Condor Asset Management Ltd v Primestone Developments Pty Ltd [2007] NSWSC 708 | Case summary

JUDGMENT 1 HIS HONOUR: This is an appeal from a decision in the Local Court. The plaintiff, Condor Asset Management Limited, sued the defendant, Primestone Developments Pty Limited, seeking to recover moneys paid out, totalling $41,000. The claim failed; the proceedings resulted in a verdict for the defendant. 2 The appeal to this Court is governed by ss 73, 74 and 75 of the Local Courts Act. These sections provide, so far as is relevant: "73. (1) A party to proceedings under this Part who is dissatisfied with the judgment or order of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order, but only as being erroneous in point of law…. 74. (1) A party to proceedings under this Part who is dissatisfied with the judgment or order of a Court sitting in its General Division may appeal to the Supreme Court against the judgment or order on a ground that involves a question of mixed law and fact, but only by leave of the Supreme Court… 75. The Supreme Court may determine an appeal made under this Division: (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal." 3 It is to be observed that an appeal as of right only lies where there has been an error in law in the court below. An appeal on a ground involving mixed law and fact may be brought by leave of this Court. 4 The appellant plaintiff has not sought leave of this Court to pursue an appeal, and Mr Shepherd has submitted that the Local Court erred in law. Mr Crossland submitted to the contrary. 5 Fifteen grounds of appeal are expressed in the plaintiff's amended summons. Ground 1 is introductory only and was not the subject of submissions. Grounds 2, and 3 concern the alleged failure of the magistrate to provide written reasons for judgment. Mr Shepherd did not ultimately pursue these grounds, but it is convenient at the outset to consider the reasons for judgment that were expressed, by way of introduction, before turning to the consideration of the grounds that were argued. Mr Shepherd did pursue ground 15, dealing with the sufficiency of the reasons for judgment, and that ground is to be addressed in this judgment. 6 The principal witnesses who gave evidence in the Local Court were Mr Thomas, a director of the plaintiff company, and Mr Richmond, a director of the defendant company. These men were involved in discussions early in August 2001. The discussions concerned possible development of a property in Mollymook. According to Mr Thomas, no agreement was entered into at that time but a future joint venture was in contemplation. According to Mr Richmond, an interim agreement was reached concerning issues to be addressed before a joint venture agreement could be reached. Mr Thomas gave evidence to the effect that the amount of $41,000 claimed by the plaintiff related to money which the plaintiff paid to reimburse the defendant for various items of expenditure concerning the contemplated joint venture. Mr Thomas claimed that the moneys were paid by way of loan. This was denied by Mr Richmond. According to Mr Richmond, with the exception of an amount of $1000 paid to Mr Wales, an urban design and development service provider, the balance of the payments by the plaintiff were to reimburse the defendant for expenditure in relation to the contemplated development; and the plaintiff paid the money now claimed pursuant to its obligation under the interim agreement. 7 The magistrate considered these competing contentions in his reasons for judgment to which I now refer: "Mr Thomas was a director of the plaintiff and he gave evidence and that evidence is now exhibit 1 in these proceedings. His evidence says that in about August of 2001 the plaintiff entered into negotiations with the defendant company over the possible development of land at Mollymook on the south coast of New South Wales. The plan was to develop the land into what might be loosely described as a tourist resort. Apparently the plaintiff [query whether this should be a reference to the defendant] had the idea but at that time not the money. Discussions took place about the setting up of a joint venture to purchase and develop the land. Subsequent to the initial discussions, the defendant sent the plaintiff a tax invoice for some $48,849 in anticipation that these amounts would be paid by the plaintiff. According to Thomas a short time later, he received what is now annexure C to his evidence statement exhibit 1 from the defendant. Despite the defendant alleging this was a document that reflected an interim agreement between the parties and was to be ultimately replaced by a formal joint venture agreement, Mr Thomas says at paragraph 7 of his statement that, 'No agreement was ever reached between the parties regarding a joint venture or investment in relation to the land'. He details the evidence at paragraph 6, the payment by four cheques on 21 August 2001, 29 August 2001 and two on 7 September of the total sum of some $41,000. At least 20,000 of this would appear to have been paid after the receipt by the plaintiff of the document annexure C in his statement which the defendant says reflects the interim agreement. At paragraph 8 of his statement, that is Mr Thomas, he says that the 41,000 was paid to or on behalf of the plaintiff and that was a loan repayable on demand. There is no direct evidence as to this assertion. The plaintiff in its statement of claim says this should be inferred from the conduct of the parties. Mr Thomas in his evidence, then takes us to a meeting in North Sydney on 21 March 2002, some seven months later when he says he was told by Mr Richmond that the defendant had, to quote his words 'Gone with another party'. Discussion took place at this meeting which is reflected in paragraph 10 of Mr Turner's statement wherein Richmond acknowledged the debt and agreed to pay within 40 days. Despite correspondence between the parties and the defendant's then solicitors, Phillips Fox, over the period 18 July 2003 until 7 October 2003, no moneys were paid to the plaintiff. The statement of claim was filed ultimately in November 2004." 8 The magistrate then referred to evidence given by Mr Sullivan and then went on to refer to the evidence of Mr Richmond in the passage which I now set out: "The defendant company's case came substantially from Mr Richmond. Mr Richmond's evidence is exhibit 19 in the proceedings. He says that in 2001, he and an associate Mr Ted Sullivan became aware of land at Mollymook that they believed should be developed. They spoke to the owners of the property who came to an agreement that is referred to in paragraph 4 of his evidence. It was during efforts by Richmond and Sullivan to obtain funding to further progress the matter that contact was made with Mr Thomas of the plaintiff company. According to Richmond, they had a number of meetings, some of which are mentioned in paragraphs 6 to 12 of his witness statement. Mr Richmond says that at a meeting in early August 2001, the evidence would suggest certainly before 17 August meeting that's referred to that he presented a document to Mr Thomas that was nearly identical to annexure A in Richmond's evidence. That's exhibit 19 and, of course, to exhibit C of Mr Thomas' evidence which he says, Mr Richmond, reflects the agreement. He says Thomas and Kanven [this should read Canvin], another officer of the plaintiff company who was present at these meetings, each agreed to the terms as set out. He says that on 17 August 2001 he sent a tax invoice of 28,849 to the plaintiff to be paid as part of the deal. Subsequent to the sending of the tax invoice, another meeting took place about the end of August 2001 wherein the plaintiff, through either Turner or Kanven [this should read Canvin] refused to pay the 48,849 although 20,000 had already been paid on 21 August and I think 27 August. They said that they had only agreed - past tense - to pay $40,000. This would appear to be consistent with the document the defendant says reflects the agreement which was sent to Thomas, according to Richmond, in early August and with which the plaintiff agreed. The reason for the refusal by the plaintiff company to pay the additional 8000 was because the plaintiff required the defendant to contribute hurt money. This is referred to in paragraph 11 of Mr Richmond's statement. Apparently hurt money was in the area which property developers operate is some money to be put in by each of the parties so that they are to suffer some disadvantage if the particular development doesn't go ahead. It's not as if one puts in all the money and the other one puts in nothing but ideas and then loses nothing financially if the matter falters. The reason for the refusal of the additional 8000 that they believed Richmond and his company should put in - a little bit of hurt money - $8,000. Richmond goes on to depose how in a meeting in early March 2002 the plaintiff indicated they were not prepared to put in any more funds despite the agreement requiring them to, amongst other things, fund the venture to the tune of $100,000. That's mentioned in paragraph 14 and 15 of his statement. Richmond then obtained another investor and refers to the North Sydney meeting of 21 March 2002 wherein he informed Kanven [this should read Canvin] they had gone with another investor. I refer to paragraph 19 to 24 of his statement. Whilst there is some common ground as to what was said at this meeting, Richmond's evidence suggests that there was no admission of liability. However, he does concede that he said: 'As a sign of good faith I will make sure that any ensuing joint venture pays off and Ted and I will make a payment to you and this will hopefully cover the $40,000 you've invested.' Thomas, allegedly, was satisfied with this agreement. Richmond said he made this offer not because he [sic] his company was legally liable but because in the small business circles within which he operates he did not want his name bandied about as a defaulter. The foregoing represents a précis of the evidence in chief given by Richmond." 9 His Honour went on to review the cross examination of the principal witnesses and expressed his assessment of the witness Mr Thomas in this passage (at p 4): "Mr Thomas impressed me as an intelligent man who adopted a very considered approach with the questions he was asked. However, on numerous occasions it seemed to me that he feigned misunderstanding and confusion to what appeared to be the simplest of questions." 10 In considering the evidence by Mr Thomas that what was paid by the plaintiff was paid by way of loan, his Honour said (at pp 4-5): "He [Mr Thomas] did, however, agree that there was no mention of any interest rates or term for what he now claims was a loan to the defendant repayable on demand. For an intelligent businessman, as I'm satisfied he is, such as Mr Thomas to part with $41,000 in the manner at which he says he did almost beggars belief." 11 His Honour went on to consider the actions of the plaintiff, and said: "…That is, their actions were consistent with Condor being a partner developer, very hands on and not the actions of a simple lender. Why, one might pose the question, would they be concerned with whether the development went ahead or not if simply a lender they could call in the 41,000 at any time. Overall, I found Mr Thomas to be an unimpressive witness. He had a tendency to prevaricate, not an open witness and somewhat shifty in his answers to questions leaving me with the impression that he was not at all times an honest witness." 12 The magistrate turned to express his assessment of the evidence of Mr Richmond, and it is clear that he made a favourable assessment of this witness: "Whilst there were a number of inconsistencies in his evidence, his explanations to these inconsistencies generally, in my view, appear plausible. I found him to be a generally impressive witness who was basically honest with a good recall of events that took place a long time ago. Where his evidence differs from that of Mr [Thomas], I prefer the evidence of Mr Richmond. I don't propose to comment any further on the evidence." 13 His Honour then proceeded to express his finding as to the plaintiff's claim that the moneys paid by the plaintiff were paid by way of a loan repayable on demand: "Having heard and considered the evidence in this case, I am not satisfied on the balance of probabilities that the sum of $41,000 was paid by the plaintiff to the defendant by way of a loan repayable on demand as asserted by the plaintiff in its statement of claim. I am satisfied the money was paid in accordance with a concluded oral agreement entered into by the parties in early August of 2001 and in terms of the document, annexure C of the statement of Mr [Thomas]." 14 His Honour then concluded (at pp 5-6): "Under the terms of that agreement the plaintiff was to contribute up to $100,000 including the $40,000 that was anticipated would be paid upfront. In fact, 41,000 was paid. Thus it was open to the defendant to request further funds as it did at the meeting of early March 2002. The plaintiff refused to contribute further funds and thus, in my view, was in breach of the agreement. This allowed the defendant to repudiate that contract as it did on 21 March 2002, and under the terms of the agreement there was no right to a refund of moneys paid by the plaintiff. Having considered all of the evidence and the submissions, the plaintiff has failed to discharge the onus cast upon it from the outset in respect of either the claim or the matter raised in the alternative." (The reference to "the matter raised in the alternative" is a reference to the concluding paragraph of the statement of claim in the nature of an indebitatus count: "Further, and in the alternative, the plaintiff sues the defendant for the sum of $41,000 for money paid by the plaintiff for the defendant and at the request of the defendant.") 15 It is clear from the above recital of the content of the reasons for judgment that there was no substance in the grounds asserting that the magistrate failed to give reasons for his judgment, and it is altogether understandable that grounds 2 and 3 were not pursued. 16 The findings that the magistrate made going to the credibility of the witnesses whose evidence was reviewed are findings which are not open to challenge in this Court. 17 The rejection of the claim that the various sums paid by the plaintiff were paid by way of a loan repayable on demand involved the making of an assessment as to whether or not the evidence Mr Thomas gave ought be accepted. The magistrate did not accept the evidence to that effect, and it seems to me the conclusion reached on this issue was based essentially upon a finding of fact, which, again, is not reviewable in this Court. This conclusion involves the rejection of Ground 12 of the grounds of appeal: "His Honour erred in failing to find that there was not a loan from the plaintiff to the defendant (5.40)." 18 That ground as expressed focuses directly upon the finding that the magistrate was not satisfied on the balance of probabilities that the sum of $41,000 was paid "by way of a loan repayable on demand as asserted by the plaintiff in its statement of claim." The magistrate was there addressing the claim pleaded by the plaintiff in para 3 of the statement of claim where it was alleged that the plaintiff entered into an agreement on 17 August 2001 whereunder the defendant was to repay money advanced "on demand". The term as to repayment "on demand" was alleged to be an implied term. The magistrate did not have to accept that the term so expressed arose having regard to the purposes for which the money was paid and the circumstances in which the payments were made. The magistrate found that the payments were made in the setting of an agreement, and this brings me to a consideration of the challenge to the magistrate's findings as to this. That challenge arises under Grounds 4 and 5 of the grounds of appeal: 4. His Honour erred in finding that a concluded oral agreement ("the oral joint venture agreement") arose in terms of the document at annexure C. 5. His Honour erred in finding in the absence of any evidence that the plaintiff was asked or required to contribute more funds to the oral joint venture agreement." 19 The evidence of Mr Richmond was that at about the beginning of August 2001 he produced a document in terms in or to the effect of that which appears in the appeal papers at p 117, and again at p 190. There was a discussion at that time involving Mr Thomas and Mr Canvin, another director of the plaintiff, and, according to Mr Richmond, both Mr Thomas and Mr Canvin expressed their agreement to the terms of the document. The document is in the following form: " MOLLYMOOK LINKS The Deal 1. Condor Asset Management Ltd (CAL) and Primestone Developments Pty Limited ('PD') form a 50:50 Joint Venture to purchase the land and potentially some of the ex-Olympic Cabins. The joint venture company is to be a newly formed company. 2. Upfront, CAL will undertake the following: (i) Reimburse costs to PD up to an amount of $40,000 (ii) To pay architects, legal, et al costs up to $100,000 including (i) 3. CAL/PD to recover their respective costs first prior to profit distribution. Profit distribution to be on a 50/50 basis between CAL/PD. Roles CHL (i) Structure tax package for cabin investors (ii) Distribute cabin investors through PKF or others (iii) Obtain underwriting for cabin investors (iv) Legal documentation (v) Broadview negotiations PD (i) Obtain DA (ii) Obtain and execute land option agreement (iii) Establish management structure for Mollymook Links (iv) Project Implementation timetable/Negotiations with contractors (v) Broadview negotiations (vi) To agree an arm's length management agreement with PD to operate Mollymook Links." 20 It was open to the magistrate to accept the evidence that Mr Richmond gave about this document being the subject of an agreement. This is so notwithstanding the evidence upon which a contrary conclusion could have been reached, and I have in mind the evidence to which Mr Shepherd referred in his closely reasoned submissions. 21 Mr Shepherd submitted that a contract based upon the document above set out must be void for uncertainty. The submission was not closely argued and I am not persuaded that an error of law has been shown in this regard in relation to a matter that did not appear to have been addressed in the Local Court. In the context of a commercial arrangement, "no narrow or pedantic approach is warranted" in seeking the meaning of a contract: see The Council of the Upper Hunter County District v Australian Chilling and Freezing Co. Limited (1967) 118 CLR 429 and in particular the judgment of Barwick CJ at 436-437; see also National Roads and Motorists Association Limited v Parkin (2004) 60 NSWLR 224. The ground was not directed to the meaning of the document, but it was submitted that the contract failed "for uncertainty as to formation or intention". There was evidence from Mr Richmond that went directly to the issue of the formation of the contract, and whether or not the magistrate was satisfied that the parties intended to enter into a contractual relationship depended essentially on his assessment of the evidence given. No appeal lies under s 73 of the Local Courts Act as to these issues. 22 Ground 4 has not been established. 23 Turning to Ground 5, there was evidence that the plaintiff was called upon to make contribution beyond the sums paid. Evidence to this effect is to be found in the statement of Mr Richmond at para 15, where Mr Richmond contends he complained: "You said you would put in $100,000. You have only put in $40,000, what about the remaining $60,000?" 24 The asserted error in Ground 5 has not been established. 25 It is convenient to deal with Grounds 6-9 together: "6. His Honour erred in finding that the Plaintiff was in breach of the Oral Joint Venture Agreement (5-56). 7. His Honour erred in finding that the Plaintiff had repudiated the Oral Joint Venture Agreement (5.57). 8. His Honour erred in finding the Defendant was entitled to repudiate (sic - terminate) the Oral Joint Venture Agreement (5.57). 9. His Honour erred in implicitly finding that the Defendant terminated the Oral Joint Venture Agreement, being a finding relating to a matter which was not at issue between the parties." 26 Having found the oral agreement early in August 2001, one of the obligations undertaken by the plaintiff, as recorded in the document set out at [19] above, was to make payments of the type specified "up to $100,000", including the sum of $40,000 mentioned in para 2(i).. Having regard to that finding, once the magistrate accepted that the plaintiff was not prepared to pay any more than it in fact paid until a lease had been signed, it was open to the magistrate to find that this unwillingness amounted to a breach of the oral agreement. The findings of fact upon which the conclusion was reached were findings plainly open to the magistrate having regard to the content of Mr Richmond's statement. An error of law for the purposes of s 73 has not been shown. Ground 6 therefore fails; so does Ground 7. 27 Turning to Grounds 8 and 9, there was in evidence before the Local Court the letter which Mr Richmond claimed to have sent to Mr Thomas and to Mr Canvin on or about 11 March 2002 (set out at p 197 of the appeal papers). Whilst the magistrate refers to a repudiation on 21 March 2002, this appears to be a reference to the letter of 11 March 2002 in which Mr Richmond wrote, inter alia: "It is therefore appropriate that we now formally conclude this matter… Any relationship that may have existed is now clearly and has for some time been at an end." 28 The letter and Mr Richmond's evidence about it were before the magistrate. Having regard to his finding that the plaintiff was not prepared to make further payments beyond the $40,000, it seems to me that there was a factual basis for the findings the subject of Grounds 8 and 9 and that under neither ground is an error of law for the purposes of s 73 of the statute made out. I observe that the magistrate did not expressly make a finding in the terms expressed in Ground 9. 29 The magistrate rejected the plaintiff's case that the sum of $41,000 was paid over by way of loan repayable on demand. For reasons earlier expressed, I do not consider that conclusion manifests error of law for the purposes of s 73 of the Local Courts Act. This leaves for consideration the alternative claim pleaded in the statement of claim as set out at [14] above. Since the money was paid by the plaintiff and the defendant had the advantage of those payments, even if later it was not directly involved in the joint venture that proceeded, Mr Shepherd submitted that the money was refundable. This brings me to the remaining grounds of appeal, Grounds 10, 11, 12, 13 and 14: "10. His Honour erred in finding that the Plaintiff had no right of refund of moneys paid by the Plaintiff to the Defendant (5-58) & (6-1). 11. His Honour erred in failing to find the Plaintiff was entitled to an order for restitution of the sum of $41,000. 12. His Honour erred in failing to find that there was not a loan between from [sic] the Plaintiff to the Defendant (5-40). 13. His Honour erred in failing to find the Defendant was not indebted to the Plaintiff (5-40). 14. His Honour erred in failing to find that such indebtedness was admitted by the Defendant (5-40)." 30 So far as Ground 14 is concerned, the error alleged, if made, could not be regarded as an error of law but of fact. Hence, no appeal on this ground lies to this Court. 31 There was evidence in the statement made by Mr Richmond of a provisional expression of intention to repay: "As a sign of good faith, I will make sure that any ensuing joint venture pays off, Ted and I will make a payment to you. This will hopefully cover the $40,000 you have invested." 32 This was referred to in the letter written by Mr Richmond to Mr Thomas on 30 July 2003 as a contemplated "ex gratia payment". In his oral evidence, Mr Richmond referred to "the Sydney business community" being "a small community", and that he expressed the intention to repay $40,000 to the plaintiff "as a sign of good faith". The intention was to make the payment "if the joint venture had permitted that we could do it as we progressed". 33 The magistrate was entitled to treat the evidence in point as evidencing an intention and an expression of intention to repay the $40,000 not because of some perceived legal obligation, but as an expression of goodwill and, perhaps, a perceived moral obligation. In any event, Ground 14 does not address an error of law and must therefore fail. 34 Ground 12 complains of error in failing to find that there was not a loan. I addressed this ground earlier (at [17] and [18]). The rejection by the magistrate of the plaintiff's primary case as pleaded in para 3 of the statement of claim involved factual findings that afford no opportunity for appeal under s 73 of the Local Courts Act. 35 This leaves Grounds 10, 11, 13 and 15, and it is convenient to deal with these grounds together. 36 Mr Shepherd submitted that the magistrate's conclusion (set out at [14] above) involved error of law because the defendant had not pleaded the basis of its entitlement to keep the money. Mr Shepherd cited Wong v Mura [2001] NSWCA 366 as authority for that submission. I am not attracted by this submission. Mr Shepherd referred to the judgment of Priestley JA in Wong where the significance of the pleadings was emphasised. His Honour said (at [2]-[4]): "2 I wish also to say that the reasons why pleadings are required in superior courts and the reasons why parties to litigation are supposed to comply with pleading rules apply equally in the District Court. 3 They enable parties to prepare for trials with a reasonably clear understanding of what the issues will be and what evidence they will need to put before the court. They next enable the parties to litigation to conduct it in an orderly and focussed way, which keeps surprise and ambush to a minimum. 4 If issues not apparent from the pleadings are allowed to be litigated at a trial, the terms on which this is permitted should include an order that the pleadings be amended accordingly. The pleadings at the end of a trial should accurately show what was or were the case or cases of the claiming side of the record, and what was put in issue by the opposing side, together with any further issues raised by that side." 37 The primary case as pleaded by the plaintiff in the statement of claim was an agreement by the plaintiff to advance moneys to the defendant repayable on demand. In the amended defence, such an agreement was denied (in para 3). The defence admitted the payment of moneys by the plaintiff but denied indebtedness and completed the defence by asserting that the money paid was paid as "an investment made by the plaintiff". Particulars were sought as to the terms of the investment. By consent, there were tendered on the hearing before me copies of the letter written by the plaintiff's solicitors to the defendant's solicitors dated 5 September 2005 and the response dated 28 September 2005. In paragraph 13 of the letter requesting particulars, particulars were sought as to para 9 of the amended defence, where the assertion of an investment was made. The terms of the investment, according to the defendant's response, were to be found in the document I set out earlier at [19] above. In the particulars furnished by the defendant's solicitors, the agreement was claimed to have been partly oral and partly written. The written part I have identified and the oral part was said to consist of the consents expressed by Mr Canvin and Mr Thomas to the terms of the document. It was further contended that there was an implied term of the contract, that if the plaintiff repudiated the agreement, the defendant had a right to terminate it. 38 At the outset of the hearing in the Local Court there was a discussion about the issues and those particulars were referred to and relied upon by the defendant as alerting the plaintiff to the issues. 39 As I see it, the particulars alerted the plaintiff to the defendant's contention that what the plaintiff paid was paid pursuant to the agreement identified in the particulars. The particulars further alerted the plaintiff to the defendant's contention that there was an implied term of the agreement that if the plaintiff repudiated it, the defendant had a right to terminate the agreement. 40 It was clear from the terms of the statement made by Mr Richmond, of which the plaintiff was aware before the hearing began, that it was the defendant's contention that Mr Thomas alerted the defendant that the plaintiff was not prepared to advance further funds until a lease had been signed with the Lawrences and that thereafter Mr Richmond wrote the letter to which I referred at [27] above. 41 In my opinion, the conclusions expressed by the magistrate recorded at [14] above were conclusions expressed on the issues as presented by the pleadings and the particulars and the evidence that emerged in the course of the hearing. The document (at [19] above) was silent as to when a right of termination was to arise, but the plaintiff's expressed unwillingness to make further payments plainly justified the defendant treating the contract as being at an end. The magistrate used the word "repudiate" in referring to the defendant's response to the plaintiff's expressed unwillingness to make further payments ([14] above) but his findings convey that it was the plaintiff who repudiated the contract in the strict sense and that the defendant elected to terminate the contract as a result. However, this choice of language does not vitiate the findings expressed. 42 The magistrate found that under the terms of the agreement there was no right to a refund of money paid by the plaintiff. There was no express right to recover that money under the agreement evidenced by the writing I set out earlier (at [19]). That document is silent as to this except that it makes provision in the paragraph numbered 3 for the recovery by the parties of "their respective costs first prior to profit distribution". Absent express provision in the contract, was the defendant entitled to recovery of the money it paid nevertheless? 43 Generally speaking, an election to terminate a contract for its breach by the other party puts an end to the contract from the time that the election is communicated and thereafter both sides are released from further performance on the contract: see McDonald v Dennys Lacelles Limited (1933) 48 CLR 457 at 469-470, and at 476-477. A contract is generally to be regarded as valid and effective until termination and a party may look to a provision of the contract such as would survive a repudiatory breach. For instance, an arbitration clause or a liquidated damages clause may be relied upon after termination: see Codelfa Construction Pty Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 per Mason J at 365; Port Jackson Stevedoring Pty Limited v Salmond & Spraggon (Aust.) Pty Limited (1980) 144 CLR 300 and the judgment of Lord Wilberforce at 306. A party to a contract may claim damages for its breach notwithstanding termination. As to this, see, again, McDonald v Dennys Lacelles Limited (supra) and the judgment of Dixon J at 476-477. 44 Following termination for breach of contract, a party whose breach led to the termination may be able to recover money paid pursuant to the contract and before breach. 45 Mr Shepherd submitted that there was no right of forfeiture in the contract here and the defendant did not plead breach of contract nor did it claim damages in consequence of breach. Moreover, there was no evidence led of damage suffered by the defendant. Hence, Mr Shepherd submitted that the magistrate fell into error in determining the plaintiff's payments were not recoverable. Mr Shepherd cited McDonald v Dennys Lacelles Limited (supra) in which it was determined that instalments of purchase money upon a sale of land could not be retained by the vendor after he elected to treat the purchaser's default as a discharge, and in that case Dixon J, at 478, referred to Mayson v Clouet (1924) AC 980 as being authority for the proposition that it "was beyond question that instalments already paid may be recovered by a defaulting purchaser when the vendor elects to discharge the contract." That right of recovery did not extend to the deposit, which has long been recognised, to use the language of Fry LJ in Howe v Smith (1884) 27 Ch 89 at 101 as "an earnest to bind the bargain": see also Mayson v Clouet (supra) and the judgment of Lord Dunedin at 986; and McDonald v Dennys Lacelles (supra) and the judgment of Starke J at 470. 46 Mr Shepherd referred also to Schmierer v Taouk [2004] NSWSC 345; 207 ALR 301 where White J determined that restitution lay where a payment was made at the request of the defendant and for his benefit even though there was no implied contract of loan, but where it appeared that the plaintiff did not intend to make a gift: see in particular the judgment at [60]. 47 The present case is factually distinguishable from McDonald v Dennys Lacelles and from Schmierer v Taouk. Between the date of those decisions the concept of restitutionary claims or unjust enrichment developed, beginning with Pavey & Matthews Pty Limited v Hall (1986) 162 CLR 221. In Pavey and other cases since, the High Court has recognised the duty to make restitution for unjust enrichment: see ANZ Banking Group Limited v Westpac Banking Corp. (1988) 164 CLR 662; David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353; see also the discussion in Cheshire and Fifoot's Law of Contract, 8th Aust. ed, Chapter 26 where the learned authors refer to the law of restitution as being "at an early stage of development in Australia". Mr Shepherd referred to no case similar to the present one and neither has my own research taken me to one. 48 In David Securities Pty Limited v Commonwealth Bank of Australia (supra) defences to restitution claims were identified but not exhaustively: see also Roxburgh v Rothmans of Pall Mall Australia Limited [2001] HCA 68 and the discussion on the defences raised in these cases in Cheshire and Fifoot at 26.6. 49 Underlying the various High Court decisions is the concept that restitutionary relief depends upon establishing that the defendant has been enriched unjustly. In Carter's Guide to Australian Contract Law (2006), the author identifies the following elements of unjust enrichment (at 495 [30-04]):

Condor Asset Management Ltd v Primestone Developments Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (11 paragraphs)

Parties

Cases Cited (13)

Cited By (1)