Case: Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; (1993) 182 CLR 26 
Outcome: applied
At the same time, Maddocks sent a third draft of the Sale of Shares Agreement to Frawley. At this stage, Middletons had not reverted with their comments. The covering letter sent by email provided: "We refer to your earlier emails and telephone conversations with Chong Ming. We attach a revised Draft Sale of Shares Agreement (Draft No. 3 dated 25 August 2004) with the amendments highlighted for your comments. Please note that Middletons have not reverted with their comments at this stage. The main amendments are as follows: 1. Recitals A, B and C have been deleted as requested. 2. ... 3. The Third Bank Guarantee has been deleted and manner of release revised in clause 6.3. 4. ... Meanwhile, we will continue to follow up with Middletons on their comments to the draft Sale of Shares Agreement..." 77 Thompson spent the morning of 26 August 2004 corresponding by email with his solicitors about amendments to the draft Sale of Shares Agreement. A copy of an amended version was emailed to him by Middletons at 9.28 am. At that stage the changes made were described, in part, by Middletons in the following terms: "I attach our further amended version of the Sale of Shares Agreement ... As you can see, the amendments previously made by the commercial group have been retained, and the amendments made by the tax and property groups are also now included and highlighted. I make the following comments regarding the property-related amendments: 1. I have assumed that Latitude is purchasing all the shares in [EHD]. On that basis, I have simply included the development rights as part of the Business of EHD since Latitude will take over that Business at completion. ... 2. You should be aware that the Business of EHD as defined in the Agreement is broader than the construction of the Stage 3 and 3A Apartments. The Agreement defines the Business as the business of developing: - the apartments already constructed as at the date of the Sale of Shares Agreement; - the apartments to be constructed (including the Stage 3 and 3A Apartments). Was this agreed? My concern is that there may be carry-over obligations from Stages 1 and 2 for which Latitude may become liable. If this has not been agreed between the parties, I suggest that either the Business be limited to the Stage 3 and 3A Apartments or Latitude obtain warranties and indemnities with respect to the previous Stages. 3. The dates for the construction milestones are different to those set out in the [HofA]. I have amended the Sale of Shares Agreement to comply with the milestone dates set out in the [HofA]. Please let me know if you have agreed different milestone dates with Break Free. 4. [Construction process flexibility]... 5. I have included the warranties, undertakings and requirements recommended in our due diligence report . 6. [Carve out of contracts of sale]... In addition, the tax group amended the GST clause to mirror the clause in the [HofA]. Once you have had an opportunity to consider the attached version, please let me know whether we may send it to Maddocks..." (Emphasis added) 78 Thompson responded at 10.02 am. His instructions to Middletons were clear: "Item 2 no this wasn't agreed and this was discus[s]ed with James Edmonds that it is only 3, 3A and potenti[a]l 4. We will definitely need protection. Ideally if they can be removed from this agreement so I don't have to deal with any issues that come up from the past work. Is this possible? Item 3 yes we amended the dates To reflect the importance of the Sunset clauses. Please put back as they were. Item 4 see what they say ditto 5 Item 6 is good...." (Emphasis added) 179 BreakFree's assertion that even if it had repudiated the HofA (as it did), Latitude did not accept the repudiation but elected to affirm it should be rejected. The conduct said by BreakFree to constitute the election affirmation was the fact that Latitude lodged a caveat upon the Crown Lease on 1 September 2004 claiming an interest as sub-lessee. Latitude contended that the lodgement of the caveat was consistent with its right to terminate for the repudiatory breach by BreakFree that the lodgement of the caveat could not be characterised as an election by Latitude to affirm the HofA. An inference of affirmation will not be drawn from conduct just because it is consistent with the existence or the continuation of the relevant contract: Immer (No 145) Pty Ltd v The Uniting Church in Australia Property Trust (NSW) [1993] HCA 27 ; (1993) 182 CLR 26. As Brennan J said (at 30): "An act amounting to an election must be unequivocal. Where a contract can be terminated at the option of a promisee, the right to terminate is not necessarily lost by the promisee doing any act consistent with the continuance of the contract. If the act is also consistent with the reservation of a right to terminate in certain events, the right to terminate is not lost by the doing of the act." (Footnotes omitted) See also Chitty on Contracts , vol 1 (2004, 27 th ed) at [24-003]. 180 Judged in that light, it cannot be said that the lodging of the caveat was unequivocal or not consistent with the reservation of a right to terminate. So much was made clear by the letter from Middletons to Maddocks of 31 August 2004 (see [96] above)). An election to terminate is a restricted right which may be effected after some delay by communicating that the contract is at end: see Cheshire and Fifoot's The Law of Contract (2002, 8 th ed) at [21.21] and [21.29]. There was no such delay in the present case. 181 In the circumstances, it is neither necessary nor appropriate to go on and consider, if Latitude had affirmed the HofA, whether it immediately breached the HofA: (1) by failing to provide the Second and Third Bank Guarantees and further or alternatively, the charge required under cl 7 of the HofA; (2) by failing to negotiate under cl 3 of the HofA. 182 For the reasons outlined earlier, none of these matters (taken singularly or collectively), viewed objectively, evinced an intention on the part of Latitude not to be bound by the HofA. Contrary to BreakFree's submissions, the losses suffered by Latitude were not attributable to its own conduct but the wrongful conduct of BreakFree, repudiatory conduct which Latitude accepted. BreakFree's counterclaim is dismissed.