(iii) Further, or in the alternative, there was no evidence that the Appellant had approved the locations which the Respondents claimed they had intended to work up and in relation to which the Respondents claimed to have suffered loss.
3. His Honour Campbell J erred in not having regard, and in not holding, that any damage suffered by the Respondents in relation to the 2001/2002 rice crop and the 2001 wheat crop, was not within the reasonable contemplation of the parties."
62 The second of these grounds of appeal can conveniently be taken first, on the assumption that the purchasers were denied access to the property to which they were entitled and thereby suffered the 2001/2002 crop losses.
63 Under the so-called rule in Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145 the extent of damages for breach of contract is confined to those losses which "may fairly and reasonably be considered either arising naturally, ie, according to the usual course of things, from such breach of contract itself, or such as those which may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract as the probable result of the breach of it" (see at 354; 151). These tests of remoteness have been refined in later cases, but for present purposes the refinements need not be considered. The vendor submitted that the 2001/2002 crop losses could not have been reasonably supposed to have been in the contemplation of the parties at the time the contract was made as the probable result of failure to give access in accordance with special condition 24.
64 It is unnecessary to consider whether the losses arose naturally from the failure to give access. In my opinion, they may reasonably be supposed to have been in the contemplation of the parties.
65 The purchasers would not have left the property idle, and it was within the contemplation of the parties that they would work the property for crops. They had embarked on rice cropping, exercising the entitlement to access under special condition 24 (although at this time neither the vendor nor the purchasers seem to have acted strictly in accordance with special condition 24). The vendor and Mr Park were both knowledgeable in growing rice and wheat. The vendor's evidence included that in discussions to purchase the property Mr Park said that he wanted to grow three 1500 acre blocks of rice. In my opinion it may be taken to have been within the reasonable contemplation of the parties that, if the seasons and the requirements of preparation for and sowing crops so dictated, the purchasers would exercise the right of access under special condition 24 for further working of the property for 2001/2002 crops, in particular for some or all of the foreshadowed 3500 acres of rice, on land extending beyond the existing irrigated land.
66 That contemplation was in my view sufficient, notwithstanding that the immediate focus of special condition 24 was spring 2000 and the time during which the contractual entitlement to access might have been expected to operate was extended as a result of the purported rescission and subsequent proceedings. As was said by McHugh JA in Alexander v Cambridge Credit Corporation Ltd (1987) 9 NSWLR 310 at 365-6, the parties need not contemplate the degree or extent of the loss suffered, or the precise details of the events giving rise to the loss, and it is sufficient that they contemplate the type of loss suffered. The difficulty lies in the level of characterisation of the loss which must be suffered, but its general nature and the general nature of its suffering must be contemplated and is sufficient. Here the contemplation satisfied that requirement. The effect of the breach, if occurring, was prevention of working up the land for crops, and if occurring in December 2000 - March 2001 was prevention of working up the land for the expanded cropping which Mr Park said he wanted to undertake. The fact that the breach was delayed by the vendor's purported rescission until December 2000 and thereafter could not work to the vendor's advantage.
67 I return to the first of the grounds of appeal. The vendor's submissions were directed to the access to the property, and in substance were that the purchasers did not lose a window of opportunity to plant the 2001-2002 rice crop, because their entitlement to access pursuant to special condition 24 was not shown to have permitted them to do the work which, on the judge's reasoning, would have been done and begun prior to 24 March 2001.
68 The vendor first submitted that the survey and landforming work was not within the phrase "to work up ground for crops" in special condition 24. No direct explanation of the phrase was given in evidence. It is clear that the crops included rice, and that, if the rice was to be sown on land other than the existing irrigated land, landforming would be appropriate if not necessary and the associated work would be necessary. Working up ground for crops must mean whatever work is appropriate for the planting of the crop. In my opinion, where the crop was rice to be planted on land not already suitable for planting rice, it extended to the landforming and the associated works. I do not think that this submission should be accepted.
69 The vendor then submitted that, absent prior approval of the locations in which the ground would be worked up, there was no entitlement to enter and work up the ground. There was no evidence that the vendor had approved the locations in which Mr Park said he intended to plant the 860 hectares of rice. Thus, it was said, the purchasers did not prove that the 2001/2002 crop losses were caused by breach of special condition 24.
70 The submission had not been put to the judge, whose reasons did not address any significance in the absence of evidence. The purchasers submitted that it was not open to the vendor to rely on the absence of evidence, when he had not at the trial taken the point that prior approval of the locations was necessary. That is better deferred until the vendor's submission has been explored.
71 What was the purchasers' entitlement under special condition 24? The condition was poorly drafted, but the right of entry was limited to entry (a) for the purpose of occupation of the manager's cottage, subject to giving fourteen days notice, and (b) for the purpose of working up ground for crops in locations first approved by the vendor. For the latter entry, prior approval was part of the description of the entitlement. If no location was approved, the purchasers would be entitled to enter and occupy the manager's cottage if they had given the fourteen days notice, but they were not entitled to enter and work up any ground for crops. If a location was approved, the purchasers could enter and work up the ground for crops in that location, but not in any other location.
72 In the operation of the condition, the purchasers would propose locations which the vendor would approve or decline to approve. The context and the words "first approved" did not envisage the vendor nominating locations which the purchasers could take up or decline to take up as they chose, although if the purchasers did take up the vendor's nomination that would be prior approval. No criteria were stated for the vendor's approval. Either the vendor's approval or disapproval was unfettered, or by implication the vendor could not unreasonably withhold approval.
73 As I have said, in the beginning neither the vendor nor the purchasers seem to have acted strictly in accordance with special condition 24. There must have been implicit approval of the locations in which the 2000/2001 rice crop was sown, because the vendor must have known what was being done. The vendor having told Mr Park that he was no longer entitled to enter upon the property, the judge found breach in "being deprived of the opportunity to care for the 2000/2001 rice crop", perhaps not breach of special condition 24 but of the implied term although the judge did not find the implied term and referred only to the special condition.
74 By late December 2000 there was contractual rigidity. The purchasers did not treat the purported rescission as a repudiation, accept it, and terminate the contract. The contract remained on foot, and the purchasers had only the qualified entitlement to enter upon the property which it conferred.
75 For present purposes there can be put aside the manager's cottage and care of the 2000/2001 crop. The vendor was not in breach of contract in excluding the purchasers from working up for crops the 860 hectares of which Mr Park spoke, because there had been no approval of any locations for working up the ground for crops. While Mr Park had prior to the contract foreshadowed the three 1500 acre blocks, his intention had been general and at the time there was no occasion for locations to be considered. The fact that the vendor responded that there was plenty of land did not mean approval of any location that the purchasers selected.
76 The purchasers submitted that it must be asked why there had been no approval of the locations for the 860 hectares. They said that the starting-point was the vendor's purported rescission of the contract, which made it pointless for them to propose locations for approval, and that when on 19 December 2000 the vendor told Mr Park that he was no longer entitled to enter upon the property it was even more clear that it was pointless. Had the purchasers asked, the vendor would plainly have refused to consider approval or declined approval, because his position was that the contract was at an end and there was no right of entry at all. The purchasers said that in those circumstances the vendor could not take advantage of the absence of approval of the locations.
77 The principle on which the purchasers relied was that described by Dixon CJ in Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235. The defendant agreed to sell a quantity of oats to the plaintiff fob Sydney, to be loaded in January or February on a ship or ships of which the plaintiff would give fourteen days notice. At the end of January the defendant told the plaintiff that it could not supply the oats fob Sydney but could supply them fob Melbourne. The plaintiff could not find a ship leaving Melbourne, and said it required delivery in Sydney, but did not nominate a ship or ships. At the end of February the defendant said it could not supply the oats. When the plaintiff claimed damages for failure to deliver the oats, the defendant said that it was not obliged to deliver them because a ship or ships had not been nominated. It was held that the defendant was liable for non-delivery because it had "adopted an attitude clearly importing that the plaintiff need take no such course" (at 246, referring to nominating a ship or ships), and the principle was stated at 246-7 -
"Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co . But a plaintiff may be dispensed from performing a condition by the defendant expressly or, impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention."
78 The principle was stated in the same case by Kitto J at 250 -
"The principle, which applies whenever the promise of one party, A, is subject to a condition to be fulfilled by the other party, B, may, I think, be stated as follows. If, although B is ready and willing to perform the contract in all respects on his part, A absolutely refuses to carry out the contract, and persists in the refusal until a time arrives at which performance of his promise would have been due if the condition had been fulfilled by B, A is liable to B in damages for breach of his promise although the condition remains unfulfilled."
79 In Foran v Wight (1989) 168 CLR 358 a number of the justices saw the principle as founded in estoppel (see per Mason J at 409-11, Deane J at 434, Dawson J at 448-9). In Austral Standard Cable Pty Ltd v Walker Nominees Pty Ltd (1992) 26 NSWLR 524 Clarke JA, with whom Kirby P relevantly agreed, said at 533 that since Foran v Wight the dispensation "should be regarded as firmly grounded in estoppel", its elements bring "intimation by one party that it would not perform its obligations thereby rendering nugatory any attempt by the innocent party to do so and an acting on that intimation by the innocent party to its detriment". The term requiring fulfilment of the condition is not written out of the contract, but the party can not say that the condition has not been fulfilled.
80 The purchasers' submission required that the condition taken to have been fulfilled was approval of the locations of the 860 hectares. I do not think that is correct. Any dispensation with performance by the purchasers (here not performance of an obligation) must be measured by what the purchasers would have done. The purchasers could have proposed the locations of the 860 hectares for approval, but that did not mean that the locations would have been approved. Let it be assumed that, but for the vendor's purported rescission and denial of entitlement to enter upon the property, they would have proposed the locations, but did not do so because of the vendor's stance - Mr Park gave no such evidence, but it is a readily available inference. The principle could found dispensation with proposal of the locations. But the vendor may or may not have given approval, and I do not think the principle would have the further consequence the vendor was deprived of his ability to approve or disapprove the locations.
81 This may be tested by postulating that, the contract still being on foot, the purchasers proposed the locations of the 860 hectares. If the vendor had an unfettered ability to approve or disapprove, on the facts he would have declined approval, as the purchasers accepted, and the purchasers would not have an action for breach of contract. If there was an implication that the vendor could not unreasonably withhold approval, the purchasers' cause of action would be for unreasonably withholding approval, not for simple exclusion: the purchasers did not present such a case, and it is not self-evident. On the case they presented, it remains that they did not establish an entitlement to access permitting them to do the work for the 2001/2002 rice crop.
82 There was reference in submissions to a related but different principle, described by Lord Diplock in Cheall v Association of Professional Executive Clerical and Computer Staff (1983) 2 AC 180 at 189 that "a man cannot be permitted to take advantage of his own wrong". An application of the principle is that a party to a contract terminating upon an event or conferring a benefit upon an event can not rely on his own breach of contract bringing about the event; many of the cases are discussed in the speech of Lord Jauncey in Alghussein Establishment v Eton College (1988) 1 WLR 587, and a local illustration of this application is TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 147-8, 161. It is applied as a rule of construction (ibid), but has also been seen as an implied term (Thompson v ASDA-MFI Group Plc (1988) Ch 241). The principle itself has a broader reach, for example in the interpretation of statutes (Grozier v Tate (1946) 16 LGR (NSW) 57 at 61; Allen v Bega Valley Council (CA, 22 December 1994, unreported)) and in the common law rules that an arsonist cannot recover under a fire insurance policy and murderer cannot claim in the estate of his victim.
83 I do not think this avails the purchasers. The vendor's wrong was either his purported rescission of the contract or his denial of entry on 19 December 2000. The purported rescission was a repudiation of the contract, but the purchasers did not accept it and it was "a thing writ in water and of no value to anybody" (Howard v Pickford Tool Co Ltd (1951) 1 KB 417 at 421 per Asquith LJ). This is an overstatement, since a repudiation can have consequences such as enlivening the Peter Turnbull & Co Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd principle, and could be a breach of contract in failing to complete on the due date. But the purchasers did not allege such a breach, and absence of approval was not a consequence of any wrong in the purported rescission. Nor was it a consequence of any wrong in the denial of entry on 19 December 2000. In either case there was no more than the dispensation with proposal of locations already considered; there was no wrongful refusal of approval to the locations of the 860 hectares.
84 If it is open to the vendor to take the point, in my opinion it should be found that the purchasers did not prove that the 2001/2002 crop losses were caused by breach of special condition 24. I go then to the purchasers' submission that it was not open to the vendor to rely on the absence of evidence when he had not at the trial taken the point that prior approval of the locations was necessary.
85 The vendor's points of defence stated only, "The Defendant denies each and every allegation in the Plaintiffs' Points of Claim." The points of defence were accompanied by a document entitled "Affidavit and Defence" in the form of an affidavit in which the vendor said -
"2. My defence is as hereunder:
(a) I rely on the Contract and the doctrine of Caveat Emptor.
(b) I deny each and every allegation of the Plaintiffs [sic] Points of Claim."
86 This was unsatisfactory. The vendor's then solicitor (not the solicitor at the time of the transaction or at the time of this appeal) permitted the vendor to deny on oath many incontrovertible facts, including that he was the vendor of the property. It nonetheless put the purchasers on notice that they had to prove all matters necessary to establish, amongst other things, their entitlement to damages for breach of contract.
87 The vendor was represented at the trial by his then solicitor. The solicitor cross-examined Mr Park at length, and diffusely. He was eventually put under a time limit, and was then refused an extension of the time. After the purchasers' counsel had made his submissions, the solicitor's submissions occupied twelve lines in the transcript. They contributed nothing.
88 To say that the point was not taken at the trial, therefore, meant that the vendor's solicitor did not address it, and was of little significance when the solicitor took no identifiable point and the points of defence stood as a general denial. The judge did not raise the point, as he had raised the significance of special condition 30(iii) to causation and other matters, during the purchasers' submissions, but that did not excuse proof of all matters necessary for the entitlement to damages for breach of contract. The point was taken in that the vendor required the purchasers to prove their case. A less than ideal conduct of the vendor's case did not relieve the purchasers from any of their burden.
89 The purchasers submitted that, by analogy with Pt 15 r 13 of the Supreme Court Rules, it was necessary for the vendor to flag in the points of defence that prior approval to locations had not been given, as something which might take them by surprise or which raised a matter of fact not already arising. I do not agree. In the manner I have indicated, prior approval was part of the description of the purchasers' entitlement. In order to establish breach of contract causing the 2001/2002 crop losses, the purchasers had to establish approval of the locations in which Mr Park said he intended to plant the 860 hectares of rice. It would have been open to the vendor's solicitor expressly to take the point at the trial, or for the judge to have raised it and determined it.
90 In the circumstances of this case, in my opinion, the principles sufficiently identified by reference to the discussion in Multicon Engineering Pty Ltd v Federal Airports Corporation (2000) 47 NSWLR 631 at 645-7 do not preclude the vendor from now relying on the absence of evidence. The purchasers had framed their case as one of breach of the contractual entitlement conferred by special condition 24. Faced with the broad denial in the points of defence, they had full opportunity to put all necessary evidence before the Court. It is clear enough that they could not provide evidence of approval of the locations. I do not think the point is correctly described as a new ground not taken at the trial, or that it is correct to say that the vendor is departing from the course he adopted at the trial. On the ultimate question of whether it is "expedient and in the interests of justice to entertain the point" (Water Board v Moustakis (1988) 180 CLR 491 at 497; Multicon Engineering Pty Ltd v Federal Airports Corporation at 645), in my opinion the balance of expediency and justice favours doing so.
91 The circumstances are essentially the same as those in Banque Commerciale SA en liquidation v Akhil Holdings Ltd (1990) 169 CLR 279. The plaintiff sued the bank and another defendant, claiming that the defendant had procured the bank to transfer away shares held on trust for the plaintiff. The bank filed a defence pleading that the proceedings were statute barred. It did not appear at the hearing. Judgment was given for the bank and the defendant on the ground that the plaintiff had not established a beneficial interest in the shares. On appeal, the bank relied on its defence that the proceedings were statute barred. It was held that it could do so.
92 Mason CJ and Gaudron J said that the bank's failure to appear was not a reason to treat the defence as withdrawn. After reference to the cases about taking a point for the first time on appeal, including Water Board v Moustakis, they said at 284 -
"In the present case there is no basis upon which it could be suggested that Akhil may have wished to call evidence to show that the breaches by the Bank occurred at a time inside the six-year period of limitation. Nor, by reason that the trial judge would not have been free either to disregard the defence or to treat it as withdrawn from the trial, can it be said that the case sought to be made on appeal is new or different from that which emerged at the trial. Accordingly, neither the decision in Moustakas nor the rule upon which it rests prevented the Bank from relying on its pleaded defence in the Court of Appeal."
93 Toohey J said at 304 -
"But these decisions involved the way in which a trial was conducted and arguments presented. Here the Bank did not appear at the hearing; its absence did not affect the course of the trial and the issues as pleaded remained the issues between it and Akhil Holdings. Likewise, no question of election could arise. The failure of the Bank to appear at trial did not constitute any representation on its part that the issues for determination were other than the issues as pleaded; … "
94 In my opinion, therefore, the first of the grounds of appeal has been made out.