Contracts - General contractual principles - Damages - Causation - Failure of innocent party to prove that but for the breach it would have been able to perform its contractual obligations

Held there was no ambiguity and the term contended for was not so obvious that it went 'without saying' appeal allowed but appellant having failed to prove its ability to perform its own obligations only nominal damages of $5 awarded

Respondent (Defendant) : Mr C J L Pullin QC & Mr D L Jones

Respondent (Defendant) : Joanne Matich & Associates

Abalos v Australian Postal Commission [1990] HCA 47; (1990) 171 CLR 167

De Vries v Australian Railways Commission (1993) 177 CLR 472

Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

Sandra Investments Pty Ltd v Booth [1983] HCA 46; (1983) 153 CLR 153

Shell UK Ltd v Lostock Garage Ltd [1976] 1 WLR 1187

State Rail Authority of NSW v Earthline Construction [1999] HCA 3; (1999) 73 ALJR 306

1 MALCOLM CJ: In my opinion this appeal should be allowed, the judgment of the learned trial Judge set aside and in lieu thereof there should be judgment for the appellants against the respondent for the sum of $5 nominal damages for breach of contract. I have reached this conclusion for the reasons to be published by Ipp J with which I am in entire agreement.

2 PIDGEON J: I agree with the reasons to be published by Ipp J and the orders proposed.

3 IPP J: This appeal concerns a claim by the appellant for damages said to have been caused by a breach of a contract for the sale of land entered into between the appellant as purchaser and the respondent as vendor.

4 At the time the contract was entered into the respondent was the owner of "Birchmont", a property comprising approximately 250 hectares lying on the shores of the Harvey estuary at West Pinjarra. The respondent was a cattle farmer, and he had for many years farmed cattle on Birchmont. The respondent knew little about property development, but he believed that Birchmont had potential for sub-division into township lots. The appellants, who conducted a cartographic business, shared this belief. They entered into several contracts with the respondent, all aimed at this way of exploiting of the property. However, the various schemes that were envisaged were unsuccessful, the parties fell into disagreement, and the present litigation ensued.

5 As long ago as 1978 the respondent contemplated selling Birchmont on the basis that it could be used for township development. In that year he retained a town planner named Mr Reid to do the planning work required for Birchmont to be rezoned from "rural" to "special rural". The rezoning was necessary to effect the sub-division of Birchmont. Mr Reid engaged the appellants to do the mapping work necessary for the rezoning. The first named appellant, Mr Elliott, undertook the field work on behalf of the appellants (Mrs Elliott being engaged in administrative tasks).

6 The rezoning of Birchmont as special rural was only achieved in December 1988. Having become familiar with Birchmont, Mr Elliott believed that it was a potentially profitable property and he wished to enter into some arrangement with the respondent with a view to making some money out of it. Although Mr Elliott had been involved for many years in mapping the property, it was only in early 1989 that he first met the respondent. He sought the meeting so as to commence negotiations with the respondent for the exploitation of Birchmont.

7 On 15 April 1989 the appellants entered into an agreement with the respondent whereby the respondent granted the appellants an option, expiring on 29 December 1989, to purchase Birchmont for the sum of $2,000,000. The appellants intended, during the option period, to put together a syndicate with sufficient funds to purchase Birchmont. They planned, thereafter, to develop the property by sub-dividing it and selling the various lots. The appellants did not intend to contribute any funds of their own; rather, they intended to contribute Mr Elliott's "expertise". As the learned trial Judge pointed out, however, that expertise was limited; "while [Mr Elliott] had assisted in some town planning work, he had not personally undertaken land development work of this type or on this scale. Nor did he have any access to investors who might be interested in such a development".

8 On 29 June 1989 the appellants and the respondent entered into a written agreement whereby the option agreement of 15 April 1989 was varied. By the variation agreement the purchase price was reduced from $2,000,000 to $1,800,000. The expiry date of the option period remained 29 December 1989.

9 On 25 September 1989 the Department of Planning and Urban Development approved the sub-division of Birchmont subject to the proviso that various stipulated conditions were "fulfilled within two years from the date of this advice". The letter stated that "all conditions must be complied with before submission of survey documents for endorsement". The conditions laid down did not require the provision of electric power for the sub-divided lots. This meant that the cost of developing the property to the stage at which lots could be placed on the market for sale was significantly reduced (although, the market price of lots without electric power would obviously be less than lots to which power was provided). At some later time (not identified in the evidence) it seems that the period of the conditional approval to the sub-division was extended to three years, i.e. to 24 September 1992.

10 Towards the latter part of 1989, Mr Elliott informed the respondent that the latter's profit on the sub-division project was estimated to be (eventually) between $800,000 and $1,000,000. In this regard, the learned trial Judge observed:

"Mr Elliott's calculations and discussions in relation to the option reveal a striking optimism concerning the proposed development which persisted throughout the party's association. Notwithstanding that Mr Elliott had at that time no funds of his own, had to perform no detail of costings, had approached no potential investors, and knew personally no potential investors he could not be persuaded (even at trial) to the view that there was a relatively slim chance of his being able to exercise the option within the time specified."

11 When the respondent learnt from Mr Elliott of the extent of the expected profit, he requested the appellants to give up the option and allow him to develop the land himself. Imbued, however, by his "striking" optimism, Mr Elliott asserted that the option had substantial value, and if the appellants were to give it up they should be appropriately compensated. Negotiations ensued and on 14 October 1989 the appellants and the respondent entered into a deed (to which I shall refer as "the First Deed") which varied their contractual relationship.

12 By cl 5 of the First Deed, the appellants undertook various obligations relating to the work necessary for the completion of the sub-division of Birchmont. For example, they assumed responsibility for making submissions to and dealing with all relevant authorities, assisting the respondent in dealing with consultants and contractors, obtaining quotations for and co-ordinating the work to be carried out by surveyors, cartographers, engineers and contractors, assisting in road design and construction, and instructing land agents in connection with the sale of sub-divided lots.

13 In consideration for these services, the respondent agreed to pay the appellants $747,000. This sum was to be paid in instalments; $220,000 was to be paid on or before 30 November 1989, $170,000 on the sale of the final lot "in respect of the first 22 lots sold in the said sub-division", $170,000 on the sale of the final lot in respect of the next 22 lots sold, and $187,000 on the sale of the final lot in respect of the next six lots sold. Clause 2(3) of the First Deed provided, however, that these instalments were payable "only if an advance, loan or some other form of financial accommodation of not less than two million six hundred thousand dollars ($2,600,000) to [the respondent] is approved by the Rural and Industries Bank (or other lender acceptable to the owner) on or before 15 November 1989".

14 Other obligations (apart from paying $747,000 for management fees) were imposed on the respondent. Clause 3 of the First Deed provided:

"The [respondent] hereby covenants with the [appellants] that he shall:-

(a) do all things necessary and proceed forthwith to sub-divide the said land in accordance with the proposals already submitted to the appropriate authorities.

(b) use his best endeavours to obtain the advance, loan or other form of financial accommodation and notify the [appellants] in writing of the approval or otherwise not later than 17th November 1989."

15 The First Deed did not affect the option that had previously been granted and varied, save that cl 2(5) of the First Deed provided that, in the event of finance in terms of cl 2(3) being approved and upon the appellants receiving the payment of the first instalment of $220,000, the option would lapse, and in the event of finance not being approved, the option would be extended to 29 June 1990.

16 The parties proceeded to attempt to obtain finance for the sub-division. An application was made to the R&I Bank, Mandurah, seeking approval in principle for a loan of $217,000 to develop a first stage of 16 lots. The application was based on the pre-selling of eight lots to a company called East Avenue Holdings Pty Ltd. This application was not successful, and nor was any other.

17 On 27 March 1990, the respondent and the appellants entered into a second deed (the "Final Deed") which replaced the First Deed. Whereas the First Deed was drafted by solicitors, Mr Elliott put together the Final Deed by cutting out portions of the First Deed, photocopying the document and replacing some of the omitted portions with provisions drafted by himself. The Final Deed was a patchwork document.

18 By the Final Deed, the respondent agreed to pay the appellants "the sum equivalent to ten per cent (10%) of the gross sales figures for the 67 lots in the sub-division". This payment was for the same cartographic and management services that constituted the consideration under the First Deed. The instalments payable by the respondent, however, were changed. Clause 2(1) provided that the respondent would pay the appellants the "management fees" as follows:

"(a) Four thousand dollars each month commencing on the date of approval of development finance and continuing to a total of fifty thousand dollars.

(b) Ten per cent of gross sales on the first thirty lots sold less monies paid as stated in clause (a).

(c) Ten per cent of gross sales in respect of the next ten lots sold.

(d) Ten per cent of gross sales in respect of the next ten lots sold.

(e) Ten per cent of gross sales in respect of the next ten lots sold.

(f) Ten per cent of gross sales in respect of the next seven lots sold

(g) Such payments as described in clauses b, c, d, e and f to be made within seven days of date of sale in respect of the 30th, 40th, 50th, 60th and 67th lot sold."

The conditions previously expressed in cl 2(3), to the effect that payments would be payable "only if an advance, loan or some other form of financial accommodation of not less than $2,600,000 ... were approved ... on or before 15 November 1989", were omitted.

19 Clause 3(a) of the Final Deed was unaltered, but cl 3(b) was changed by the omission of the time limit of 17 November 1989. Thus, the new cl 3(b) provided merely that the respondent covenanted to "use his best endeavours to obtain the advance, loan or other form of financial accommodation and notify the [appellants] in writing of the approval".

20 The appellants' obligations under the Final Deed were substantially the same as those under the First Deed. They undertook to perform the same management and cartographic services. Their obligations under the Final Deed were expressed to "terminate on the date of sale of the 67th lot in the said sub-division".

21 Finally, it is to be noted that, by the Final Deed, it was provided that "all previous deeds and options between the [respondent] and the [appellants] shall lapse on the date of the signing of this deed". Thus the Final Deed replaced all other agreements between the parties.

22 On 7 September 1992 an application was made on the respondent's behalf for a fresh approval for sub-division of the property. This was necessary as the first sub-divisional approval was scheduled to expire on 24 September 1992. On 22 June 1993 the Department of Planning and Urban Development granted approval to the sub-division, but subject to different conditions to those applicable to the first approval. I shall refer to this approval as the "second sub-divisional approval".

23 By the second sub-divisional approval, the Department approved the proposed sub-division provided that the conditions in question were met within a period of three years. These conditions included a requirement that the State Energy Commission certify "that financial and other requirements have been satisfied for the provisions of overhead electricity to the lots approved under this application". On the evidence, the cost of providing the requisite electricity was estimated to be at least $290,000.

24 On 30 May 1995, the respondent sold Birchmont to a third party for $3,000,000. By letter dated 28 March 1996 the appellants, by their solicitor's letter, contended that the respondent had repudiated the Final Deed and accepted that repudiation. The appellants then brought proceedings for damages for the repudiation. The damages claimed amounted to $1,110,819. They were based on the plaintiffs' entitlement under the Final Deed to 10 per cent of the gross sale price of the anticipated average selling price per lot, together with the loss of commission on sales that, according to the appellants, they would have been able to earn, but for the repudiation.

25 The respondent's defence to the appellants' claim was based principally on the assertion contained in the defence that "the agreement incorporated in the [Final] Deed was conditional on finance approval being obtained". The Final Deed did not contain an express condition in the terms of the condition so pleaded, and the respondent contended that a condition to that effect was to be implied in the Final Deed. Relying on such an implied condition, the respondent pleaded that "the failure to obtain finance within a reasonable time determined the agreement".

26 The learned trial Judge found that there was to be implied into the Final Deed "a condition to the effect that the obligations it contained were conditional upon the [respondent] obtaining within a reasonable time (objectively understood) adequate finance to enable the development of a first stage of a sub-division of Birchmont". This finding was the subject of the main ground of appeal. It was said that her Honour erred in holding that such a term should be implied.

27 The learned Judge commenced her reasoning on this issue by noting that the Final Deed was ambiguous in two respects. The first ambiguity arose from the phrase "development finance" in cl 2(1)(a) (that is, the provision requiring the respondent to pay to the appellants $4,000 each month commencing on the date of approval of "development finance" and continuing to a total of $50,000). The second ambiguity arose from the reference in cl 3(b) to "the advance loan or other form of financial accommodation". In this regard the learned Judge said:

"So far as cl 3(b) is concerned, it appears that there are two possible views of it. Either it is mere surplusage, inadvertently included, or alternatively, it should be implied from the presence of what is a usual adjunct to a 'subject to finance clause' that the contract was, indeed, subject to finance."

28 By reason of these ambiguities, the learned Judge considered that resort could be had to parol evidence of the surrounding circumstances. The evidence that her Honour considered to be relevant was that the respondent, from his own resources was unable to pay for the development and sub-division of Birchmont. Therefore, she held, "it must have been obvious to any reasonable person in the position of either of the parties that finance was essential for the contractual obligations to be fulfilled and that finance would not necessarily be forthcoming".

29 In coming to this conclusion, the learned Judge took into account the well known requirements (set out in BP Refinery (Westernpont) Pty Ltd v Shire of Hastings [1977] HCA 40; (1977) 52 ALJR 20 (at 26) and reconsidered and approved in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337) which have to met before a term or condition may be implied. These are:

2. It must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;

3. It must be so obvious that 'it goes without saying';

5. It must not contradict any express term of the contract."

30 I would make two comments regarding this approach. Firstly, with great respect, I do not think that either "development finance", or cl 3(b) give rise to any ambiguity. In my opinion, "development finance" simply means finance necessary to develop the project. On this basis, cl 3(b) means the development finance in question. That is to say, by cl 3(b), the respondent undertook to use his best endeavours to obtain the development finance. Senior counsel for the respondent submitted that the definite article "the", in cl 3(b), was inappropriate to such a construction. In my opinion, however, construing the phrase "the advance, loan or other form of financial accommodation", as it appears in cl 3(b), as meaning "the development finance referred to in cl 2(1)(a)" removes any awkwardness of language.

31 Further, I do not regard cl 3(b) as mere surplusage. On the construction which I favour, cl 3(b) records the obligation of the respondent to use his best endeavours to obtain the development finance referred to in cl 2(1)(a). In this sense it forms an essential part of the agreement between the parties.

32 In my opinion the ambiguities said to arise are resolved by the construction I have outlined. If that is so, extrinsic evidence is not permissible.

33 In any event, in my opinion, the absence of finance, in the sense of substantial loans of money, did not mean, necessarily, that the agreement constituted by the Final Deed would not be effective. Plainly, finance in the form of substantial monetary advances would have been very helpful to carry out the sub-division. But a different kind of finance, also, might have allowed the sub-division to proceed. This other kind of finance needs some explanation. It was the appellants' case at trial that the Shire of Murray had agreed to defer payment for the construction of an access road, and a road contractor, Mr Brown, had agreed to defer claiming payment for all of the internal road construction until after the commencement of lot sales. Under the first sub-divisional approval, lots could have been sold without the provision of electric power. It was not beyond the bounds of reasonable possibility that arrangements could have been made with various contractors to do the work required to comply with the first sub-divisional approval on the basis that the payment to them would be deferred until after the sale of the lots constituting the first stage of the development. The sale of these lots was capable of financing the next stage of the development, and the succeeding stages could have financed the stages that followed them. There was a dispute between the parties as to whether there was in fact an agreement with Mr Brown, and the learned trial Judge found against the appellants in this regard; but the possibility of adopting this method of financing the development existed, irrespective of whether there was an agreement with Mr Brown.

34 Further, the striking optimism of the appellants at the time the Final Deed was entered into must be borne in mind. Without the implied condition, the effect of the Final Deed was that the appellants took the risk of finance not being obtained and the conditions for sub-division not being met. On the evidence, they were prepared to take this risk. If finance were not obtained the respondent would not be required to pay the appellants the instalments of $4,000 each month as provided by cl 2(1)(a). On the other hand, were sub-division eventually to be effected without development finance ever having been obtained (in the manner I have outlined), the appellants would receive payment of the full consideration payable to them by way of instalments payable in terms of cls 2(b) to (g). The appellants' optimism could well have persuaded them to agree to the Final Deed without it being subject to an express condition making the respondent's payment obligations (or any other obligations) subject to finance.

35 Of course, until sub-divisional approval was obtained and lots were sold, the respondent would not be required to make any payments under cl 2. In the meantime, the parties would be obliged to comply with their respective obligations under the Final Deed. In particular, the respondent would be required to comply with cl 3 and to do all things necessary to pursue the sub-division of the land (including seeking finance). Were it to become manifest that the parties' obligations under the Final Deed were incapable of performance, or the fundamental purpose of the Final Deed was incapable of achievement, the parties' obligations thereunder would terminate.

36 On the basis I have described, the Final Deed is an effective agreement between the parties. The condition contended for by the respondent does not need to be implied therein to give it efficacy.

37 I now turn to the requirement that the term "must be so obvious that 'it goes without saying'." In my opinion, in the circumstance of this case, it is simply not possible to devise a subject to finance condition that is so obvious that "it goes without saying". There are many issues which arise. I will mention only a few. The first question is whether the condition to be implied is to be a condition precedent or a condition subsequent. The condition found by the learned Judge was a condition subsequent in the sense that, by that condition, all the obligations of both parties under the Final Deed were conditional upon the respondent obtaining, within a reasonable time, adequate finance to enable the first stage of the development of Birchmont to occur. This is to be contrasted with the express condition contained in the First Deed, which was a condition subsequent qualifying only the respondent's payment obligations under cl 2(1). In my opinion it is not possible to determine which of the two forms of condition should be implied.

38 Generally, there is little to suggest whether only certain of the obligations should be conditional (and, if so, which conditions) or whether all the obligations should be conditional.

39 Then, it is by no means clear, whether the term to be implied should identify the lender (as did cl 2(3) of the First Deed) or whether this question should be left open, without any qualification whatever. The problem with leaving the identity of the lender entirely free of qualification is that, in effect, it leaves open the terms on which the finance is to be made available. At least, once a particular bank is identified, it can be assumed that the loan is to be on the terms usually offered by the bank in question.

40 Finally (concerning the requirement of obviousness) as the learned Judge recognised, it is an open question whether the condition to be implied should relate only to finance for the first stage of the development (as her Honour held) or to the development as a whole.

41 In my opinion, these difficulties, on their own, negate the implication of the term in question.

42 I turn now to the requirement that the condition to be implied "must not contradict any express term of the contract". Without the implied condition, the respondent's obligation to "do all things necessary" to sub-divide the land arises immediately upon entry into the Final Deed. Similarly, in the absence of the implied condition, the appellants' obligation to "use their best endeavours to ensure that the sub-division of the said land is completed without undue delay" arises immediately. Obligations of these kind were necessary to ensure that timeous attempts were made to obtain the finance for the sub-division of the land, or to make other arrangements whereby the land would proceed to sub-division. The implied condition suspends these obligations. Not only does this contradict the express terms of the Final Deed, but it prevents the agreement constituted thereby from being effective.

43 Finally, account has to be taken of the fact that, in entering into the Final Deed, the parties deliberately omitted the subject to finance condition contained in the First Deed. In NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 Rogers CJ Comm D, held that a deliberate deletion of a clause in a loan agreement expressly providing for repayment by a borrower ousted an obligation, said to be implied, to the effect that the borrower repay the loan. His Honour relied in coming to this conclusion on the remarks of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW at 352-353. In my opinion the same reasoning is applicable here. Once the parties agreed to exclude from the Final Deed the subject to finance condition that was contained in the First Deed, it is not open to imply a condition in the Final Deed to substantially the same effect as the one deliberately excluded.

44 Accordingly, I would uphold the appeal on the ground that the subject to finance condition relied on by the respondent should not have been implied in the Final Deed.

46 In pleading their case based on repudiation, the appellants relied on two categories of conduct on the part of the respondent. Firstly, it was said that at times prior to 30 May 1995, the respondent advised them that he did not intend to proceed to sub-divide Birchmont and he intended to sell the property as a whole. Secondly, it was pleaded that on 30 May 1995 the respondent sold Birchmont as a whole to a third party for $3,000,000 without the sub-division having been effected. It was said that these actions constituted a repudiation, accepted, as I have mentioned, by the appellants, on 28 March 1996.

47 It is unnecessary to consider the first category of acts allegedly amounting to repudiation as the sale of Birchmont undoubtedly was a repudiation (save, for any argument that. by reason of breaches of their own, the appellants were precluded from relying on such repudiation - Foran v Wight [1989] HCA 51; (1989) 168 CLR 385). Moreover, the critical date for the assessment of the damages suffered by the appellants as a result of the repudiation is the date upon which the repudiation was accepted by them: see for example Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105 at 126 and cases cited there. The point being that once it is established that a repudiation took place (that is, on either of the categories pleaded), the relevant date for the purposes of assessing damages is the date of acceptance, and the date of the repudiation has no bearing on this issue.

48 Senior counsel for the respondent submitted that the appellants had failed to establish that they had performed all their obligations under the Final Deed. He said the appellants had failed (in terms of cl 4(a) of the Final Deed) to "use their best endeavours to ensure that the sub-division of the said land is completed without undue delay". On this basis, he submitted, the appellants could not complain of non-performance by the respondent and were precluded from asserting that the respondent had repudiated the Final Deed (see in this regard Foran v Wight at 417). Senior counsel submitted that the learned trial Judge had omitted to deal with this issue and (as issues of credibility were involved) no finding that the respondent had repudiated the Final Deed could be made by this Court.

49 In my opinion, however, the respondent's contentions in this respect should not be upheld. The issue of non-performance on the part of the appellants was raised by the respondent in his defence, but it does not appear to have been a live issue at the trial. Her Honour noted:

"Although a variety of matters were set out in the defence, as the trial developed it became clear that the real issue between the parties was the question of whether there should be implied into the deed a term to the effect that it was subject to the obtaining by the defendant within reasonable time of finance."

Further, her Honour made an express finding that, by selling Birchmont as a whole, the respondent repudiated the Final Deed. No notice of contention was filed by the respondent on this issue. In the circumstances, I would reject the respondent's argument on this issue.

50 I proceed, therefore, on the basis that the respondent repudiated the Final Deed by selling Birchmont to a third party, and the damages payable to the appellants have to be assessed as at the date of acceptance of the repudiation, namely, 28 March 1996.

51 The principles by which these damages are to be determined are set out by Brennan J in Foran v Wight at 430 as follows:

"A breach by A of an essential term of the contract entitles B to rescind the contract and to recover damages for the loss of the benefit to which, had the contract been performed, he would have been entitled. Whether the breach be anticipatory or actual, it is necessary to form an estimate of what would have happened had the contract been performed in comparison with what has happened, the contract been broken: ...

In assessing the damages, it is necessary to form an estimate of the benefit to which B would have been entitled had A performed his contractual obligation. Where, in this case, a purchaser who has made no announcement that he will not complete and is attempting to raise finance in order to complete when the vendor intimates that he will not complete on the stipulated day, the purchaser's entitlement to damages for the vendor's failure to complete on that day depends on two related but distinct questions: first, whether the purchaser was at the time of the intimation substantially incapable of raising the finance and, second, whether it is more likely or not that the purchaser would have succeeded in raising the finance. A reasonable prospect of a purchaser's raising finance (the converse of 'substantial incapacity') suffices to show that the purchaser was ready and willing at the time of the intimation, but it does not establish that the purchaser would have been ready and willing to complete when the time for completion arrived and would have been entitled for the benefit of a completed contract. The onus is on the purchaser to establish his damages on the balance of probabilities."

52 The appellants claim loss of bargain damages. They must prove, on the balance of probabilities, what bargain they would have received, but for the determination of the Final Deed. The bargain lost by them was, in effect, the loss of profits from the sale of sub-divided lots and the loss of commissions on the sale of sub-divided lots. The appellants would only have been able to earn such profits and commissions had the conditions applicable at the relevant time, on which sub-divisional approval was dependent, been met. The relevant time, as mentioned, was March 1996. Thus the conditions applicable to the second sub-divisional approval were the conditions that had to be fulfilled. Those conditions, as mentioned, required certification from the State Energy Commission that financial requirements had been satisfied for the provision of overhead electricity to the lots. As mentioned, this particular condition required a provision of $290,000.

53 There is no evidence whatever that the appellants would have been able to provide finance to cover the need for the provision of $290,000. On the contrary, the evidence that was available on this issue was to the opposite effect. There was some argument that the appellants would have been able to comply with the conditions necessary to comply with the first sub-divisional approval. But this was irrelevant. The critical question, as explained, is whether they would have been able to comply with the conditions necessary to comply with the second sub-divisional approval. The evidence did not establish this. That being so, the appellants failed to prove that on a balance of probabilities they suffered any loss in consequence of the repudiation (and termination) of the Final Deed. In the circumstances, they are only entitled to nominal damages. I would award them $5 as nominal damages.

54 Accordingly, I would uphold the appeal, set aside the decision of the learned Judge, and order that the respondent pay the appellants nominal damages of $5.