Dimond v Moore [1931] HCA 12

Dimond v Moore [1931] HCA 12 - HCA 1931 case summary — Zoe

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same were mere negotiations and did not constitute a concluded or binding contract. The defendant also denied that he entered into possession but said that, if he did so, he entered either as a weekly tenant or as a tenant on sufferance or in expectation of the said negotiations resulting in his obtaining from the plaintiff a lease registrable under the provisions of the Real Property Act 1886 (S.A.) upon terms approved by the defendant and embodying the terms and conditions stipulated in the said letters, and that the defendant paid the rent for the period of his occupation and until the plaintiff finally refused to grant such lease ; that the plaintiff finally refused verbally by her solicitors on 1st November 1928, whereupon the defendant by notice in writing to the plaintiff determined his tenancy and vacated the premises on or before 30th November 1928. The defendant also denied that on 6th December 1927 he refused to carry out the said agreement, and said that if the correspondence referred to constituted an agreement the plaintiff, despite repeated application by the defendant for a draft lease in terms of the said correspondence for his approval, refused at all material times and, until after the defendant had vacated the said premises pursuant to the said notice, continued to refuse to carry out the said agreement by submitting such draft as aforesaid but insisted upon the acceptance and execution by the defendant of a lease in terms different from that referred to in the said correspondence. The defendant also alleged unreasonable delay on the part of the plaintiff, and that grave hardship would be caused to the defendant by an order for specific performance, and alleged that in consequence of the plaintiff's failure to carry out the agreement the defendant had been compelled to lease other premises at a higher rental of £22 10s. per week (exclusive of rates and taxes). The defendant also counterclaimed for damages alleged to be occasioned by the plaintiff's breach of the said agreement. The material facts are set out in the judgments hereunder.

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the lease did not know of the terms of the agreement. Some delay then took place, but in June of 1928 Mrs. Moore's advisers interviewed Dimond, who insisted that he was entitled to a lease in the same terms as his old lease, subject to an alteration in rental and in the insurance clause. He specially objected to clauses 5 and 12 of the draft lease submitted for his execution. On 9th July 1928, Mrs. Moore's advisers wrote to Dimond, enclosing a lease in triplicate for perusal and execution by him. They said they had been instructed by their clients to prepare it, that it was virtually in the form of Dimond's previous lease; and they added: "this is the form of lease which our clients require." This draft or engrossment of a lease was also contrary to the terms of the agreement, particularly those clauses numbered 4, 5, 6, and 9. Again Mrs. Moore's advisers do not appear to have known the real agreement between her and Dimond. And, like the draft of December 1927, the new lease was the result of an endeavour to have a lease as nearly in the same form for all Mrs. Moore's tenants as possible. Delay again took place, owing to the absence of Dimond in Western Australia, but on Ist November 1928 he wrote to Mrs. Moore's advisers that he accepted the notice given to vacate the premises, and would return the keys on 30th November or earlier if desired. In this he was under some misapprehension, for it is denied that any such notice was given, and the learned trial Judge acted upon this view. How- ever, on 2nd November Dimond's advisers put the position on a clear and definite basis. They wrote to Mrs. Moore's advisers as follows (omitting immaterial passages) : - '' Our client instructs us that his offer was to take a further lease of these premises upon the distinct understanding that it was to be upon the same terms and conditions as the existing lease, subject only to the exclusion of the insurance clause and the consequential increase of rent. The lease tendered for his signature is . . . not in the same terms as the expired lease, and our client, quite properly, objected to accept it.

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client was not prepared to continue negotiations and in substance had terminated the contract. And it was not until 11th December that Mrs. Moore's advisers admitted the contract contained in the correspondence already mentioned, and then they insisted upon Dimond "carrying out his obligations in this connection." The tergiversation on the part of Mrs. Moore and her advisers and the long delay before the admission of Dimond's right to a lease in the terms of the agreement would disentitle her, in any event, we think, to specific performance of the agreement (Cornwall vy. Henson (1) ). But we go further : we think that her conduct and that of her advisers justify the conclusion that she did not recognize the agreement with Dimond, and did not intend to be bound by its provisions. The facts show that what she or her advisers insisted upon was a lease in the form that other tenants were prepared to accept. Such a demand was quite inconsistent with the agreement with Dimond, and the conduct of herself and her advisers from July 1927 to November 1928 was wholly inconsistent with the terms of that agreement. Then, in November 1928, when her advisers were confronted with a precise statement of the agreement, they asserted that such an agreement was never made. But they promised to refer the matter to their client and advise Dimond's solicitors immediately. Dimond waited for three weeks longer, offering to return the keys in the meantime pending developments, but on 28th November 1928 he acted decisively as already mentioned. In our opinion Dimond, at this point, was entitled to conclude that Mrs. Moore did not intend to be bound by or carry out the agreement with him, and he was justified in electing and did elect to treat the agreement as at an end. Only when this election was made, and finally made, did Mrs. Moore and her advisers bestir themselves, and offer, on 3rd December 1928, "to consider the terms of the proposed agreement."' But it was too late. And in an endeavour to retrieve the position, they, on 11th December, for the first time admitted the agreement that Dimond had all along relied upon.

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as those of the lessee's previous lease, and it contained two new provisions which were quite unwarranted. The first of these entitled the lessor, upon one month's notice, to enter for the purpose of altering or adding to the present buildings. The other forbade the lessee to place advertisements upon any external part of the premises. Upon receiving this draft the lessee consulted with another of the lessor's tenants, and with him went to see a solicitor whom the other tenant had instructed. This solicitor advised them not to agree to the form of the lease offered, and although, according to the lessee, he was not instructed to do so, he afterwards interviewed the lessor's solicitors on behalf of the lessee as well as of other tenants and said that they objected to the two new clauses which restricted advertising and allowed the lessor to enter for the purpose of building. Her solicitors appear to have sought and obtained instructions from the lessor to excise these provisions, but nothing was done, probably because the conveyancing clerk who was dealing with the matter went abroad. The lessee remained in possession and paid his rent but did not communicate with the lessor's solicitors. On Ist June 1928 the solicitor in their employ, who had taken the matter in hand, went to see him, taking a form of the draft lease. The tenant said that he expected a lease like the previous lease but with an increased rent and an alteration of the provision relating to insurance. The solicitor then read over to him the draft which he had brought, and asked to what he objected. He said that he objected to the clauses which had been introduced, namely, that relating to the landlord's tight of entry to effect alterations and that prohibiting advertise- ments. He appears also to have said that it had been agreed between himself and the accountant in the employ of the lessor's son that the new lease should be in the terms of the former lease, and he gave the solicitor his copy of the old lease. The solicitor said that he could not agree to delete the two new clauses without his client's instructions, but that he would submit the matter for further instructions. He obtained further instructions authorizing him to omit the provisions which were objected to, and he prepared an engrossment with these provisions omitted. On 9th July 1928 he sent the lessee this engrossment together with the old lease which

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solicitor spoke over the telephone again to the lessee's son, who 0 this occasion said the lease would not be signed as it was not in the agreed form. The solicitor replied that his clients insisted that ' the matter be completed, but the telephone was disconnected ar the conversation interrupted. He said nothing to the effect the premises must be vacated, but, nevertheless, the father at once to the lessor's solicitors saying that he accepted the notiey given to him by them to vacate the premises and would hand over the keys on 30th November 1928. He wrote a similar letter to the accountant employed by the lessor's son. He then consulted a firm of solicitors, who wrote on his behalf a letter dated 2nd November 1928 which adopted the wise course of treating as open the question whether their client was to deliver up or retain possession of the premises. After stating that the lessee's offer was to take a further lease upon a distinct understanding that it should be upon the same terms and conditions as the existing lease except the provision - for insurance and the amount of rent, that the lease tendered for execution was not in the same terms and the lessee had properly objected to accept it, and that on the previous day the lessee had - been requested by telephone to vacate, the letter proceeded :- - * Our client has always been ready and willing to abide by his offer, but as the premises are now unoccupied he is quite willing to hand over _ possession and the keys immediately if you so desire. Our client cannot however afford to leave the matter in the present unsatis- factory condition. We understand our client handed you his old lease for the purpose of preparing the new lease in the same terms with the modifications mentioned and he is not prepared to accept any lease in any other form. We desire to know, however, and immediately, whether you desire our client to hand you the ke and vacate the premises, as intimated by you yesterday. We return the lease in triplicate tendered by you and would be obli by an immediate reply."

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the term, and with the increased amount of rent. I do not think that, by tendering the first draft lease on 5th December 1927, the lessor's solicitors either committed an actual breach of contract or intimated an intention of refusing to perform the contract. In any case the lessee by his conduct and by his discussion on 1st June 1928 with the lessor's solicitors affirmed the contract which remained open. When the second form of lease was prepared I think the lessor's solicitors believed that the lessee was willing to accept it although it did not conform exactly to the former lease, as it should. I think they knew that the lessee considered himself entitled to insist upon a lease, the provisions of which conformed to those of the former lease, but they did not know of the written agreement which in fact gave him this right. His objection, however, to two provisions of the first draft and his failure to object to any of the other provisions, which were all gone through at the interview, led the solicitors to suppose that he would accept them. I do not think that by the sentence in their letter of 9th July 1928 " we are instructed to inform you that this is the form of lease which our clients require," the lessor's solicitors meant to intimate that their clients refused to grant him a lease which followed the provisions of the previous lease even although he should insist upon such a lease, and I do not think that he understood the statement so to intimate. But again, however this may be, I think he elected to affirm the contract and keep it open. It is true that he disowns statements made by his son and, I think, the more material of his son's actions, and it is true that the trial Judge considered that there was " no evidence to lead to the conclusion that the son had authority to deal with the matter of the lease." But when his long silence is considered with the fact that he had read the solicitor's letter of 9th July 1928 and the lease, that he knew his son had communicated with them, that he paid rent regularly, that he attempted to sublet, and, in fact, did for a time sublet the premises, no other inference is open save that he elected to keep the contract open and not to disaffirm it. But in any case I think the proper inference is that the son's authority did extend to communicating with the lessor and with her solicitors upon the subject of the lease during the

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With some appearance of inconsistency the father relies the unfinished conversation with his son on 1st November 1: as a renunciation by the lessor's solicitors of the lessor's obli tion to tender a proper lease. But perhaps it was open to hi to treat his son as a messenger chosen by the lessor's solicito or to adopt the son's receipt of the message on his behalf, and avoid any real inconsistency. In my opinion, however, the conve sation did not express any such renunciation. It amounted to more than an insistent request for the completion of the tran Accordingly the lessee was not entitled to disaffirm the contract! returning the keys or otherwise, and his solicitors rightly t the contract as still on foot, in their letter of 2nd November But the lessee relies upon what next took place as in itself enou to relieve him from the agreement. He contends that in their to this letter the lessor's solicitors took up a position inconsis with the contract and thus absolved the lessee. After dealing the unfinished telephone conversation of Ist November 1928 denying that the lessee was given notice to vacate the pren the letter said " the lease as originally prepared by us was in act ance with our instructions, a fair copy was submitted to your clie and several times we attended your client's shop and at last on the form of the lease which we understood your client would sign. According to our instructions it was never agreed the new lease should be on the same terms and conditions as th former lease, subject only to the deletion of the insurance ¢ and the consequential increase of rent. However, we will ref matter to our client and advise you immediately we have been abl to obtain her further instructions herein." This was written Tuesday 6th November 1928. On Saturday 10th November letter was written to the lessee by the accountant employed by th lessor's son saying, in effect, that the solicitors had no authority t give notice to the lessee to vacate the premises and the;

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Court

Decision date

Before

Source

Judgment (133 paragraphs)

Cited By (2)