IDP 971 Richmond Pty Ltd v Xerri

1. [1]

   The defendants are the registered proprietors of the land at X Richmond Road, Marsden Park, being Lot X in DP X (the Property).

2. [2]

   On 30 August 2018 the plaintiff (IDP 971) entered into a Deed with the defendants whereby the defendants granted an option to IDP 971 to purchase the Property for $22 million (August Option Deed).

3. [3]

   The Property is a green fields site that IDP 971 was purchasing with a view to subdividing it for residential use.

4. [4]

   The August Option Deed was terminated by IDP 971 as a result of concerns about a potential railway corridor adversely affecting the use of the Property.

5. [5]

   Negotiations took place between the solicitors for the parties, the result of which was a new option deed entered into on 10 October 2018 (October Option Deed) again for $22 million but this time with an amended clause 15.4 which provided for a reduction in purchase price in certain circumstances.

6. [6]

   IDP 971 contends that it has now been ascertained that the railway corridor reduces the area of the Property that can be developed by 8,106.1 m2 and as such the purchase price under the October Option Deed should be reduced.

7. [7]

   By these proceedings, IDP 971 seeks rectification of particularly clause 15.4 of the October Option Deed to give effect to the agreement that it says was reached regarding the circumstances in which the purchase price would be reduced, that agreement not being reflected in the terms of the October Option Deed.

8. [8]

   The defendants contend that the October Option Deed should not be rectified and further contend that even if the October Option Deed is rectified in the manner contended for by IDP 971, the purchase price should not be reduced in the amount contended for by IDP 971. This is because no rail corridor or buffer area has in fact been created.

9. [9]

   The option was exercised on 24 March 2025. The date for completion of the ensuing contract has been extended pending determination of these proceedings.

10. [10]

    The proceedings were heard on 18 September 2025. Mr P T Lynch SC and Mr P Wiggins appeared for IDP 971 and Mr J C Kelly SC and Mr A Maroya appeared for the defendants.

11. [11]

    The evidence was documentary. The one deponent of an affidavit – one of IDP 971’s current solicitors – was not required for cross-examination.

12. [12]

    For the reasons set out below, IDP 971’s claims do not succeed. I am not satisfied that IDP 971 has demonstrated that the October Option Deed should be rectified.

The Facts

1. [13]

   The relevant facts are as follows.

2. [14]

   The starting point – having regard to the present dispute – is the terms of the State Environmental Planning Policy (Sydney Region Growth Centres) 2006 (2006 SEPP). Clause 7 of the 2006 SEPP relevantly provided that Appendix 12 of the 2006 SEPP applied to the carrying out of development in “Marsden Park Precinct, North West Growth Centre” which included the Property.

3. [15]

   Clause 6.10 of Appendix 12 provided:

4. [16]

   The area marked “I” on the Land Zoning Map includes an area, approximately 55 metres wide running through the Property where it abuts South Street.

5. [17]

   Clause 3.10 of State Environmental Planning Policy (Precincts – Central River City) 2021 (2021 SEPP) similarly picks up Appendix 11 to the 2021 SEPP which is in identical terms to clause 6.10 of Appendix 12 to the 2006 SEPP.

6. [18]

   The effect of these provisions is that Council could not grant consent to the development of the area marked “I” without the concurrence of Transport for NSW (TfNSW).

7. [19]

   The August Option Deed was entered into on 30 August 2018. Pursuant to clause 3.1 of the August Option Deed, IDP 971 was granted a 30 day due diligence period. In general terms, IDP 971 had the right to terminate the August Option Deed if the results were considered unsatisfactory to IDP 971.

8. [20]

   Pursuant to clause 4, a non-refundable Call Option Fee of $4.4 million was payable in six instalments, the first instalment being due 31 days after the date of the August Option Deed.

9. [21]

   Clause 15 of the August Option Deed was in the following terms:

10. [22]

    On 12 September 2018, IDP 971’s lawyer (Ms Tania Kallianiotis) sent an email to the defendants’ lawyer (Mr Siderowitz) in the following terms:

11. [23]

    Later that day, a response was received attaching extracts from two town planning reports from 2015.

12. [24]

    In the earlier of these two reports, which were commissioned in the context of an earlier road widening proposal dispute, the authors provided the following background to the proposed transport corridor:

13. [25]

    In the later report, Mr Haskew stated:

14. [26]

    On Friday 21 September 2018, Ms Kallianiotis emailed Mr Siderowitz in the following terms (my emphasis):

15. [27]

    On Monday 24 September 2018, Ms Kallianiotis wrote again to Mr Siderowitz:

16. [28]

    The handwritten amendments to clause 15 were as follows:

17. [29]

    Amendments to clause 4 (Call Option Fee) were also proposed, changing the amount of the first two instalments from $1.1 million each to $550,000 each, and adding a new final instalment of $1.1 million seven days from the grant of development consent.

18. [30]

    Mr Siderowitz responded later on 24 September 2018 as follows:

19. [31]

    On 26 September 2018, Mr Siderowitz emailed Ms Kallianiotis as follows (emphasis added in bold):

20. [32]

    About an hour later, Ms Kallianiotis responded to Mr Siderowitz:

21. [33]

    On 2 October 2018, Ms Kallianiotis wrote to Mr Siderowitz:

22. [34]

    It appears common ground that the August Option Deed thus came to an end on 2 October 2018.

23. [35]

    The correspondence then continued with Mr Siderowitz emailing Ms Kallianiotis on 3 October 2018:

24. [36]

    There were then further emails on 3 October 2018. First, at 2.48 pm Ms Kallianiotis wrote to Mr Siderowitz:

25. [37]

    At 5.04 pm, Mr Siderowitz emailed Ms Kallianiotis:

26. [38]

    On 8 October 2018, Mr Siderowitz wrote to Ms Kallianiotis:

27. [39]

    Relevantly, clause 15 of the draft was now in the following terms (underlining has been added to show relevant changes from existing clauses):

28. [40]

    A further email with a further draft of clauses 15.3 and 15.4 was sent by Mr Siderowitz to Ms Kallianiotis on 9 October 2018:

29. [41]

    No evidence was adduced by either side as to what, if anything of substance, was discussed in the telephone call referred to in the email. The redrafted clause 15 was as follows (underlining in clause 15.3 and 15.4 to show changes from the August Option Deed not the previous draft):

30. [42]

    There were no changes to these clauses in the deed as executed.

Terms of the October Option Deed

1. [43]

   The October Option Deed was executed by IDP 971 on 9 October 2018. The executed copy was emailed by Ms Kallianiotis to Mr Siderowitz on 9 October 2018. The executed original was hand delivered to Mr Siderowitz together with bank cheques totalling $550,000. Deeds were exchanged later on 10 October 2018.

2. [44]

   The Recitals to the October Option Deed were in the following terms:

3. [45]

   Clause 3 dealt with the Development Application and was as follows:

4. [46]

   Clause 15 was in the following terms:

5. [47]

   Attached to the October Option Deed was the form of Contract for Sale of Land to be entered into on exercise of the option. Page 3 of the Contract contained the List of Documents attached to the Contract.

Events after the October Option Deed

1. [48]

   As foreshadowed in Ms Kallianiotis’ email of 21 September 2018, a meeting was held with representatives of Blacktown City Council on 27 September 2018. The minutes record that the meeting was a “Pre-Application Meeting”. The minutes state, relevantly:

2. [49]

   Representatives of IDP 971 thereafter undertook consultation with TfNSW and the Council.

3. [50]

   On 23 August 2019, Ms Kallianiotis emailed Mr Siderowitz as follows:

4. [51]

   Mr Siderowitz responded on 26 August 2019:

5. [52]

   According to the uncontradicted evidence of Mr Cassimatis – one of IDP 971’s current solicitors – an outcome of the consultations with TfNSW and the Council was, among other things, the preparation of a revised plan of the subdivision of the Property dated 5 November 2020. That proposed plan contained a Proposed Lot 3 or residue lot of 8106.1m2 in the area marked “I” (Proposed Plan of Subdivision).

6. [53]

   On 11 November 2020, TfNSW wrote to the Council in the following terms:

7. [54]

   On 17 December 2020, Council refused to grant development consent. IDP 971 appealed to the Land and Environment Court. An amended application was lodged.

8. [55]

   On 3 November 2021, the parties to the Land and Environment Court proceedings reached an agreement for the determination of those proceedings and consent orders were made on 18 November 2021.

9. [56]

   Consent was granted by reference to the Proposed Plan of Subdivision including the creation of Lot 3, being the residue lot of 8,106.1m2 in the area marked “I”.

10. [57]

    The consent was a deferred consent to cater for the fact that various easements for stormwater drainage and the like had to be negotiated.

11. [58]

    On 8 December 2021, Ms Kallianiotis wrote to Mr Siderowitz:

12. [59]

    The deferred conditions were not satisfied until early 2024. On 20 February 2024 the plan of subdivision was issued with a pre-allocated number PP DP 1303453.

13. [60]

    On 21 July 2024, Mr Kallianiotis wrote to Mr Siderowitz as follows:

14. [61]

    On 22 July 2024, Mr Siderowitz responded:

15. [62]

    On 7 August 2024, Mr Siderowitz emailed Ms Kallianiotis in the following terms:

16. [63]

    The evidence did not provide any detail as to the different interpretations.

17. [64]

    On 19 August 2024, Mr Siderowitz emailed Ms Kallianiotis:

18. [65]

    On 28 August 2024, a representative of TfNSW emailed Mr Siderowitz attaching a map of the Property showing the “corridor impact”, as well as the sqm in and out of the corridor, for both zonings.

19. [66]

    Mr Siderowitz forwarded that email, and the attached plan to Ms Kallianiotis on 18 September 2024. He stated:

20. [67]

    On 18 September 2024, Mr Siderowitz emailed Ms Kallianiotis:

21. [68]

    On 4 October 2024, TfNSW stated as follows in relation to an inquiry concerning the Property:

22. [69]

    A search of the Property with “Transport Asset Holding Entity of New South Wales” dated 8 October 2024 states, inter alia:

23. [70]

    The option was subsequently exercised on 24 March 2025. Completion of the ensuing contract has been extended pending the determination of these proceedings. The disputed part of the purchase price has, pursuant to orders made by consent of the parties, been paid into a controlled monies account held in the name of IDP 971’s solicitors.

Overview of the Contentions

1. [71]

   By its amended summons filed 21 February 2025, IDP 971 seeks the following substantive relief:

2. [72]

   As rectified, clauses 15.3 and 15.4 would read as follows (inserted words underlined):

3. [73]

   The essence of the case advanced by IDP 971 was that as a result of the written communications between their respective solicitors at about the time the August Option Deed was terminated and before the October Option Deed was executed, a common intention was reached to the effect that “to the extent that the railway corridor adversely affected the use of the Property for residential subdivision, the price would be reduced at the rate of $773.82 psm.”

4. [74]

   That common intention is said not to have carried through into the drafting of the October Option Deed – the drafting miscarried in that the respective solicitors thought that the adverse effect would manifest itself in an amended attachment to the Contract which was not correct. This was a case where the parties were aware of the document but misapprehended its effect: Commissioner of Stamp Duties (NSW) v Carlenka Pty Ltd (1995) 41 NSWLR 329 at 341C (Carlenka).

5. [75]

   If the October Option Deed is rectified in the manner sought, IDP 971 contends that, in the events which have happened, clause 15.4 has been satisfied and applies to the area covered by Lot 3 – the residual lot – such that the purchase price should be reduced at the rate of $773.82 m2 – this underlies order 2 of the relief sought.

6. [76]

   The defendants joined issue with IDP 971 on both planks of IDP 971’s case – rectification of the October Option Deed and application to the facts even if rectified.

7. [77]

   On the question of rectification, by way of general overview, the defendants contended that the effect of adding the words sought by IDP 971 would be to alter the agreement between the parties, not merely to reform the instrument in which the parties expressed their intentions. The only initiating event is said to be the defendants’ solicitor giving IDP 971’s solicitor an updated version of an attachment to the Contract. It was further contended that there is not a skerrick of evidence to support a finding that the common intention of the parties was to change that position by introducing another quite different initiating event – namely the outcome of the development application. Reliance was placed in this regard, on the absence of any evidence being led by IDP 971 of any mistake.

8. [78]

   As to the application to the facts, the defendants contended that the development approval does not operate to “reduce or propose to reduce” the area of the Property, nor does it operate to “create a corridor or buffer area”. At present, no such corridor or buffer area has been created. There has been no reduction or proposed reduction in the area of the Property and the development approved does not operate to reduce IDP 971’s rights in any way. All of its rights are preserved, including a right to substantial compensation if and when the corridor is resumed.

Relevant Principles

1. [79]

   In Simic v NSW Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [103]-[104], Gageler, Nettle and Gordon JJ stated:

2. [80]

   Equity focuses on what is unconscientious for a party to assert about a contract. The rationale is that it is unconscientious for a party to a contract to seek to apply the contract inconsistently with what he or she knows to be the common intention of the parties at the time that the written contract was entered: see Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 at [444] per Campbell JA (Franklins).

3. [81]

   Rectification is not confined to a situation where the parties intended to use one set of words but mistakenly used another. It applies where the parties intended to use the words they did but were mistaken as to their effect.

4. [82]

   In Carlenka, Sheller JA stated at 341 C to E:

5. [83]

   The present case is said to be of the first kind, where the parties have used words which they intended to use but which, properly construed, do not express their true intention.

6. [84]

   It is clear that the onus on the party seeking rectification is a heavy one - clear and convincing proof is required to succeed in a rectification claim: Newey v Westpac Banking Corporation [2014] NSWCA 319 at [170] per Gleeson JA.

7. [85]

   In Franklins at [451]-[461] Campbell JA reviewed the authorities on standard of proof for rectification, observing at [439] that great care is required in making the factual findings of common intention that found a rectification order. His Honour concluded this passage at [461] with the following:

8. [86]

   In Public Trustee v Smith [2008] NSWSC 397, White J stated at [71] that it must be demonstrated with clarity that the parties had a sufficiently precise intention that the Court can determine both the substance and the detail of the precise variation to be made to the wording of the instrument.

9. [87]

   There is also no issue that parol evidence is receivable in an action seeking rectification, to establish what was the intention of each of the parties: see Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [269] per Campbell JA.

Determination

1. [88]

   The contention by the defendants that there should be no rectification because the parties intended to use the words that they did can be immediately put to one side. This is not how the rectification case is put. The case is put on the basis that whilst there was no mistake as to the words used, there was a mistake as to their effect.

2. [89]

   The contention is that the parties had a common intention but the words used miscarried in the sense that those words did not give effect to the common intention.

3. [90]

   I take the common intention alleged by IDP 971 to be that set out at [1.5] of the plaintiff’s revised submissions dated 16 September 2025:

4. [91]

   In determining this, the obvious starting point is a consideration of why it was that the August Option Deed was terminated and the October Option Deed entered into. The two are obviously linked in the sense that the amendments relevantly introduced into the October Option Deed were intended to deal with the concerns which led to the termination of the August Option Deed.

5. [92]

   I have set out the chronological communications above. They are all in writing. Whilst some of the emails refer to telephone conversations having occurred between Ms Kallianiotis on behalf of IDP 971 and Mr Siderowitz for the defendants, no evidence was adduced as to what was said.

6. [93]

   The following points emerge from the communications:

7. [94]

   IDP 971 contends that the email from Ms Kallianiotis dated 21 September 2018:

8. [95]

   It is then contended that on 26 September 2018, Mr Siderowitz communicated acceptance of that way of managing the Corridor Risk. Further, it is contended that in Mr Siderowitz’s proposals for clauses 15.3 and 15.4 made on 8 and 9 October 2018, the parties:

9. [96]

   The mistake in drafting was the use of an updated attachment as the initiating event in circumstances where the determination of a development application would not result in an updated attachment.

10. [97]

    As set out above, the onus on a party seeking rectification is a heavy one – clear and convincing proof of the alleged common intention is required. Put another way, it must be demonstrated with clarity that the parties had a sufficiently precise intention.

11. [98]

    I am not satisfied that IDP 971 has discharged that heavy onus on the evidence before me. I am not satisfied that there was a common intention as contended for by IDP 971 – namely that to the extent that the railway corridor adversely affected the use of the Property for residential subdivision, the price would be reduced at the rate of $773.82 per square metre.

12. [99]

    It is immediately to be observed that the alleged common intention as set out immediately above is nowhere to be found in any of the communications between the parties during the relevant period. Nowhere is it said that the trigger for, and measure of, the reduction in purchase price is the “extent that the railway corridor adversely affected the use of the Property for residential subdivision”. The concept of “adverse affectation” is in any event quite imprecise and no doubt susceptible to different meanings.

13. [100]

    Whilst it seems obvious that IDP 971 in the 21 September 2018 email from Ms Kallianiotis to Mr Siderowitz identified what may be termed a “Corridor Risk” – being the impact of the transport corridor on the development of the Property, that is only the first step, and a small step at that, along the path to rectification.

14. [101]

    The manner in which that risk was proposed to be dealt with by IDP 971 – as reflected in the words proposed by Ms Kallianiotis – is far from clear. The proposed amendment to clause 15.4 is simply to pick up any proposal to reduce the area of the Property. It is not entirely clear how the proposed definition of “area” which includes “any corridor or buffer area that causes part of the land to be unsuitable for residential land subdivision” is intended to fit in with the substantive clauses, including the proposed to be amended clause 15.4.

15. [102]

    Even assuming, most favourably to IDP 971 that what was intended by the proposed amendments was the creation of a corridor or buffer area that causes part of the land to be unsuitable for residential land subdivision, a number of further questions arise. Picking up on one of the matters raised during argument, what is meant by a “corridor or buffer area” – is it an area which TfNSW has determined will be used for a transport corridor, or is it simply an area in respect of which TfNSW has expressed concurrence with a development consent that does not presently permit development?

16. [103]

    Further, what is meant by part of the land being “unsuitable” for residential land subdivision? Does it mean being unable to be built on at all or not able to be developed to the same extent as the rest of the Property?

17. [104]

    Against the background of a development application having to be submitted which would require consultation with TfNSW, there are a number of potential outcomes of the consultation with TfNSW and, more particularly, the basis on which TfNSW may express concurrence. The options would include a formal corridor being created or TfNSW not yet determining to create a corridor but not permitting any development at the present time to enable a decision to be made at a later time as to whether to go ahead with the proposed corridor. Which of these options was intended to be picked up is far from clear.

18. [105]

    Under the first option, development would not be possible. Under the second, it would not be possible until a decision is made as to whether to proceed with the corridor or not. If a decision is made to proceed, the land would be compulsorily acquired and compensation paid to the land owner at that point in time under the Just Terms Act (defined below).

19. [106]

    The fact that Mr Siderowitz subsequently said he was instructed to agree to the proposed amendments to clause 15 does not advance the rectification claim too far in the absence of some clear statement as to what his clients – the defendants – understood was intended by the amendments.

20. [107]

    There is no evidence in the present case about what either side subjectively intended.

21. [108]

    The position does not become any clearer when regard is had to what subsequently occurred – principally the drafting efforts of Mr Siderowitz. The drafting of clauses 15.3 and 15.4 on 8 October 2018 is far from clear. There was then a telephone discussion between Ms Kallianiotis and Mr Siderowitz on the morning of 9 October 2018, resulting in the redraft sent later that day.

22. [109]

    There was no evidence from either side as to what was discussed in this conversation – whether it was simply a confirmation of some earlier common intention or otherwise. It is for IDP 971 to prove the common intention and its continuation up to execution.

23. [110]

    For these reasons above, the claims advanced by IDP 971 fail.

24. [111]

    The wording proposed by IDP 971 to rectify clauses 15.3 and 15.4 of the October Option Deed also demonstrate the difficulty with IDP 971’s case. The trigger proposed to be introduced is now “the operation of the development consent” affecting the Property so as to create a corridor or buffer area. Such a trigger, in my view, is nowhere to be found in the communications of the parties from 21 September 2018 onwards. Expressed in its rectified form, the question is whether the development consent may affect the Property so as to reduce or propose to reduce its area, or create a corridor or buffer area. It was not explained how the operation of the development consent would affect the Property in either of these ways.

25. [112]

    For completeness, I also reject the contention that any of the conduct by Mr Siderowitz in response to the updates provided by Ms Kallianiotis in relation to the development consent, amount to an admission on the part of the defendants that the October Option Deed should be rectified in the manner contended. As I understood the submission, it rested principally on the email from Ms Kallianiotis to Mr Siderowitz dated 23 August 2019 and his response dated 26 August 2019. I have set out earlier in these reasons the two emails.

26. [113]

    Ms Kallianiotis’ email is nothing more than an update as to the progress of the application – “at this stage it appears that the transport corridor is resulting in a loss of approximately 7,760.7 sqm useable land” – and Mr Siderowitz simply noted the update. Nothing in this correspondence could constitute an admission.

27. [114]

    In light of the conclusion I have reached above to the effect that the contract should not be rectified, it is strictly unnecessary for me to consider the question of whether the contract price should be reduced according to the rectified clause 15.4.

28. [115]

    Against the possibility that I am wrong in relation to the rectification issue above, I turn now to consider whether, if the October Option Deed is rectified in the manner contended for by IDP 971 that, in the events which have happened, clause 15.4 has been activated in respect of the residual Lot 3, such that the price should be reduced by the claimed $6,272,662.30.

29. [116]

    Whilst the evidence seems clear enough that TfNSW was consulted and expressed concurrence with the Proposed Plan of Subdivision which created the residual Lot 3, it is equally clear that TfNSW has not yet determined whether to proceed with the Transport Corridor and as such no corridor has yet been “created” in a legal sense. In a practical sense, no corridor or buffer area has been created either. A residential lot has been created which cannot presently be developed.

30. [117]

    It should be kept firmly in mind however, that I am considering this second point on the basis, contrary to what I have held above, that the October Option Deed would be rectified in the manner contended for by IDP 971.

31. [118]

    The defendants contended that I could not be satisfied that in the events which have happened, there has been the creation of a corridor or buffer area within the meaning of clause 15.4. The defendants’ primary contention was that this would only be satisfied in the strict sense of the formal creation of a Transport Corridor by TfNSW by the compulsory acquisition of the relevant part of the Property under the Land Acquisition (Just Terms Acquisition) Act 1991 (NSW) (Just Terms Act). Prior to that occurring, so the defendants’ argument ran, the position is simply that the relevant part of the Property has been designated as a residual lot. There remains the potential for its development.

32. [119]

    If the relevant question was to be considered devoid of context, I would be inclined to accept the defendants’ contention. There is a well understood means by which, in a statutory sense, a corridor can be created.

33. [120]

    The context here, as perhaps always, is important. I am construing the words “create a corridor or buffer area” in the context of a rectified clause 15.4. As rectified, immediately before the words “create a corridor or buffer area” are the words “so as to either reduce or propose to reduce its area or”. Senior counsel for the defendants accepted that the formal creation of a corridor under the Just Terms Act involves a compulsory acquisition of the relevant land which in turn is preceded by a proposed acquisition notice (PAN) under the Just Terms Act.

34. [121]

    On this analysis, if “create a corridor or buffer area” was intended to refer to the formal or legal process those words would not be necessary as the formal process would satisfy the preceding words of “reduce or propose to reduce its area”.

35. [122]

    On the hypothesis of the rectified agreement, the parties must be taken to have intended something different and lesser than the formal creation of a corridor and, relevantly, something created from the operation of the development consent. Creation of a residual lot in the area of the existing corridor which is not presently able to be developed under the terms of the development consent, likely falls within what was objectively intended on the agreement as rectified as being a corridor or, more likely, buffer area.

36. [123]

    As such, had I reached a different view on the rectification issue, I would likely have upheld IDP 971’s position on the second issue.

Conclusion and orders

1. [124]

   For the reasons set out above, IDP 971’s claims fail. The amended summons should thus be dismissed. There is no reason why costs should not follow the event.

2. [125]

   The Court orders that:

   1. (1)

      Amended summons dismissed.

   2. (2)

      The plaintiff pay the defendants’ costs of the proceedings.