J Cummins Pty Ltd v F & D Bonaccorso Pty Ltd [2014] NSWSC 1064

Supreme Court New South Wales

Medium Neutral Citation: J Cummins Pty Ltd v F & D Bonaccorso Pty Ltd [2014] NSWSC 1064 Hearing dates: 19-23 May 2014 Decision date: 07 August 2014 Jurisdiction: Equity Division Before: Darke J Decision: Statement of Claim is dismissed with costs. Catchwords: EQUITY - rectification - Put and Call Option Agreement - alleged common intention that stipulated deposit be treated as already paid - common intention not established Cases Cited: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 Lewis v Condon; Condon v Lewis [2013] NSWCA 204 Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65; (2007) 69 NSWLR 603 W & K Holdings (NSW) Pty Ltd v Laureen Margaret Mayo [2013] NSWSC 1063 Category: Principal judgment Parties: J Cummins Pty Ltd (plaintiff) F & D Bonaccorso Pty Ltd (defendant) Representation: Solicitors: Strathfield Law (plaintiff) CLS Legal (defendant)

Counsel: V R W Gray (plaintiff) R A Parsons, A Kaufmann (defendant) File Number(s): 2011/304034 Publication restriction: Nil

Judgment

Introduction 1By a Statement of Claim filed on 21 September 2011, the plaintiff seeks an order for rectification in relation to a Put and Call Option Agreement dated 6 August 2010 entered into by the plaintiff and the defendant. The Agreement concerns a block of twelve home units at 5 - 9 Chapman Street, Strathfield, which is owned by the defendant. The property is located within an area sometimes referred to as the "Strathfield Triangle" which is evidently subject to considerable pressure for development. 2The form of contract that is annexed to the Agreement is sought to be rectified so that it provides that in the event of exercise of either the put or call option, the plaintiff as purchaser is to be treated as having already paid the defendant as vendor a deposit of $1.4 million towards a stated purchase price of $5.7 million. 3The plaintiff claims to have duly exercised the call option to purchase the property, and seeks specific performance of the contract as rectified. 4The plaintiff also pursues a claim in the alternative for declaratory relief in respect of an alleged oral contract. This contract, said to be in the nature of a joint venture, is to the effect that the defendant would sell the property, and out of the net proceeds the defendant would receive the first $4.3 million, the plaintiff would receive the next $1.4 million, and any amount above $5.7 million would be shared equally between them. 5The defendant denies that the plaintiff is entitled to any relief. By its Defence filed on 8 December 2011, it denies that there was any agreement to treat the plaintiff as having already paid the deposit of $1.4 million in the event that either of the options was exercised, denies that the plaintiff validly exercised the call option, and denies the existence of the alleged oral agreement for the sharing of the net proceeds of sale of the property. 6A number of conversations, the terms of which are disputed, lie at the heart of the proceedings. The critical conversations occurred in the period from about late May 2010 to early August 2010. The parties to the conversations were principally Mr John Hawkins (the sole director of the plaintiff), Mr Frank Bonaccorso (who was one of two directors of the defendant, the other director being his wife, Dorothy), and Messrs Garry and Paul Bonaccorso (sons of Mr and Mrs Bonaccorso who, along with their parents and siblings, are shareholders in the defendant). 7Each of those four persons gave evidence and was cross-examined. So too, was Mr Carl Buda, a solicitor who acted for the defendant and drafted the Put and Call Option Agreement. An affidavit sworn by Ms Angela McCrea, a daughter of Mr and Mrs Bonaccorso, was read, but she was not required for cross-examination. 8Before dealing with the detail of the evidence concerning the disputed conversations, it is desirable to set out the history of the dealings between the parties as revealed primarily by the documentary evidence.