of 1996 he became aware that Unit 42, previously owned by the late RG & BJ Joyce, was likely to be offered for sale. He said that he contacted Mr Jaeger and advised him that he was prepared to offer $195,000 for the unit. Mr Noon said that he later increased his offer to $197,000 on the basis that a car space was included. Mr Noon said that at no stage during those negotiations was any mention made of any "buy back" arrangement, but I think Mr Noon is incorrect. 9 A major attack was mounted on the credit of Mr Jaeger. He made a mistake in his affidavit of 21 May 2007 when he said that after about June 2003 Mr Maloney said to him that they were no longer selling units at the Astra with the buy back agreement, just selling the units at market value. Mr Jaeger said that June 2003 should read May 1998. 10 Initially, I was wary whether I should accept Mr Jaeger's evidence as to his recollection of his conversation. He stressed that the buy back feature was a major discussion point with purchasers. He stressed to potential purchasers that they could not lose money as they would receive back what they had paid, subject to some specified deductions for costs and expenses. This would be useful in a falling market. Some potential purchasers and their families were not interested because they would miss out on any capital appreciation. 11 The late Mr Noon acknowledged receiving Disclosure Statement A from Mr Jaeger on 12 September 1996. That would not have come out of the blue. A prominent feature of the purchases of units in 1996 was the buy back arrangement. It is probable that this feature would have been discussed between Mr Jaeger and Mr Noon not later than 12 September 1996. The late Mr Noon was not able to be cross examined. 12 On 19 September 1996 Mr Jaeger, on behalf of Raine & Horne, Bondi Beach, issued a receipt for $6,000 in favour of Mr and Mrs Noon, stating: "Holding Dep for purchase of Unit 42/34 Campbell Pde Bondi WIWO, incl use of carspace, No 2." (WIWO probably meaning 'walk in walk out', that is, in its current condition) 13 On or about 10 October 1996 a further receipt was issued by Raine & Horne, Bondi Beach for $13,700 in favour of Mr and Mrs Noon in these terms: "Balance of 10% Deposit (Sale Price $197,000) Unit 42/34 Campbell Pde Bondi WIWO incl use of car space 2" 14 The plaintiffs do not have the original counterpart contract signed by the late Mr and Mrs Noon. However, the original contract executed by CG Maloney Pty Limited, under its Common Seal with attesting signatures, is available. The copy contract held on behalf of the vendors has as its back page what appears to be a faxed copy with the copy signatures of B & J Noon as purchasers. It does not contain copy signatures of B & J Noon as residents. In my opinion it was not necessary for B & J Noon to sign twice. The defendants challenged the plaintiffs to prove the contract and what it contained, in particular, whether it contained the buy back provisions and whether they were enforceable. It was not in issue that B & J Noon were bound by a contract, but what were its terms? 15 In these circumstances, it is necessary to set out what occurred in some detail. On 23 September 1996, Gilbert & Associates, the solicitors acting for CG Maloney Pty Limited, the vendor, under cover of a letter of that date, forwarded to the solicitors for B & J Noon, the purchasers' counterpart of the contract for Unit 42. By letter of 25 September 1996 from the purchasers' solicitors to the purchasers, the purchasers' solicitors enclosed "contract received from the vendor's solicitors". Advice was given as to the terms of the contract proposed and instructions sought that the purchasers wished to insert their names as the residents. A copy of that letter was in the file of the purchasers' solicitors. The purchasers lived at 52/34 Campbell Parade, Bondi Beach, but their solicitors were in Newcastle where the purchasers had previously purchased property. 16 Attention was drawn in paragraphs 2, 3 and 4 of the last mentioned letter, respectively to Special Conditions 10 (interest), 16 (repairs) and 17 (car space). In paragraph 5 of their letter, the solicitors stated that there was a Disclosure Statement attached to the contract provided prior to contracts being issued. In paragraph 6 of the letter it is stated: "Clause (j) on page 3 of the disclosure statement provides the buy back provisions which provides that 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 Ltd (which we assume has now changed its name to CG Maloney Pty Ltd). There are a number of deductions from the buy-back price which are listed in (i) to (v)." 17 In paragraph 7 of the letter of the solicitors it is stated: "There is a further disclosure statement B attached to the contract which should be read carefully prior to executing the contract." 18 There is a file note of 30 September 1996 of instructions from Mr B Noon in the file of the purchasers' solicitors and that deals with each of the paragraphs in the letter. The file note records: "1. Yes [confirming that the purchasers wished their names to be inserted as residents] … 5. Disclosure statement - OK 6. Buy-back provisions – OK 7. OK" 19 By letter of 2 October 1996 to the vendor's solicitors, the purchasers' solicitors requested that the particulars on the first page should be completed showing the purchasers as the residents, required deletion of Special Condition 10 (interest) and requested that the following be added to the end of Special Condition 17, "No fee shall be payable by the purchasers in respect of the license to use car space No 2. This clause shall not merge on completion of the contract". 20 By fax of 10 October 1996 to the purchasers' solicitors, the solicitors for the vendor enclosed a requested back page of contract, noted that the front page of the contract should be completed showing the purchasers as the residents, advised that Special Condition 10 must remain and agreed to the proposed addendum to Special Condition 17. 21 The vendor's solicitors asked the purchasers' solicitors to forward the contract by way of exchange as soon as practicable. 22 The copy back page of the contract forwarded under cover of the fax bore a reproduction of the Common Seal of the vendor and the signatures of the witnesses, but both the seal and the signatures were struck out. 23 By letter of 10 October 1996 to the vendor's solicitors, the purchasers' solicitors wrote: "We enclose counterpart Contract executed by our client. The deposit of $19,700 is being paid to the agent … Kindly let us have the original Contract by way of exchange." 24 By fax of 14 October 1996 to the solicitors for B & J Noon, the vendor's solicitors enclosed "the requested front page of the contract". That showed that on the front page the words "Brian Noon and Jennifer Noon" had been inserted by hand against Item C1 Resident. The front page contained the names of the parties, the purchase details, the title references and the inclusions. 25 By letter of 16 October 1996 to the purchasers' solicitors, the vendor's solicitors acknowledged receipt of the letter of 10 October 1996 from the purchasers' solicitors "enclosing the Purchasers' counterpart of the Contract by way of exchange". The letter continued: "In conformity with the authority received from you, we completed the exchange of contracts on 11th October and the Contracts are dated accordingly. Enclosed please find the Vendor Company's counterpart of the Contract duly executed." (The counterpart executed by the vendor bears the date "11th October 1996".) 26 The purchasers' solicitors caused the original contract executed by the vendor and the Transfer to be stamped on 29 October 1996. This is in accordance with the usual practice. The Transfer has been executed by the vendor under its Common Seal and signed by the solicitor for the transferee (the purchaser). The copy in evidence is undated. It was lodged at the Land Titles Office and apparently registered. 27 The defendants submitted that the statement in the letter of 10 October 1996 from the purchasers' solicitor that they were enclosing "counterpart contract executed by our client" was incorrect. They relied on the following: a) the original purchasers' counterpart contract (exhibit 1) remained unsigned in the purchasers' solicitors' file and was produced on discovery by the defendants (the successors to the purchasers); b) the vendor's solicitors produced and faxed an alternative execution page (copied from the vendor's counterpart with the signatures crossed out) for execution by the purchasers which execution page was signed and returned by facsimile ; and c) the facsimile copy signature page was attached to a photo copy contract which was retained by Mr Gilbert as the purchasers' counterpart. 28 Exhibit 1 does appear on visual inspection to be the counterpart of the original contract. The typing on the front and back pages of Exhibit 1 appears to have been produced by the use of carbon paper, or another method of copying, and inapplicable alternatives on page 1 have been ruled out in blue ink or biro. Most of the inserts in the Contract consist of roneoed or duplicated material. Special Conditions 16 and 17 in Exhibit 1 appear to have been added to the duplicated material. Special Condition 17 in Exhibit 1 does not include the words agreed to be added as a result of the letter of 2 October 1996 and the fax of 10 October 1996. They have been added in hand in the copy agreement held by Gilbert and Associates, the vendor's solicitor. That is also the copy the back page of which contains the copy signatures of the late Mr and Mrs Noon. 29 In her memo of 1 November 1996, the solicitor handling the matter for the purchasers writes as to the addition to clause 17: "It appears that this was overlooked when exchanging contracts." Perhaps this was added later by agreement between the solicitors when it was written in on the copy held by Gilbert and Associates. 30 It is difficult to reconstruct with any degree of accuracy what happened in September – October 1996. Mr Noon was in Sydney and his solicitors in Newcastle. Mr and Mrs Noon were sent the counterpart contract which had been sent to their solicitors. The late Mr and Mrs Noon were given a letter of advice and he gave instructions to the solicitor handling the matter. After the contract had been explained and various amendments sought and responses given, the late Mr and Mrs Noon decided to proceed. The letter of 10 October 1996 from the purchasers' solicitors to the vendor's solicitors enclosing "counterpart contract executed by out client" is explicit, as is the acknowledgement of its receipt in the letter of 16 October 1996. There are a number of possibilities. Perhaps the contract was copied and a copy executed by the purchasers was sent to the vendor's solicitors. If so, it can no longer be found. I accept that the front and back page of the contract contain important details. Perhaps they were wanted for record purposes or other purposes which no one now recalls. 31 It s improbable, in view of the terms of the letters of 10 and 16 October 1996, that the solicitors for both parties would have proceeded and exchanged contracts if a copy had not been signed by the purchasers and forwarded by the solicitors for the purchasers to the solicitors for the vendor. 32 The letter of 25 September 1996 and the file note of 30 September 1996 of the purchasers' solicitors demonstrate that the purchasers were both aware of, and accepted subject to the modifications sought, the terms of the contract, including the Special Conditions, the two Disclosure Statements and the buy back provisions. Agreement was subsequently reached on the modifications sought and the contracts exchanged. 33 I do not think that the purchasers, who must have paid the stamp duty, and the purchasers' solicitor would have submitted the contract and the transfer for stamping if there had been any doubt as to its terms and that it included the two Disclosure Statements and the buy back provisions. They appear to be part of the Contract for Sale. The file note of 1 November 1996 of the solicitor handling the transfer indicates that she was aware of the buy back provisions and their effect. There is no evidence of what happened on settlement or how it was effected. 34 Mr Gilbert, who handled the matter in 1996, has no recollection of any specific negotiations about the purchase of the unit by B & J Noon, but does recall that Mr B Noon was the manager of the Astra at the time. His retainer to act for the plaintiffs existed from about June 1991 to about February 1998 when the plaintiffs retained Mr Stephen Wawn. Mr Gilbert does not know why the signature page of the copy contract held on behalf of the vendor was not an original. After completion of the transfer of the unit to B & J Noon the file was stored in a box at Mr Gilbert's office. He has no recollection of either he or the plaintiffs having access to the file after completion. In 1998 the box containing the file relating to the sale and purchase of Unit 42 was transferred to Mr Wawn. He was not aware of any person accessing the file in his custody until he did so in 2006 for the purposes of lodging a caveat. The file contained a contract for Unit 42 in the Astra. 35 The defendants pointed out that Mr S Gilbert had not deposed to ever receiving the signed counterpart. That does not strike me as odd. I would not expect him to have a recollection of that fact, especially after the lapse of so many years. 36 Mr Gilbert stated that during the time in which he acted for the plaintiffs on the sale of the units at the Astra, he was instructed to include in the agreements for the sale of land an agreement between the vendor and purchaser which provided that, upon the occurrence of certain events, such as the death of the purchaser, either the plaintiffs or their nominee had the right to purchase the unit from the purchaser at the price which the purchaser paid for the unit ("the buy back agreement") and that it was his practice to include the terms of the buy back agreement within the Agreement for Sale of Land. I doubt if this evidence is significant or useful given the terms of the Contract and the records of the solicitors for B & J Noon. 37 I note these further matters: a) On one copy of the Disclosure Statement (prior to contract) Mr BR Noon has endorsed that the Disclosure Statement was given to him by Karl Jaeger on 12 September 1996. That refers to the buy back arrangement. This Disclosure Statement is marked "A" in the Contract. (See Special Condition 13 and paragraph (j) of the Disclosure Statement.) It has to be handed to a potential purchaser prior to contract. Mr Jaeger was aware of this. The buy back arrangement was important. It meant that in times of rising markets the appreciation in value of the unit passed to the vendor and in times of falling markets any loss in value was borne by the vendor. The potential purchaser would get back the money he had invested to buy the unit. The arrangement involved both parties taking a risk. b) Mr Noon had been the manager at the Astra for over two years when he offered to purchase Unit 42. It is improbable that he did not know of the buy back arrangements and their likely effect. It was a matter of importance to him when he was planning to spend a substantial sum of money on renovations and it was his negotiating lever to obtain the unit at what he regarded as an acceptable price. c) In times of inflation, a buoyant market and rising real estate prices (whether actual or anticipated), the buy back arrangement was likely to have a depressing effect (and a substantial one) on the value of a unit, even one in such a premier position. d) I do not accept that Mr and Mrs Noon were unaware of the buy back arrangements or of their inclusion in the Contract for Sale. Mr Noon is incorrect in his recollection when he states in his affidavit that he was unaware that he was entering into any simultaneous agreement permitting the first or second plaintiff to repurchase the unit at some time in the future. He may have overlooked the advice from and instructions to his solicitor. 38 On the balance of probabilities I am satisfied that the contract between the vendor and the purchaser included all the documents in the stamped version and, inter alia, included the Special Conditions 1 – 11, 13 – 17, Disclosure Statement bearing date 20 September 2006 and Disclosure Statement B. This means that the buy back conditions were included in the contract bearing date 11 October 1996. I attach importance to the purchasers stamping the contract and transfer executed by the vendor, the purchasers having the full contract, the explanations given by the purchasers' solicitors and the instructions received by them. Contract 39 This has to be read against the background of the Retirement Villages Act 1989 and the Retirement Village Industry Code of Practice Regulation 1995 made under the Fair Trading Act 1995. 40 The provisions presently of central importance relate to the Disclosure Statements and the buy back provisions. Special Conditions 13 and 15 of the Contract state: "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." [Disclosure Statement 'A'] "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." [Disclosure Statement 'B'] Disclosure Statement A consisted of a roneoed or duplicated copy of provisions apparently produced in February 1990. Inter alia, it included on p 3: "(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 Village Pty Limited." 41 Paragraph (g) on p 2 of Disclosure Statement A refers to Schedule A which sets out the answers to the questions from the Retirement Village Industry Code. Question 11 and the answer are as follows: "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." 42 The defendants pointed out that Special Condition 13 contains no incorporation of any part of Disclosure Statement A and that it does not contain any provision in the nature of contractual covenants to the effect of the alleged option agreement. (The defendants referred to the buy back provisions as the alleged option agreement.) The last sentence of (j) is inapt as B & J Noon did not buy the unit from Bondi Beach Astra Retirement Village Pty Limited. The answer to question 11 is also affected. 43 Disclosure Statement B contains a mixture of provisions dealing with a variety of matters. Some of its provisions deal with the rights and obligations of the service Company (the first plaintiff) and the purchasers and /or residents, charges and payment for services. 44 In the Definitions in clause 1 of Disclosure Statement B, "Agreement" means and includes this agreement and all conditions and annexures to it. Clause 1 contains these further provisions: "Disclosure Statement A [previously referred to as the Disclosure Statement] is the annexed Disclosure Statement setting out matters required to be disclosed prior to this Agreement. Disclosure Statement B [of 20 pages excluding annexures] [referred to in Special Condition 15 as a further Disclosure Statement] is the annexed Disclosure Statement setting out matters required to be disclosed at the date of the Agreement. 'Purchaser' means and includes: i) the purchaser named in this Agreement her/his executors, administrators and successors in title to the Unit: ii) where the purchaser is to be the resident the word 'purchaser' shall be taken to incorporate the words 'the purchaser(as defined in i)) and resident.' 'Service Company' means and includes Bondi Beach Astra Retirement Village Pty Ltd its successors and assigns. The terms defined or used in the Act and/or the Code shall have the same meaning when used herein except to the extent that the context otherwise requires." Clause 2(2) of Disclosure Statement B provides that the covenants and agreements having application after the date of completion enure, notwithstanding completion. In Clause 3 attention is drawn to the Code of Practice and Retirement Villages Act 1989. In Clause 5 of Disclosure Statement B the parties acknowledge that the unit is a lot in a retirement village to be occupied only by persons 55 years of age or over. 45 The purchaser(s) and residents may be different. For example, adult children may purchase the unit and propose that their parents aged 55 or over will reside in the unit. 46 There was no separate residence contract prepared by the solicitors for the vendors or executed by either of the parties. The plaintiffs asserted that the agreement of 11 October 1996, including its annexures and incorporations, constituted the residence contract. The defendants submitted that a separate residence contract was required. 47 (a) The Service Company is not a party to the Contract for Sale and yet it appears to be given rights and to be able to confer rights under Disclosure Statement B. Clause 10 of Disclosure Statement B contains agreements by the purchaser and the resident with the Service Company for the payment of levies, rates etc, not to use, or permit the use of, the unit for other than residential occupation and as to other matters. The Service Company may not be able to enforce these obligations except perhaps indirectly. (b) Clause 12 of Disclosure Statement B states that the Service Company grants to the purchaser and /or resident the right to the reasonable use and enjoyment of the communal areas with the other residents of the Village. There is the further important provision that the Service Company agrees that, on the sale by the purchaser of the unit to a qualified occupant, it will grant to such qualified occupant similar rights of user of the communal areas. The question arises whether the purchaser and/or the resident can enforce these provisions as against the Service Company. One approach may be to imply that the vendor is warranting that the Service Company will make the grants mentioned. That is indirect. (c) It is an incident of the occupation of the unit to be able to exercise the reasonable use and enjoyment of the communal areas. Clause 12(a) records that the Service Company has exclusive use of the "communal areas". That phrase is defined in clause 1 of Disclosure Statement B. Clause 13 of Disclosure Statement B deals with the Residents Committee and the role of the Service Company. 48 Clause 14 of Disclosure Statement B provides, inter alia: "The right of the purchaser and/or resident to occupy the unit terminates only: a) when the resident dies, or; b) if the Residence Contract is terminated in accordance with Special Condition 15; or …" 49 Clause 15 of Disclosure Statement B provides: "(1) If:- (i) the resident wishes to terminate the Residence Contract; … (iv) the purchaser wishes to sell or dispose of the unit; (v) the resident dies; (vi) the Tribunal makes an order terminating the Residence Contract …" a specified procedure shall apply. It is further provided in clause 15(1)(b) that upon the expiration of the period of one month's notice as specified in para (a) of cl 15(1): "… the purchaser or the Service Company shall have the option by notice in writing (the 'Buyback Notice') served upon the other … 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 condition as are contained in the Agreement for Sale of Land – 1998 Edition …" [A series of alterations, omissions and additions followed.] 50 I shall briefly refer to some of the provisions of the Code, as set out in Schedule 1 of the 1995 Regulation. It contains these definitions: "'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; 'residential premises' means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a place of residence; 'retirement village' means a complex containing residential premises (whether or not including hostel units) predominantly or exclusively occupied, or intended to be predominantly or exclusively occupied, by retired persons in pursuance of: (a) a residential tenancy agreement or any other lease or licence; or (b) a right conferred by shares; or (c) the ownership of residential premises subject to a right or option of repurchase or conditions restricting the subsequent disposal of the premises, and for the right to occupy which those persons are or will be required to pay or donate money." 51 The Retirement Villages Act 1989 (repealed on 1 July 2000 by the Retirement Villages Act 1999) contained definitions in the same terms with one minor exception in the definition of retirement village. The Retirement Villages Act 1989, s 3 defines "resident" to mean "a person who occupies residential premises in a retirement village under a residence contract". Clause 3.1 of the Retirement Village Industry Code provides "This Code is mandatory". Clause 4(1) states that the provisions of this Code apply to those who sell property or interests and to residents. 52 The plaintiffs submitted that the Contract for Sale, upon completion, gave the purchasers the right to occupy the unit which were residential premises in a retirement village as they were over the age of 55 years. They did not have to enter into a residence contract with themselves. The plaintiffs pointed out that in the definition of "residential premises", it was envisaged that the right of predominant or exclusive occupation by retired persons might arise from the ownership of residential premises subject to a right or option of repurchase. That proceeded on the basis that for that right to occupy, the retired persons were or would be required to pay money. 53 Clause 7(1) of the Code as embodied in the 1995 Regulation provides that where accommodation in a retirement village is secured by strata title, the provisions of the Strata Titles Act 1973 apply, as do the provisions of the Code and the Retirement Villages Act 1989. 54 Clause 13(2) of the Code states 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. Under clause 1, "management", in relation to a retirement village, means the person by or on whose behalf the retirement village is administered, and includes a person (other than a resident) who owns land within the village and has the same meaning as "administering authority" in the Retirement Villages Act 1989. Both plaintiffs fell within this definition in 1996. The Contract of Sale was supplied in sufficient time for B & J Noon to obtain legal advice. 55 Under clause 13(3) all information and contracts relating to a retirement village must comply with any relevant legislation including the Fair Trading Act 1987, the Retirement Villages Act 1989 and the Strata Titles Act 1973. 56 Clause 21 of the Code sets out the information which is to be made available to every prospective resident of the retirement village. 57 Under clause 24 of the Code 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. 58 Clause 26(1) of the Code provides that the residence contract documents must include, or be accompanied by, accommodation plans and (adequate) details. The fixtures, fitting and furnishings which are to be provided must be listed and any items for which maintenance will be the resident's responsibility or which are not covered by maintenance fees payable by the resident, must be so identified (Cl 26(3)). 59 Clause 27(1) of the Code provides that contracts between management and a resident relating to a retirement village must detail all services and facilities that are to be provided by the management. 60 There are also the provisions contained in clauses 28 and 29, and the provisions in Part 4 dealing with the termination of the residence contract. 61 I return to Disclosure Statement B. The defendants submitted that the terms of Disclosure Statement B have been drawn on the assumption that the terms upon which the unit was to be occupied were to be governed by a "residence contract". They relied not only on clause 15 but clauses 12, 14, 17(a), (b) and (c). 62 The defendants submitted that: (a) there was no "residence contract" and consequently, the circumstances that are triggered by the termination of the residence contract, including through the death of the "resident" have not occurred; (b) the agreement does not provide for the option to be exercisable upon the death of the purchaser. There is no definition of the expression "resident" which extends to include the purchaser. Further, the plaintiffs are not assisted by the definition of resident under the Retirement Villages Act 1989 by the inclusion of a person "who occupies residential premises in a retirement village under a residence contract". As no "residence contract" was entered into, that definition cannot in the circumstances identify the resident; (c) in the absence of a "residence contract" the essential provisions of the alleged option agreement cannot operate in the manner contemplated and cannot be given a sensible operation; (d) the alleged option agreement in clause 15 proceeded upon the basis that the occupation of unit 42 would be governed by terms set out in a residence contract. The provisions of the Second Disclosure Statement are dependent upon the existence of a residence contract. The terms of that agreement cannot sensibly be decoupled from the terms of the alleged option agreement because the exercise of rights under the residence contract creates entitlements under the alleged option agreement (in clause 15). If rights under the residence contract are incapable of ascertainment, then rights under the alleged option agreement are not sufficiently defined. 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. 65 Clause 15 of the Second Disclosure Statement B deals with both the situation of the resident of the strata title unit and the purchaser. In some cases the purchaser and the resident will be the same person, but not necessarily. 66 Clause 15(1)(b) creates what is commonly called a "put and call option" but one of an unusual kind. 67 Clause 15(1)(ee) of Disclosure Statement B contains provisions designed to avoid delay where "the purchaser" is deceased and clause 15(1)(c) covers the situation where neither the purchaser nor the Service Company exercises the option. The "purchaser" may transfer the unit to any qualified occupant but must simultaneously cause that person to entire into an agreement with the Service Company "incorporating the special conditions of this agreement, with any reasonable alterations. …" 68 I do not accept the submission of the plaintiffs that they have a right, either singly or jointly, to exercise the option in the absence of a residence contract. Both Disclosure Statement B and the Code envisage that there will be a residence contract, albeit that it may be incorporated in the Contract for Sale of Land. I accept that it is not expressly stated in clause 15 that there must be a residence contract and that clause 15(v) provides that the option may be exercised if the resident dies. However, "resident" means a person who occupies residential premises in a retirement village under a residence contract. 69 If I had taken the view that there was no residence contract, I would not have held that the right to exercise the option arose. This is apart from the question as to who was entitled to exercise the option. Astra's purported exercise of "Option Agreement" - Mutuality 70 The defendants relied upon Astra purporting to exercise the "option agreement". 71 The plaintiffs responded that, as a matter of construction, not rectification, where the words "the Service Company" appear in clause 15 of Disclosure Statement B, they should read "the vendor" or "CG Maloney Pty Limited", being the vendor's name. I will return to this issue. 72 The defendants submitted: (a) even though Astra is not a party to the Agreement, Disclosure Statement B purports to impose contractual obligations on Astra. An option to purchase is granted to Astra and an option to sell is granted to the purchasers; (b) the assumption by the parties of a commitment to perform identified obligations is the essence of a contract. Until there is an accord in the nature of an agreement by each of the parties to be bound there is no contract; (c) as Astra has not signed the Contract for Sale of Land or either of the Disclosure Statements the option agreement could not have been enforced against Astra. 73 The defendants called in aid principles of law drawn from other fields, namely, that in guarantee law one guarantor's assumption of liability may be conditional upon or made in consideration of other guarantors assuming liability. It was submitted that a similar approach should be adopted in the present case, as the promise in the alleged option agreement to sell if called upon to do so by Astra was given in consideration of a promise by Astra to purchase the unit if called upon to do so. The bargain contemplated was not secured in the absence of an effective assumption by Astra of its obligation to perform that promise. 74 The defendants also relied on Player & Ors v Isenberg & Ors [2002] NSWCA 186, especially at [24] – [32]. They submitted that, as Astra was not a party to the agreement, clause 15 was meaningless in the terms in which it is expressed because it purports to impose contractual obligations on Astra in the event of certain circumstances occurring. Construction - Rectification 75 I return to the plaintiffs' submission that as a matter of construction not rectification "Service Company" should be read as "the vendor" or CG Maloney Pty Limited. 76 There are indications of infelicitous drafting in the Contract for Sale. CG Maloney Pty Limited is shown on page 1 of the Contract as the vendor and at the top of the page containing the Strata Title provisions. Also on page 1 are references to the vendor's solicitor and the vendor's agent. On the back page the contract has been executed under the Common Seal of CG Maloney Pty Limited which is described as the vendor. Throughout the printed conditions there are references to the vendor. However, at the top of page 3 of the Special Conditions there is the heading: "Bondi Beach Astra Sale To" 77 Nevertheless, the body of the Special Conditions refer to the "the vendor" (clauses 1, 7, 10, 11, 16 and 17). There is no reference in the Special Conditions to either the Service Company or Bondi Beach Astra Retirement Village Pty Limited. 78 However, Disclosure Statement A, required and issued pursuant to the Retirement Village Industry Code of Practice, refers in the first part of sub-clause (j) to the buy back price as "the price the resident paid for the unit when he bought the unit from Bondi Beach Astra Retirement Village Pty Limited". There is a similar statement in sub-clause (j)(iv). B & J Noon did not buy the unit from this company. 79 Disclosure Statement B contains many references to the "Service Company". It is included in the definition of "Management". Disclosure Statement B deals with many of the incidents of daily living in the retirement village, the rights of residents and financial matters. Clause 9 purports to confer a series of rights upon the Service Company. If the Service Company purported to exercise any of the powers conferred, obligations on its part would arise including, inter alia, those arising under sub-clause 9(4). I have earlier referred to clauses 10 and 12. While clauses 8(iii) and 9 – 13 of Disclosure Statement B relate to the Service Company, its rights and its tasks, there is then a change of subject matter. In clause 14 it deals with the termination of the residence contract and in clause 15 with termination of that contract, other related events and the option. Clause 16 deals with what is to happen on the sale or transfer of the unit. Many of the references in Disclosure Statement B to the Service Company up to and including clause 13 appear to be appropriate. 80 In clause 15(1), (ii), (iii) and (vi) there is a deeming or assumption of the service of one month's written notice upon the Service Company. In clause 15(1)(a) there is a requirement to serve one month's written notice upon the Service Company. 81 Clause 15(1)(b) continues the references to the Service Company and provides that it has the option by notice in writing (described as the "buyback Notice") served upon the purchaser to require the transfer of the unit by the purchaser to the Service Company or its nominee for the price at which the purchaser bought the unit. 82 There is no reference in Clause 15 of Disclosure Statement B to CG Maloney Pty Limited or the vendor under the Contract for Sale. The words "the vendor" in clause 15(1)(ee) refer to the vendor under the sale agreement entered into consequent upon the exercise of the option. 83 The obligation in clause 16(b) of the purchaser to pay to the Service Company "any costs payable by the Service Company" in relation to the repair and refurbishment of Unit 42 is inappropriate as the vendor not the Service Company would be concerned to restore the unit to the condition it was in at the date of this agreement. 84 The plaintiffs relied on the observations of Brereton J in McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd [2008] NSWSC 542 at [39]: "Where extrinsic evidence is not required to ascertain the true contractual intention of the parties, that result can be achieved by construction, as opposed to rectification. A useful touchstone in this respect is whether the mistake can be ascertained on the face of the instruments without recourse to extrinsic evidence." The decisions which Brereton J cited were persuasive. 85 There are frequent reference in Disclosure Statement B to the "Service Company" but it is not a party to the Contract. It if had been a party many of the references to it would have been appropriate because of the subject matter. It appears to have managed the Village and to be intimately concerned with the subject matter. I hesitate about treating the words the "Service Company" as Bondi Beach Astra Retirement Village Pty Limited in one part of Disclosure Statement B and as a matter of construction treating it as a mistake in another part, that is, as meaning CG Maloney Pty Limited in clauses 15 and 16 of the Statement. 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. Challenge to exercise of "option" 89 Allied with their other submissions was a contention by the defendants that the "option" had not been validly exercised. By letter of 6 November 2007 the solicitors for the plaintiffs wrote to the Executors of the estate of the Late Brian Noon, Messrs Pike, Pike and Fenwick (the solicitors acting for the late Mr Noon in these proceedings) and Messrs Peter Evans & Associates (the solicitors who acted for B & J Noon on the purchase) thus: "We are the solicitors who act on behalf of the Bondi Beach Astra Retirement Village Pty Ltd and CG Maloney Pty Ltd. … We are instructed by our client that Mr Brian Noon purchased the property from out client, CG Maloney Pty Ltd, for $197,000 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. 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." 90 The reference to "our client" in the first line of the last quoted paragraph appears to be a reference to both companies. Bondi Beach Astra Retirement Village Pty Limited purports to exercise the option and not CG Maloney Pty Limited. I have earlier held that as a matter of construction the "Service Company" in clause 15(1) of Disclosure Statement B should read the vendor, CG Maloney Pty Limited. As at 6 November 2007 this construction issue had not been resolved. The "Service Company" was Bondi Beach Astra Retirement Village Pty Limited. Clause 15(1)(b) of Disclosure Statement B refers to the "Buyback Notice" requiring 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". 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. Section 66ZG of the Conveyancing Act 93 The defendants relied on the terms of s 66ZG(1) as they stood in 1996, as a result of the Conveyancing (Sale of Land) Amendment Act 1990 namely: "66ZG(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." 94 In Lindsay v Balgi (1993) 30 NSWLR 244 at 247 Hodgson J said: "… the provision states that the option is void if 'it is not signed in duplicate by both parties'; and I believe that clearly relates the required duplication to the signatures, and not merely to the actual terms of the option. I think that those words are too clear to admit any other interpretation … " Thus the requirement for signatures (in duplicate by both parties) in s 66ZG(1) was not satisfied by each party signing a counterpart of the option. 95 The plaintiffs accepted that if s66ZG(1), as it stood in 1996, was the applicable provision, they could not satisfy it and the option was void, assuming that provision applied to the buy back provisions in clause 15(1) of Disclosure Statement B. The plaintiffs also contested that s 66ZG(1) as it stood in 1996 applied. 96 By the Conveyancing Amendment Act 1997 Schedule 1, Clause [2], section 66ZG(1), as it stood in 1996, was omitted and the following were inserted instead: "(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 was 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." Those provisions remain. 97 Section 30(1)(b) of the Interpretation Act 1987 provides that the amendment of an Act does not affect the previous operation of the Act or anything duly suffered, done or commenced under the Act. Section 5(2) of the Interpretation Act provides that that Act applies to an Act except in so far as the contrary intention appears in the Act concerned. Section 5(3) provides that wherever appropriate the Interpretation Act applies to a portion of an Act in the same way as it applies to the whole of the Act. 98 The plaintiffs contended that the amending provisions inserted in 1997 did exhibit a contrary intention and that their effect was retrospective. 99 The original s 66ZG(1) cut across existing conveyancing practice and the amendment was designed to overcome the difficulties which it had created, as pointed out by Hodgson J. After the amendment, no longer did the option have to be signed in duplicate by both parties. It was sufficient if there was an exchange of counterparts, one of which was signed by the purchaser and the other signed by the vendor. 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. 102 The defendants relied on the further contention that the plaintiffs could not rely on the present s 66ZG(1) as they could not establish that the option was granted by way of exchange of counterparts one of which was signed by the purchaser. I do not accept this submission. I prefer to proceed on the basis of the letter of 10 October 1996 from the solicitors for B & J Noon, the letter of 16 October 1996 from the solicitors for CG Maloney Pty Ltd and the copy contract held by the solicitors for the plaintiffs. I am not prepared to speculate on why the contract, Exhibit 1, ended up in the possession of the solicitors for B & J Noon. Was the buy back Agreement an Option within s 66ZG? 103 The answer to this question does not depend upon and is not affected by whether s 66ZG(1) applies as originally enacted or as amended in 1997. 104 The plaintiffs submitted that the buy back agreement was not an "option" for the purposes of s 66ZG (and presumably Division 9 of the Act). That term is undefined. They submitted that it was directed to the protection of purchasers of residential land: see Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304 at [17] – Hulme J. It was the defendants who were the vendors, for the purposes of the buy back provisions, who sought to invoke the section. It was contended that the buy back provisions were not a freestanding option but conditions in a contract for sale. 105 The plaintiffs relied on s 66ZG(2) which deals with the situation where an option is void under s 66ZG. Section 66ZG(2), which existed in 1996 and continues to exist, provides: "(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." 106 It is to be noted 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" are the words used. 107 The words "the whole of the consideration paid in relation to the option" are not apt as to the buy back arrangement. There is no specific consideration payable or specified as to the buy back arrangement. There has been residence in the unit for about 10 years. The period could have been shorter or longer depending on the circumstances and wishes of Mr and Mrs Noon. The plaintiffs also contended that the terms of s 66ZE reinforced the conclusion that a buy back arrangement was not an option within s 66ZG. 108 The defendants submitted: (a) The transfer of the title of the unit was not consideration paid for the option within the meaning of section 66ZE. (b) The consideration provided by the other party to the alleged option agreement the first plaintiff was its covenant to repurchase the property if called upon to do so. The deemed rescission of the alleged option agreement does not give rise to an obligation to repay any consideration pursuant to s 66ZE(5). (c) Alternatively, the consideration paid was the reduction in the purchase price below market value. (The defendants contended that the Court cannot be satisfied that there was any such reduction. This submission was directed to the situation which would arise if the Court held that there was such a reduction.) (d) The difficulties which may, in some circumstances, arise in identifying the consideration provided in connection with an option to "buyback" residential property do not provide a sufficient basis for excluding arrangements of that type from the range of options to which the Act applies. (e) An agreement to purchase property which is conditional upon the giving of notice or other stipulated conditions is no less an option within the well understood meaning of that expression simply because the grantee of the option was the vendor of the property to the grantor. The expression option is unambiguous and effect should be given to the terms of the legislation. 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 term, 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). Section 66ZG(1)(b) – 42 days 113 There was a further argument advanced by the defendants upon the assumption that the provisions of clause 15 of Disclosure Statement B constitute an option within s 66ZG of the Conveyancing Act. The defendants relied on the provisions of s 66ZG(1)(b) that an option granted for the purchase of residential property is void if it is exercisable within 42 days after it is granted. The word "granted" is important. The defendants submitted that it was possible for certain of the events referred to in sub-clauses (1)(i) to (v) of Disclosure Statement B to occur immediately upon or following the entry into the agreement, about 11 October 2006. The defendants counted the time from 11 October 2006 whereas the plaintiffs submitted there first had to be completion of the sale. Prior to completion there would be requisitions and replies, the stamping of the contract and the transfer, the execution of the transfer and payment of the purchase moneys on completion. It is possible, although not usual, for those events to take place within a short period of time, for example, seven days. If, prior to completion, one or both the residents and purchasers died or wished to sell or dispose of the unit or not go into residence, that would hold up completion. Clauses 14 and 15 assume that completion has taken place and that the purchaser or purchasers have title, that is, are entitled to be registered as proprietors of the unit. Once the relevant event in Clause 15(1) takes place one month's written notice has to be given to the Service Company. 114 The option could only be exercised in 42 days after being granted if completion occurred and the various time limits envisaged in the documents were truncated. For example, if the initial notice were given 28 days after the option is granted. 115 I take the view that when the section refers to the option being exercisable within 42 days of being granted it is looking at it being exercisable in the ordinary course of events and not in some truncated time frame. Section 66ZG(1)(b) is protective and designed to prevent options being exercised within short periods of time, less than 42 days, after being granted. It has the effect of preventing the exercise of options for the purchase of residential property with undue haste. 116 In the present case, in my opinion, s 66ZG(1)(b) does not operate to render the provisions in clause 15 of Disclosure Statement B void. Miscellaneous 117 These proceedings were commenced by Summons on 24 October 2006 when Bondi Beach Astra Retirement Village Pty Limited and CG Maloney Pty Limited sought an order extending caveat dealings lodged by Bondi Beach Astra Retirement Village Pty Limited on the title to Unit 42. The defendant was Brian Noon. He had previously served a lapsing notice. A Statement of Claim was filed on 28 November 2006. When Mr Noon died on 28 October 2007 the proceedings were unresolved. 118 Evidence was led by the plaintiffs from a valuer, Mr M Casemore. He did not conduct a traditional valuation exercise but gathered together two bodies of sales evidence in relation to units on Campbell Parade, Bondi Beach. He relied on sales of one storey residential units in 34 Campbell Parade, the Retirement Village, between September 1995 and May 1997, three being from April 1996 to September 1996. He ascertained the floor area from the plans and found that on a square metre basis the units in 34 Campbell Parade ranged from $2,322 to $3,051 per square metre. This excludes a non-residential property that was sold. Mr Casemore thought that the value on a square metre basis of unit 42 at 11 October 1996 was $2,400 per square metre. It was agreed for the purposes of this proceeding that the contracts for sale for units 33, 39, 60, 20 and 61 referred to on pages 6 and 7 of Mr Casemore's report contain provisions materially identical to Disclosure Statement A and Disclosure Statement B in document 17 of the plaintiffs' tender bundle. 119 Mr Casemore also collected sales evidence of units he regarded as approximately comparable on Campbell Parade Bondi Beach around October 1996, but not in 34 Campbell Parade. He described these as general sales and found that on a square metre basis they ranged from $3,121 – $5,603 per square metre. 120 Mr Casemore said that 34 Campbell Parade was not typically inferior to the other complexes but he commented that sales in 34 Campbell Parade were measurably lower than others in Campbell Parade. 121 It is not necessary to make precise findings. In times of rising markets (whether actual or anticipated) potential purchasers could sensibly be expected to pay less for a unit in a retirement village when they have no opportunity over a number of years to participate in any capital appreciation. I do not accept that, as at 11 October 1996, buy back provisions along the lines of those in clause 15 of Disclosure Statement B were not material as to the price a potential eligible purchaser was prepared to pay for a unit in 34 Campbell Parade. I accept that 34 Campbell Parade was, by virtue of its position overlooking Bondi Beach and its closeness to the city and facilities, a unique retirement village. Sales in other retirement villages are unlikely to be comparable. Decision 122 In my opinion the plaintiffs' claims in contract succeed. It is therefore unnecessary to consider the plaintiffs' causes of action based on common law conventional estoppel and equitable promissory estoppel. I am not persuaded that the defendants should pay the costs of Bondi Beach Astra Retirement Village Pty Limited of these proceedings. I make the following declaration and orders: 1. A declaration that there exists a specifically enforceable agreement between CG Maloney Pty Limited and the defendants entitling CG Maloney Pty Limited or its nominee to repurchase the property known as Unit 42/34 Campbell Parade, Bondi Beach for $197,000, being the consideration equal to the price at which the late Brian and Jennifer Noon purchased such unit. 2. An order in the nature of specific performance of the agreement between CG Maloney Pty Limited and the late Brian and Jennifer Noon requiring the defendants to sell and convey the title of the unit to CG Maloney Pty Limited or its nominee for the price of $197,000. 3. An order that the defendants pay the costs of CG Maloney Pty Limited of these proceedings. I am prepared to hear argument as to the terms of the Declaration and Orders if application is made in writing within 7 days. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.