Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust

Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (“Uniting Church case”) [1993] HCA 27; (1993) 182 CLR 26; (1993) 112 ALR 609; (1993) 67 ALJR 537

• Date: 12 May 1993
• High Court of Australia
• Brennan, Deane, Toohey, Gaudron and McHugh JJ
• Areas of law: Contract; Rescission; Election

Given below is a summary of the legal case Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW), heard by the High Court of Australia in 1993. It deals with contractual disputes, specifically focusing on the right to rescind a contract involving the sale of transferable floor space rights between Immer (the purchaser) and the Uniting Church (the seller).

Case Background – Immer (No 145) Pty Ltd v Uniting Church

Immer entered into a deed with the Uniting Church for the purchase of excess air space rights related to a building in Sydney. Under the deed, Immer had the right to rescind the contract if approval from the Sydney City Council for the transfer was not obtained by April 1, 1989.

Approval was not granted by the specified date. However, Immer’s actions (e.g., forwarding settlement documents) created ambiguity about whether it had elected to affirm the contract despite the missed deadline.

Immer later attempted to rescind the agreement, arguing that the Council’s delay justified termination. The Uniting Church countered that Immer’s actions amounted to an election to affirm the contract, thereby waiving the right to rescind.

Legal Questions that Emerged

Did Immer’s conduct constitute an irrevocable election to affirm the contract?

Can a mistake (Immer’s belief that Council approval had been granted) affect the interpretation of its actions?

High Court Decision – Immer (No 145) Pty Ltd v Uniting Church

The court ruled in favor of Immer, finding that its actions did not unequivocally affirm the contract. It emphasized that for an election to affirm or rescind to occur, the conduct must be unequivocal and the party must have full knowledge of the relevant facts. Immer’s mistaken belief that approval had been granted influenced its actions. So, the actions did not constitute a definitive election to affirm the contract. Immer’s actions were consistent with a belief that the council approval had been granted and did not irrevocably abandon its right to rescind.

Here are a few important excerpts from the case that reflect the reasoning:

“The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other.” (Sargent v. A.S.L. Developments Ltd.)

“Immer was proceeding on the footing that the Council had approved a transfer of air space rights and that completion of the transfer was possible… In a context where the Council had not, in fact, approved the transfer, the stage had not been reached where Immer was required to make an election either to rescind the contract or to abandon the right to rescind.” (Deane, Toohey, Gaudron, and McHugh JJ)

Outcome

The High Court allowed the appeal, overturning the decision of the Court of Appeal.

It reinstated the judgment of the primary judge, who had ruled that Immer’s conduct did not amount to an election to affirm the contract.

This case is significant in Australian contract law for clarifying the principles governing election, rescission, and the impact of a mistaken belief on contractual rights.

References:

https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/HCA/1993/27.html

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