Metroland Funds Management v Skyrise Consultants [2011] NSWSC 343

Two joint venturers entered into a written contract providing for one of the joint venturers to commence certain advisory services. They had to be performed upon a completion notice being issued and not before. If no completion notice was issued within 12 months, the deposit paid by the other joint venturer would be returned. Twelve months passed and no notice issued and the deposit was claimed. The joint venturer providing the advisory services refused to return the deposit on the basis of a purported oral agreement before the contract came into existence, varying the later written contract to permit work to start before the issue of a notice.

The court found that a written agreement cannot be altered by an earlier conversation at a time when the contract did not exist and ordered repayment of the deposit plus interest.

It is possible to vary a contract after it comes into existence and it is possible to vary it by a subsequent oral agreement. But the court found it logically impossible to vary a contract before it comes into existence and impossible to have a contract which is partly written and partly oral, where the basic terms of those documents are contradictory. The joint venturer providing the services read the written contract and knew its terms and did not ask for any alteration. The written document must prevail as the oral agreement claim cannot stand with the written document.

The court noted there was no claim that there was no contract. There was no claim of a collateral contract and, in fact, there could not be, as it would contradict the written contract. There was no defence of estoppel by representation. There was no claim for rectification of the written contract. There was no claim for estoppel by enticement or encouragement. There was no cross-claim by way of quantum meruit for work done or any real evidence of that work. There was no defence of set-off relying on any such cross-claim.

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