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Hall v Busst (1960) 104 CLR 206 (CB p170) Facts: ● 1949: Hall purchased Bedarra Island from Busst for £3,157 4s. ○ Terms (Clause 5) of the contract provided Hall would not sell the land without first giving Busst the option to repurchase for the sale price plus… ■ 'the value of all additions and improvements to said property since the date of purchases… from which shall be subtracted the value of all deficiencies in chattel property and reasonable sum to cover depreciation of all buildings and property.' ● 1957: Hall sold the land for £8,500 without giving Busst notice or the opportunity to repurchase the property. ● Hall argued that the specific part of the contract Busst referred to was uncertain and thus void - uncertain around the price. Procedural History: Appeal from the Supreme Court of Queensland. Issue: Was the Clause that restricted Hall from selling the property without giving Busst the opportunity to buy it first, certain enough to make the contract valid/binding? Decision: ● The High Court found; a contract for sale of land that does not specify a price is void for uncertainty. ○ Contract for sale of land requires: Parties, Subject Matter, and Price. ● Dixon CJ: ○ Clause 5 is unascertained and too uncertain to be enforceable. ○ No external standard of value to determine a certain amount for the ‘additions and improvements’ to the island or standard for a reasonable sum to cover depreciation. ■ Not clear what ‘other property’ refers to when determining depreciation. ● Fullagar J: ○ In cases of ‘land and improvements’, to be binding a contract needs the three essential elements (parties, subject matter, and price) are supplied with certainty. ■ If parties are ‘silent as to the price’ then there can’t be an implication of a term that a reasonable price is to be paid. ○ Not sufficient to say ‘for the value of the land’ or ‘fair value of the land’ or ‘for a reasonable price’. ● Windeyer J: ○ Dissented - found the provisions of Clause 5 ascertained the price payable and is valid to be enforced. ○ Believes that agreeing to sell for a ‘reasonable price’ is sufficient and completes their contract - the parties intended for the contract to binding. ● Appeal allowed → The Clause (5) was too uncertain and insufficient to be enforceable. ○ The original price is certain, but the ‘value of all additions and improvements’ to that price is uncertain. Whitlock v Brew (1968) 118 CLR 445 (CB p168)

Facts: ● Whitlock (vendor) agreed to sell, and Brew (purchaser) agreed to buy an area of land for the price of £165,000 → contract of sale was drawn up and signed by both. ● As part of an agreement to purchase land, the plaintiff (purchaser) promised the vendor (in Special Condition of Clause 5) that it would grant a lease to Shell: ○ 'upon such reasonable terms as commonly govern such a lease. In the event of any dispute between the parties as to the interpretation or operation of this clause such dispute shall be referred to an arbitrator.' ■ The start date of the lease and the piece of land were identified, but not the rent or the term of the lease. ● Brew paid a £15,600 deposit but thereafter declined to complete the purchase. Procedural History: Appeal from the Supreme Court of Victoria. Issue: 1. Did language 'upon such reasonable terms as commonly govern such a lease' render the contract incomplete (or uncertain)? 2. Can the machinery provided by the contract cure the problem? ○ Can them stating the dispute will be referred to an arbitrator cure the problem? 3. If not cured, what is the effect of such incompleteness on the contract? Is it void or can Special Condition 5 be severed? Decision: 1. Yes, as reasonable terms commonly governing such leases could not be found rendered the contract incomplete. 2. No, as this was not a question of 'interpretation or operation' of a clause (which is what the Clause stated the arbitrator would be for) - this was about the essential terms in the lease. 3. Void as contract was not contemplated without lease. ● Kitto J: ○ Agreed with the decision of the Full Court of the Supreme Court, no concluded contract for sale was made between the parties. ○ Found that the void clause couldn’t be severed from the contract. ● Taylor, Menzies, and Owen JJ: ○ Found that Clause 5 is ‘uncertain in that it neither specifies nor provides a means for determination as between the parties of the period for which the contemplated lease shall be granted or the rent which shall be payable’. ○ Found that the void clause couldn’t simply be ignored - material and inseverable part of the considerations of the vendor’s (Whitlock) promise (case of Duggan v Barnes [1923] VLR 27). ● McTiernan J: Dissented. ● Appeal Dismissed → Found in favour of Brew, the purchaser, that the contract was not concluded and thus void.

1 Jess Meehan v Jones (1982) 149 CLR 571 (CB p179) Facts: Was on sale of land

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Vendor agreed to sell to the appellant land on which an oil refinery had been built Included a term stating ‘it was subject to the purchaser receiving agreement for fiance on satisfactory terms and conditions in an amount sufficient to complete the purchase’ - 1 - that the condition left vital matters yet to be agreed - so what appeared to be a "contract" was really no more than an agreement to agree. - 2 - that the language was so imprecise that one could not say what actions would satisfy it. - 3 - that if P retains discretion as to whether they will perform obligations, then what appears to be a contract is really illusory. - should either of the above conditions not be satisfied on or before the 31st of July 1979 then this contract should be null. - The vendor claimed the contract was void for uncertainty and entered into a contract on 23 July to sell the land to the second respondent. - One party was trying to get out of the contract by saying because of this clause the contract was to vague and uncertain Procedural history: Originally went to the Supreme Court of Queensland, then appealed to the High Court of Australia. Issue: Was there a contract? Were the terms certain? Decision: there was a contract and appeal was held Gibs J: - In Australia and NZ, the courts have not found "subject to finance" clauses void for uncertainty. NSW has been an exception, and they have found the clauses void, whether construed objectively or subjectively (Moran v Umback [1966]). it may be argued, suggests that in this case, there is no contract on the grounds that the purchaser has a discretion whether to perform or not. - In both situations, once the condition is satisfied, the contract becomes completely binding. Mason J: - "Satisfactory to the purchaser" may well be subject to an implied obligation that the purchaser will act honestly and reasonably in attempting to obtain finance. To say that such a clause renders the contract void for uncertainty would be draconian - there are many cases where an agreement depends on finance to complete the contract - Mason pointed out at 2 places in his judgment that he had no present need to decide the question. Murphy J: - The implication of the word "honest" adds nothing, and there is no justification for implying that the purchaser must act reasonably. The parties can limit the discretion by the clause if they wish, but otherwise, the discretion is unlimited. Wilson J: - He agreed with Mason and added the following ambiguous comments. Pirie v Saunders (1961) 104 CLR 149 (p202) Facts: - The plaintiff brought an action for the alleged breach of a shop lease by the defendant

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The plaintiff relied upon a note of the defendant's instructions written by the defendant's solicitor. - The note referred to the property as "Lot B Princess Highway, Sylvania Heights", and specified the rent and duration of the lease, but there was no statement of the commencement date, and the note contemplated the formulation of further terms. Procedural History: was originally unsuccessful in the Supreme Court of NSW and Appealed to the High Court of Australia Issue: Were there illusory terms? Decision: the decision was held - The Full Court considered that the solicitors note was capable of being regarded as a sufficient note or memorandum of an earlier concluded agreement. This view was based upon the "authenticated signature fiction". - However, the principle cannot be applied to a document which is not recognisable as a note or memorandum of a concluded agreement. It is not necessary that the written note appears to have been made after the making of the contract - in some cases a written offer subsequently accepted will suffice. - There is no evidence that the defendant had any knowledge of what was written down, let alone, that the defendant recognised the writing as an authentic record of a prior oral bargain. - The document is incapable of being regarded as a sufficiently complete record of the contract: it fails to specify the property with necessary precision, and it contemplates the formulation of further special conditions.

2 Umi Council of the Upper Hunter County District v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 (CB p158) Facts: - The council agreed to supply ACF w/ electricity at a certain rate - Within said agreement, Clause 5 stated - ‘If the Supplier’s costs shall vary in other respects than has been herein before the provided the Supplier shall have the right to vary the maximum demand charge and energy charge’ - The council sought to increase its charges according to this clause however ACF claimed that the clause was void for uncertainty, relying on the vague term ‘supplier’s costs’ - The matter proceeded to arbitration as per clause 18 of the agreement and was taken to the Court of Appeal in the Supreme Court of NSW - With the opinion of the CA of the SCNSW, the arbitrator decided that the COuncil was not entitled ro increase its energy charge as clause 5 was void for uncertainty - Appealed to the HCA which found Clause 5 certain Procedural History: - The matter was officially taken to the supreme court where the clause in question was found uncertain and voided

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Appeal made to the High Court HCA found that the clause was certain Appeal allowed

Issue: - Was clause 5 void for uncertainty? Decision/Ratio: Barwick CJ thought that a ‘narrow or pedantic approach’ to interpretation should not be taken - As a result in this case, there is no uncertainty even though there may be a chance for disagreement about what constituted a ‘supplier’s costs’ in individual cases 2 Maggie Biotechnology Australia v Pace (1988) 15 NSWLR 130 (CB p159-164) Facts: - Dr Pace (respondent) enters into a contract of employment with Biotech (appellant). - Relevant term in contract found in the letter of offer. ‘I confirm a salary package of $A36,000 per annum, a fully maintained company car and the option to participate in the Company’s senior staff equity sharing scheme.’ - At the time of the offer, as Dr Pace was aware, no such scheme existed. - Termination of employment, Dr Pace claimed damages because Biotech failed to provide him with the option of the scheme. Procedural History: - Trial judge held Biotech liable for damages for breach of its contractual promise to provide Dr Pace with an opportunity to acquire shares in the company (not illusory, Biotech pays damages for breach). - Biotech appealed Discussion on principles the law may legitimately insist upon honesty of dealings. - To maintain a ‘sharp distinction’ between terms which are vague, uncertain or ambiguous and those which are illusory - The determination of every case depends on its own facts. The meaning of the agreement between the parties must be discovered objectively. It may sometimes be both necessary and appropriate to have regard to extrinsic evidence in order to give meaning to that which the parties have agreed. - Generally left two parties themselves to make bargains. Court will endeavour to uphold the validity of the agreement. But will not to an unacceptable extent spell out to which the parties have themselves failed to agree. To do so would be changing the contract not enforcing it (out of their power and responsibility) - There is no objectively right decision in these cases. Views will differ about the classification of a challenge provision.

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Which will pay regards features of the agreement, of the relationship and of relevant external reference points to determine whether the term which is a challenged can or cannot be sustained

Discussion on case - What he (respondent) would have done is, however, not certain. But it was a term which he had been promised, which was important and apparently valuable and which he had accepted - No standard or market reference point for the scheme in the equity of a company such as the appellant - Even if the term was not illusory it was uncertain – how many shares, what class of shares, what options would exist, what rights would attach? Kirby P?:‘in the end, my opinion, the Court must draw back from filling the gaps which the parties did not themselves fill… Mikayla

Biotechnology Australia v Pace (1988) 15 NSWLR 130 (CB p164-167)

Allen J, thought that the promise of biotech was not illusory because there was a ‘perneint market measure’. There was no evidence before his Honour as to the exact remuneration paid to “world class biotechnologists employed in commercial work of comparable standard and responsibility”. McHugh states “Accordingly, I do not think that there was any express promise, as opposed to a representation, that Biotech would institute the scheme. Nor do I think that such a promise should be implied.” Neither honesty nor reasonableness would identify the precise amount of the offer which Biotech would decide to make, but they would in my opinion provide criteria to fix the amount of the minimum offer Biotech was required to make. The circumstances which would have to be taken into account in determining reasonableness in such a context are many and varied, and having regard to the way in which the case has been divided, I doubt that evidence concerning them, or at least all of them, has been tendered.

1 Emelia - Placer Development Ltd v Cth (1969) 121 CLR 353 (CB p199) Facts - The commonwealth entered into an agreement with the plaintiff for the formation of a company to produce timber products in Papua New Guinea for export to Australia. - Clause 14 of the agreement provided - “If customs duty is paid upon the importation into Australia of the plywood, veneers, logs and other products of the Timber Company, and is not remitted, the Commonwealth will pay to the Timber Company a subsidy upon the exportation of these products from the Territory for entry into Australia of an amount or at a rate determined by the Commonwealth from time to time, but the amount of subsidy paid shall not exceed the amount of customs duty paid and not remitted." - The timber company was duly formed. Between 1st July 1959 and 30th June 1963 it imported into Australia certain plywood which it had produced in the Territory, and paid in respect of the importation customs duty which was not remitted. - The Commonwealth has not paid the timber company any subsidy upon the exportation of the plywood from the Territory in those years, nor has it determined any amount or rate of subsidy in respect thereof. - In these circumstances the plaintiff sues the Commonwealth in this Court for a clarification of the meaning of cl. 14, and by a case stated the parties submit for decision certain questions which reflect the respective contentions of the parties. Issue - Whether or not an illusory promise is enforceable. Is there a certain contract? Decision Majority opinion: - The promise was illusory, as the Defendant had complete discretion to determine the amount to be paid. - “…words showing that the Promisor is to have a discretion or option as to whether he will carry out that which purports to be the promise, the result is that there is no contract[1]” Dissenting judges: - Defendant has an enforceable obligation to determine amount, and then pay it - The discretion is only to the amount, reasonable sum intended, could be determined by the court. - However, in this case, court cannot determine a reasonable sum - Nevertheless, the Defendant has an obligation. Kitto J: 'whatever words which by themselves constitute a promise are accompanied by words showing that the promisor is to have a complete discretion or option as to whether he will carry out that which purports to be a promise, the result is that there is no contract…' Menzies J (dissenting) ● Interpreted the clause requiring the Cth to determine a subsidy, and to pay the subsidy once determined

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Found that the language of legal obligations had been used and the court should give effect to it Windeyer J (dissenting) ● Cth promised to determine an amount and had to pay that amount. Discretion was only as to the amount to be paid, and not whether or not to determine an amount of the subsidy Outcome - Order that the plaintiff pay the defendant's costs of and incidental to the case stated.

Sophie Pipikos v Trayans [2018] HCA 39 (p205) FACTS - Leon and Sophie Pipikos (appellant) made real estate investments with Leon’s brother and sister-in-law George and Velinka Trayans (respondent). - Purchased a property together in July 2004 (Penfield Road). Leon claimed that in order to fund the Trayans’ participation in the Penfield Road purchase, they had orally agreed to sell him a half-interest (valued at $45,000) in another property they owned - Clark Road. This half-interest was to be paid by Leon covering their contribution to the Penfield Road property, as well as a cash payment of $8,000. - When George and Velinka divorced, Velinka became the sole proprietor of the Clark Road property. Leon claimed that he was entitled to a half-interest. PROCEDURAL HISTORY - This case was heard in the High Court on appeal from the Supreme Court of South Australia. - Trial judge found that no valid contract had been made, but even if it had, Leon’s payments were insufficient to invoke doctrine of part performance because they were not unequivocally referable to a contract of the kind asserted - On appeal, the Full Court found that a contract had been established but agreed that the requirements of part performance had not been satisfied ISSUES - Was Pipikos’ payment towards the Clark Road property sufficient part performance? - Was he therefore entitled to half interest in the property? - Appellant argued that the requirement of unequivocal referability must be relaxed because it is unduly demanding OUTCOME + REASONING - HCA unanimously rejected the appeal

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Applied Lord Selborn in Maddison v Alderson (1883) 8 App Cas 467: ‘the acts relied upon as part performance must be unequivocally, and in their own nature, referable to some such agreement as that alleged’ Found that the doctrine of part performance is not concerned with the proof of contract, but with the enforcement of equities arising from the partial performance of the contract [46] ‘Unequivocal referability is unconcerned with the proof of acts partially executing a transaction that remains uncompleted...proof of the agreement that had been made was not required to show the equity to have the transaction completed’ [50] Because the part performance by the appellant in this case could not be proved to be unequivocally referable to the sale of the Clark Road property, he was not entitled in equity to any specific performance by the defendant [56] ‘No party performed any act that was unequivocally referable to the Clark Road property. There was no giving or taking of possession of that land. There were no other acts indicative of a change in the respective positions of the parties in relation to the land.’ Therefore… acts on which the appellant relied were not sufficient to engage the doctrine of part performance [79]...