Could a land owner terminate his option agreement with a developer because of delay by the developer? Which case won?
Land owner and developer enter into put and call option agreement
A land owner owned a large block of land in West Pennant Hills, in Sydney’s north west. The land owner was approached by a developer who indicated he was interested in purchasing the land under a put and call option agreement. This is an agreement for the sale of land under which the developer can compel the land owner to complete the contract once certain conditions have been met.
The relevant conditions were that development approval would need to be granted first, before the developer would commit to completing the purchase, and the developer was responsible for obtaining the development approval.
Land owner seeks to terminate agreement and developer lodges caveat on the land
Significant time had passed, and development approval had not been granted. Due to the time that had elapsed, the market value of the land had increased substantially from the time when the contract was entered into. With no clarity as to when the option under the agreement would be called, the land owner sought to bring the contract to an end.
The developer refused and lodged a caveat on the land to protect its alleged interest. The land owner commenced proceedings in the Supreme Court to have the contract brought to an end