CE Hyde Park Pty Ltd v The Returned and Services League (New South Wales Branch)

These proceedings concern a contract entered into on 5 December 2024 for the sale and purchase of the land known as 262 Castlereagh Street, Sydney and 271 Elizabeth Street, Sydney (the Property) between The Returned and Services League of Australia (New South Wales Branch) (RSL) as vendor and CE Hyde Park Pty Limited (CEHP) as purchaser (the Contract).

The Contract came into existence as a result of CEHP exercising its call option under a Deed of Put and Call Option that had been entered into on 6 December 2020 between RSL (as grantor) and CEHP (as grantee) (the Option Deed).

The parties have fallen into dispute about the date on which the Contract is to be completed, about the contractual process for determining the amount of the price payable to RSL on completion, about whether CEHP is required to consent to the registration of a certain lease that RSL has granted to a related entity over part of the Property (the Board Room Lease), and about whether CEHP is required to reimburse RSL for certain valuation costs that it has incurred under the Contract.

CEHP commenced these proceedings by Summons filed on 11 March 2025 seeking declaratory and other relief concerning the date on which the Contract is to be completed and the validity of its appointment of a valuer for the purpose of a contractual procedure to determine an integer of the price to be paid to RSL on completion.

RSL filed a Cross-Summons on 17 March 2025 seeking a declaration that it is entitled to issue a notice to complete the Contract, a further declaration that CEHP is required to consent to the registration of the Board Room Lease and an order requiring it to do so within two days, and judgment in the amount of the valuation costs incurred by RSL under the Contract that it contends CEHP is liable to pay.

In or before 2020, RSL published an Information Memorandum:

As explained in the Information Memorandum, those two properties adjoin one another. At the time of the Information Memorandum, 262 Castlereagh Street was vacant and was not subject to any leases or licences. RSL was operating the Hyde Park Inn business at 271 Elizabeth Street. The whole of the Property was the subject of an existing development consent for the construction of a new hotel at 262 Castlereagh Street, the refurbishment of the rooms in the Hyde Park Inn at 271 Elizabeth Street, and the connection of the two buildings. That development consent would expire on 18 May 2022. The Information Memorandum described the Property as well suited to a range of uses, including luxury apartments, a four-star hotel, or an A-Grade office building, given its location opposite Hyde Park, its close proximity to public transport, and its proximity to commercial precincts, schools and universities, several retail and entertainment precincts, Chinatown, and the International Convention Centre.

The Information Memorandum stated:

As I have already mentioned, RSL and CEHP entered into the Option Deed as grantor and grantee (respectively) on 6 December 2020.

By clauses 2 to 4 of the Option Deed, RSL granted to CEHP an option to purchase the Property on the terms of the contract for sale of land in Annexure A to the Option Deed, exercisable at any time during the period between 30 months (two and a half years) and 48 months (four years) after the date of the Option Deed (the Call Option).

By clauses 6 to 8 of the Option Deed, CEHP granted to RSL an option for RSL to sell the Property to CEHP on the terms of the contract in Annexure A, exercisable for a period of 15 business days after the expiry of the time for exercise of the Call Option (the Put Option).

CEHP was obliged to pay an annual Call Option Fee of $3,300,000 until the exercise of the Call Option or the Put Option, which would be offset against the purchase price payable by CEHP for the Property assuming that one of those options was exercised.

A Put Option Fee of $1.00 was payable by RSL.

The Option Deed contained a series of provisions concerning the steps to be taken by the parties while the Option Deed was on foot with the objective of obtaining development consent for the Property.

Clause 10 of the Option Deed required RSL and CEHP to establish a management committee to convene to discuss the development application as often as may be required to progress the application efficiently. CEHP was required to prepare a monthly report to the management committee covering: (1) the status of planning activities and approvals; (2) updates in relation to the milestones by which clauses 11 and 12 of the Option Deed required CEHP to appoint an architect and town planner, prepare a concept design, attend a pre-development application meeting with the consent authority, and lodge the development application; (3) any likely causes of delay in achieving development consent; and (4) any other matters reasonably requested by RSL. Clause 10 also required CEHP to keep RSL fully informed of its dealings with the relevant consent authority.

Clause 11.1 of the Option Deed required CEHP to lodge a development application or, if necessary, several development applications, until a development consent was obtained in respect of the Property. CEHP was required to obtain RSL’s approval for the lodgement of any development application before lodging it with the consent authority. CEHP was required to bear all of the costs associated with the design, documentation, lodgement and negotiation of the development application, and to ensure that the development application maximised the permissible gross floor area (GFA) and the total gross realisation of the Property.

Pursuant to clauses 11.2 and 11.3 of the Option Deed, RSL was required to reasonably assist CEHP to make development applications and obtain development consent, and to either approve or refuse approval for the lodgement of any development application within ten business days after CEHP requested approval.

Clause 11.4 required CEHP to lodge with the relevant consent authority any development application approved by RSL as soon as practicable after being notified of RSL’s approval. The milestones that applied pursuant to clause 12 of the Option Deed required CEHP to lodge a development application within 36 months (three years) after the date of the Option Deed. It will be recalled that CEHP was entitled to exercise its Call Option at any time between 30 months (two and a half years) and 48 months (four years) after the date of the Option Deed.

Clause 11.5 required CEHP to promptly notify RSL in writing when “a Development Consent is obtained”. RSL was then required to review that development consent and approve or refuse approval for that development consent within eight business days. There were limited grounds on which RSL was entitled to refuse approval for the development consent. One of those grounds was that the development consent did not achieve a gross floor area greater than the reference design annexed to the Option Deed. If RSL failed to provide approval within eight business days, CEHP was entitled to serve a notice requiring RSL to provide its approval or refusal within a further two business days. If RSL failed to respond within those two business days, then it was deemed to have approved the development consent. If RSL refused approval for a development consent, CEHP was required to prepare and lodge a new development application if requested by RSL to do so. The term “Development Consent” was defined in clause 1.1 of the Option Deed as having the same meaning as in the Environmental Planning and Assessment Act 1979 (NSW), and as including “any Modification” which was also defined as having the same meaning as in that Act.

Clause 13 made provision for CEHP to construct and operate a display suite in the Property for the purpose of marketing and sale of the lots to be created by the proposed development.

Clause 14 of the Option Deed precluded RSL from:

Clause 14 is expressed to be subject to clause 17 of the Option Deed.

By clause 17.1, read together with Part A of Schedule 6 to the Option Deed, CEHP acknowledged that the Property was subject to a lease to The Group of Four Pty Limited in respect of the Ground Floor of 271 Elizabeth Street for a term of five years with an option to renew for a further five years. Clause 17.1 otherwise relevantly provided that, after the date of execution of the Option Deed, RSL must not grant a “New Lease” in respect of the Property except in accordance with clause 17.2.

Clause 17.2 provided:

The “Redevelopment Clause” referred to in clauses 17.2(b)(ii) and (c)(ii) relevantly provided for the lessor to terminate the lease on six months’ notice to the lessee if the lessor proposes to demolish, substantially repair, renovate or reconstruct the building or a substantial part of it.

The “New Leases” to which clause 17.2 applies are defined in clause 1.1 of the Option Deed as including a “Board Room Lease” in the form of Annexure L to the Option Deed.

The Board Room Lease in Annexure L comprises:

The Recitals to the Lease Term Deed record that the lessee and lessor have entered into the Lease and that the lessor has requested, and the lessee has agreed, to bring the term of the Lease to an end on the terms of the Lease Term Deed.

Clause 2 of the Lease Term Deed provides:

Clause 1.1 of the Lease Term Deed also contains a definition of “Termination Date” as meaning:

The Lease Term Deed defines the “Lease Term Fee” as:

The term “Substantial Commencement” is not defined in the Lease Term Deed, and is not used in the Lease Term Deed outside the definition of “Termination Date”. Nor is the term “Substantial Commencement” defined in the Lease, or the Option Deed. The term “Substantial Commencement” is defined in clause 33.1 of the contract for sale of land in Annexure A to the Option Deed as meaning:

The “Terminating Date” of the Board Room Lease in registrable form in Annexure L to the Option Deed is defined as the “Termination Date” in the Lease Term Deed, or any earlier date on which the Lease is terminated or otherwise determined.

As referred to in more detail later in these reasons, the Revised Price under clause 37 of the contract for sale of land in Annexure A to the Option Deed is a “Guaranteed Minimum Purchase Price” of $95,000,000 increased by a “Price Uplift” calculated according to a formula set out in clause 37 in respect of any and all development consents obtained within up to seven years after the date of the Option Deed. The Price Uplift is calculated by reference to the gross floor area achieved by the development consent and the “Residual Land Value” of the Property ascertained in accordance with a valuation process in clause 38.

Clause 17.3 of the Option Deed contained the further provision in relation to the Board Room Lease that was anticipated at the time the Option Deed was entered into:

Clause 22 of the Option Deed provided that, if CEHP failed to perform its obligations under clause 11, and failed to remedy that non-compliance within a reasonable time after receiving notice of that non-compliance, RSL was entitled to do all things and sign all documents required to seek development consent, and to recover all reasonable costs thereby incurred from CEHP.

On 13 July 2023, the Council of the City of Sydney granted development consent for the construction of a 15-storey building with two retail tenancies and 42 apartments.

On 15 May 2024, the Council of the City of Sydney approved an application by CEHP to modify the development consent pursuant to s 4.55 of the Environmental Planning and Assessment Act to permit the works to be carried out in stages, with separate construction certificates being issued for each stage.

Although the evidence is silent on this point, I assume that the development consent granted on 13 July 2023 was approved by RSL under clause 11.5 of the Option Deed. Neither party suggested otherwise, and it was implicit in their competing submissions concerning the construction and operation of clauses 35 and 38 of the Contract that the development consent had been so approved.

On 5 December 2024, CEHP gave notice of its exercise of the Call Option in accordance with clause 4 of the Option Deed, whereupon the contract for sale of land in the form of Annexure A to the Option Deed became binding on the parties (the Contract).

The Contract stipulates a price of $95,000,000, which is defined as the “Guaranteed Minimum Purchase Price” or “GMPP”, subject to clause 37.

The Contract contemplates that the work of applying for development consent in respect of the Property may be continuing at the time the Contract is entered into following the exercise of the Call Option or the Put Option. Clause 36 of the Contract provides that certain provisions of the Option Deed, including clause 10 (relating to the management committee to progress the development application), clauses 11 and 12 (relating to the lodgement of one or more development applications and RSL’s approval of any development consent granted), clause 13 (relating to the display suite), clause 14 (restricting RSL’s dealings with the Property), clause 17 (relating to New Leases, including the proposed Board Room Lease) and clause 22 (RSL’s step-in rights), apply to the Contract mutatis mutandis until 36 months (three years) after completion of the Contract.

Consistently with clause 11 of the Option Deed, clause 37 of the Contract contemplates that more than one development consent may be granted in respect of the Property, including after the Contract is entered into or even after completion of the Contract.

If a development consent is granted prior to 84 months (seven years) after the date of the Option Deed, or prior to “Substantial Commencement” of works that are the subject of any development consent which has previously been approved by RSL under the Option Deed, whichever is earlier, this triggers a revision of the price payable by CEHP under clause 37 of the Contract. As I have already mentioned, the term “Substantial Commencement” is defined in clause 33.1 as meaning:

The price revision process commences with CEHP notifying RSL that the development consent has been granted, and RSL then notifying CEHP of the “Revised Price”, under clause 37.1 of the Contract.

Clause 37.2 of the Contract provides that the Revised Price is the Guaranteed Minimum Purchase Price of $95,000,000, plus the “Price Uplift”. The Price Uplift must be calculated as the aggregate of: (1) a specified sum per square metre for half of the increase in GFA achieved by the development consent up to a specified cap; (2) a specified sum per square metre for a quarter of any further increase in GFA above that cap; and (3) the sum that is 30% of a sum calculated as the “Residual Land Value” (or RLV) minus the GMPP and sums that I have referred to in (1) and (2). This revision of the price is the mechanism by which RSL shares in the value created by the development consent and the market recovery as anticipated in the Information Memorandum. [1] Clause 37.3(a) provides that the Revised Price is payable on completion or, if the Contract has already been completed, within 20 business days after the vendor notifies the purchaser of the Revised Price under clause 37.1. Clause 37.3(b) provides that the Revised Price cannot be less than the price previously determined and, if the Contract has already been completed, paid.

The Residual Land Value is to be determined in accordance with clause 38 of the Sale Contract, which provides as follows:

The issues for determination in these proceedings include an issue concerning the validity of a notice issued or purportedly issued by CEHP under clause 38.5(a) of the Contract. The notice or purported notice was attached to an email sent by Mills Oakley (on behalf of CEHP) to Corrs Chambers Westgarth (on behalf of RSL) at 7:10pm on 15 January 2025.

The resolution of that issue turns, in part, on the date on which the 15 business day period referred to in clause 38.5 expired, and the time and date at which the email attaching the notice was sent or served, or is taken to have been given.

Relying on clause 33.2 of the Contract, CEHP contends that the 15 business day period expired on 16 January 2025. Clause 33.2 relevantly provides that:

If that contention is rejected, CEHP contends that its clause 38.5(a) notice was given on 15 January 2025, and is not taken to have been given on the following business day by reason of the notice having been given by email sent after 5:00pm on 15 January 2025. CEHP relies on: (1) clause 20.6.9 of the Contract; and (2) further or alternatively, the definition of “Business Day” in clause 33.1 of the Contract as “a day which is not a Saturday, Sunday or bank or public holiday in Sydney” and the ordinary meaning of “day” as a 24-hour period.

Clause 20.6 of the Contract forms part of what is referred to as the “printed clauses” of the Contract, being the standard terms and conditions of the 2019 edition of the Law Society of New South Wales and Real Estate Institute of New South Wales contract for the sale and purchase of land. The provisions of clause 20.6 have been amended by what the parties refer to as the “additional clauses”, being clauses 33 to 59 which the parties have drafted to apply in addition to the printed clauses. Those amendments include the addition of clauses 20.6.8 and 20.6.9. Clause 20.6 of the printed clauses, as amended by clause 34(l) of the additional clauses, provides:

Clause 1 of the printed clauses of the Contract defines “serve” as meaning:

As I have already mentioned, clause 20.6.9 is the particular clause on which CEHP relies.

It follows, in RSL’s submission, that 15 January 2025 was the last day of the 15 business day period within which CEHP was entitled to give a notice appointing a valuer under clause 38.5(a). RSL denies that clause 20.6.9 of the Contract applies to a notice under clause 38.5.(a). RSL relies on clauses 33.7 and 33.8 of the Contract as the applicable provisions. Clauses 33.7 and 33.8 provide:

RSL contends that, by reason of clauses 33.7 and 33.8, the email sent by CEHP’s solicitors to RSL’s solicitors at 7:10pm on 15 January 2025 is taken to have been received at 9:00am on 16 January 2025.

RSL further submits that, if both clause 20.6.9 of the Contract and clauses 33.7 and 33.8 apply to the notice, then clauses 33.7 and 33.8 of the Contract are to prevail by reason of clause 33.4 which provides that:

In the event that the Court finds that CEHP failed to notify RSL of its appointment of a valuer within the 15 business day period permitted by clause 38.5 of the Contract, CEHP submits that time is not of the essence, that the clause 38 process must therefore proceed involving both its appointed valuer and RSL’s appointed valuer, and that RSL has not suffered any loss by reason of its delay of just over 2 hours in sending the email notifying its appointment of a valuer at 7:10pm on 15 January 2025.

Although the Option Deed and the Contract require development applications to be lodged, and the Contract contemplates that one or more development consents may be granted in respect of the Property before or after the Contract is entered into, completion of the Contract is not conditional on any development consent being granted.

Clause 35 of the Contract provides:

The term “Development Consent” is defined in clause 33.1 of the Contract to mean the development consent approved by RSL pursuant to clause 11.5 of the Option Deed and clause 36 of the Contract. It will be recalled that clause 36 of the Contract provides that various clauses of the Option Deed, including clause 11, apply to the Contract until three years after completion of the Contract.

Clause 41 of the Contract relevantly provides:

The Daily Rate at which liquidated damages accrues under clause 41.4 is $11,753.42.

Clause 21 of the printed clauses of the Contract relevantly provides:

The word “normally” is defined in clause 1 of the printed clauses as meaning “subject to any other provision of this contract”.

Clause 42 of the Contract relevantly provides:

Clause 54.3 of the Contract provides:

Clause 54.8 of the Contract relevantly provides:

On 6 December 2024, Corrs Chambers Westgarth on behalf of RSL wrote to Mills Oakley on behalf of CEHP referring to the Contract that had been entered into on 5 December 2024 as a result of CEHP exercising its Call Option, and stating:

Corrs Chambers Westgarth sent a further letter to Mills Oakley on 6 December 2024 setting out RSL’s calculation of the Revised Price under clause 37.2 of the Contract as $120,726,685. RSL subsequently acknowledged that its calculation was erroneous. It withdrew that calculation, and issued an amended calculation of $105,206,407.93 by letter from Corrs Chambers Westgarth to Mills Oakley dated 19 December 2024. The amended calculation did not involve any change to RSL’s assessment of the Residual Land Value, which was one integer of the Revised Price calculation. Thus, RSL’s notice of its assessment of the Residual Land Value issued on 6 December 2024 was not withdrawn.

CEHP did not raise any objection at the time, or in these proceedings, to RSL’s entitlement to notify CEHP of its RLV assessment on 6 December 2024 and its Revised Price calculation and amended Revised Price calculation on 6 and 19 December 2024. However, CEHP issued a notice under clause 38.2 of the Contract on 20 December 2024 disputing the amount of the RLV stated in RSL’s 6 December 2024 notice referred to at [69] above.

It is common ground that RSL’s notice referred to at [69] above (the Vendor’s RLV Notice) triggered the mechanism under clause 38 of the Contract for determining the Residual Land Value of the Property, and that CEHP’s notice referred to at [71] above (the Purchaser’s Dispute Notice) was issued within the time stipulated by clause 38.2 of the Contract.

On 31 December 2024, RSL sent to CEHP a copy of the RLV valuation obtained by RSL for the purpose of clause 37 of the Contract, in anticipation of a meeting to be held between RSL and CEHP on 8 January 2025 to attempt to resolve their dispute about the RLV as required by clause 38.4 of the Contract. The valuation report set out the reasons of the author – Mr Tahir Khan of CBRE Valuation and Advisory Services – for assessing the RLV as $114,250,000.

The parties failed to resolve their dispute at the meeting on 8 January 2025, which triggered the operation of clause 38.5 of the Contract. It will be recalled that clause 38.5 provides that, if the parties do not resolve their dispute within 10 business days after CEHP served the Purchaser’s Dispute Notice, then each party “must” appoint a valuer by notice to the other party within 15 business days after the date of service of the Purchaser’s Dispute Notice (the Purchaser’s Valuer Notice and the Vendor’s Valuer Notice, respectively). Clause 38.6 provided that, if either party failed to appoint a valuer, then the RLV was to be determined by the other party’s valuer and the cost of that determination was to be apportioned between the parties equally.

On 9 January 2025, Corrs Chambers Westgarth on behalf of RSL wrote to Mills Oakley on behalf of CEHP, stating:

On 15 January 2025, Corrs Chambers Westgarth wrote to Mills Oakley giving notice that RSL had appointed Mr Khan as its valuer for the purpose of clause 38.5 of the Contract. That letter was sent to Mills Oakley by email sent at 4:07pm on 15 January 2025. It is common ground that this was a valid Vendor’s Valuer Notice under clause 38.5 of the Contract.

At 7:10pm that evening, Mills Oakley sent an email to Corrs Chambers Westgarth attaching a letter stating:

Since 15 January 2025, RSL has disputed the validity of that communication as a Purchaser’s Valuer Notice under clause 38.5 of the Contract. I have outlined at [44] to [58] above the bases on which CEHP contends, and RSL disputes, that the Purchaser’s Valuer Notice was given “within 15 Business Days after the purchaser serves the Dispute Notice” as required by clause 38.5. RSL contends that, in the absence of a Purchaser’s Valuer Notice given within that period, the RLV fell to be determined by Mr Khan alone pursuant to clause 38.6(b)(i). On 10 February 2025 – some 17 business days after the date of the Vendor’s Valuer Notice – Mr Khan issued a report setting out his assessment of the RLV as $114,250,000. RSL contends that Mr Khan’s determination brought the clause 38 process to an end, and that the cost of Mr Khan’s determination is to be apportioned equally between RSL and CEHP pursuant to clause 38.6(b)(ii) of the Contract.

On 4 March 2025, Mills Oakley (on behalf of CEHP) wrote to Corrs Chambers Westgarth (on behalf of RSL) attaching a valuation report prepared by Mr Sukkar dated 28 February 2025 setting out his reasons for assessing the RLV as $84,000,000. Mills Oakley’s letter stated that clause 38.7 required an umpire to be appointed because the difference between Mr Khan’s assessment and Mr Sukkar’s assessment of the RLV exceeded 10% of the aggregate of their assessments.

No umpire has been appointed. RSL maintains that CEHP failed to validly appoint a valuer under clause 38.5(a) of the Contract, and that the RLV to be applied in calculating the Revised Price is the RLV as determined by Mr Khan in his 10 February 2025 report.

CEHP commenced these proceedings on 11 March 2025. CEHP’s claims for final relief include:

By prayer 3 of the Cross-Summons, RSL seeks a declaration that the Revised Price under the Contract is $105,206,407.93, being the amount of RSL’s amended calculation given to CEHP on 19 December 2024.

The date for completion of the Contract is governed by clause 35, the terms of which are set out at [60] above.

At the time the Contract was entered into on 5 December 2024 as a result of CEHP exercising its Call Option, a period of twelve months had already elapsed since the grant of the development consent referred to at [37]-[39] above on 13 July 2023. The period of 20 business days after the date of the Contract referred to in clause 35(a)(ii) would expire on 7 January 2025.

On 20 December 2024, Mills Oakley (the solicitors for CEHP) sent an email to Corrs Chambers Westgarth (the solicitors for RSL) attaching a document described as a notice under clause 35(b) of the Contract. The notice stated that CEHP nominated 19 June 2026 as the date for completion of the Contract pursuant to clause 35(b).

Corrs Chambers Westgarth replied later that same day, stating:

As at 7 January 2025, the parties remained in dispute about RSL’s assessment of the Residual Land Value and the Revised Price to be paid under the Contract.

There were numerous exchanges of correspondence between the parties concerning the completion date, culminating in Corrs Chambers Westgarth writing to Mills Oakley in the following terms on 12 February 2025:

On 17 February 2025, Corrs Chambers Westgarth sent a further letter to Mills Oakley clarifying that their 12 February 2025 letter was not a formal notice to complete under the Contract, and stating that RSL would issue such a notice if CEHP failed to complete on or before 12 March 2025. The letter confirmed that RSL would be ready, willing and able to complete on 12 March 2025, and invited CEHP’s solicitors to inform them if CEHP wished to complete the Contract prior to that date.

As I have already mentioned, CEHP commenced these proceedings on 11 March 2025. CEHP sought interim injunctions restraining RSL from requiring it to complete the Contract on 12 March 2025, and from issuing any notice to complete making time of the essence for completion on the premise that CEHP had failed to complete on 12 March 2025.

CEHP’s claims for final relief include:

CEHP’s claims for interim relief were resolved by RSL giving the following undertaking to the Court on 12 March 2025:

By prayer 4 of the Cross-Summons, RSL seeks, inter alia, a declaration that it is entitled to issue a notice to complete the Contract.

As explained in more detail at [174]-[180] below, RSL and one of its related bodies corporate have entered into the Board Room Lease and the Lease Term Deed on terms that do not include the Redevelopment Clause. CEHP has declined to consent to the registration of the Board Room Lease. RSL contends that CEHP is obliged to consent to its registration because the Board Room Lease is in the form of Annexure L to the Option Deed. It will be recalled that the form of the Board Room Lease in Annexure L did not include the Redevelopment Clause. CEHP contends that the absence of the Redevelopment Clause in the Board Room Lease that RSL has entered into means that it fails to comply with clause 17.2(b) of the Option Deed, which applies as a term of the Contract pursuant to clause 36 of the Contract. CEHP contends that it is therefore not required to consent to the registration of the Board Room Lease.

By prayers 1 and 2 of the Cross-Summons, RSL seeks a declaration that CEHP is required to provide its consent to the registration of the Board Room Lease on the title for 271 Elizabeth Street, and an order requiring CEHP to provide that consent in writing within two days.

RSL seeks to recover from CEHP the whole of the cost that it incurred in obtaining a valuation of 271 Elizabeth Street for the purpose of the GST margin scheme, and 50 per cent of the cost that it incurred in obtaining Mr Khan’s valuation of the Residual Land Value for the purpose of clause 38 of the Contract on 10 February 2025.

Clause 51.3 of the Contract confers a discretion on RSL to determine that the supply of the Property is a taxable supply under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) (the GST Act). In that event: (1) clause 51.3 of the Contract requires CEHP to pay to RSL an amount equivalent to the GST that is payable on the supply of the Property; (2) clause 51.5 provides that the margin scheme under Division 75 of Part 4.2 of the GST Act applies; (3) clause 51.5(b) requires CEHP to pay the costs of RSL obtaining an “approved valuation” for the purpose of that margin scheme; and (4) the price is to be adjusted in accordance with a formula set out in clause 51.6 of the Contract.

Section 75-35(1) of the GST Act provides that the Commissioner may, by legislative instrument, determine in writing requirements for making valuations for the purpose of Division 75. Section 75-35(2) provides that such a valuation is an “approved valuation”.

On 19 December 2024, RSL notified CEHP that it had determined that GST was payable on the whole of the supply of the Property on the basis that the supply was not a going concern.

RSL contends that it incurred costs of $71,500 in obtaining from M3 Property on 31 January 2025 a valuation of the market value of 271 Elizabeth Street as at 1 July 2000, and that this is an “approved valuation” under section 75-35(2) of the GST Act and within the meaning of clause 51.5(b) of the Contract. RSL contends that CEHP is therefore liable to pay that cost, and seeks judgment against CEHP in that amount to reimburse RSL for the costs of the valuation which RSL has already paid in full.

In the event that the Court construes clause 38.5 of the Contract in the manner for which RSL contends, RSL relies on clause 38.6(b)(ii) of the Contract as entitling it to recover 50% of the cost of Mr Khan’s 10 February 2025 valuation from CEHP. That is a sum of $2,296.25.

By prayer 5 of the Cross-Summons, RSL claims judgment in the total sum of $73,796.25.

The parties’ claims and defences raise five issues for determination:

For the reasons that follow, I have determined that:

I have arrived at those conclusions after considering all of the parties’ written and oral submissions, although I have not found it necessary to record all of the details of those submissions in order to explain my reasons.

The Contract is a commercial contract. There was no dispute about the principles to be applied in resolving the dispute about the proper construction of clause 35. Those well-established principles were recently summarised by the Court of Appeal, with reference to High Court authority, in J & P Marlow (No 2) Pty Ltd v Hayes & McCabe [2] (J & P Marlow) and Zhong v Guan [3] (Zhong).

Meagher and Kirk JJA summarised the core principles in the following terms in J & P Marlow:

After referring to that summary in Zhong, Kirk JA, with whom the other members of the Court of Appeal agreed, explained that:

As RSL submits, in this context, “something opposed to reason” will constitute absurdity. [4] As is plain from all of the authorities referred to above, this requires more than an outcome produced by the ordinary meaning of the language chosen by the parties which the Court regards as commercially unreasonable. It requires that there be no rational basis for imputing to the parties an intention to achieve the outcome that flows from the ordinary meaning of that language. [5]

The high level of conviction with which the Court must be satisfied of the mistake or absurdity, and the position that the parties objectively intended to agree, has been discussed in many cases, including Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq). [6] In that case, Leeming JA cautioned about the need to bear in mind, before construing a contract in manner that departs from the words used, that “imperfections and infelicities and ambiguities in contractual language commonly reflect the give and take of negotiations, or the parties’ appreciation that some obscurities are not capable of resolution.” [7]

In applying all of those principles, the Court ordinarily looks to what the reasonable businessperson, standing in the position of the parties and having knowledge of the surrounding circumstances known to the parties, would have understood the terms of the contract to mean at the time it was entered into. In the present case, the terms of the Contract were fixed by the parties at the time that they entered into the Option Deed, and the Contract came into force automatically upon CEHP’s exercise of the Call Option. As RSL submitted, the Court must therefore construe the Contract according to how the reasonable businessperson would have understood its terms at the time the parties entered into the Option Deed.

It is convenient to set out again the terms of clause 35:

I accept RSL’s submission that the reference in clause 35(a)(i) to a vendor-approved development consent that “has been granted” refers to the state of affairs at the time the Contract is entered into upon the exercise of the Call Option or the Put Option. If a development consent has already been granted at that time and approved by RSL then, putting clause 35(b) to one side for the moment, the completion date fixed by clause 35(a) is the later of (i) and (ii). If no development consent has been granted at that time, then (i) has no work to do and the completion date is the date fixed by clause 35(a)(ii), being 20 business days after entry into the Contract. I reject CEHP’s submission that it follows from the inclusion of a modification of a development consent in the contractual definition of “Development Consent” that, if a development consent is granted and approved by RSL, but is subsequently modified, then the 12-month period under clause 35(a)(i) runs from the date of the modification rather than from the date of the grant of the development consent. A development consent does not cease to exist merely because it has been modified. Clause 35(a)(i) expressly nominates the date of the grant of a development consent that is approved by the vendor, not the date of the most recent modification of such a development consent, as the time from which the 12-month period commences to run. CEHP did not identify any reason why a reasonable businessperson in the position of the parties would not have understood the parties to have intended that time under clause 35(a)(i) would begin running from the date on which a development consent was first granted.

I reject CEHP’s submission that clause 35(a)(i) applies to any development consent that is granted after the Contract is entered into but before the Contract has been completed. That construction is inconsistent with the ordinary temporal meaning of the words “has been granted” and renders the completion date uncertain at the time the Contract is entered into. In my opinion, the reasonable businessperson reading the provisions of the Contract as a whole (including the provisions of clause 41 referred to at [62] above), understanding that the Contract had been entered into either because the purchaser had chosen to exercise the Call Option (with or without development consent having been granted) or because the vendor had chosen to exercise the Put Option (being a possibility of which the purchaser had four years’ prior notice), understanding that the parties had not seen fit to make the purchaser’s obligation to complete the Contract conditional on the grant of development consent, and knowing that the parties do not control the timing of the grant of any development consent that may be granted, would have understood the parties as having intended by clause 35(a) to fix a completion date that could be calculated with certainty at the time of entry into the Contract, subject only to clause 35(b).

There is no dispute between the parties that the ordinary meaning of the plain words of clause 35(b) is that CEHP may, at any time prior to the date on which completion otherwise falls due under clause 35(a), issue a notice to RSL nominating a later completion date that falls at least 12 months after the giving of that notice. If CEHP gives such a notice, this does not affect the purchase price that is payable on completion, and which may be revised upwards after completion, in accordance with clauses 37 and 38 of the Contract. CEHP is under no obligation to compensate RSL by reference to the time value of money for the extended period of time that RSL must wait to receive the purchase price payable on completion as a result of CEHP giving notice under clause 35(b). RSL continues to bear the costs of holding the Property during the period up to completion on CEHP’s nominated date, and CEHP is under no obligation to pay any contribution or compensation to RSL for those costs.

I accept CEHP’s submission that the Contract expressly requires that the period by which a completion date nominated under clause 35(b) may exceed 12 months after the date of the notice must be a reasonable time. That express requirement arises under clause 21.1 of the Contract. [8] Even in the absence of clause 21.1, the law would have implied that the date specified in any clause 35(b) notice must fall within a reasonable time for completion of the Contract, there being no indication to the contrary. [9] I therefore reject RSL’s submission that clause 35(b), if construed according to the ordinary meaning of the words used, operates to permit the purchaser to unilaterally extend the time for completion of the Contract with no outer limit.

CEHP emphasises that the parties expressly provided that clause 35(a) is subject to (b), and that (b) is to apply despite (a). CEHP submits that this language and structure makes it clear that (b) is to prevail over (a) in the event of any conflict between the operation of the two sub-clauses. RSL does not cavil with CEHP’s submissions about the ordinary meaning of “subject to” and “despite” in clause 35, but submits that the words of clause 35(b) produce an outcome that is absurd and an obvious mistake, being contrary to the clear intention of the parties ascertained objectively from the terms of the Contract read as a whole and understood in the context of the Option Deed and the surrounding circumstances known to the parties.

The object of the Option Deed and the Contract which came into existence on the exercise of the Call Option was to provide for the sale and purchase of two adjoining commercial properties in the centre of Sydney on the basis that CEHP was required to lodge an application for consent for a development that would maximise the gross floor area and thereby enhance the value of the Property, benefitting both parties in the event that CEHP exercised its Call Option or RSL exercised its Put Option. RSL would benefit through the Price Uplift mechanism in clause 37 of the Contract, and CEHP would benefit as the purchaser of the Property with the right to carry out the development. It is plain from the three-year period allowed to CEHP to prepare and lodge the development application after the date of the Option Deed that the parties expected when they entered into the Option Deed and fixed the terms of the Contract that the development application process would be time consuming and complex. [10] As is clear from the terms of clauses 35 to 37 of the Contract, the parties anticipated that development consent might not be obtained before the expiry of the four-year Call Option Period. Irrespective of whether development consent had been obtained, and irrespective of the terms of that development consent and whether it had been approved by RSL under clause 11.5 of the Option Deed, [11] CEHP had the right to exercise the Call Option between two and half years and four years after entering into the Option Deed. If it did not do so, RSL had the right to exercise the Put Option within 15 days after the expiry of the four-year Call Option Period. During such period as expired between the parties entering into the Option Deed and either the expiry of the Call Option Period with no Contract being entered into or the completion of a Contract entered into at some time between two and a half and four years after the Option Deed as a result of the exercise of the Call Option or the Put Option, RSL was required to hold the Property at its own cost, RSL was not entitled to mortgage, charge or otherwise encumber the Property without CEHP’s consent, and RSL was constrained as to the terms on which it was entitled to lease the Property or parts of the Property. [12]

As RSL submits, completion of the Contract is not expressed to be conditional on development consent being granted by the relevant consent authority and approved by RSL under clause 11.5 of the Option Deed. Thus, CEHP bears the risk of being required to purchase the Property for the Guaranteed Minimum Purchase Price of $95,000,000 if RSL exercises the Put Option in circumstances where CEHP has not obtained development consent that has been approved by RSL. That risk is ameliorated somewhat by the provisions of clauses 10 and 11 of the Option Deed, which apply to the Contract for a period of three years after completion by reason of clause 36 of the Contract, and which require RSL to continue to assist CEHP to lodge development applications and to participate in the management committee established to progress development applications. This also serves the interests of RSL, which is entitled to revise the price upwards under clause 37 of the Contract even if development consent is first obtained after completion, provided that this occurs within seven years after the date of the Option Deed or prior to Substantial Commencement. The continued operation of clauses 10 and 11 of the Option Deed for three years after completion of the Contract ameliorates to some extent the risk of CEHP never obtaining any development consent or never obtaining RSL’s approval of a development consent that is granted by the relevant consent authority. However, as RSL’s submissions acknowledge, that does not ameliorate CEHP’s commercial risk of failing to raise the funds necessary to pay the balance of the purchase price on completion of the Contract if no development consent has been granted, or if development consent has not been approved by RSL, by the time the Contract is required to be completed.

As RSL submits, there is an approximate correlation between the maximum seven-year period within which RSL is entitled to a Price Uplift under clause 37 of the Contract, and the four-year Call Option Period plus the three-year period after completion of the Contract during which clauses 10 and 11 of the Option Deed continue to apply, in circumstances where the Contract is entered into on or very close to the expiry of the four-year Call Option Period and is completed very soon thereafter, and if Substantial Commencement is not achieved within three years after completion of the Contract.

However, that is only one of many potential scenarios which would have been foreseen by the parties at the time they entered into the Option Deed and fixed the terms of the Contract. Under all of the other potential scenarios, however, the correlation between the seven-year period in which RSL is entitled to a Price Uplift under clause 37, and the three-year period after completion of the Contract during which clauses 10 and 11 of the Option Deed continue to apply, breaks down. It suffices to refer to two examples. First, if CEHP were to exercise its Call Option at the beginning of the Call Option Period (being two and half years after the date of the Option Deed) and prior to grant of any development consent, and if completion of the Contract occurred within 20 business days after the date of the Contract, then the three-year period after completion during which RSL and CEHP are required to progress the development application would expire before the end of the maximum seven-year period under clause 37. Second, if CEHP were to exercise its Call Option at the expiry of the four-year Call Option Period and if development consent had been granted and approved by RSL one month earlier, then clause 35(a) of the Contract would require completion to occur one year after the grant of development consent (subject to any clause 35(b) notice which CEHP contends it would be entitled to give in these circumstances) and the three-year period would begin to run on completion and would expire almost one year after the end of the maximum seven-year period under clause 37. However, the seven-year period would become irrelevant if Substantial Completion were reached earlier.

Both parties’ submissions fail to recognise the lack of correlation between the maximum seven-year Price Uplift period under clause 37 of the Contract and the time frame within which Contract would be completed under most of the potential scenarios which the reasonable businessperson would have understood the parties to have anticipated at the time they entered into the Option Deed and fixed the terms of the Contract that would automatically be entered into upon the exercise of the Call Option or the Put Option.

RSL submits that the reasonable businessperson would have understood the parties to have intended that, if the Call Option or the Put Option was exercised, completion of the Contract should occur as soon as possible after the expiry of four years after the date of the Option Deed. I reject that submission for the reasons explained at [120]-[121] above.

As I have already explained, clause 35(a) requires completion to occur on the date after entry into the Contract that is 12 months after the grant of a development consent approved by RSL. If that date has already passed or will expire within 20 business days after entry into the Contract, then clause 35(a) requires completion to occur on the expiry of that 20-business-day period.

If no development consent has been granted and approved by RSL at the time the Contract is entered into, clause 35(a) operates to require completion within 20 business days after entry into the Contract.

As CEHP submits, the whole of clause 35(a) is expressed to be subject to clause 35(b).

However, contrary to CEHP’s submission, there is no rational reason in my opinion to attribute to the parties an intention that, in either of the scenarios referred to at [124] above. CEHP would be entitled to unilaterally extend the completion date by a further period of at least 12 months by giving notice under clause 35(b) of the Contract. I have accepted CEHP’s submission that the Contract expressly requires that a completion date nominated under clause 35(b) must fall within a reasonable time for completion. The legal meaning of what is a reasonable time is to be ascertained as at the date of the Option Deed when the parties agreed on the terms of the contract for sale of land that would automatically come into existence on the exercise of the Call Option or the Put Option, having regard to the nature of CEHP’s obligation to complete the Contract and the extent to which its ability to do so was known or expected by the parties to be dependent on some circumstance outside CEHP’s control. [13] If development consent is granted by the relevant consent authority and approved by RSL under clause 11.5 of the Option Deed prior to entry into the Contract, clause 35(a) operates to allow CEHP until 12 months after the date of the grant of the development consent or the expiry of 20 business days after the date of the Contract, whichever is later, to complete the Contract. That is a period of at least 12 months after CEHP knows that the development consent has been granted and approved, and that the Contract may be entered into (either by reason of its own exercise of the Call Option or by reason of RSL’s exercise of the Put Option) for CEHP to undertake any debt or equity capital raising process that may be necessary to finance the payment of the purchase price on completion of the Contract, with the benefit of the approved development consent to present to prospective lenders or investors. There is no evidence of any circumstance other than fundraising on which the parties knew or anticipated that CEHP’s ability to complete the Contract might be dependent. There is no evidence suggesting that 12 months is less than a reasonable period of time for CEHP to undertake that fundraising process. It is therefore my opinion that the reasonable businessperson in the position of the parties at the time they entered into the Option Deed, with knowledge of all of the terms of the Option Deed and the Contract, the circumstances in which they were entered into, and the effect of those terms as summarised at [118]-[121] above, would have understood the parties to have intended and agreed that the period of 12 months after the grant of development consent approved by RSL referred to in clause 35(a)(i) was a reasonable time for CEHP to complete the Contract if development consent had been granted and approved before the Contract was entered into and that, if the 12 month period had already expired, the completion date would be extended until 20 business days after the Contract date as provided by clause 35(a)(ii) to allow both parties to attend to all of the usual practical matters required to facilitate completion. In my opinion, the reasonable businessperson, cognisant of the fact that the parties did not choose to make completion of the Contract conditional on CEHP obtaining finance, would not have attributed to the parties an intention that a reasonable time for completion may extend beyond the period allowed under clause 35(a) if CEHP’s fundraising process failed to raise any or all of the necessary funds. The reasonable businessperson would certainly not have attributed to the parties an intention that any such extension must be for a further period of at least 12 months in order for completion to occur within a reasonable time. CEHP’s submission that clause 35(b) is to be construed in accordance with the ordinary meaning of the words used by the parties as permitting CEHP to give notice nominating a completion date later than that which would apply under clause 35(a), and falling at least 12 months after the date of the notice, in circumstances where a development consent has been granted by the relevant consent authority and approved by RSL by the time the parties entered into the Contract, is therefore irreconcilably inconsistent with its correct concession that any notice issued under clause 35(b) must specify a completion date that is within a reasonable period of time for completion.

For those reasons, it is my opinion that the reasonable businessperson in the position of the parties at the time they entered into the Option Deed, with knowledge of all of the terms of the Option Deed and the Contract, the effect of those terms as summarised at [118]-[121] above, and the circumstances in which the Option Deed was entered into, would have understood the parties to have intended that clause 35(b) would apply only in circumstances where no development consent had been granted by the relevant consent authority and approved by RSL at the time the Contract was entered into. I accept RSL’s submission to that effect. Contrary to RSL’s submissions and for the reasons I have already explained at [120]-[123] above, the imputation of that intention to the parties has nothing to do with achieving completion as close as possible to four years after the date of the Option Deed, even though that will be the effect of clause 35(a) in the events which have happened. The reasonable businessperson would have understood the parties to have intended clause 35(b) to apply in the absence of a vendor-approved development consent in order to afford CEHP a reasonable period of time to take such further steps as may be necessary in the circumstances then existing to endeavour to obtain development consent, to obtain RSL’s approval for that development consent, and to undertake any fundraising process necessary to finance the payment of the balance of the purchase price on completion of the Contract with the benefit of the approved development consent to present to prospective lenders or investors. That is the legal meaning of the reasonable time for completion that clause 35(b) permitted CEHP to nominate in a notice issued under that clause if there was no vendor-approved development consent in place at the time the parties entered into the Contract. Bearing in mind the parties’ expectation manifested in the terms of the Option Deed and the Contract that the development application process would be complex and lengthy, the reasonable businessperson would have understood the parties to have intended and agreed that 12 months after the date of the notice, which would need to be served within 20 business days after the date of the Contract in this scenario, was the minimum period that would be a reasonable period of time for CEHP to take all of those steps. Whether any date beyond that 12-month period which CEHP might have nominated in any notice validly issued under clause 35(b) was in fact within a reasonable period of time for completion is a question of fact that would have fallen to be determined at the time of the issue of such a notice by reference to the time that would be likely to be required in the circumstances then existing to afford CEHP a reasonable opportunity to obtain development consent, to obtain RSL’s approval of that development consent, and to raise the monies payable on completion of the Contract. That would depend on, inter alia, the reasons why CEHP had failed to obtain vendor-approved development consent before the Contract was entered into, and that status of any development application then awaiting determination by the consent authority. [14] I reject CEHP’s submission that any nominated completion date up to the expiry of seven years after the date of the Option Deed would necessarily be a reasonable time for completion. As RSL submits, the reasonable businessperson would have understood clause 35(b) to have been intended by the parties to operate in the manner that I have described so as to further ameliorate the risk to CEHP of being obliged to complete the Contract without any vendor-approved development consent in place, and the corresponding risk to RSL of CEHP lacking the funds to complete in those circumstances after both parties have invested time and effort in CEHP applying for development consent, but without making completion conditional on development consent or on CEHP raising funds. If CEHP nominated a date for completion in its clause 35(b) notice which fell within a reasonable time for completion, and then failed to complete on that date, RSL would be entitled to give notice to complete making time of the essence under clause 41.1 of the Contract and CEHP would be liable for liquidated damages under clause 41.4 of the Contract and for loss of bargain damages if it failed to complete by the essential date and if RSL terminated the Contract.

For all of those reasons, I reject CEHP’s submission that, even where it has obtained a development consent approved by RSL before the parties entered into the Contract, clause 35(b) is to be construed in accordance with the ordinary meaning of the words used as permitting CEHP to give written notice to RSL at any time prior to completion of the Contract nominating a completion date that is later than that fixed by clause 35(a), provided that CEHP’s nominated completion date falls at least 12 months after the date of the clause 35(b) notice and represents a reasonable time for completion. The words used in clause 35(b) are an obvious mistake in that they depart from the clear objective intention of the parties, and an absurdity. That mistake must be corrected, and the absurdity which must be avoided, by construing clause 35(b) in a manner that departs from the words of the clause so as to limit its operation to circumstances in which no vendor-approved development consent is in place at the time the Contract was entered into.

For the same reasons, I reject RSL’s submission that clause 35(b) manifests a further obvious mistake or absurdity in requiring CEHP to give the notice at least 12 months before the nominated completion date, effectively permitting CEHP to extend the completion date by at least 12 months but not by less than 12 months. As I have acknowledged earlier in these reasons, the Contract does not provide for RSL to receive any monetary compensation for its costs of holding the Property, or for the delay in receiving the purchase price, during any such period for which completion is deferred by a clause 35(b) notice. However, given RSL’s interest in maximising the prospects of CEHP obtaining a vendor-approved development consent for the Property and enhancing CEHP’s prospects of successfully raising the funds required to complete the Contract to which I have referred above, RSL has failed to establish that the requirement in clause 35(b) for CEHP to give the notice at least 12 months before the nominated completion date is an obvious mistake or an absurdity. I accept that it would have been open to the parties to specify an outer limit of the period for which completion could be delayed by a notice given under clause 35(b) rather than leaving that to be determined according the criterion of reasonableness. As RSL submits, that would have been a sensible commercial approach. But the parties’ leaving the outer limit to be determined according to reasonableness, with the legal meaning that I have explained above, is neither an obvious mistake nor an absurdity.

Clause 35(b) must therefore be construed as follows:

Development consent had been granted on 13 July 2023 and presumably approved by RSL shortly thereafter, almost 18 months before the Call Option was exercised and the Contract entered into on 5 December 2024. [15] It follows that clause 35(b), properly construed, did not apply, and the notice issued by CEHP on 20 December 2024 purporting to nominate a completion date of 19 June 2026 was invalid and of no effect. [16] The 12-month period stipulated by clause 35(a)(i) had expired before the Contract was entered into, and the date for completion was therefore 7 January 2025 in accordance with clause 35(a)(ii). [17] Nothing in the Contract required completion to be deferred pending the determination of the Revised Price under clause 37, which was dependent on the determination of the Residual Land Value under clause 38. If those matters are determined after completion, the Price Uplift will be payable after completion in accordance with clause 37.3 of the Contract. RSL was nevertheless apparently content to defer completion pending the determination of those matters. [18] RSL did not thereby expressly waive its right under clause 41.1 of the Contract to issue a notice to complete after 7 January 2025, making time of the essence. Clauses 54.3(a) and 54.3(b)(ii) of the Contract expressly provide that a party waives a right under the Contract only if it does so in writing, and that a delay in the exercise of a right does not constitute a waiver of that right. [19] There is no suggestion that RSL has not been ready, willing and able to complete the Contract at all times since 7 January 2025, including on 12 March 2025 which RSL had proposed to CEHP as a convenient date for both parties to complete the Contract.

In case a different view of the construction of clause 35(b) might be taken in any appeal proceeding, it is appropriate to record that, if I had upheld CEHP’s construction of that clause, I would have held that CEHP had failed to discharge its onus of establishing as a matter of fact that, in the circumstances existing at the time it gave the notice under clause 35(b), its nominated completion date of 19 June 2026 fell within a reasonable period of time for the completion of the Contract. [20] CEHP did not adduce any evidence of the circumstances then existing, other than the terms of the Contract and the Option Deed and the fact that the transaction for the sale and purchase of the Property had been on foot since the parties entered into the Option Deed just over four years earlier. CEHP relied on its submission that any date that fell within seven years after the date of the Option Deed was necessarily within a reasonable time for completion. I have rejected that submission at [128] above. Under the provisions of clause 37 of the Contract, the parties selected the period of seven years after the date of the Option Deed as the maximum period of time within which the purchaser would be exposed to the risk of the vendor revising the price upwards following the grant of a development consent in respect of the Property. For the reasons explained at [120]-[122] above, there is no rational reason to attribute to the parties an intention that that seven-year period would coincide with the four-year Call Option Period plus the three-year period after completion of the Contract during which both parties remain subject to the obligation to progress a development application, let alone an intention that that seven-year period would coincide with the period for completion of the Contract. That seven-year period therefore provides no guide to assessing the reasonableness or otherwise of CEHP’s nomination of 19 June 2026 as the date for completion in its notice purportedly issued under clause 35(b) of the Contract on 20 December 2024 in the circumstances existing at that time.

For all of those reasons:

I have outlined at [44] to [58] and [69]-[82] above the facts and the provisions of the Contract that are relevant to this issue, together with the parties’ competing claims for relief. The parties’ submissions are also outlined at [44] to [58] above and I will address them here in the same order in which they are there set out.

It will be recalled that the Purchaser’s Dispute Notice under clause 38.2 of the Contract was given on 20 December 2024, and that the parties failed to resolve their dispute about the RLV within 10 business days thereafter. In those circumstances, clause 38.5 of the Contract provides that (emphasis added):

The words immediately following clause 38.5(b) have been omitted from the quotation above because the parties agreed that they were superfluous and had been included due to a drafting error.

I reject CEHP’s submission that the 15 business day period in clause 38.5 commences not on the first business day after the date of service of the Purchaser’s Dispute Notice (being the ordinary meaning of the word “after” that is used in clause 38.5), but on the second business day after that first business day, by reason of clause 33.2 of the Contract.

It will be recalled that clause 33.2 provides that (emphasis added):

As RSL submits, the period for CEHP to appoint a valuer by notice to RSL under clause 38.5 of the Contract is a period of time that is specified to start after, not from, the date of service of the Purchaser’s Dispute Notice. Clause 33.2(e) therefore does not apply to the calculation of the 15 business day period specified in clause 38.5. As CEHP submits, the parties could have specified a period of time in clause 38.5 to start from the date of service of the Purchaser’s Dispute Notice – a form of drafting which would have attracted the operation of clause 33.2(e). However, they did not do so. As RSL submits, the mere availability of that alternative drafting technique, which the parties did not employ in clause 38.5, does not attract the operation of clause 33.2(e) to the different expression of time used by the parties in clause 38.5 so as to afford CEHP a bonus day.

For those reasons, the last day of the period described in clause 38.5 as 15 business days after the date of service of the Purchaser’s Dispute Notice on 20 December 2024 was 15 January 2025.

As a matter of fact, CEHP’s solicitors sent the email attaching the Purchaser’s Valuer Notice to RSL’s solicitors within the 24-hour period of the day that was 15 January 2025. As CEHP submits, that was a “Business Day” as defined in the Contract. However, as RSL submits, that does not resolve the question about when the notice was taken to have been sent under the contractual regime for the service of documents and giving of communications. The issue is whether the notice is taken to have been served on or given to RSL on the business day of 15 January 2025 by reason of clause 20.6.9 of the Contract, or at 9:00am on the following business day by reason of clauses 33.7 and 33.8 of the Contract.

A written notice of one party’s appointment of a valuer under clause 38.5 of the Contract is a “document under or relating to this contract” within the meaning of clause 20.6. When it is sent to the other party, it is “served” as defined in clause 1 of the Contract. Contrary to RSL’s submissions, it is irrelevant that clause 38.5 of the Contract does not use the word “served” to describe the manner in which a party’s notice of appointment of a valuer under that clause is to be given to the other party. Neither party suggested that the notice could be given otherwise than in writing. It follows that such notice can only be given by a written document that is delivered to the other party in person or sent to the other party by some other means, including by email. That constitutes “service” as defined in clause 1 of the Contract. At the time of service, the notice is also capable of being characterised in more general terms as a “communication”, within the ordinary meaning of that word, that has been “given” to the other party. The term “communication” is not defined as having any special meaning in the Contract or in clauses 33.7 and 33.8 of the Contract, and I reject CEHP’s submission that the ordinary meaning of the word “communication” requires a bilateral exchange of messages or information between the persons who are parties to the communication. As RSL submits, the ordinary meaning of “communication” encompasses a one-way transmission of information in addition to an exchange of information. [21]

I accept CEHP’s submission that clause 20.6.9 of the Contract is a specific provision that applies to the service of documents under or relating to the Contract, including the Purchaser’s Valuer Notice.

However, I reject CEHP’s submission that the concepts of service of documents under clause 20.6.9 and the giving of communications under clauses 33.7 and 33.8 mean different things. Clauses 33.7 and 33.8 are general provisions relating to the giving of communications which are drafted in terms sufficiently broad to apply to written notices and other documents under or relating to the Contract that are sent by one party to another (i.e. “served” within the meaning of clause 1 of the Contract), as well as to other communications which the Contract requires or contemplates will be made by or given to persons who are not parties to the Contract. For example, clause 38.9(b) of the Contract requires the valuers and any umpire appointed by the valuers under clause 38.8 to “each give written notice of acceptance of the appointment to the vendor and purchaser”. Clause 38.9(c) provides for the vendor and purchaser to make written submissions to their appointed valuers and to the umpire within 10 business days of receipt of written notice of acceptance of appointment by the valuers or the umpire (as applicable) under clause 38.9(b). Clause 38.9(e) requires the valuers and the umpire to determine the RLV within 15 business days of giving written notice of their acceptance of their appointment, and to give written reasons for that determination. Each of those steps is, or requires, a communication, within the ordinary meaning of that word, to be given by or to one or more of the valuers and the umpire. None of those communications is recorded in a document that would be served by either the vendor or the purchaser on the other, to which clause 20.6.9 of the Contract would apply.

Those provisions of clause 38.9 of the Contract to which I have referred immediately above illustrate the work that remains for clauses 33.7 and 33.8 to do if clause 20.6.9 applies to a party’s notice of appointment of a valuer under clause 38.5. I reject RSL’s submission that clause 20.6.9 cannot apply because clauses 33.7 and 33.8 will otherwise have no work to do.

I also reject RSL’s submission that clauses 20.6.9 and clauses 33.7 and 33.8 apply cumulatively so that the notice is taken to have been served at the time it was sent by email at 7:10pm on 15 January 2025, but the notice so served is taken as having been given at 9:00am on the following business day. I also reject CEHP’s submission, which I understand to have been responsive to that submission made by RSL, that the notice is served at 7:10pm on 15 January 2025 for the purpose of stopping the running of time for the appointment of a valuer under clause 38.5, but given at 9:00am on the following business day for the purpose of starting time running under clauses 38.7 and 38.8 for the valuers to either agree on the RLV or appoint an umpire. In my opinion, the reasonable businessperson would not have understood the parties to have intended by the provisions of clauses 20.6.9 and clauses 33.7 and 33.8 of the Contract to have created different regimes for the time at which the sub-set of communications comprising documents under or relating to the Contract are taken to have been served and given. Neither of the parties identified any object that would be served by such documents being taken to have been served and given at different times. The confusion and inconvenience that such a construction would occasion to the parties to this commercial contract is evidenced by the parties’ submissions. That inconvenience is avoided by my construction of clauses 33.7 and 33.8 as general provisions applicable to communications that include, but are not limited to, documents to which clause 20.6.9 applies, as explained at [145] above.

On my construction, there is an inconsistency between clause 20.6.9 on the one hand, and clauses 33.7 and 33.8 on the other hand, in their application to the Purchaser’s Valuer Notice attached to the email sent by CEHP’s solicitors to RSL’s solicitors on 15 January 2025. Under clause 20.6.9, that notice is taken to have been served “at the time the email was sent”, being 7:10pm on 15 January 2025. That is within the 24-hour period of 15 January 2025 that was a “Business Day” as defined in the Contract. However, under clauses 33.7 and 33.8, the notice is taken to have been given at 9:00am on the following business day, being 16 January 2025.

Contrary to RSL’s submission, this is not an inconsistency between the printed clauses and the additional clauses of the Contract to which clause 33.4 of the Contract applies. As CEHP submits, clause 20.6.9 of the Contract forms part of the additional clauses, having been inserted into clause 20.6 by clause 34(l) of the additional clauses. I therefore reject RSL’s submission that clauses 33.7 and 33.8 prevail over clause 20.6.9 to the extent of the inconsistency.

I accept CEHP’s submission that the inconsistency is to be resolved by applying the long-established principle that, where a contract contains general and specific provisions concerning the same subject matter, the specific provision will prevail over the general provision to the extent of the inconsistency. [22]

For those reasons, I accept CEHP’s submission that clause 20.6.9 of the Contract applies to the service of the Purchaser’s Valuer Notice to the exclusion of clauses 33.7 and 33.8 of the Contract. It follows that the Purchaser’s Valuer Notice sent by CEHP’s solicitors to RSL’s solicitors by email at 7:10pm on 15 January 2025 was given within the 15 business day period stipulated in clause 38.5 of the Contract and was valid and effective to notify to RSL the appointment of Mr Sukkar as the Purchaser’s Valuer for the purpose of clause 38 of the Contract.

That conclusion renders it unnecessary to consider the parties’ submissions about whether or not the 15 business day period stipulated in clause 38.5 of the Contract is of the essence. Had it been necessary to do so, I would have held that, on the proper construction of clause 38 of the Contract, compliance with the time stipulation in clause 38.5 is not essential to the validity of a notice given by one party to the other of the first party’s appointment of a valuer. I will state my reasons as briefly as possible.

As RSL submits, clause 38.5 confers on each party a right, rather than an obligation, to appoint a valuer, and stipulates the time period within which that “must” be done by notice to the other party.

The question is not whether that time stipulation is of the essence in the sense that any failure by a party to comply with it would entitle the other party to terminate the Contract. Rather, the question is whether compliance with the time stipulation is an essential requirement for the validity of a notice appointing a valuer under clause 38.5. If so, a party who fails to give such a notice within the stipulated time period loses the right to appoint a valuer after the expiry of that time period. That question is one of construction which falls to be resolved in accordance with the principles summarised at [106]-[111] above. [23] It is not answered by clause 21.6 of the Contract referred to at [64]-[65]. As RSL submits, clause 21.6 applies “normally”, and the definition of that word in the Contract raises the very question whether, on the proper construction of clause 38, the 15 business day period stipulated in clause 38.5 as the time within which a party to is to give any notice appointing a valuer is essential.

As both parties accepted, there is no presumption that time stipulations in machinery provisions for determining price adjustments under a contract are not essential. [24]

As I have explained earlier in these reasons, [25] clause 38 of the Contract establishes an agreed process for the determination of the RLV, which is an integer in the calculation of the Revised Price which RSL is entitled to be paid if a development consent is granted before: (1) seven years after the date of the Option Deed; or (2) Substantial Commencement, whichever is earlier. Clause 11.5 of the Option Deed, which is also a term of the Contract until three years after completion of the Contract by reason of clause 36, requires CEHP to promptly notify RSL in writing when a development consent has been obtained.

The first step in the contractual process for determining any such Revised Price is for RSL to give notice under clause 37.1. That clause provides that, if a development consent is granted within the time period to which I have referred immediately above, then (emphasis added): [CB tab C20 p 545]

It will be recalled that RSL may refuse to approve a development consent under clause 11.5 of the Option Deed or, if the Contract has been entered into, before the development consent is granted under clause 36 of the Contract.

If a development consent is granted prior to the expiry of the four-year Call Option Period but before the Contract is entered into, clause 37.1 will not be in force. In that scenario, RSL has not yet become entitled to exercise the Put Option and so cannot cause the Contract to come into existence. When the Contract later comes into existence, one available construction of clause 37.1 is that the period of 10 business days within which the clause provides that RSL “must” notify CEHP of the Revised Price is essential. It would follow from that construction that, from the time the Contract is entered into, RSL is not able to notify a Revised Price referable to a development consent that has been granted more than 10 business days prior to the date of the Contract and, notwithstanding any increase in the gross floor area achieved by that development consent and any increase in the Residual Land Value, the price payable for the Property under the Contract is limited to the Guaranteed Minimum Purchase Price of $95,000,000. An alternative construction is that, despite the use of the word “must” in clause 37.1, the 10 business day time period for RSL to give notice of the Revised Price is not essential, and that, by reason of clause 54.3 of the Contract, [26] mere delay by RSL in giving that notice after the expiry of the 10 business day period does not waive its right to give the notice. The first construction is wholly contrary to the object of the Contract which I have described at [118] above, and contrary to clause 37.3(a) of the Contract which expressly provides that the price is to be changed to equal the Revised Price each time a development consent is granted after the date of the Option Deed. The second construction is therefore to be preferred and represents the legal meaning of clause 37.1.

The notification of a Revised Price under clause 37.1 of the Contract directs attention to the process for determining the RLV under clause 38 of the Contract because the Revised Price must be calculated in accordance with clause 37.2, the RLV is an integer of that calculation, clause 33 of the Contract defines the RLV as meaning the residual land value measured in accordance with clause 38, and clause 38.1(a) provides that the RLV will vary as determined in accordance with clause 38.

The clause 38 process is initiated not by the Revised Price notification under clause 37.1, but by a separate notice which clause 38.1(b) provides that RSL may serve on CEHP stating RSL’s assessment of the RLV for the purpose of clause 37. Clause 38.1(a) provides that RSL may serve such a notice “at any time and from time to time”.

In my opinion, the non-essentiality of the time stipulations for RSL to give the notice under clause 37.1 which effectively triggers the clause 38 process, and for RSL to serve the notice under clause 38.1 which is the first step in that process, is one reason why the reasonable businessperson, placed in the position of the parties at the time they entered into the Option Deed and thereby agreed the terms of the Contract that later came into existence automatically on the exercise of the Call Option, would not have understood the parties to have intended by the words in clause 38.5 that a party would lose the right to appoint a valuer conferred by that clause if it failed to give notice of the appointment to the other party within the stipulated 15 business day period.

The following further matters also support that construction of clause 38.5.

First, contrary to RSL’s submissions, clause 38 of the Contract does not provide for a series of interlocking steps that facilitate an expeditious determination of the RLV within a certain time frame. The steps in the process and the time periods stipulated with respect to each step (or, in some instances, the lack of any stipulated time period) are internally inconsistent, which creates intractable uncertainty about the operation of the process as a whole. In particular, clause 38.5 requires each party to notify the other of its appointment of a valuer within 15 business days after CEHP serves the Dispute Notice under clause 38.2. Clauses 38.9(b) and clause 38.10 acknowledge that no such appointment will be effective as between the appointing party and the valuer until the valuer has accepted the appointment. If a valuer declines to accept the appointment, the appointing party may request the President of the Australian Property Institute to appoint a valuer. Clause 38.10 does not stipulate any time period within which such a request is to be made. The time period within which the President might act on any such request is obviously beyond the control of the parties. Notwithstanding this delay that may be occasioned by a valuer declining to accept an appointment, clauses 38.7 and 38.8 purport to require the valuers to appoint an umpire within 15 business days of notification of their appointment if they have not agreed on the RLV (within an aggregate margin of 10%) within 10 business days of notification of their appointment, irrespective of whether or when they have given notice of their acceptance of appointment under clause 38.9(b). Clause 38.9(c) entitles the parties to make written submissions to their appointed valuers within 10 business days after receiving written notice of acceptance of their appointment but, if a valuer delays notifying acceptance of their appointment for any reason, the time by which clauses 38.7 and 38.8 purportedly require the valuers to either reach agreement or appoint an umpire may have expired before those submissions are due. The 15 business day period within which clause 38.9(e) purportedly requires the valuers and the umpire to determine the RLV runs from the valuers notifying acceptance of their appointment, and so does not align with the period of 15 business days from the notification of their appointment within which clauses 38.7 and 38.8 purportedly require the valuers to either agree or appoint an umpire. In any event, the time stipulations purportedly imposed on the valuers under clauses 38.7 and 38.8, and on the valuers and any umpire under clause 38.9, are unenforceable because neither the valuers nor the umpire are parties to the Contract. Assuming that all of the time periods in clauses 38.2 to 38.9 are complied with by all parties, that each party’s appointment of a valuer is promptly accepted by that valuer, and that the two valuers receive submissions from the parties and reach agreement about the RLV (within an aggregate margin of 10%) within 10 business days after notifying their acceptance of appointment, the clause 38 process will take 36 business days. The process will require longer in the event of any departure from those assumptions underpinning that best case scenario. That will not facilitate calculation of the RLV and the Revised Price in sufficient time for CEHP to pay the Revised Price to RSL within 20 business days of receiving RSL’s Revised Price notification under clause 37.1 of the Contract, as required by clause 37.3(a)(iv), even if RSL issues a notice under clause 38.1 at the same time as issuing its Revised Price notification under clause 37.1. RSL is not required to issue those two notices simultaneously. Clause 38.1(b) expressly entitles RSL to serve notice under that clause stating its assessment of RLV “at any time and from time to time”. Those provisions display a haphazard approach to the interaction between clauses 37 and 38, between the steps within clause 38, and between the time stipulations referred to in those clauses, that weighs strongly against imputing to the parties an objective intention that compliance with the time stipulation in clause 38.5 – being merely one step in the overall process – was essential to the validity of a party’s notice appointing a valuer.

Second, clause 38.6 provides for the consequences if either party ‘fails to appoint a valuer”. In contrast to the language of clause 38.3 dealing with the consequences of any failure by RSL to serve a Dispute Notice under clause 38.2, clause 38.6 does not expressly state that it applies to a failure to give notice under clause 38.5 within the time period stipulated in clause 38.5. Moreover, and contrary to RSL's submission, the giving of the clause 38.5 notice is not synonymous with an effective appointment as between the appointing party and the valuer. As I have already mentioned, clause 38.9(b) and clause 38.10 envisage that a valuer who is the subject of a clause 38.5 notice may decline to accept the appointment.

Third, the sole purpose of the clause 38 process to determine the RLV is to facilitate the calculation of the Revised Price in accordance with clause 37.2 of the Contract. If the Contract is yet to be completed, that Revised Price will be payable on completion. Time for completion is not of the essence unless and until a notice has been given under clause 41.1 of the Contract. If the Contract has already been completed, the clause 38 process will not facilitate payment of the Price Uplift within the time stipulated by clause 37.3(a)(iv) of the Contract, as I have explained above. Those are further matters which weigh strongly against imputing to the parties an objective intention that the time stipulated in clause 38.5 was of the essence.

Fourth, construing the clause 38.5 time stipulation as essential to the validity of a notice given in exercise of a party’s right to a appoint a valuer under that clause would be inconsistent with the express provisions of clause 54.3 of the Contract.

For all of the reasons at [135]-[151] above, the Purchaser’s Valuer Notice sent by CEHP’s solicitors to RSL’s solicitors by email at 7:10pm on 15 January 2025 was given within the 15 business day period stipulated in clause 38.5 of the Contract and was valid and effective to notify to RSL the appointment of Mr Sukkar as the Purchaser’s Valuer for the purpose of clause 38 of the Contract.

There will be a declaration in terms similar to that claimed by CEHP in prayer 16 of the Summons that, on the proper construction of the Contract, the notice served by CEHP’s solicitors on RSL’s solicitors was given within the time period stipulated in clause 38.5 of the Contract, and was valid and effective to notify to RSL the appointment of Mr Sukkar as the Purchaser’s Valuer for the purpose of clause 38 of the Contract.

I do not consider that it is necessary or appropriate to make the further declaration sought in prayer 17 of the Summons to the effect that RSL’s assertion that the notice was not valid and effective was wrong. The Court is not in the habit of making declarations about the accuracy or inaccuracy of assertions made in inter-partes correspondence where such a declaration would add nothing to the other declarations and orders to be made resolving the substance of the dispute that has been litigated.

There will be an order for specific performance of the kind sought in prayer 18 of the Summons. In my opinion, the appropriate terms of the order are to require RSL and CEHP to perform clause 38 of the Contract on the basis of the declared validity and effectiveness of the notice served at 7:10pm on 15 January 2025. I do not consider that it is appropriate to direct the order to the valuers personally on the basis that they are the agents of the parties. The valuers are not parties to the Contract, and they are not parties to the proceedings. Their role under the Contract is to act as experts rather than as the agents of the parties. They are not bound by the time stipulations in clause 38 that purport to apply to their assessment of the RLV, and they should not be constrained by an order for specific performance to comply with those time stipulations which they may consider to be inconsistent with the discharge of their role as experts to assess the RLV of the Property applying their professional expertise. Alternatively, if the valuers consider that the assessments that they have already made suffice to discharge their function as experts under clause 38, they should not be the subject of an order for specific performance suggesting that something further is required of them. [27]

As referred to at [81] above, CEHP also seeks a declaration in prayer 11 of the Summons that, in the events which have happened, there was, and is, a binding contract between the parties dated 5 December 2024 for the sale and purchase of the Property for a purchase price of $95,000,000. There is no proper basis for the making of such a declaration. There is no dispute that the Contract is binding on the parties, and the purchase price stipulated on the first page of the Contract is $95,000,000 subject to clause 37.

It follows from my conclusion that CEHP served a valid and effective notice of appointment of valuer on RSL on 15 January 2025 that the Revised Price is not to be calculated on the basis of the assessment of the RLV made by RSL’s valuer acting alone. Accordingly, prayer 3 of the Cross-Summons which seeks a declaration that the Revised Price is $105,206,407.93, must be dismissed.

RSL (as lessor) and RSL Custodian Pty Ltd (as lessee) entered into the Board Room Lease and the Lease Term Deed on or about 3 December 2024. RSL caused those documents to be re-executed on 7 April 2025 to remove some differences which RSL regarded as immaterial between the documents executed on 3 December 2024 and the documents in Annexure L to the Option Deed. In referring to the Board Room Lease and the Lease Term Deed below, I am referring to the documents re-executed on 7 April 2025, except where I expressly indicate otherwise.

The Reference Schedule in Annexure A to the Board Room Lease stipulates that it is for a term of 10 years, terminating on the Termination Date provided for in the Lease Term Deed.

It will be recalled that clause 1 of the Lease Term Deed defines the “Termination Date” as meaning:

The Lease Term Deed defines the “Lease Term Fee” as:

Inconsistently with the definition of “Termination Date”, clause 2 of the Lease Term Deed provides:

The inconsistency arises because, under clause 37 of the Contract, there is a maximum period of seven years after the date of the Option Deed during which a grant of development consent will trigger the calculation of a Revised Price under clause 37.2. Accordingly, the whole of the Lease Term Fee as defined in the Lease Term Deed would be paid within that time, plus some additional period for the parties to undertake the calculation and valuation processes, and the term of the Lease would then expire according to clause 2 of the Lease Term Deed. However, according to the definition of Termination Date in the Lease Term Deed, which is defined as the Terminating Date in the Reference Schedule to the Board Room Lease that has been executed, the payment of the Lease Term Fee is necessary but not sufficient to bring the Term of the Board Room Lease to an end. Even after payment of the Lease Term Fee, the Termination Date as defined would not occur until the earlier of 10 years after the date of commencement of the Board Room Lease or the date of Substantial Commencement. The first of those dates – 10 years after the date of commencement of the Lease – will self-evidently fall many years after the seven-year anniversary of the Option Deed which is the outer limit of the period in which a grant of development consent in respect of the Property will trigger an obligation on the part of CEHP to pay a Price Uplift under clause 37 of the Contract. The notion that the Lease might remain on foot as at the second of those two dates is absurd because Substantial Commencement is only achieved after substantial demolition of the building on the Property. The Term would only end on the occurrence of the earlier of those two dates, and only if the Lease Term Fee had been paid.

It will be recalled that clause 17.2 of the Option Deed, which is set out in full at [24] above provides that CEHP consents to RSL granting a New Lease (which is defined as including the Board Room Lease) on the basis that, relevantly, a New Lease that is not a retail lease and that is for a term of more than three years must contain the Redevelopment Clause referred to at [25] above. The Redevelopment Clause entitles the lessor to terminate it on six months’ notice if the lessor proposes to demolish, substantially repair, renovate, or reconstruct the building or a substantial part of it.

It will be recalled that clause 14 of the Option Deed, which applies to the Contract pursuant to clause 36 of the Contract, precludes RSL from registering any dealing on the titles to the Property without CEHP’s prior written consent. [28]

CEHP has declined to consent to the registration of the Board Room Lease.

RSL accepts that the Board Room Lease is not a retail lease and is for a term of 10 years commencing on 26 August 2024, and that neither the Board Room Lease nor the Lease Term Deed contains the Redevelopment Clause.

RSL submits that the executed Board Room Lease is in the form of Annexure L to the Option Deed, which does not contain the Redevelopment Clause. RSL submits that the Board Room Lease cannot be in the form of Annexure L and also contain the Redevelopment Clause. RSL submits that this “essential problem” gives rise to a question whether, properly construed and applied as a term of the Contract pursuant to clause 36 of the Contract, the requirement for the inclusion of a Redevelopment Clause in any New Lease under clause 17.2(b)(ii) of the Option Deed was intended to apply to the Board Room Lease. RSL submits that this cannot have been intended because that would result in RSL never being able to grant and register the Board Room Lease because it would be non-compliant with clause 17 either by reason of departing from the terms in Annexure L by including the Redevelopment Clause, or by failing to include the Redevelopment Clause contrary to clause 17.2(b)(ii). RSL further submits that the inclusion of the Redevelopment Clause in the Board Room Lease would defeat its “evident purpose” of providing security for CEHP’s compliance with its obligations that continue after completion of the Contract to pay the Revised Price calculated in accordance with clauses 37 and 38 of the Contract.

Relying on the principles referred to at [107]-[111] above, RSL submits that clause 17.2 of the Option Deed should be construed in a manner that departs from the words used in that clause by adding the underlined words below:

The effect of RSL’s additional words would be:

I reject RSL’s submissions. Neither clause 17 nor any other provision of the Option Deed expressly requires RSL to ensure that the Board Room Lease is in the terms of Annexure L. RSL has failed to establish that, notwithstanding the express requirement in clause 17.2(b)(ii) of the Option Deed for any New Lease (including the Board Room Lease) with a term of 10 years to include the Redevelopment Clause, it was the objective joint intention of RSL and CEHP that RSL was obliged to consent to the grant and registration of a Board Room Lease containing the inconsistent provisions concerning term and termination in the draft form of the lease to which I have referred at [175]-[179] above, and omitting the Redevelopment Clause. It would therefore be contrary to the established principles referred to at [106]-[111] above for the Court to construe clause 17.2 of the Option Deed in the manner for which RSL contends. That is sufficient reason to dismiss RSL’s claim for an order requiring CEHP to consent to the registration of the Board Room Lease.

For completeness, I also reject RSL’s submission that the “evident purpose” of the proposed Board Room Lease was to provide security for CEHP’s compliance with its obligations that continue after completion of the Contract to pay the Revised Price calculated in accordance with clauses 37 and 38 of the Contract. In my opinion, the reasonable businessperson would not have understood the provisions of clause 17 of the Option Deed insofar as they apply to the Board Room Lease to have been intended to provide such security. The reasonable businessperson would have understood from the ordinary meaning of the language used in clause 17.2 and the inclusion of the Board Room Lease in the definition of New Lease that the parties intended to ensure that any long-term leases granted by RSL in respect of the Property would be on terms that permitted CEHP to terminate those leases so as to facilitate the anticipated development that was central to the object of the Option Deed in the event that the Contract was entered into and completed, whereupon CEHP would become the registered proprietor of the Property subject to any registered leases. In circumstances where it would have been open to RSL to negotiate a charge over the Property on completion to secure the performance of any or all of CEHP’s contractual obligations that continued after completion of the Contract, it would not have occurred to the reasonable businessperson that the foreshadowed Board Room Lease was intended to provide such security.

For all of those reasons, RSL’s claims for relief in prayers 1 and 2 of the Cross-Summons must be dismissed.

I refer to [96]-[102] above.

CEHP disputes that it is liable to pay $71,500 to RSL in respect of the costs of the margin scheme valuation for two reasons: (1) the valuation is not an “approved valuation” within the meaning of clause 51.5(b) of the Contract because RSL did not obtain CEHP’s approval prior to the valuation being undertaken; and (2) even if CEHP is liable to pay that sum to RSL, that payment is to be made on completion of the Contract as provided for in clause 16.7.2.

I reject CEHP’s first submission. The term “approved valuation” is not defined in the Contract. Clause 51 of the Contract addresses GST and the margin scheme. The reasonable businessperson would have understood the parties to have intended the term “approved valuation” in clause 51.5 to have the same meaning as in Division 75 of Part 4.2 of the GST Act.

RSL conceded during the hearing that CEHP is not required to pay the $71,500 approved valuation cost to RSL until completion of the Contract. It follows that RSL is not presently entitled to judgment for that sum. To quell the controversy, it is appropriate to make a declaration to the effect that, on completion of the Contract, CEHP is liable under clause 16.7.2 and clause 51.5(b) of the Contract to pay to RSL the cost of RSL obtaining from M3 Property the valuation report dated 31 January 2025 in respect of the market value of 271 Elizabeth Street as at 1 July 2000.

It follows from my determination that the Purchaser’s Valuer Notice was given within the time stipulated in clause 38.5 of the Contract, that clause 38.6(b) does not apply and each party must bear the costs of its own valuer under clause 38.11. RSL’s claim to recover from CEHP half of the cost of Mr Khan’s RLV valuation under clause 38.6(b)(ii) therefore fails.

For all of the foregoing reasons, the declarations and orders of the Court are:

Order 5 above includes a dismissal of CEHP’s claims for damages in prayers 19 and 20 of its Summons, which were not mentioned in CEHP’s written or oral submissions and are therefore taken to have been abandoned.

I will hear the parties in relation to costs.