The underlying premise of the abandonment cases is that a period of time elapses during which neither party to the contract manifests any intention to perform the contract, leading to the inference that the contract has been abandoned. It is clear that the question whether an "inordinate length of time has been allowed to elapse" is relative. In DTR Nominees Pty Limited v Mona Homes Pty Limited the High Court was prepared to infer abandonment after a period of less than five months had elapsed during which neither party took any steps to perform the contract. In Fitzgerald v Masters it was held that a contract for the sale of land had not been abandoned even though proceedings for its specific performance were not commenced until 26 years after its execution.
21 In Fitzgerald v Masters Dixon CJ and Fullager J, in a passage which has long been regarded as the locus classicus in this area of the law, said, at 432,
There can be no doubt that, where what has been called an "inordinate" length of time has been allowed to elapse, during which neither party has attempted to perform, or called upon the other to perform, a contract made between them, it may be inferred that the contract has been abandoned.
22 It will be appreciated that, consonant with the foregoing passage from the judgment of McColl JA in Ryder v Frohlich, the question whether there is abandonment of a contract is a matter of fact to be inferred from an objective assessment of the conduct of the parties, and accordingly, it is not necessary for the Court to examine whether the parties themselves actually had the intention of abandoning the agreement. The question for the Court is only whether their conduct, when viewed objectively, manifests such an intention. (See CGM Investments v Chelliah (2003) 196 ALR 584 at [18]; Wallera Pty Limited v CGM Investments Pty Limited [2003] FCAFC 279; see also, Air Great Lakes Pty Limited v KS Eastern Pty Limited (1985) 2 NSWLR 309; where Mahoney JA observed, at 330, the existence of a contract is "a consequence which the law imposes upon, or sees as a result of, what the parties have said and done").
23 In Wallera Pty Limited v CGM Investments Pty Limited, a decision of Full Court of the Federal Court of Australia, Kiefel J (with whom Ryan and Gyles JJ agreed), said, at [40],
While the Australian cases may not have discussed the theoretical basis for abandonment to any great extent it is clear that regard is to be had to the conduct of the parties and what might be inferred from it. Abandonment may be seen as a conclusion that parties have no further interest in a contract continuing, even though they may have said nothing to that effect. It may nevertheless be clear that they both regard it as at an end. This can more readily be discerned where one or more of the parties have ineffectively attempted to bring the agreement to an end and both behave as if it was ended as occurred in Summers v The Commonwealth (1918) 25 CLR 144 and DTR Nominees Pty Limited v Mona Homes Pty Limited (1978) 138 CLR 423.
24 In Summers v The Commonwealth Isaacs J (as he then was), at 151 - 152, considered that, whatever the terms of a contract may be, it is possible for the parties so to conduct themselves as mutually to abandon or abrogate it, regardless of whether there had been something in the nature of rescission.
25 It will be appreciated that each of the relevant authorities in which the question of whether or not there has been abandonment or abrogation of a contract has been considered is, essentially, a decision upon its own facts. Similarly, the concept of "inordinate" delay must be a relative one, to be considered in the context of the circumstances of the particular case. It has already been observed that a period of less than five months has been treated as an "inordinate length of time" (DTR Nominees Pty Limited v Mona Homes Pty Limited), whilst a period of 26 years has been regarded as not falling within that description (Fitzgerald v Masters).
26 In the instant case it has been submitted on behalf of the Defendant that there has been inordinate delay. The Defendant points to the fact that the contract was entered into 17 years ago. The time frame stipulated for plans to be registered expired 15 years ago. Communications directly between the Plaintiff and the vendor ceased in 1995, twelve years ago. Communications between the Plaintiff and Mr O'Neil (who in the 1990s was the Deceased's solicitor and held his power of attorney) ceased in 1997, some ten years ago. It was not until 28 September 2004 that the Plaintiff (through its solicitors, Barker & Barker) communicated that it had a valuation of the land at $255,000 and that the Plaintiff's strong preference would be to complete the contract for sale rather than to exercise its rights as mortgagee to recover the $15,000 that was advanced in 1990. That communication (which took place six months after the death of Mr Fraser and seven months after the death of the Deceased) was responsive to communications which had been initiated by the solicitors for the Defendant concerning the mortgage.
27 The Defendant submits that the inactivity of the Deceased produces the clear inference that the Deceased did not wish to proceed with the contract and that the Plaintiff, by its silence and its failure to call upon the vendor to perform the contract, consented to this situation.
28 The Plaintiff, however, in recognising the various authorities relied upon by the Defendant, pointed to the passage in the joint judgment of Dixon CJ and Fullager J in Fitzgerald v Masters at 432,
What is really inferred in such a case is that the contract has been discharged by agreement, each party being entitled to assume from a long-continued ignoring of the contract on both sides that (in the words of Rowlatt J) "the matter is off altogether".
It is impossible, in our opinion, to infer a discharge of the contract in the present case…. Here the contract had been partly performed by the respondent. Before he left the property, he had paid more than half of the purchase price, and he had an equitable interest in the land…. As Taylor J observed during argument, if he had at any time regarded the contract as at an end, the first thing one would have expected him to do was to demand repayment of his money. The truth is, we think, that the equitable interest in the land, which the respondent had acquired, could not be lost or destroyed by mere inaction on his part. It could only be lost or destroyed by release or express agreement on his part, or if the deceased lawfully rescinded the contract.
29 The Plaintiff, upon entering into the contract with the Deceased, acquired an equitable interest in the land which was the subject of the contract. (As to the nature and enforceability of such an interest, see Peter Butt, Land Law (5 ed., 2006), [729] - [733].)
30 Further, it will be appreciated that the Plaintiff paid to the Deceased by way of deposit, which was then released to the Deceased, 25 percent of the purchase price. It will be recognised, in passing, that that was an amount considerably more than the normal deposit of 10 percent of the purchase price payable in respect to a contract for the sale of land in New South Wales.
31 The Plaintiff relied upon the following passage from Meagher, Gummow, Lehane, Equity Doctrines and Remedies (4 ed., 2002) [36-070],
In Fitzgerald v Masters equitable relief was granted after an inordinate length of time had elapsed. On the point under discussion, there was a divergence of views. Dixon CJ and Fullager J at 433 held that there were no circumstances apart from delay for refusing relief, thereby (and it is submitted, correctly) holding that mere delay of itself cannot constitute laches. McTiernan, Webb and Taylor JJ, on the other hand, at 440-441 seemed to favour the view that mere delay would be sufficient to bar the plaintiff's right, although on the exceptional facts of that case they held that because of the operation of the Moratorium Acts no relevant delay had taken place. In Fullwood v Fullwood (1878) 9 ChD 176 Fry J held that mere lapse of time affords no bar in equity. And in Lamshed v Lamshed (1963) 109 CLR 440 at 445, Kitto J was careful to emphasise that relief was not withheld simply because of the antiquity of the claim. His Honour said: "The case is therefore not one of bare delay", hinting that the result would have been otherwise if it were.
32 The learned authors also point out in paragraph [36-080] that the view that mere delay does not constitute laches is consonant with principle, is supported by the old authorities and has now been endorsed by the New South Wales Court of Appeal (constituted by Handley, Sheller JJA and Sheppard AJA) in Savage v Lunn (CA) NSW, 9 March 1998, (unreported) BC 9800548 (at paragraph 58) ("…delay, without more, is not a defence to a claim for equitable relief").
33 In Wallera the Full Court of the Federal Court of Australia accepted and relied upon the foregoing passage from the judgment of Dixon CJ and Fullager J in Fitzgerald as stating the law. In Wallera Kiefel J said, at [54],
The evidence, such as it was, did not suggest that the parties regarded the contract as abandoned. At most it suggested they were not presently interested in its performance.
34 Her Honour also said, at [49],
Whilst there had been some performance of the agreement at an early point, Wallera had not paid for and did not obtain any proprietary interest which is subject to being divested were the contract held to be abandoned. It merely had a licence, albeit one which extended over a long period of time.
35 It was submitted on behalf of the present Plaintiff that if the plaintiff in Wallera had obtained a proprietary interest which would have to be divested if the contract were held to have been abandoned, a finding of abandonment would not have been made by Her Honour.
36 In the instant case it is significant that the Plaintiff does have a proprietary interest in the land, which interest is subject to being divested if the agreement be held abandoned. The Plaintiff has both an equitable interest as purchaser (since it has partly performed the contract by paying 25 percent of the purchase price), and also a legal interest as mortgagee (the land being under the Old System) under a registered mortgage (subject to the right of the mortgagor to repay the mortgage, a right which has never been exercised). Those interests cannot be lost or destroyed by mere inaction on the part of the purchaser.
37 The concept of abandonment imports a degree of mutuality in the attitude manifested by each of the parties.
38 In support of the abandonment the Defendant relied upon an incident where the Deceased was said to have purported to act regarding the subject land in a manner inconsistent with the Deceased treating the contract as still being on foot. That incident was the alleged conduct of the Deceased in signing a document, bearing date 6 December 2002, which purported to evidence an agreement between the Deceased and Ron Pomering regarding, inter alia, the sale of land (said to include the subject land) to Mr Pomering.
39 Concerning that alleged incident I would make the following observations. First, I did not regard the evidence of the Defendant on this matter (his being the sole evidence concerning this alleged incident) as being entirely reliable. However, in any event, it was the Defendant's evidence that there never was an agreement between the Deceased and Mr Pomering, only that there was an offer by the Deceased and that the offer was never accepted, and that the offer was rescinded three days later, on 9 December 2002.
40 Second, even if I were to accept unquestioningly the Defendant's evidence concerning this incident and the document bearing date 6 December 2002, there is no suggestion that the Plaintiff was ever informed by the Deceased of this incident or of the document, or that the Plaintiff otherwise became aware of them.
41 The incident and the asserted intention of the Deceased manifested thereby cannot result in the contract being abandoned by this unilateral conduct of the Deceased.
42 The incident might be treated as evidence of an intention on the part of the Deceased to repudiate the contract, or not to carry out its terms. But that is something entirely different from an abandonment of the contract by both parties - and it is abandonment which is here being asserted by the Defendant.
43 It must be emphasised that abandonment of a contract cannot be effected by one party alone. The abandonment, if it occurs, is an abandonment by both parties. (See Summers v The Commonwealth, at 151-152; Fitzgerald v Masters, at 432; Ryder v Frohlich at 135-137.)
44 I do not see how the conduct of the parties in the instant case can be regarded as manifesting mutual abandonment in circumstances where, if there were abandonment, the Plaintiff would, in consequence, be divested of its equitable interest in the property, and the Plaintiff would be entitled to repayment of the deposit. As was recognised by Taylor J during argument in Fitzgerald v Masters, if a party in the position of the present Plaintiff were by its inaction to be regarded as having abandoned the contract, then the first thing one would have expected the Plaintiff to do was to demand repayment of the deposit of $15,000. Similarly, if the Deceased were to be treated as manifesting an intention to abandon the contract (whether by reason of the letter of 6 December 2002 addressed to Mr Pomering or for some other reason), then such abandonment would require that he repay the $15,000 and, further, that he discharge the mortgage over the subject land which he had given to the Plaintiff.
45 It should not be overlooked that Ian Fraser, the principal of the Plaintiff company was an old and close friend of the Defendant. The so-called "inactivity" attributed to the Plaintiff in the submissions of the Defendant appears essentially to have resulted from the willingness of the Plaintiff, through Mr Fraser, to help the Deceased through his financial difficulties and his health problems, including giving to him the latitude of time and forbearance (and the use of the deposit money, free of interest, over many years). Indeed, there was nothing that the Plaintiff needed to do, or even could do, to enable the contract to be completed. It was the Deceased, by his "inactivity" (resulting, in part, from his financial difficulties and later from his ill health) in failing to effect the registration of the deposited plan, who essentially caused the problem in this regard.
46 I am not satisfied that the evidence objectively discloses an abandonment of the contract by either party, let alone by both parties. Here I again emphasise that abandonment of the contract cannot result from the conduct (be it active or passive) of only one of the parties. For there to be abandonment there must be conduct (be it active or passive) by both parties which manifests that "neither intends that the contract should be further performed" (Ryder v Frohlich at 135). At most, the evidence relied upon by the Defendant suggests merely, in the words of Kiefel J in Wallera, that the parties "were not presently interested in performance [of the contract]".
47 Since I am not persuaded that the contract has been abandoned by the Plaintiff and the Deceased, and since I am satisfied that, in consequence, the contract presently remains on foot, it is necessary now to proceed to the question of whether the relief by way of specific performance (which is in the nature of discretionary relief) should be refused, on account of what is asserted to be laches on the part of the Plaintiff.