Casha v Georgiev [2000] VSC 248

5. This truly lamentable piece of litigation occupied five days of hearing in the Magistrates' Court during which it is my impression that the junior counsel appearing for the parties respectively cross-examined all witnesses exhaustively, took all available objections and made lengthy final submissions. To add to the difficulties, the learned magistrate did not reserve his decision but embarked immediately upon the pronouncement of his reasons orally, the delivery of which was frequently interrupted, primarily by counsel for the plaintiff/appellants. Moreover, in the course of hearing counsel's submissions, on the last day (those submissions alone occupying 60 pages of transcript) his Worship from time to time made indicative statements of likely findings of fact and as to his understanding of the law. Mr. P. Wikrama, who appeared before me sought to rely on a number of such statements. However, as I stated then and state again, I am not prepared to treat remarks made in the course of hearing counsel's submissions, with the usual discussions and exchanges between Bench and Bar as other than indicative statements, provisional only, and not necessarily as final findings of fact and law. To some extent, some of these observations are capable of being taken into account, particularly with respect to aspects not addressed by his Worship when he embarked upon his reasons, counsel's submissions having been concluded.

8. To add to the unhappy matrix against which I must consider this appeal, the appellants included as an exhibit to the application before the Master, and thereby for my purposes, only the transcript (which was a full transcript) of the final day, that is the submissions of counsel and the magistrate's decision. None of the evidence given by the parties on oath before the magistrate has formed part of the material (save for one aspect to which I will shortly refer). Whilst this has relieved the Court, and counsel appearing before me (not counsel who appeared in the Magistrates' Court) from the burden (not to say the misery) of traversing hundreds of pages of evidence in a case over $16,000, it has made the task of knowing what were the facts upon which the magistrate ultimately depended virtually impossible, as the findings of fact he made were scattered and episodic (not entirely his fault as he was frequently interrupted). The same difficulty exists in knowing what were the legal principles to which he had resort. Not having set out in an orderly manner the facts which he did find, the task of revisiting his application of the law to the facts is difficult, if not impossible.

11. I will shortly deal with the issues that are raised and the substance of the arguments advanced but, for the present purpose, it is sufficient to indicate that the arguments revolved around what was the agreement between the parties, whether or not the vendors' estate agent was a stake-holder only or an authorized agent as well as a stake-holder (as the magistrate found) and, assuming for present purposes that circumstances had arisen which entitled the vendor to call for payment of the balance of the deposit, whether that right was waived (or alternatively that the vendors had elected not to enforce their rights in that respect or are now estopped from seeking to assert them) because of the return of the $200 preliminary deposit to the purchasers and failing to take any action to recover the balance of the deposit, some $15,800, until 20 months after the contract was terminated. All of these issues involve critical questions of fact.

14. The magistrate's conclusions about these issues are stated clearly enough but, in the way of magistrates, he did not make detailed and specific findings of fact tied to the evidence of witnesses whom he accepted or rejected. On this appeal, quite apart from any other matter, this has proved to be fatal to the chances of the appeal being successful particularly on the agency and waiver - estoppel arguments, because the appellants are unable to demonstrate that there was no evidence sufficient to support the Court's conclusions because nearly all of the evidence (which was recorded) has not formed part of the material on the appeal. The only exception to this aspect was the evidence of the purchasers' solicitor which, with submissions, occupied part of the final day of hearing. Later, after leave was obtained from the Master and questions formulated, the solicitors acting for the respondents to the appeal swore an affidavit which exhibited the evidence of one Cuk, the estate agent for the vendors who dealt with the purchasers and returned the preliminary deposit to them.

17. Prior to the commencement of this appeal, so I was told, the appellants' solicitors had objected to the respondents seeking to raise that material at that later stage. Mr. Gillies of counsel who appeared for the respondents stated that he was not intending to rely upon it. Mr. Wikrama (apparently because he, like me, had no knowledge of any of this evidence) objected. The respondents' solicitors' affidavit had been filed but the exhibit, namely the transcript of Cuk's evidence, had never been filed. In those circumstances I directed that it be made available to counsel for the appellants so that he would not be disadvantaged, even though the respondents did not seek to rely upon that evidence. In the upshot, however, Mr. Wikrama did not refer to Mr. Cuk's evidence either in his address to me nor in his address in reply to Mr. Gillies' submissions.

20. The skeletal facts were not much in dispute. The parties entered into a contract for the sale of land owned by the appellants situated at 7 Orion Close, Taylors Lakes, on 19 November 1996. They had solicitors. There was some dispute before the magistrate as to what was the governing contract of sale between the parties, there being possibly three. The magistrate concluded the contract called "the third contract" was the governing contract and there has been no dispute before me that this was other than correct. The contract price for the sale of the land was $160,000. The vendors had signed a contract of sale before the purchaser/respondents had. When that contract was sent to the respondents' solicitor some alterations were made by him to it. The purchasers executed that altered contract of sale which was returned to the vendors' solicitor. It would appear that the contract was not re-engrossed or re-signed by the vendors but no point has been raised about that. This is probably because the alterations affected have, in the circumstances that ultimately prevailed, arguably assisted the appellants. The contract provided for the payment of a deposit of $16,000 by 22 November 1996 (i.e. within three days), with a preliminary deposit ($200 of that $16,000) payable on 19 November. This was paid to the vendors' agent who held it. The contract provided that the balance of the purchase price, $144,000 was to be paid by 18 December 1996. It appears that originally a contract had provided for that date to be 22 December 1996 but the time was shortened. However, to use a neutral phrase for the present purpose (as there was some legal dispute about it both before the magistrate and before me) the contract was subject to finance. All of the critical terms are contained on the front first page of the REIV contact note which constituted the contract in this case, subject to Table A. All of the terms to which I have referred, the parties, the property (and the chattels), the price, the deposit, the preliminary deposit, the date of payment of the deposit and the date of payment of the balance of purchase money are all set out on that page. Below all of those details are other terms under the heading of "Subject to" that is that the particulars previously recited were subject to the following terms. One of those terms was the third, in this form:

"3. Finance - the lender approving the loan on the security of the property by the approval date or any later approval date allowed by the vendor. The purchaser may enter contract if the loan is not approved by the approval date only if the purchaser (a) has made immediate application for a loan (b) has done everything reasonably required to obtained approval of the loan (c) reserves written notice ending the contract on the vendor on or before two business days after the approval date and (d) is not in default under any other condition of this contract when the notice is given. All money must be immediately refunded to the purchaser if the contract is ended."

It went on to state under the side note of "purchasers' finance", that the lender was Marconi Bell, the loan was not less than $100,000 and the approval date was 29 November 1996. There is no dispute between the parties that an application for that loan was made; there was no dispute that it was made immediately and there appears to be no dispute that it was declined by 25 November (the borrowers not falling within the financier's guidelines). The purchasers' solicitor notified the agent on 25 November by telephone and then in a follow-up letter that the finance had not been obtained and that the contract was thereby at an end. It is obvious from the final submissions that there was considerable argument about many of the features that led to the contract and the subsequent events. Both of the Cashas gave evidence and both of the Georgievs gave evidence. The agent Cuk gave evidence. That all occupied four days. The cases put did not depend upon an agreed statement of facts such as I have indicated. If that had been so, the arguments could have been advanced based upon the contract note and some brief evidence as to subsequent events. What the detail of the dispute was I know not because the appellants never made it part of the sphere of debate in this court. It is immediately obvious from looking at the conditions as to finance that the purchaser was arguably entitled to end the contract if the loan was not approved by 29 November only if they were "not in default under any condition of this contract when the notice was given". Thus, self-evidently, a considerable part of the argument here was concerned with was whether the failure of the purchasers to pay by 22 November 1996 the $15,800 due as a deposit has entitled them to "end the contract".

25. On 17 December the Master formulated questions of law (although these were obviously formulated by counsel for the appellants, there being no appearance for the respondents at that time). These are:

"(a) In circumstances where there is a written contract with provision that the purchaser may terminate the contract (if not in breach of any other terms of the contract) as a result of not being able to obtain finance and at the time of purportedly notifying the vendor of such inability, the purchaser was in breach of the obligations to pay the 'full deposit' was it open to the Magistrate to hold that the purchaser was entitled to terminate the contract so as to avoid paying such deposit (see Exhibit 'E', document 3)? (b) Having regard to the contract, was service of a notice on the estate agent acting/inter alia/for the Applicant sufficient service? (c) Was the Magistrate justified in holding that as the 'holding deposit' had been repaid by the relevant estate agent that the Appellants had waived their rights under the contract? (d) Was it open for the Magistrate to hold the said notice (exhibit 'E', document 20) complied with condition 13 of Table A to the Transfer of Land Act 1958?"

29. As I have indicated on a number of cases there is no binding necessity in an appellate court to answer the questions formulated by one party, as though they must have focussed on the requirements of doing justice according to law. In this case the questions broadly reach out to the issues as the parties themselves debated them. Question (a), however , immediately reveals the assumption that the termination of the contract by the purchaser was to avoid paying the deposit rather than any other reason such as the unavailability of finance bringing the whole contract to an end. I will deal with the matters broadly raised in the course of delivering my reasons here. I turn first to identify the basic submissions made by the parties.

32. Mr. Wikrama's submissions commenced by stating that the facts in the appeal were uncontradicted. This reveals such a naïvete generally uncustomary in him that I can only assume that it was a bold attempt at the outset to dismiss as being irrelevant the evidence in the case. In this case that the plaintiff later served a notice of rescission. The defendants' claim that they were the ones with the right to terminate the contracts and had served a notice of default. This depends upon whether the view taken by the magistrate that the whole of the contract failed because of the inability to obtain finance, including the obligation to pay the balance of the deposit.

35. Mr. Wikrama's first submission of substance was that the decision of the magistrate was wrong. He argued that under condition 3 of the contract that the purchasers could only rely on the subject to finance condition if they were not in default of their obligations under the contract. He submitted that the failure to pay the balance of the deposit of $15,800 on or before 22 November 1996 constituted a breach of their obligations under the contract because failure to pay a deposit is a breach of a fundamental term entitling a vendor to rescind. He relied upon Brien v. Dwyer[1] and Hill v. Sydney[2]. Secondly, he submitted that the magistrate erred in deciding that the purchasers were entitled to rescind the contract and serve a notice of default upon the plaintiffs' estate agent. His submission was that the agent was no longer an agent for the vendor once he had found the vendors a buyer, that the estate agent's actual authority had come to an end and he simply held the deposit of $200 as a stake-holder. He relied on some statements of Brooking, J. in Bot v. Ristevski[3] to the effect that a deposit was an earnest to bind the contract and if the purchaser is in default of his obligations under the contract the vendor is entitled to sue the purchaser for the deposit as a simple debt. Thirdly he said that the magistrate had found that the condition as to finance was a condition precedent and not a condition subsequent and was thereby wrong in concluding that the contract was brought to an end once finance was not available. See Zieme v. Gregory[4]; Tait v. Bonnice[5]; Hutchinson v. Payne[6]. Next he submitted that the magistrate erred in concluding that the appellant plaintiffs had waived their rights under the contract to recover the balance of the deposit of $15,800 as a consequence of the agent returning the sum of $200 to the purchasers. He argued that it was not open to the magistrate to find that the estate agent could be a stake-holder and an agent for the vendor for the return of the deposit or part-deposit to the purchasers. He argued that the magistrate was in error in finding that the letter from the purchasers' solicitor to the estate agent was sufficient notice because it did not comply with clause 13 of Table A of Transfer of Land Act 1958. If it was purporting to be a notice under general condition 3, it was insufficient notice because it identify it did not comply with the provisions of clause 13 of Table A because it was not sent to the vendors or the vendors' solicitor.

38. Finally he submitted that any notice by the purchasers was irrelevant because they had repudiated their obligation under the contract to pay the deposit. As a consequence the vendors were not required to serve a notice of default. For this proposition he relied upon Poort v. Development Underwriting Ltd.[7], the Full Court taking the view that the acceptance of the repudiation might be but is not always necessary to be communicated to the defaulting party.

41. Mr. Gillies' submissions for the respondents attacked at the outset the defective nature of the material arising from the failure to produce as an exhibit the transcript which contained the substance of the evidence upon which the decision was based. The only transcript produced contained some evidence from the respondents' solicitor, the submissions and the decision. He relied upon the decision and statements of Kaye, J. in Ramsey v. L.M. Ericsson Pty. Ltd.[8], his Honour there expressing the view that an order nisi made on defective material must be discharged on the return if the affidavit in support did not set out who the witnesses were, the substance of the evidence of each of them and their cross-examination if the transcript was made or not made with a certified copy of the order. It should be said that earlier in Bata v. Taylor[9], Stawell, C.J. required the depositions to be brought up or an affidavit verifying that none were taken. Essentially the argument here was that the questions of law raised before the Master, or which clearly arose upon the Court's findings of fact, are not capable of rational challenge at this point of time, as the evidentiary basis of the findings cannot be known. He was not there referring to non-contentious matters to some of which I have referred but some of the facts underwriting the key arguments. For instance he claimed that the meaning of the phrase "subject to finance" was the subject of argument and the magistrate decided what it meant. But the magistrate did not refer specifically to the evidence that led to that and, it was contended, it could not now be argued by the appellants (they failing to bring forward the transcript of four days of evidence) that the evidence had nothing to do with it, and that the meaning could be construed from the document. One might ask what was the evidence all about, and why it was led, if what each of the parties and other witnesses were called to say did not impact on the contractual rights and obligations? Mr. Gillies argued that the contract meant what the magistrate said it meant, namely that every obligation was subjected to the necessities of obtaining finance, including the payment of the balance of the deposit by 22 December. He also argued that the situation had to be looked at as a whole and that it was unlikely that the parties ever intended that the purchasers, seeking to get finance from the nominated financier, would be in the position of losing ten per cent of the purchase price if the financier did not give a decision in their favour in the maximum seven-day gap between 22 and 29 November. He argued that the contract came to an end upon the writing of the letter of 25 November (Exhibit 18 in the court below) to the agent who promptly returned the deposit. The plaintiffs' solicitors did serve a notice of rescission, 18 months later on 9 July 1998. He argued that the contract had clearly come to an end for one cause or another in November 1996. The principal submission here (and it had been pleaded) was that the refund by the vendors of the part-deposit upon notification that the finance could not be obtained (that is 25 November) had the effect amounting to waiver, election or estoppel against the vendors from asserting that they were entitled to the balance of the deposit when the notice of rescission was served nearly 20 months later. He supported the findings of the magistrate that the statement "to be not in default under any other condition" meant not in default of conditions other than financial conditions, which he contended meant not in default of conditions other than those ones relating to payment. He also contended that his Worship was right in viewing Bot v. Ristevski as not applying in the case where there was no unconditional right to recover the deposit (as here) or no right to retain it. He relied upon the finding by the magistrate that the estate agent Cuk was both a stake-holder and the agent for the plaintiffs and that the cheque hand-delivered from the office of the real estate agents for $200 came from the agent of the Cashas, and from the office of their estate agent.

44. Mr. Gillies argued in relation to the first ground or question that there was no evidence one way or the other to say whether the purchaser was in default of any other condition of the contract at the time the notice was given. He said the discussions which took place between the parties both before and after that event had been excluded from the corpus of evidence in this Court including, according to him, whether or not any other notice had been served under the contract. That is, his argument was that if the plaintiff was relying upon the non-service of the appropriate notice under clause 13 of Table A, there is no evidence one way or the other about that because the transcript was omitted. He also submitted that question 2, that is whether service of a notice on the estate agent acting for the vendors was sufficient service, was a point not taken by the plaintiffs in the court below. He said it appeared to be argued that no notice was given in accordance with the contract which is a different point to service on the agent being insufficient service (see page 70 of the final day's submissions). He claimed that it also appeared to be conceded on page 77 of Exhibit D that a notice had in fact been served. He also submitted with respect to the notice (question 4) that the point in this form was not raised before the magistrate and that there was complete confusion as to what was being referred to, that is whether it was Exhibit 18 in the Magistrates' Court or Exhibit E, document 20 or some other document.

47. It is necessary to set out some part of the matters which the parties before me referred to as constituting either reasons or some indication of reasons in the course of submissions. According to the transcript (page 44-45 Exhibit D) his Worship stated:

"... I can go through a few findings of fact that I am prepared to make. We will write them down as we go, do you think, so we won't have any problems with them. (1) That exhibit 3 is the contract that determines this case. (2) Finance was not available to the defendant therefore the finance clause could be invoked. (3) $200 was paid in effect by the defendant to the plaintiffs' estate agent. (4) $200 was returned by the estate agent to the defendants because of the belief of the estate agent and the defendants that the contract was at an end. (5) At no time did Mrs Casha know about the $200 being paid to the agent."

51. I pause to state with respect that the last matter of these that a perusal of the transcript indicates that his Worship did indicate he was prepared to find that Mrs. Casha knew that a sum had been paid by way of deposit to the agent although not necessarily the precise amount. However, the basis upon which these findings of fact were made does not appear, for the usual reason.

54. At page 46 his Worship stated that he believed that both the estate agent and the purchasers believed that the contract was at an end. On page 47 his Worship referred to his invitation to counsel for the defendant to put waiver and estoppel and that, if a sale was subject to finance and the finance was not achieved, the contract is capable of being at end at that point.

57. Relevant to the issues in contention here, his Worship referred the "subject to finance" clause, including 3(d) and stated:

"Reliance is placed on that understandably ... I find that in my understanding of that contract that 'not in default under any other condition', means not in default under any other financial condition and that is my ruling on law on that. In any event the contract did fail because there was no finance obtained."

61. As to Bot v. Ristevski, the magistrate, referring to the judgment of Brooking, J.[10] wherein his Honour said "I prefer to approach the problem by asking whether an unconditional right to recover and retain the deposit arose when the contract was discharged" stated that there was in this case no such unconditional right to recover because everything was conditional upon finance being achieved. Later he stated "I do find that at the time the cheque was handed over in the real estate agent's office, their office was the agent of the Georgievs. I find he may also have been a stake-holder." He subsequently stated:

"As agent he was informed by the purchasers that the contract was at an end, or his office was. There is a whole context in which that cheque was handed back. There was a lot of common sense, might I say, between the people at that point in time. I think the solicitor for the vendor backed off because there was nothing much more to do; that Mr. Zaicos saw the whole thing had died, and common sense if he did not proliferate more letters, the thing had died a death. The contract was over. It was over, dead and buried, until some year or more later somebody thought to resurrect it and that is the sadness that people had got themselves into. ... You wanted to talk for some time I suppose about latitudes and how there was the significant time there which went by, which clearly also demonstrates the point which I'll go on to now which is the further point of waiver. The sheer time that went by before anything significant was done is another matter. "

65. Mr. Wikrama referred me to the judgments of Barwick, C.J.[11], Gibbs, J.[12], Stephen, J.[13], Jacobs, J.[14] in Brien, all of which he contended confirmed the principle that the provision for the payment of the deposit was a fundamental term, that is that the payment of deposit in accordance with the terms of the contract is ordinarily an essential condition of the contract. It should not be overlooked that in Brien the issue was what was the meaning of the phrase "upon" in respect of the term "provided that the purchaser should upon the signing of the agreement pay a deposit". ...

68. There are many authorities (a number of them referred to by Brooking, J. in Bot v. Ristevski) concluding that "the deposit is in earnest to bind the bargain"[15] or, as Lord McNachten said in Soper v. Arnold[16] "a guarantee that the purchaser means business". However whether the payment of a deposit is a fundamental term can yield to circumstances or to a different intention of the parties. I note that in Brien v. Dwyer Barwick, C.J. stated[17]:

"Of course, if a vendor is aware of the failure to pay the amount of the stipulated deposit, he cannot delay in exercising what, in my opinion, is his undoubted right of rescission of the contract. If he takes steps in performance of the contract without knowing whether or not the deposit has been paid the ability validly to rescind the agreement might have to be decided upon general grounds in the particular circumstances. If, without taking any such steps, a vendor fails to pursue his right to rescind, a court of equity might possibly be prepared to treat his activity as inordinate and as having itself led the purchaser into some position of disadvantage, in the particular circumstances of the case. But, in my opinion, the right to rescind, arising at the very moment of the execution of this contract, is not otherwise lost than by the conduct (including, perhaps in an appropriate case the inaction) of the vendor."

This seems to be a potent statement of applicable legal principle here.

73. In the same case, Stephen, J. stated, after referring to the failure of the purchaser to pay a deposit at the time an amount stipulated as entitling the vendor to terminate the contract:

"It is also because of this character which a deposit bears for the purchaser's tardy payment of the deposit, unaccompanied by waiver of the breach by the vendor, will not avoid the consequence of the breach involved in that tardiness, namely the vendor's entitlement to terminate the contract. The vendor required this entitlement as soon as the breach occurred and a unilateral act on the part of the purchaser can deprive him of it."

77. A central feature of the appellant's argument with respect to this part of the case was that the magistrate erred in his construction of the finance conditions of the contract. Mr. Wikrama, in colourful language, expressed his inability to comprehend the magistrate's statement that find not in default under any condition meant not in default under any other financial condition.

80. He sought to bolster his argument that this construction, whatever it meant, was incorrect by arguing that his Worship had "gone completely off beam" because he wrongly believed that the condition as to finance was a condition precedent rather than a condition subsequent solely for the benefit of the purchaser.

83. There had been some statements by the magistrate in the course of addresses where he used the phrase "condition precedent" but upon my reading of the transcript his Worship was not using that as contrasting the conditions as to finance as a condition precedent as opposed to a condition subsequent. It does not appear to me that his Worship ever used the phrase "condition subsequent" and indeed in his reasons he referred to the finance condition as "in effect" a condition precedent.

86. In my view, his Worship, in reaching the conclusions he did, was intending to describe the condition as to finance as being a fundamental term of the contract that applied to all the obligations, including the obligation to pay the deposit. There can be little doubt that the terms of the contract themselves imposed an obligation to pay the deposit by 22 November, that is, three days after the parties made the agreement, and did not specifically except the deposit condition from the operation of the conditions as to finance, that is, no provision was specifically made that failing to pay the deposit of 10% by 22 November was not a breach for the purposes of the finance clause.

89. There is no doubt that a finance clause of this kind would in an ordinary contract be construed as a condition subsequent for the benefit of the purchaser. Cases such as Zieme v. Gregory and Tate v. Bonnice make that clear. Nevertheless the operation of that concept is such as to not permit a vendor to take advantage of a clause devised for the benefit of the purchaser to operate after the agreement had been made. However, I do not accept that the magistrate used the phrase "condition precedent" as contrasting it to "condition subsequent" but was indicating a view he formed that the parties had agreed and intended that if finance were not obtained then the contract was to be at an end, that is, no obligation to pay the balance of the deposit and the balance of the purchase money arose and no obligation to convey the property arose in the vendor.

92. His Worship appeared to use the statement of Brooking, J. in Bot v. Ristevski (above, at 124) "I prefer to approach the problem by asking whether an unconditional right to recover and retain the deposit arose before the contract was discharged" as a means of concluding there was no unconditional right to recover the deposit in this case. His Honour, in a typically thorough and scholarly judgment, was there concerned to uphold the principle, undoubtedly correct, that a vendor who discharges a contract over the sale of land by accepting a purchaser's repudiation can still nevertheless recover the deposit that should have been paid before the contract was discharged. If the correct construction of the contractual obligations between the parties in the case before me was such that the vendors never had the right to recover the deposit because the obligation to pay the deposit was itself subjected to the obtaining of finance from Marconi Bell, then the issue which Brooking, J. had to consider in Bot v. Ristevski would not arise, not because of his Honour's conclusions as to the survival of the right to a deposit but simply because there was no right to it. Brooking, J. was concerned to extirpate the heresy, current in the United Kingdom up until the decision in Johnson v. Agnew[18] (decided not long before his Honour's decision in Bot v. Ristevski) that a vendor who determines a contract by accepting repudiation cannot assert rights which arose under the contract and must return to the purchaser what the vendor received under the contract, the vendor's right to retain the deposit being viewed as an exception to the general rule. Brooking, J. explained the origin of the failure to distinguish between rescission for some extrinsic collateral clause and the discharge of contracts for breach.

95. It seemed likely that the view of the magistrate in this case was affected and influenced by some relatively unusual facts. The time for performance of the obligations originally contemplated in this case had been reduced. Some delays had occurred in formulating which of what were ultimately three contracts would be the repository of the terms on which the parties contracted. At the other end, the date for completion (already less than five weeks) was contracted even further. The contract was executed on 19 November; it provided for payment of a tenth of the purchase price within three days. But, at the same time that event was to take place in the course of a total period of ten days after the execution of the contract in which the purchaser was to obtain a specified but not inconsiderable amount of the purchase price, $100,000, from a nominated financier. The purchasers were thereby in a position that if they paid their deposit on say the 22 November (they had already applied for their finance) and were told on the 23rd that finance was not available, they lost $16,000. His Worship doubtless thought that that was a thoroughly unmeritorious windfall although he would not be entitled to take a moral stance about that to support his decision. However, he heard all of the evidence (four days of it) that preceded the final day. It would be surprising if some of that did not bear upon these matters. It seemed to me that his Worship took the view that the intention of the parties was that over such a tight time-frame the obligation to pay the deposit was suspended beyond the 22nd for the relatively brief period until the financier announced his intentions. If he had that view arising from the admissible evidence that he heard and consistent with the appropriate law, then it may have been open to him, depending what the evidence was, to take the view that the parties had orally agreed to suspend the operation of some of the terms. He said little more than what his conclusion was as to that, but I cannot overlook the fact that he heard four days of evidence.

98. It was the obligation of the appellant to have dealt with the decision of the magistrate which they attacked in this appeal by bringing forward the transcript of evidence, so that the matters to which I have referred as a possible basis for his decision could be dispelled. Accordingly, I take the view that the appellant has failed to bring forward the appropriate material that would enable me to be satisfied that there was no basis open for his conclusion on the whole of the evidence. Beyond doubt, it is very unsatisfactory to leave four-fifths of the evidence out.

101. I turn now to the question of whether or not, if I had reached a positive conclusion that the magistrate's view of the contract was incorrect, as to whether or not the appellants had waived the breach by non payment of the deposit on 22 November or elected not to take any step about it when it was not paid (still expecting the contract to go on when the finance was obtained), or are estopped from relying upon that breach. The magistrate dealt with this matter with a paucity of analysis but, it does appear from the passages which I have reproduced, taken in context with the reference by counsel for the respondents in his written submissions (see pp.10-14) to the mainstream authorities on waiver and estoppel (see Exhibit "F" the affidavit of Stephen Peter Byrne of 17 December 1999) and his reference to them briefly in his oral submissions, that his Worship was made aware of the principles being relied on. He had earlier stated in the course of addresses that he thought the relevant concept was waiver rather than estoppel and he referred to waiver when he gave his reasons, brief as they were. It is, in my view, within this area that the failure to bring forward for the Court's consideration the evidence that was given is most damaging. The matters that did emerge from the evidence in the findings of fact that were articulated include the notification by the defendants' solicitor Zaicos to the agent by telephone on 25 November of the information just received from the financier that the finance would not be forthcoming and the writing of a letter. Mr Zaicos's evidence was the only evidence reproduced because it was given on the same day, the final fifth day of the case. It also established (whatever the other evidence did) the receipt by the purchasers from the vendor's agent of the $200 paid by way of a preliminary deposit. This was relied on by the defendants/respondents as evidence of waiver of any breach occasioned by failure of the defendants to pay the deposit in full on 22 November, so that they were not precluded on that ground from relying on the "subject to finance" condition.

104. It is not necessary for me to refer in any depth to principles well known (but not always uniformly stated) that find their home in waiver, election or estoppel. Waiver and election appear to be applied most frequently in a case where a person has alternative rights and acts in a manner consistent only with him having chosen to rely on one of them. See Carter and Harland, Contract Law in Australia, 3rd ed. paras.151 and 391. As the passages previously cited by me from Brien indicate, in the context of vendors failing to act upon a breach of the fundamental obligation to pay a deposit (where that exists) the courts, particularly by way of equitable principle, will look to the conduct of the person who is said to have waived. As is well known, the principles of estoppel look towards the situation of the person relying on the estoppel. See Crane v. Colonial Mutual Fire Insurance Co. Ltd.[19] and more latterly, in a case relied on both before the magistrate and before me, Khoury v. Government Insurance Office New South Wales[20]. Waiver or election cannot be imputed without knowledge, thus a focal point of the debate there and here was as to the agency of Mr Cuk. The magistrate held that he was both an agent and stakeholder. If these findings were to be rationally attacked, the evidence upon which the conclusion was based, in order to enable its re-examination on appeal, had to be included as part of the material on which the appeal would be heard. No counsel referred to the evidence of Cuk. In particular, Mr Wikrama, who had the carriage of the appeal, did not either address me on it nor asked for time to consider it further, although he had the period during which Mr Gillies addressed, if needed, to look at Cuk's evidence. I conclude from that silence that there was nothing to be found in Cuk's evidence that would have assisted on this appeal, that is, nothing to suggest that his instructions ran contrary to the conclusion that he was an agent as well as a stakeholder. Mr. Wikrama suggested the duality of legal roles could not be maintained but he did not demonstrate how this could not be so. The agent could be invested by his principal with far wider authority than might be said to be commonplace. For all I know, the magistrate might have concluded that there was evidence of specific authorisation to return the deposit, although it appears that Mrs Casha, at least, was not aware that it had been. There was some debate between the parties before me as to the meaning of various passages from Bowstead & Reynolds on Agency. The issues of the authority of agents and authority implied from the practices in special fields is relevant. The magistrate found that the appellants knew that a preliminary deposit had been paid. The case on waiver election and estoppel was pleaded prior to the hearing of the proceeding before the magistrate and was "on the table" during the hearing. If there were evidence capable of being called that rebutted the waiver case then it ought to have been called. Perhaps it was, but if it was, neither party has bothered to refer me to it or address me on it. The argument made here by the vendors, and, as I would apprehend from the magistrate's remarks, made to him was simply that Cuk was a stakeholder and was not an agent. The latter matter was, as his Worship apparently thought, susceptible to a different conclusion based upon the facts. I know some of the facts but the absence of other evidence engenders no confidence in me that I am privy to all of the facts which the magistrate had. As was not uncustomary with him, he did not articulate them fully. Once the vendors' agent was told of the rejection of the application for finance, it would be surprising if Cuk had not told his vendors. That was the time at which the vendors might have insisted upon the whole of the balance being paid or they could have agreed to accept the proposed termination. What was done was that the agent returned the preliminary deposit, an act consistent with either accepting termination or indicating that the plaintiff accepted that the contract would not proceed and that all parties would return to the position in which they had been prior to the making of the contract. Some reliance was placed upon the principles pronounced in the 16th edition of Bowstead that the law imputes to the principal and charges him with notice of knowledge relating to the subject matter of the agency which his agent acquires or obtains while acting as such agent. There may be some limitations to the breadth of this doctrine as thus pronounced but it once again raises the question as to why this Court has not been put in possession of the evidence concerning the matter. It would seem that the vendors must have known that the contract was not going ahead and that the full deposit had not been paid. Otherwise they would not have known, even into December, whether they would have to leave their house. Once that information was discovered then that was the time for steps to be taken. They sat on the rights which they claim to have had and sought to assert in this proceeding after more than 18 months elapsed, at which time the notice of rescission was served. The magistrate apparently concluded that the Georgievs' believed that their notice of termination was accepted because their preliminary deposit was returned. As a consequence it is a short step (although he does not appear to have articulated it) to conclude that they were denied the opportunity of remedying the defect because they relied upon the inaction and continuing inaction of the vendors. See Grundt v. Great Boulder Pty. Ltd. Goldmines[21].

107. I do not propose to deal with the argument that the notice given was not an appropriate notice under clause 13 of Table A. I do not because the issue of waiver, election or estoppel cannot be put to one side by the importation of Table A into the contract of sale, it being a doctrine that stands outside the terms of the contract itself and being a function of the ameliorating influence of equity. Even if the argument were correct, it will not serve to set aside the waiver, election or estoppel arguments. Moreover, as Mr Gillies argued a proper notice was given, perhaps it was given but the evidence about that omitted. For these reasons the appellants' appeal must fail and is dismissed.

110. Since the questions of law were formulated, as I would understand, either in ignorance of the fact that the whole of the transcript has not been produced or on the basis that it ultimately would be or upon no other basis than they were questions suggested by the appellants, there seems little point in seeking to answer the questions. For the sake of completeness I would say as follows:

Question A: This question is not capable of being answered relevant to this proceeding as it contains assumptions of fact not established by evidence.

Question C: Yes, if the estate agent was an agent as well as a stakeholder.

[1] [1978] HCA 50; (1979) 141 C.L.R. 378.

[2] (1991) Qd.R. 547.

[3] [1981] VicRp 13; [1981] V.R. 120.

[4] [1963] VicRp 34; [1963] V.R. 214 at 220.

[5] [1975] VicRp 9; [1975] V.R. 102.

[6] [1975] VicRp 17; [1975] V.R. 175.

[7] [1977] VicRp 52; [1977] V.R. 454.

[8] [1989] VicRp 35; [1989] V.R. 383 and at 385.

[15] Howard v. Smith (1884) 27 Ch.D 89 at 101.

[18] [1979] 2 W.L.R. 487

[19] [1920] HCA 64; (1920) 28 C.L.R. 305

[20] [1984] HCA 55; (1984) 165 C.L.R. 622 at 633

[21] [1937] HCA 58; (1938) 59 C.L.R. 641 at 674