Scenario as follows:

1. On 26 June 2023 Mr & Mrs Fountain and Ms Winks, entered into a contract of sale for a property near Bacchus Marsh. Ms Winks was the vendor and Mr and Mrs Fountain the purchasers. The purchase price was $900,000.

2. Ms Winks now alleges she entered into the contract under a serious mistake about its contents. She is currently refusing to settle the transaction which is due to settle on 26 September 2023. Mr and Mrs Fountain seek specific performance of the contract. Ms Winks alleges Mr and Mrs Fountain were aware of her mistake and had opportunistically sought to take advantage of it. Ms Winks currently argues the contract of sale should be rescinded as void for mistake.

3. The property is a rural property of 50 acres (20 hectares) with a farmhouse, 4 dams, equestrian training facilities, stables etc.

4. In April 2012 Ms Winks entered into a 99 years lease with Dialaphone Network Pty Ltd. The area leased is approximately 100 square metres of her property. A telecommunications tower was constructed on the leased area. The lease provided for a total rental of $350,000 plus goods and services tax, equating to a rate of approximately $3,500.00 per annum, with the total amount of the lease rental to be paid in two instalments, one on 30 June 2013 and the second on 30 June 2014.

5. On 17 May 2023 Ms Winks gave Country Realty Pty Ltd an exclusive selling agency authority. She authorised the agent to offer the property for sale for a price between $870,000 and $950,000.

6. Prior to 14 June 2023 Mr and Mrs Fountain saw an advertisement on the internet offering the property for sale. The advertisement included a "price guide" of $870,000 to $950,000.

7. The person responsible at Country Realty Pty Ltd was Ms Barbara Chen. On Friday 16 June 2023, Mr Fountain and his wife went to the property and were briefly "shown around" by Ms Chen. On that occasion there was some discussion about the telecommunications tower and the lease.

8. On Friday 16 June 2023 Mr and Mrs Fountain made an offer to purchase the property for $870,000, sent to Ms Chen in an email.

9. At the time Mr Fountain made the $870,000 offer on behalf of himself and his wife, he knew there was a telecommunications lease because there had been some discussion about it during the informal inspection with Ms Chen, but his instructions to you are, he did not know the duration of the lease and he did not know what rent was payable, if any.

10. At that time, no statement under s 32 of the Sale of Land Act 1962 had been prepared. Ms Chen was not prepared to put Mr & Mrs Fountains' offer to Ms Winks until "the right documentation" was in place.

11. On Monday 19 June 2023 Ms Chen met Mr and Mrs Fountain on site. Amongst other things, the telecommunications tower was discussed. Mr Fountain instructs you, Ms Chen was unable to give him any details about the lease.

12. Ms Winks had engaged Ms Paine of Equal Conveyancing to prepare the contract of sale and the section 32 statement. Ms Winks had provided Ms Paine with a copy of the telecommunications lease amongst a number of other documents to enable her to prepare the section 32 statement. Ms Paine concedes she was instructed that Ms Winks was to retain all the money from the lease.

13. The contract which Ms Paine drew had a Special Condition (SC) 23, dealing with the telecommunications lease. The special condition read as follows: "The purchaser acknowledges the Lease contained in the contract to Dialaphone Network Pty Ltd and the continuing rights of the Lessee contained therein. The purchaser further acknowledges that all payments due pursuant to the terms of the Lease have been paid to the vendor/lessor and that no further payments are required to be made by the Lessee under the terms of the Lease."

14. Ms Paine overlooked one of the standard conditions contained in the contractual form which she used, being the standard form general conditions (previously) prescribed by the Estate Agents (Contracts) Regulations 2008. General Condition (GC)15 provided as follows:

GC 15: All periodic outgoings payable by the vendor and any rent and other income received in respect of the property must be apportioned between the parties on the settlement date ...

15. Ms Paine admits she had not taken GC 15 into consideration when she drafted SC 23.

16. The draft contract and a section 32 statement were provided to Mr and Mrs Fountain on 20 June 2023.

17. On 21 June 2023 and 23 June 2023 there were communications between Ms Chen and Mr and Mrs Fountain, as a consequence of which Mr Fountain increased their offer to $900,000.

18. Following the open for inspection on 24 June 2023, Ms Chen put Mr Fountain's $900,000 offer to Ms Winks and Ms Winks instructed Ms Chen that she was happy to accept that offer.

19. There were then some dealings between Ms Chen and Mr Fountain finalising the particulars of sale, and there was a further telephone discussion concerning the telecommunications lease.

20. Signed contracts were exchanged on 26 June 2023 and the deposit of 10% of the purchase price paid to the Vendor's estate agent.

21. The next day, 27 June 2023, Mr and Mrs Fountains' then conveyancer, Advantage Conveyancers, wrote to Equal Conveyancing (Ms Paine). It is set out in full: "I refer to the above matter and confirm that I act on behalf of the purchasers Mr Ronald Fountain and Mrs Joy Fountain. In relation to the contract, please provide clarification as to the following: Is the lease to Dialaphone Network Pty Ltd the only current lease on the property? Item 3 Rent has your client received both rental payments of $175,000 plus GST? Confirmation that rental in the total sum of $385,000 will be an adjustable item at settlement. We await your response."

22. The dispute began from that point onwards. If the rental were adjusted at settlement in the manner foreshadowed in Advantage Conveyancers' letter, the amount Mr and Mrs Fountain would be required to pay at settlement would be more than $300,000 less than the $900,000 specified as the purchase price, effectively entitling the purchaser to a large percentage of the total rent. Ultimately, Mr and Mrs Fountain seek specific performance of the contract, and Ms Winks counterclaimed alleging an oral or an implied term that there would be no adjustment of the Dialaphone lease, estoppel, mutual mistake, or unilateral mistake.

23. Your conveyancing firm now acts on behalf of the purchasers Mr and Mrs. Fountain as Advantage Conveyancers advised it was inappropriate to act in view of the advice they had given Mr Fountain about GC15 and SC 23 of the Contract and they did not want to be involved in any potential litigation.

24. You telephoned Ms Paine of Equal Conveyancing on 23 July 2023 advising you were now acting on behalf of Mr and Mrs Fountain. Ms Paine informed you she had decided it was inappropriate for her to act as the whole matter was embarrassing as she and the vendor were good friends. She stated the new conveyancer for the Vendor was Stable Conveyancing. The same day you received an email from Stable Conveyancing which omitting formal parts reads as follows:

"We now act on behalf of the Vendor and understand you now act for the Purchasers. Settlement of the sale of the Bacchus Marsh 20 hectares property was not due until 26 September 2023. However, as you are aware the parties are in disagreement as to whether there should be any adjustment of the rental paid on the communication tower lease. My client vendor's position is she entered the contract on the basis of a unilateral mistake as she believed, under the contract, she retained the right to keep the rental on the communication tower and there was to be no adjustment on the very substantial rent paid effectively, in advance, for the 99 year term of the lease. It is my client's contention Mr Fountain was aware of the mistake she made and sought to take advantage of it. Mr Fountain did all the discussions and negotiations for the purchase on behalf of his wife and himself. In the circumstances Ms Winks firmly maintains she is entitled to rescind the contract and she is willing to authorise the refund of the deposit to your clients.

Our understanding is your clients maintain they did not know of the mistake by my client Vendor and did not seek to take advantage of it. Your clients seek specific performance of the contract.

On a without prejudice basis, we advise my client does not wish to be involved in litigation and she would like to explore an alternative dispute resolution. Kindly obtain your clients' instructions and let us know your views."

Questions:

Your clients, in their initial discussion with you as their new conveyancer, indicated they wished to proceed to resolve the matter without litigation. What are your recommendations to achieve your clients' goal?

(1) Please propose at least three dispute resolution methods, then recommend one that is most appropriate in this situation. Be supported with relevant facts and case law, where applicable.

(2) The client will ask why you are recommending the specific method and challenge the method you select. The client will request one of the other methods be utilised. Please give detail reason to convince the client that the you recommended method is the most appropriate.