Home » North Star – A lesson in complex contracting

North Star – A lesson in complex contracting

Posted by Kevin Pathinather | 08 November 2018 | Commercial Agreements

Somewhere between Wariada and Goondiwindi in far north west New South Wales lies the village of North Star, population 327.  The dirt is almost red in these parts.  Summers are dry and hot.  Rain (when it does rain) is no gentle business: stormfronts gather menacingly coating the sky in deep, dark blue-grey contrasting beautifully with the silver woolshed and yellow grass below.  It is the kind of place that city folk have either forgotten or never met.

Nearby North Star lies a farmstead named “Wolonga.”

Wolonga is no ordinary farmstead, having found its way into a Supreme Court of New South Wales judgement.[1]  The reason for this unlikely juxtaposition between city and country was due to an option agreement dispute.  The facts are quite simple, Mr and Mrs Carbone entered into the option agreement with the owner Mr Mills for rights of possession over Wolonga for (among other things), harvesting grain with a call option to purchase within four years of the date of the agreement.  Or so it was thought…

The date of the agreement was 4 September 2012, thus the time period expired (according to the agreement) on 4 September 2016.  On 14 September 2016, Mr Mills’s solicitors issued a noticed to vacate.  The Carbone’s responded with a notice to exercise the option on 28 September 2016, claiming that the date for the option to be exercised actually ran from 4 October 2012 being the date they took possession of the property; due to a series of alleged oral agreements extending the commencement date.  And so the country dispute eventually found itself into the hallowed halls of city justice.

Unfortunately for the Carbone’s, the judge was not persuaded of their version of events holding that there was no such oral agreement for the commencement date to be varied.[2]  Importantly, the judge also found that the alleged conversations were not capable of varying the terms of the agreement, and the claimed variation failed for lack of writing in any event.[3]

The Carbone’s also pleaded other causes of action including rectification of the agreement, variation so the lapse date became 4 October 2016, and the defendant is estopped (legal speak for bound to representations made) from claiming otherwise. The judge wasn’t buying any of this primarily because he was against the Carbone’s on the alleged commencement date variation.

Harvesting grain is a precise process:  it requires the right combination of moisture levels, equipment and conditions to produce a quality crop.  A similar level of precision is required to manage complex documents so that hundreds of thousands of dollars are not later spent in an ultimately unfruitful exercise.

We don’t know much about harvesting but we can help with your legal issues.  Feel free to get in touch with Kevin Pathinather (krp@nexuslawyers.com.au; (02) 9016 0141). 

This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.

[1] Carbone v Mills [2018] NSWSC 496

[2] [76]

[3] [162], [163]

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