Evolution Living Property Management Pty Ltd v CSP Australia Pty Ltd [2010] NSWSC 65

Evolution Living Property Management Pty Ltd v CSP Australia Pty Ltd [2010] NSWSC 65

The call option in each deed was an option granted for the purchase of residential property and was exercisable within the 42 days after it was granted, so s 66ZG(1)(b) rendered it void with the consequences in s 66ZG(2). However, s 66ZG did not operate on the put option, which was not an option granted for the purchase of the property by the prospective purchaser. After the call option provisions were excluded, the put option remained a distinct and intelligible economic transaction, exercisable only after the call option period expired without a contract for sale coming into existence. The statutory avoidance of the call option therefore did not make the put option void, unenforceable...

Jurisdiction
Australia
Judgment Date
12 February 2010
Procedural Posture
Separate Question in Equity Division Proceedings Concerning Option Deeds for Residential Property / Separate Question Ordered Under Rule 28.2 of the Uniform Civil Procedure Rules 2005 to Be Determined Separately From Any Other Question and Before Trial
Outcome
Separate question answered: the call option was void under s 66ZG(1), but the put option was not made void, unenforceable or deprived of legal effect.
Legal Topics
['void Contracts' 'call Options and Put Options' 'severance' 'residential Property Options' 'conveyancing Act 1919, Ss 66 ZE and 66 Zg' 'separate Question']
['contract Law' 'property Law' 'equity' 'civil Procedure'] ['void Contracts' 'call Options and Put Options' 'severance' 'residential Property Options' 'conveyancing Act 1919, Ss 66 ZE and 66 Zg' 'separate Question']

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Procedural Posture

Separate Question in Equity Division Proceedings Concerning Option Deeds for Residential Property / Separate Question Ordered Under Rule 28.2 of the Uniform Civil Procedure Rules 2005 to Be Determined Separately From Any Other Question and Before Trial

Legal Issues

  1. 1 ['Whether the call option granted pursuant to clause 2.1 of each Option Deed was void, unenforceable and/or of no legal effect by reason of s 66ZG of the Conveyancing Act 1919 (NSW).' 'Whether, in consequence of the call option being void, the put option granted pursuant to clause 3.1 of each Option Deed was also void, unenforceable and/or of no legal effect.' 'Whether the statutory avoidance of the call option affected the put option or whether the contractual provisions were severable.']

Ratio Decidendi

The call option in each deed was an option granted for the purchase of residential property and was exercisable within the 42 days after it was granted, so s 66ZG(1)(b) rendered it void with the consequences in s 66ZG(2). However, s 66ZG did not operate on the put option, which was not an option granted for the purchase of the property by the prospective purchaser. After the call option provisions were excluded, the put option remained a distinct and intelligible economic transaction, exercisable only after the call option period expired without a contract for sale coming into existence. The statutory avoidance of the call option therefore did not make the put option void, unenforceable...

Court Disposition

Separate question answered: the call option was void under s 66ZG(1), but the put option was not made void, unenforceable or deprived of legal effect.

Orders

  • ['The call option granted pursuant to clause 2.1 of each of the Option Deeds is rendered void by s 66ZG(1) of the Conveyancing Act 1919, with the consequence that s 66ZG(2) applies to and in relation to that call option.' 'Section 66ZG(1) does not make void or unenforceable or deprive of legal effect the put option...