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[1989] HCA 51
High Court of Australia
1987-12-24
Gaudron JJ, Needham J
Original judgment source is linked above.
High Court of Australia Mason C.J. Brennan, Deane, Dawson and Gaudron JJ. Foran v Wight [1989] HCA 51
ORDER Appeal allowed with costs. Set aside the orders of the Court of Appeal of New South Wales dated 24 December 1987 and in lieu thereof order that the appeal to that Court be dismissed with costs.
This appeal raises an important question of principle. It concerns the entitlement of purchasers under a contract for the sale of land to terminate the contract and recover their deposit following a statement by the vendors shortly prior to completion that they would be unable to complete on the date fixed for completion, completion on that date being an essential term of the contract, in circumstances in which the purchasers did not treat that repudiation as an anticipatory breach but terminated the contract after the time fixed for completion in consequence of the vendors' failure to complete on the appointed day.
The facts may be shortly stated. By a contract dated 24 December 1982 the vendors agreed to sell and the purchasers agreed to buy a parcel of land at Ebenezer for $75,000. The contract provided for payment of a deposit in the sum of $7,500 on execution of the contract. This sum was paid, leaving a balance of $67,500 to be paid on completion. The contract fixed 22 June 1983 as the date for completion, time being of the essence in this respect.
The contract contained a number of special conditions, one of which was in these terms:
The Purchaser shall not make any requisition, objection or claim for compensation in respect of Right of Way 3 metres wide shown on the draft Plan attached hereto and marked with the letter " a " and draft 88b Instrument attached herewith and marked with the letter " b ". The Purchaser acknowledges that he is aware that the attached draft Plan and draft 88b Instrument have not been registered and the Vendor warrants that he will attend to the registration of the said Plan together with 88b Instrument prior to completion.
On 20 June 1983, two days before the date fixed for completion, the solicitor for the purchasers telephoned the solicitor for the vendors. The primary judge (Needham J.) accepted the evidence given by the purchasers' solicitor of the terms of the conversation and his Honour's findings on this matter were accepted by the New South Wales Court of Appeal.
The terms of the conversation are recorded in the judgment of Street C.J. [35] in this way:
The purchasers' solicitor said that he had just received word that finance had been arranged for Wednesday, 22 June 1983 and asked, "What time can we settle on that day?". The vendors' solicitors replied, "We have a problem here. We won't be able to settle on Wednesday 22 June because the Right of Way which we are required to give under one of the Special Conditions in the Contract is not registered as yet". The purchasers' solicitor said, "What went wrong[?] You had six months or more in which to register the Right of Way" and the vendors' solicitor replied, "We have had problems with the neighbours of Mr Wight and his solicitor has mucked us around". The purchasers' solicitor asked, "What stage has the registration of the Right of Way reached?" and the vendors' solicitor replied, "I don't know. I'll have to check that. What is your attitude to settling this matter some time after Wednesday when the Right of Way will be registered? We can't settle without the Right of Way". The purchasers' solicitor responded, "You realise that time is of the essence in the contract. I cannot say anything in relation to that and will have to seek instructions. I can't enter into any further discussions in relation to settlement". 1. (1987) 11 N.S.W.L.R. 470, at pp. 472-473.
Nothing was done by the vendors or the purchasers until two days after the date fixed for completion. Then, on Friday, 24 June, the purchasers executed and served a notice of rescission addressed to the vendors in these terms [1] :
With reference to the Contract for Sale by you to us dated 24th December 1982 in relation to the Property described as Lot 8 Deposited Plan 227211 in Tizzana Road Ebenezer Certificate of Title Volume 10340 Folio 84 and in consequence of your default under the said contract in registering a Plan Of Right Of Way together with 88b Instrument in providing a good selling title to the said property and in completing the sale in accordance with the requirements thereof, We hereby give you Notice that the said purchase is hereby rescinded and we require repayment to us of the amount of the deposit paid without deduction and without prejudice to our rights to claim damages costs or expenses in respect of the default. The right of way referred to in the earlier conversation and in the notice, which was required to be registered prior to completion, was not in fact registered until 22 July 1983. The vendors were thus unable to complete the contract on the date fixed for completion. 1. (1987) 11 N.S.W.L.R., at p. 473.
There was further correspondence between the solicitors in 1983 and 1984. In that correspondence the vendors sought to enforce completion and the purchasers maintained that they had validly terminated the contract. This correspondence culminated on 28 September 1984 when the vendors entered into a contract selling the property to other purchasers for the price of $68,000.
Meantime, on 30 November 1983, the purchasers issued out of the Supreme Court of New South Wales a summons, which was later amended. The amended summons sought a declaration that the purchasers had validly terminated the contract, another declaration that they were entitled to the return of the deposit and an order that the vendors return the deposit to the purchasers, and a further declaration that they were entitled to relief against forfeiture of the deposit under s. 55(2A) of the Conveyancing Act 1919 N.S.W.. In an amended cross-summons filed on the day of the hearing before Needham J. the vendors sought declarations that the purchasers were not able to complete the agreement, that by reason thereof the purchasers were not entitled to rely on the essential time condition fixing the date for completion, that the purported notice of rescission dated 24 June 1983 was invalid and that in the events that had happened the vendors had validly terminated the contract and were entitled to forfeit the deposit. The amended cross-summons also claimed damages.
One major issue of fact at trial concerned the ability of the purchasers to complete the contract on 22 June 1983. The purchasers' case was that as at 20 June they had in place funding arrangements and resources which would have enabled them to pay the outstanding balance of $67,500. Needham J. held that he was not satisfied that those arrangements and resources would in fact have funded the required amount. His Honour said (in a passage quoted by Street C.J. [2] ):
I accept that they had arranged for finance from Nat. West. in the sum of $56,000 and that that sum, assuming that the plaintiffs and their solicitor acted expeditiously, would have been available on Wednesday, 22 June.
Mrs. Foran, the female plaintiff, in an affidavit, claimed that she had a sum in excess of $15,000 available to her in the A.N.Z. Bank at Guildford. However, in cross-examination, it appeared that only the sum of $1,783.42 or so of that was her own money, and she gave no evidence to indicate that she had any right to make use of any of the other accounts with that bank.
The male plaintiff gave some evidence in the witness-box that he would have been able to obtain some $7,000 from his mother, but that came at the heel of the hunt, and I find it difficult to accept without some further evidence that that amount of money was available. The male plaintiff's evidence, in my opinion, is somewhat suspect, from the suggestion he had made to the defendant as to the amount of purchase price in the contract. A further source of finance was said to have been the potentiality of the plaintiffs to obtain further moneys under an overdraft granted by the bank to their company, which carried on business as plumbers. The evidence established that the limit of the overdraft was $20,000, but Mr. Foran said that frequently he overdrew that figure up to the extent of $36,000 or $37,000, that is, that the overdraft went to the sum $36,000 or $37,000.
It appears from the balance-sheets of that company that, as at 30 June, the company was in overdraft to the bank in the sum of between $36,000 and $37,000, and the suggestion from the plaintiff that he could have drawn a cheque to meet a balance of some $10,000 required under the contract was not, to me, convincing, in the absence of any evidence from the bank manager that such a cheque would have been honoured.
In the result, his Honour was not satisfied that the purchasers had discharged the onus of establishing that they were able to complete on the date fixed for completion. 1. (1987) 11 N.S.W.L.R., at p. 274.
However, his Honour held that this finding was not relevant to the purchasers' claim for relief. His Honour concluded that the vendors' indication that they could not settle on 22 June entitled the purchasers to treat that statement as a repudiation and to terminate the contract on that account. His Honour concluded that the purchasers acted with adequate promptitude and regarded the occurrence of the time for completion in the meantime as irrelevant to the purchasers' exercise of the right to terminate for repudiation.
On appeal, the Court of Appeal [3] (Street C.J. and McHugh J.A., Kirby P. dissenting) came to a different conclusion. The Court of Appeal was of the opinion that the purchasers terminated the contract, not for anticipatory repudiation, but for failure to complete on the essential date. The majority held that a party to a contract, in order to be entitled to terminate for non-completion on an essential date, must show that it was ready and willing to complete on that date. For this reason the purchasers were not entitled to relief and the contract continued on foot. The Court of Appeal set aside the orders made by the trial judge and ordered that the amended summons be dismissed and declared that the vendors had validly terminated the contract and were entitled to forfeit the deposit. The Court of Appeal declared that the purchasers were liable for damages for breach of contract and the matter was referred to the Master for assessment of damages.
The purchasers' case in support of their appeal in this Court was that they terminated for actual breach, that breach being the natural consequence of the antecedent anticipatory breach, and that the only relief which they sought was a declaration that the contract had been terminated and an order for the return of their deposit. The purchasers contended that the vendors' fundamental anticipatory breach on 20 June relieved the purchasers from their obligation to tender the balance of the purchase money on 22 June and entitled them to terminate for actual breach, once that occurred on 22 June, without the necessity of proving a tender of performance or even that they were ready and willing to perform on that date. The purchasers further submitted that the finding of the primary judge fell short of a finding that they were unable to complete and that in any event the evidence fell short of establishing that this was the case.
The vendors filed a notice of contention challenging, amongst other things, the finding that the words uttered by the vendors' solicitor on 20 June gave rise to a repudiation by them entitling the purchasers to terminate the contract. However, they did not appear on the hearing of the appeal and, although they filed an outline of argument prepared by counsel, it did not deal with all the points made in support of the appeal.
It is convenient to begin with the challenge to the primary judge's finding that the purchasers had not discharged the onus of establishing that the arrangements that they had made before 20 June would have enabled them to complete the contract on 22 June. Once the purchasers' ability to complete on 22 June was put in issue, the onus was on them as the plaintiffs to establish that they would have been ready and willing to perform the contract on 22 June had it not been for the vendors' repudiation: Australian National Airlines Commission v. Robinson [4] ; see also Bahr v. Nicolay [No. 2] [5] .
Even if, as will appear, the vendors' repudiation absolved the purchasers from any obligation to continue their efforts to procure finance, it may become necessary to determine whether they would have been able on the date for completion to provide the outstanding balance of the purchase price, $67,500. Needham J. accepted that $56,000 would have been available on 22 June. Having considered the financial arrangements made by the purchasers, the financial position of the purchasers and those associated with them, in particular the likelihood of funds becoming available by 22 June, his Honour concluded that the purchasers had failed to satisfy the onus of proof. True it is, as Kirby P. pointed out, that experience instructs us that last-minute arrangements might be made and the purchasers discontinued efforts to procure finance after the vendors' repudiation on 20 June. However, it was for the purchasers to prove what arrangements might have been made and whether they might have come to fruition. Needham J. found that the evidence did not establish that finance was likely to be forthcoming and I am not persuaded that his decision on this issue was incorrect. I therefore approach the case on the footing that the purchasers were not and would not have been ready and willing to complete the contract on 22 June. The trial judge did not attribute a single cause to that failure of the purchasers, but was clearly of the view that they would not have been ready and willing to complete, regardless of the vendors' repudiation.
In the circumstances of this case, for reasons which I shall state later in this judgment, the relevant question for determination by the primary judge was whether there was a substantial incapacity on the part of the purchasers to complete on the due date. However, at no stage in the proceedings in the courts below, or for that matter in this Court, was the issue for decision formulated by the purchasers in this way. On the particular facts of this case I am inclined to think that the primary judge's finding amounted to one of substantial incapacity. But, in any event, I do not consider that, having regard to the way in which the case was conducted, the issues should be reformulated and decided afresh by this Court.
The starting point of our consideration of the principal question agitated by the vendors lies in the concurrent findings of fact made by the courts below. The inevitable consequence of Needham J.'s finding that the vendors' solicitor stated on 20 June that they would not settle on 22 June was that the vendors thereby committed an anticipatory breach of an essential term of the contract. The breach was then anticipatory because it amounted to a refusal by the vendors to perform an essential term of the contract before the time for performance had arrived. The breach was a repudiation which entitled the purchasers at their election to treat the contract as at an end, subject to the court's power to grant relief in respect of any termination which happens to be unconscionable or inequitable (see Legione v. Hateley [6] ; Stern v. McArthur [7] ; Laurinda Pty. Ltd. v. Capalaba Park Shopping Centre Pty. Ltd. [8] , or to keep it on foot (see Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. [9] ).
It was not necessary for the purchasers to show that the breach of the essential term was also a fundamental breach in the sense in which that expression was explained by Lord Diplock in Afovos Shipping Co. v. Pagnan [10] , before they acquired a right to terminate the contract. However, if it were necessary to consider the question, I would regard the anticipatory breach as fundamental. The law has traditionally treated completion on the date fixed for completion, where time is of the essence, as being a matter of vital importance to the parties. And the vendors' solicitor gave no indication that the delay in registration of the right of way would be negligible.
But the purchasers did not terminate for anticipatory breach. The notice of rescission made no mention of the statement made by the vendors' solicitor on 20 June that the vendors would be unable to complete on the due date. Instead the notice referred to the failure to register the right of way and to provide a good selling title and to complete in accordance with the requirements of the contract. More importantly, if the purchasers wished to terminate for anticipatory breach they should have done so "while the period specified by the contract for performance is unexpired", to use the words of Kitto J. in Peter Turnbull [9] . It follows that the purchasers terminated for actual breach, that is, for the vendors' failure to complete on the day fixed for completion. It matters not that the actual breach occurred shortly after the anticipatory breach and that the notice was given only four days after 20 June. The fact is that the purchasers allowed the time for performance to pass without electing to terminate and of necessity they relied on the actual breach, that breach being the natural consequence of the antecedent anticipatory breach.
A failure by the innocent party to treat an anticipatory breach of an essential term as a repudiation and to terminate the contract has the effect of leaving the contract on foot, in which event it remains in force for the benefit of both parties, just as it would if the anticipatory breach had never occurred, subject to a qualification to which I shall refer in a moment. The parties then remain bound by the contract and the repudiating party may rely on any supervening circumstance which justifies his non-performance of the contract when the time for performance arrives: Bowes v. Chaleyer [11] ; Peter Turnbull [12] . The qualification is that, if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party of his obligation, and does not retract that intimation in time to give the innocent party an opportunity to perform his obligation, that party may be excused from actual performance of the condition precedent. The repudiating party then waives complete performance of the condition precedent and his conditional promise becomes unconditional. The term "waiver" is generally used where one party by words or conduct relieves the other party from timely fulfilment of a condition or performance of a promise, time being of the essence of the contract: Peter Turnbull [13] . The precise nature and extent of this qualification is critical to the outcome of the present case.
In a contract for the sale of land, the vendor's obligation to deliver a good title and the purchaser's obligation to pay the purchase money are concurrent and mutually dependent obligations in the sense that they are "simultaneous acts to be performed interchangeably": Palmer v. Lark [14] ; Michael Realty Pty. Ltd. v. Carr [15] ; Frankcombe v. Foster Investments Pty. Ltd. [16] . Generally speaking, a party in breach of such an obligation cannot terminate for the other party's breach. But a party may be excused or absolved from performance of his concurrent obligation by conduct on the part of the other party amounting to a waiver or dispensation with performance. A repudiation by that party of his concurrent obligation may constitute such a waiver or dispensation. In that event the party excused or absolved from performance may terminate the contract and sue for damages.
In the context of concurrent and mutually dependent obligations it was recognized as early as the eighteenth century that a party who was ready and offered to perform his part of the contract could maintain an action against the party who refused or neglected to perform his part. In Kingston v. Preston (1773), as noted in 2 Dougl. 689, Lord Mansfield said [17] :
if one party was ready, and offered, to perform his part, and the other neglected, or refused, to perform his, he who was ready, and offered, has fulfilled his engagement, and may maintain an action for the default of the other. The principle thus established was that the plaintiff, being unable to prove actual performance, had to prove that the defendant had refused to perform (thereby dispensing with performance by the plaintiff) and that he (the plaintiff) was ready and willing to perform and would have performed but for the dispensation. In this context readiness and willingness imports ability, as well as disposition, to perform: De Medina v. Norman [18] ; Peter Turnbull [19] . Repudiation by one party amounting to a waiver of performance by the other party does not entitle that party to enforce the contract on the notional footing that he has actually performed his part of the contract; it merely entitles him to recover such damages as he may have sustained by losing the benefit of the contract: Laird v. Pim [20] ; Peter Turnbull [21] . 1. (1773) 2 Dougl., at p. 691 [99 E.R. 437, at p. 438]. 2. (1842) 9 M. & W. 820, at p. 827 [152 E.R. 347, at p. 350]. 3. (1954) 90 C.L.R., at p. 253. 4. (1841) 7 M. & W. 474 [151 E.R. 852]. 5. (1954) 90 C.L.R., at pp. 252-253.
The principle enunciated in Kingston v. Preston was applied in Jones v. Barkley [22] to a case in which an agreement provided that the plaintiffs would execute and deliver a release and an assignment of an equity of redemption, upon which the defendant was to make payment of £611. The plaintiffs averred readiness and willingness to complete. They had tendered to the defendant a draft assignment and release which they offered to execute, the defendant then absolving them from execution. The defendant pleaded that the averment failed because execution was a condition precedent to payment. It was held that the plaintiffs need only show that they were ready and willing. In the words of Lord Mansfield [23] :
the question is, whether there was a sufficient performance. Take it on the reason of the thing. The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act. All that was excused in Jones v. Barkley [22] was the delivery of executed documents; in all other respects the plaintiffs were required to have been ready and willing to deliver the documents contracted for. See also Goodisson v. Nunn [24] ; Morton v. Lamb [25] . All these cases involved actual rather than anticipatory breach, but that consideration does not affect the statements of principle they contain relating to dispensation. 1. (1781) 2 Dougl. 684 [99 E.R. 434]. 2. (1781) 2 Dougl., at p. 694 [99 E.R., at p. 440]. 3. (1781) 2 Dougl. 684 [99 E.R. 434]. 4. (1792) 4 T.R. 761 [100 E.R. 1288]. 5. (1797) 7 T.R. 125 [101 E.R. 890].
A waiver of a condition precedent arising from the defendant's repudiation did not entirely relieve the plaintiff from showing that he was ready and willing; the plaintiff was dispensed from the need to do that which the defendant had indicated would be pointless. He was not excused from showing that at the time of repudiation he was ready and willing to complete the contract had it not been repudiated by the defendant: see Dawson, Waiver of Conditions Precedent on a Repudiation, Law Quarterly Review, vol. 96 (1980) 239, at pp. 244-245. So, in Ripley v. M'Clure [26] a buyer repudiated before the time for performance a contract to purchase tea. The plaintiff pleaded that he was ready to deliver in accordance with the contract and would have performed but for the repudiation. It was held that the refusal to perform, unretracted down to the time for performance, was a waiver of the seller's need actually to deliver the goods. Parke B. observed [27] :
By an express refusal to comply with the conditions of the contract of purchase, the defendant must be understood to have said to the plaintiff, "You need not take the trouble to deliver the cargo to me, when it arrives at Belfast, as purchaser, for I never will become such;" and this would be a waiver, at that time, of the delivery, and, if unretracted, would dispense with the actual delivery after arrival. His Lordship went on to say [28] : [A]fter the time that the delivery was excused, and the defendant refused to receive readiness and willingness is wholly immaterial. The jury expressly found that the plaintiff was willing to deliver according to the contract down to the time of the defendant's refusal [29] . 1. (1849) 4 Ex. 345 [154 E.R. 1245]. 2. (1849) 4 Ex., at pp. 359-360 [154 E.R., at p. 1251]. 3. (1849) 4 Ex., at p. 361 [154 E.R., at p. 1251]. 4. (1849) 4 Ex., at p. 353 [154 E.R., at p. 1248].
The defendant appealed: M'Clure v. Ripley [30] . In dismissing that appeal, Patteson J. expressed a different view in these terms [31] :
The declaration would be good enough without any averment of readiness and willingness, supposing there were only an averment of discharge, and that averment were traversed and found for the plaintiff. The assessment of damages would be on the nonperformance of the contract, and not upon the question, whether the plaintiff was ready and willing or not. This approach to the question seems not to have been followed in the later cases until it was revived in Taylor v. Oakes, Roncoroni and Co. [32] , especially by Atkin L.J. [33] . 1. (1850) 5 Ex. 140 [155 E.R. 60]. 2. (1850) 5 Ex., at p. 146 [155 E.R., at p. 63]. 3. (1922) 127 L.T. 267. 4. (1922) 127 L.T., at p. 272.
The same question arose for decision in Cort v. Ambergate Rly Co. [34] . There the defendant buyer informed the plaintiffs that it would accept no more iron chairs under a contract for the manufacture of such chairs. The plaintiffs treated themselves as discharged and commenced proceedings against the defendant for wrongfully refusing to accept the chairs. The plaintiffs pleaded that, from the making of the contract until the defendant's refusal, they were ready and willing to perform but that they had been discharged from further performance by the defendant's repudiation. The defendant denied that its renunciation before the time for performance excused the plaintiffs from the need to show that they were ready and willing to perform at the time for performance. It was held that the plaintiffs' averment was sufficient. Lord Campbell C.J. said [35] :
In common sense the meaning of such an averment of readiness and willingness must be that the noncompletion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete it if it had not been renounced by the defendants. 1. (1851) 17 Q.B. 127 [117 E.R. 1229]. 2. (1851) 17 Q.B., at p. 144 [117 E.R., at p. 1236].
These comments reflect not only the observations of Parke B. (in preference to those of Patteson J.) but also the earlier remarks of Tindal C.J. in Pontifex v. Wilkinson [36] where the plaintiffs agreed to manufacture and fit certain fittings for a fixed price. It was argued that the defendant refused to permit the plaintiffs to complete the manufacture and "absolutely discharged them from proceeding". Tindal C.J., delivering the judgment of the Court, held [37] that the two issues (a) readiness and willingness and (b) whether the defendant discharged the plaintiffs from completing the contract, were no more than one issue, namely, "whether the non-completion of the contract proceeded from the wrongful act and conduct of the plaintiffs in refusing to finish, or of the defendant in not permitting them to finish the goods according to the terms of the contract". The inference is that the defendant's conduct did not absolve the plaintiffs from any failure to be ready and willing of which that conduct was not the sole cause. Accordingly, the issue was whether the plaintiffs refrained from performing their promise in reliance on the defendant's conduct or for an independent cause.
Two other cases indicate that proof of readiness and willingness went to the existence of the cause of action; its materiality was not confined to the recovery of substantial damages. In Smith v. Wilson [38] the plaintiff's action failed because he was unable to establish that he was ready and willing to perform. In Griffith v. Selby [39] the defendant, having entered into an agreement to buy wrought iron goods solely from the plaintiff, later decided to buy the goods from another source. The plaintiff sued for damages, averring that he had always been ready and willing to supply the goods. The defendant contended that, if the plaintiff supplied the goods, the goods would not have been fit and proper for the purpose contemplated by the contract. It was held that this would be a defence, if established, so that it was for the jury to decide whether the plaintiff was able to perform.
The doctrine of anticipatory breach was first recognized in Hochster v. De la Tour [40] . This explains why in the earlier cases there was no attempt to distinguish between actions for actual breach and actions for anticipatory breach. The principles expounded in the cases were considered to apply to instances of actual breach. However, as Dixon C.J. noted in Peter Turnbull [41] , Ripley v. M'Clure [42] "might at a later date have been decided as a case of anticipatory breach".
In the context of actions to recover damages the principles stated in such cases as Jones v. Barkley and Cort v. Ambergate Rly Co. [43] have been enunciated and applied by Australian courts. So, in Hensley v. Reschke [44] Barton J. referred to the purchaser's readiness and willingness to complete as a "condition precedent" to his right to recover damages in the sense of special damages. Likewise, Isaacs and Rich JJ. [45] stated that the purchaser would have no right to claim damages unless he was ready and willing to pay the purchase money at the relevant time. In the course of discussing this point, their Honours said [46] :
If Gunson [the purchaser] were suing Mrs. Reschke [the vendor] for damages an averment of his readiness and willingness to pay his purchase money would under Order XX, rule 13, be implied But that would be so because the condition would go to the cause of action. (My emphasis.) Subsequently, in Cohen & Co. v. Ockerby & Co. Ltd. [47] , where buyers brought an action against the sellers for damages for non-delivery of goods, Isaacs J. discussed the buyers' right to sue on the footing that they had been absolved from performing their obligation, concurrent with the sellers' obligation to deliver, to establish a local credit with a bank to enable the sellers to obtain payment. His Honour said [48] : In my opinion Byrne v. Van Tienhoven [49] goes to show that a party so absolved, though he may defend an action against him, by merely showing he was so absolved, yet, if he sues the other party whose refusal he relies on, he must show he was ready and willing to perform his part, had he not been absolved from actual performance. "Readiness and willingness" is in that case a condition precedent. Later, in Bowes v. Chaleyer [50] , this Court held that judgment must be given for the defendant (the buyer) in an action for damages for breach of contract for the sale of goods brought by the seller where the plaintiff had affirmed the contract, after repudiation by the buyer before the time for performance, on the ground that the plaintiff was not ready and willing to perform the contract according to its terms - he had not arranged for shipment of the goods as promised - and he was not absolved from performance by the repudiation [51] . And in Henry Dean & Sons (Sydney) Ltd. v. P. O'Day Pty. Ltd. [52] Knox C.J. said: The meaning of the averment of readiness and willingness is that the non-completion of the contract was not the fault of the plaintiff and that he was disposed and able to complete it if it had not been renounced by the defendant (Cort v. Ambergate Rly Co. [53] ). Henry Dean & Sons was not followed by the House of Lords on another point: see Gill & Duffus S.A. v. Berger & Co. Inc. [54] . 1. (1781) 2 Dougl. 684; [99 E.R. 434]. 2. (1914) 18 C.L.R. 452, at pp. 462-463. 3. (1914) 18 C.L.R., at pp. 467-468. 4. (1914) 18 C.L.R., at p. 467. 5. (1917) 24 C.L.R. 288. 6. (1917) 24 C.L.R., at p. 298. 7. (1880) 5 C.P.D. 344. 8. (1923) 32 C.L.R. 159. 9. (1923) 32 C.L.R., at p. 198. 10. (1927) 39 C.L.R. 330, at p. 336. 11. (1851) 17 Q.B. 127 [117 E.R. 1229]. 12. [1984] A.C. 382, at p. 392.
Properly understood, the English and Australian cases to which I have referred and the statements which they contain (other than those of Patteson J. in M'Clure v. Ripley [55] ) support the view that the readiness and willingness requirement goes to the existence of the plaintiff's cause of action. Failure by the plaintiff to prove that element in his cause of action resulted in a verdict and judgment for the defendant: see Smith v. Wilson; Bowes v. Chaleyer. Such a failure did not result in an award of nominal damages. Absent proof of readiness and willingness, the plaintiff had no cause of action.
The prevailing rules and forms of common law pleading in the eighteenth and nineteenth centuries, which necessarily reflected the principles of substantive law as applied by the courts, demonstrated that the courts treated readiness and willingness as being material to the existence of the plaintiff's cause of action. The plaintiff was required to aver in his declaration the material elements in his cause of action. These elements included satisfaction or performance of all conditions precedent. Thus the plaintiff was required to aver performance of any condition precedent to, or concurrent with, performance of the defendant's promise. Just as the plaintiff was required to plead and prove readiness and willingness in a suit for specific performance, so at common law he had to plead and prove that he was ready and willing in an action for damages for breach of contract. It followed that proof that the plaintiff was ready and willing to perform his obligation on which performance of the defendant's promise was expressed to be conditioned was regarded as being essential to the plaintiff's cause of action. See also Jefferson v. Paskell [56] ; Lloyd, Ready and Willing to Perform: The Problem of Prospective Inability in the Law of Contract, Modern Law Review, vol. 37 (1974) 121.
When it became necessary to frame a declaration where the defendant had dispensed with performance by the plaintiff of a mutually dependent and concurrent obligation, it was natural and logical for the pleader to mould the usual form of declaration to the new situation by averring his excuse for non-performance in lieu of performance. But he was still required, in conformity with the authorities already mentioned, to allege (and prove) that he was ready and willing to perform that obligation; see Bullen and Leake, Precedents of Pleadings, 3rd ed. (1868), p. 61; Chitty's Treatise on Pleading, 7th ed. (1844), vol. 1, p. 335.
It is perhaps not surprising that with the passing of the strict rules of pleading the courts came to make occasional statements suggesting that readiness and willingness was relevant not so much to the establishment of a cause of action as to the assessment of damages. That is especially so when one considers that the majority of cases involve claims for damages. But the fact that the principles governing assessment of damages necessarily raise questions as to whether the plaintiff would have been able to perform the contract in any event should not lead us to lose sight of the more fundamental importance of the readiness and willingness requirement. The relevance of the requirement in a damages context is discussed in Y.P. Barley Producers Ltd. v. E.C. Robertson Pty. Ltd. [57] . Notwithstanding such considerations, when the defendant has dispensed with performance by the plaintiff of a mutually dependent and concurrent obligation, it remains for the plaintiff to show, not that he was ready and willing to perform, but that he would have been ready and willing to perform had the defendant not dispensed with performance.
Mahoney v. Lindsay [58] , though it was a purchasers' action for specific performance and not an action for damages, illustrates the point. The purchasers succeeded, although they did not seek out the vendor and tender the purchase money. The primary judge found that the vendor's solicitor had indicated that it would be useless for the purchasers to attend with the purchase money since the vendor did not intend to perform his part of the contract. The purchasers were ready and willing to complete and would have completed but for the vendor's dispensation.
Peter Turnbull [59] was a more complicated case. There the buyer recovered damages for non-performance by the seller of a contract for the sale of oats, notwithstanding non-fulfilment by the buyer of a condition requiring the nomination of a ship in February for delivery f.o.b. and the giving of fourteen days notice of the ship and shipping date. It was held that in the circumstances, including a repudiation of the contract by the buyer before the time for performance had arrived, the seller had dispensed the buyer from performance of these conditions. The action was for damages for actual, not anticipatory, breach of the contract, the buyer having elected to keep the contract on foot. Dixon C.J. [60] observed that it was always the law that, if a contracting party prevented the other party from fulfilling a condition precedent, it was equal to performance. His Honour went on to say [61] :
[A] plaintiff may be dispensed from performing a condition by the defendant intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention. His Honour referred to Lord Mansfield's comments in Jones v. Barkley and recited Lord Campbell C.J.'s account in Cort v. Ambergate Rly Co. of Ripley v. M'Clure. 1. (1954) 90 C.L.R. 235. 2. (1954) 90 C.L.R., at p. 246. 3. (1954) 90 C.L.R., at pp. 246-247.
Dixon C.J. did not address the question whether readiness and willingness goes to the existence of the cause of action or only to damages. As his Honour pointed out [62] , the case was not confined to a simple anticipatory refusal to perform followed by an election by the seller not to treat the contract as discharged for breach. Because the buyer's conduct involved more than that, it brought other principles of law into play. The buyer insisted that it could perform the contract only in one way, by substituting a shipment in Melbourne for the contracted shipment in Sydney. By seeking the seller's co-operation in securing this substitution and maintaining that it could not perform the contract according to its terms, the buyer clearly intimated to the seller that it need not pursue the conditions applicable to shipment in Sydney. The seller left the contract on foot subject to a continued intimation that only by a substituted performance could the buyer carry it out. Dixon C.J.'s stated reason for disagreeing with the Supreme Court's view that the seller must fail because it was not ready and willing to complete was that the buyer intimated that it would be useless to take steps to comply with the contract and excused the seller from doing so "at and from a time when the [seller] could still have fulfilled it" [63] .
Kitto J. adopted a similar approach. His Honour also made the point [64] earlier made by Tindal C.J. in Pontifex v. Wilkinson [1] and Lord Campbell C.J. in Cort v. Ambergate Rly Co. [2] that the question of readiness and willingness was an aspect of the larger question whether non-completion of the contract proceeded from the wrongful act or conduct of the defendant or of the plaintiff.
But it is the judgment of Dixon C.J. in Rawson v. Hobbs [3] that demonstrates the true significance of the plaintiff's readiness and willingness in an action for damages for breach of contract arising out of the plaintiff's acceptance of an anticipatory repudiation. The Chief Justice [4] evidently approved, subject to a slight qualification, the discussion of readiness in Lord Sumner's speech inBritish and Beningtons Ltd. v. N.W. Cachar Tea Co. [5] . In that case Lord Sumner (with whom Lord Buckmaster and, it seems, Lord Wrenbury and Lord Carson agreed) had been concerned to reject the notion, apparently favoured by Lord Atkinson [6] and supported by the Court of Appeal decision in Braithwaite v. Foreign Hardwood Co. [7] (see also Taylor v. Oakes, Roncoroni and Co. [8] and Continental Contractors Ltd. v. Medway Oil & Storage Co. Ltd. [9] ), that a repudiation by a buyer under a contract for the sale of goods excused the seller from the performance of all conditions precedent, including readiness and willingness. His Lordship denied that Braithwaite decided "that a buyer, who has repudiated a contract for a given reason which fails him, has, therefore, no other opportunity of defence either as to the whole or as to part, but must fail utterly" [10] .
If he had repudiated, giving no reason at all, I suppose all reasons and all defences in the action, partial or complete, would be open to him. [B]ut I do not see how the fact, that the buyers have wrongly said "we treat this contract as being at an end, owing to your unreasonable delay in the performance of it" obliges them, when that reason fails, to pay in full, if, at the very time of this repudiation, the sellers had become wholly and finally disabled from performing essential terms of the contract altogether. 1. [1923] A.C., at pp. 71-72.
In Rawson v. Hobbs [12] , Dixon C.J. pointed out that when a party seeks to justify termination before the time for performance on the ground of anticipatory breach or renunciation, the question is whether up to the time when he elects to treat himself as no longer bound he is "ready and willing to proceed with the contract and, as and when the time comes to do his part, so far as it is of the essence, to perform the contract on his side". The Chief Justice went on to point out that this was not the case when the party was acting under "a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires". Moreover, with reference to the position of the non-repudiating party, his Honour said:
On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete. His Honour had earlier referred [13] to the plaintiff posited by Lord Sumner, who "had become wholly and finally disabled from performing essential terms of the contract altogether", observing that a party in that situation "cannot recover from the opposite party to the contract if the latter at that point renounces the contract on his side". 1. (1961) 107 C.L.R., at p. 481. 2. (1961) 107 C.L.R., at p. 481.
Implicit in this view of the concept of readiness and willingness in the context of an action for damages for anticipatory renunciation is the proposition that the action will be dismissed if the plaintiff was not, immediately before acceptance of the renunciation, in a position to complete on the day appointed for completion. It is a view that is consistent with the proposition that a party who refuses to perform a contract can justify his action by pointing to grounds that justify his refusal even if at the time of refusal he was unaware of the existence of those grounds: Shepherd v. Felt and Textiles of Australia Ltd. [14] ; Rawson v. Hobbs [15] ; D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. [16] ; Sunbird Plaza Pty. Ltd. v. Maloney [17] ; Universal Cargo Carriers Corporation v. Citati [18] . And, as Rawson v. Hobbs itself demonstrates, the incapacity of one party to complete the contract is a lawful ground of termination by the other party before the time for performance.
In my opinion it is not possible to read the judgment of Dixon C.J. in Rawson v. Hobbs as stating that readiness and willingness is material only to the assessment of damages. The propositions stated by his Honour are of a more fundamental character, deriving, as they do, from the traditional concept of readiness and willingness as a material element in the existence of the plaintiff's cause of action. Nor do I think that it is possible to regard his Honour's remarks as having no application to the entitlement of a party to terminate a contract for breach. A party who is disabled from suing for damages because he is not ready and willing to perform in the sense discussed above cannot exercise a right to treat himself as discharged from the contract on the ground that the other party is in breach of an essential term or is otherwise in fundamental breach of the contract. As Stephen, Mason and Jacobs JJ. observed in D.T.R. Nominees [19] :
A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation. Otherwise he is not an innocent party, the common description of a party entitled to rescind for anticipatory breach. 1. (1978) 138 C.L.R., at p. 433.
The approach taken by Dixon C.J. and by Lord Sumner in British and Beningtons is to be preferred to that pursued in Braithwaite , Taylor v. Oakes, Roncoroni and Co., Continental Contractors and by Lord Atkinson in British and Beningtons. The former approach conforms to that adopted in the eighteenth and nineteenth century cases, subject to the qualification, which is appropriate to cases of election to terminate for anticipatory breach, that readiness and willingness after termination of the contract is immaterial. As anticipatory breach was not foreseen before Hochster v. De la Tour [20] , it is logical and proper to confine the requirement of readiness and willingness to the period down to the moment before the party elects to accept the anticipatory renunciation. In this way the established principle is given an application which fits the new situation to which it is directed. The contrary approach is inconsistent with the strong stream of earlier authority and generates unsatisfactory results, including those suggested by Lord Sumner. In passing, I should mention that in the United States it has been held that the plaintiff must show readiness and willingness as a material element in his cause of action for anticipatory breach: Yale Development Co. v. Aurora Pizza Hut Inc. [21] .
Braithwaite [22] has very recently sustained a mortal wound at the hands of the House of Lords: see Fercometal S.A.R.L. v. Mediterranean Shipping Co. S.A. [23] , where Lord Ackner treated it as an instance of acceptance of an anticipatory breach before the time for performance, or alternatively, if it was a case of actual breach, as being wrongly decided. From what I have already said, there are other reasons for declining to regard it as a persuasive decision. Indeed, even on the issue of quantification of damages, it now seems to be at odds with Gill & Duffus S.A. v. Berger & Co. Inc. [24] .
On this aspect of the case it remains for me only to mention the alternative approach advocated in such cases asPontifex v. Wilkinson [25] and adopted by Lord Campbell C.J. and Kitto J., namely, to ask the question whether the contract went off through the wrongful default and conduct of the plaintiff or the defendant. If the issue is to be looked at in this way the result would be no different, as indeed the discussion in the judgments makes clear. Insistence on the plaintiff being ready and willing is a means of ensuring that a plaintiff will not succeed in an action for breach of contract if the contract has gone off through his wrongful default or conduct. The burden this places on a plaintiff will vary from case to case. But it will generally be true to say that a plaintiff relying on anticipatory breach or claiming the benefit of some dispensation with complete performance will be faced with a burden capable of being displaced without undue expense or inconvenience. Moreover, it would be arbitrary and unjust if a plaintiff who could not show that he did not cause the contract to go off were able to succeed in an action against a defendant who has been open and forthcoming about the difficulties he is facing in his own performance. There are therefore good reasons in policy for the position revealed by the authorities.
Accordingly, in relation to termination for actual breach, the principle is that established by the earlier decisions - the plaintiff is required to show that he was ready and willing to perform the contract if it had not been repudiated by the plaintiff. In other words, the requirement is that the plaintiff be ready and willing to perform except to the extent that the defendant dispensed with his performance. In the case of an anticipatory renunciation accepted by the plaintiff, the requirement of readiness and willingness extends only up to the time of acceptance because then the earlier repudiation results in an early termination of the contract. Accordingly, in the case of actual breach the requirement of readiness and willingness is more stringent; it continues through to the time for performance. That is because the termination of the contract does not antedate the time for performance. Subject to this difference and to the possibility of a difference in the onus of proof, the principle to be applied in the case of actual breach is consistent with that to be applied in the case of termination for anticipatory breach. The difference in the onus of proof arises because in the case of termination for anticipatory breach the plaintiff will generally be able to show at the time of termination that he would have been able to perform at the time for performance by demonstrating that he was not then disabled or incapacitated from such performance. As Dixon C.J. noted in Rawson v. Hobbs [26] , one "must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness".
However, in the present case, the anticipatory breach of the vendors was not accepted. The case is one of termination for actual breach. The time for determining whether or not the purchasers would have been ready and willing to perform the contract had it not been for the dispensing conduct of the vendors is therefore the time for performance. The purchasers have not discharged the onus of showing that at that time they would have been so ready and willing. It follows that the purchasers are unable to justify their termination by reference to the ordinary principles of contract law. It is necessary now to turn to the doctrine of estoppel in order to ascertain whether the application of that doctrine enables the purchasers to succeed.
In Fercometal [27] , Lord Ackner, speaking for the House of Lords, recognized that the defendant might be estopped from relying on the plaintiff's non-performance of a condition precedent or concurrent condition. Fercometal is authority for the proposition stated by Lord Ackner [28] in these terms:
When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind, the right to take advantage of any supervening circumstance which would justify him in declining to complete. With respect to the possible operation of the doctrine of estoppel, Lord Ackner said [28] : [I]t is always open to A, who has refused to accept B's repudiation of the contract, and thereby kept the contract alive, to contend that in relation to a particular right or obligation under the contract, B is estopped from contending that he, B, is entitled to exercise that right or that he, A, has remained bound by that obligation. If B represents to A that he no longer intends to exercise that right or requires that obligation to be fulfilled by A and A acts on that representation, then clearly B cannot be heard thereafter to say that he is entitled to exercise that right or that A is in breach of contract by not fulfilling that obligation. His Lordship went on to point out [29] that there was no finding of any relevant representation by the repudiating charterers in that case and that the non-readiness of the owners to load on the material date was in no way induced by the charterers' conduct, but was the result of the owners' decision to load other cargo first. 1. [1989] 1 A.C. 788. 2. [1989] 1 A.C., at p. 805. 3. [1989] 1 A.C., at p. 805. 4. [1989] 1 A.C., at pp. 805-806.
So far as the present case is concerned, on the primary judge's findings, the vendors through their solicitor represented to the purchasers through their solicitor that they could not and would not complete the contract on the date fixed for completion. The representation was not retracted and continued until the time stipulated for completion. The representation fell into two parts: first, a representation as to a future fact - that they would not complete; secondly, a representation as to an existing fact - that they could not complete, due to non-registration of the right of way. By expressing the representations in this way, I run some risk of expressing inadequately the vendors' attitude as it was stated by their solicitor in the critical conversation. From the terms of that conversation, it seems that the vendors wished to proceed with the contract, but with a later date for completion substituted for 22 June. However, what is important, and perhaps critical, judged from the perspective of applying the doctrine of estoppel is that the vendors impliedly intimated that it would be pointless or futile for the purchasers to tender performance of the contract. It is that intimation upon which an application of the doctrine of estoppel stands or falls. Whether that intimation amounts to a representation of future fact or existing fact is a fine question, but as will appear, it is not a question which I need to determine.
Not every anticipatory repudiation of a contract amounts to a representation to the other party that it would be pointless for him to complete the contract. So much plainly appears from Dixon C.J.'s discussion of the buyer's repudiation and conduct in Peter Turnbull [30] . His Honour was at pains to emphasize that the buyer's conduct involved more than a simple repudiation, in particular its endeavours to secure the seller's co-operation in a substituted shipment in another port. Although his Honour did not speak explicitly of estoppel, his insistence on looking for clear evidence of waiver is characteristic of the traditional insistence on a clear and unambiguous representation as a necessary foundation for an estoppel: see Legione v. Hateley [31] , and the cases there cited. Granted that a representation relied upon as an estoppel must be clear and unambiguous, the representation in the present case satisfies that requirement, despite the fact that it arises from the repudiation itself in the setting in which it was communicated by the vendors' solicitor to the purchasers' solicitor and, unlike in the case of Peter Turnbull, the representation did not take the form of a request.
There is a long line of authority to support the proposition that, in order to ground a case of common law estoppel by representation, the representation must be as to an existing fact, a promise or representation as to future conduct being insufficient: Legione v. Hateley [32] ; Waltons Stores (Interstate) Ltd. v. Maher [33] . In Waltons Stores [34] Wilson J. and I pointed out that if there was a basis for holding that common law estoppel arises where there is a mistaken assumption as to future events, it was to be found in reversing Jorden v. Money [35] and in accepting the powerful dissent of Lord St. Leonards in that case. In the absence of argument we declined to embark on that course and instead decided the case by reference to promissory estoppel which extends to representations or promises as to future conduct: see Legione v. Hateley [32] ; Waltons Stores [1] . On further reflection it seems to me that we should now recognize that a common law estoppel as well as an equitable estoppel may arise out of a representation or mistaken assumption as to future conduct. To do so would give greater unity and consistency to the general doctrine of estoppel. Moreover, the clear acceptance by the Court in Waltons Stores of the doctrine of promissory estoppel makes this course inevitable. After all, it was the apprehension that representations as to future conduct, unsupported by consideration, would invade the territory of promises for valuable consideration that led to the confinement of common law estoppel to representations of existing fact. Given the recognition of promissory estoppel and the fact that the doctrine may preclude the enforcement of rights at least between parties in a pre-existing contractual relationship, the dam wall has fractured at its most critical point with the result that we should accept that a representation or a mistaken assumption as to future conduct will in appropriate circumstances create a common law estoppel as well as an equitable estoppel.
In Waltons Stores [2] Wilson J. and I referred to and applied the underlying principle that the courts will grant relief to "a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has "played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it" ": Grundt v. Great Boulder Pty. Gold Mines Ltd. [3] ; see also Thompson v. Palmer [4] . The same principle may be applied to the purchasers in this case if they acted to their detriment on the faith of the representation by not tendering performance on 22 June. The estoppel would operate to protect the purchasers from a claim by the vendors that the purchasers' failure to tender performance constituted a breach of contract and, as well, to enable the purchasers to maintain their termination of the contract on the footing that the vendors, not the purchasers, were in breach of the contract.
This brings me to the question whether the purchasers acted to their detriment in reliance upon the vendors' representation. The purchasers acted in reliance upon the representation by not continuing their efforts to procure finance and by not tendering performance on 22 June. Whether they did so to their detriment is the critical issue. If, in any event, quite apart from the making of the representation, the purchasers would have been unable to tender performance on that date, due to the inadequacy of their financial resources, there can be no basis for concluding that they were induced by the representation to act to their detriment. As Dixon J. observed in Grundt [5] :
[The] purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice. Even if it were accepted, as Lord Denning stated in W.J. Alan & Co. v. El Nasr Export [6] , and Brikom Investments v. Carr [7] , that detriment need not be proved as a separate element, over and above reliance, in order to found an estoppel, at least in the case of promissory estoppel if that were to continue to be regarded as being in a special category, it is clear in the present case that the reliance which Lord Denning required in those cases is not present. 1. (1937) 59 C.L.R., at pp. 674-675. 2. [1972] 2 Q.B. 189, at pp. 213-214. 3. [1979] Q.B. 467, at p. 482.
My conclusion adverse to the purchasers on the issue of readiness and willingness denies that the purchasers sustained a relevant detriment in consequence of their reliance upon the representation. Although it might be true to say that, as a result of the vendors' intimation, the purchasers lost the chance of tendering the purchase price and therefore were subjected to the requirement that they demonstrate that they would have been ready and willing to perform but for that intimation, the evidence reveals that that chance would have come to nothing. The purchasers cannot by invoking the doctrine of estoppel avoid the need to show that the vendors' conduct caused them not to perform the contract.
The contract went off for two reasons: first, because the purchasers lacked the financial resources to complete on the appointed day; secondly, because the vendors were unable to complete on the appointed day as the right of way could not be registered in time. Accordingly, the failure of the contract was as much due to the purchasers' incapacity as that of the vendors. But in order to terminate the contract the purchasers needed to show that the vendors were at fault. The consequence is that the purchasers did not validly terminate the contract. In this situation it might at first seem just and fair that the purchasers should recover their deposit but it is conceded that, if the purchasers did not validly terminate, the vendors' later termination of the contract was valid and it was not contested, in this event, that the purchasers' claim to recover the deposit should fail. In any case, so long as the contract continued on foot, it governed the relations between the parties and there is no basis in these circumstances for an appeal to the law of quasi-contract.
Contracts for the purchase and sale of a parcel of land known as Lot 8, Tizzana Road, Ebenezer, were exchanged on 24 December 1982. The appellants were the purchasers, the respondents the vendors. It was a term of the contract that settlement should take place "on or before June 22, 1983 and in this respect time shall be of the essence." A deposit of $7,500 was paid. The contract contained a clause relating to an easement burdening the subject land shown on an unregistered plan and referred to in an instrument executed for the purposes of s. 88B of the Conveyancing Act 1919 N.S.W.. The clause provided, inter alia, that "the Vendor warrants that he will attend to the registration of the said Plan together with 88b Instrument prior to completion".
On 20 June 1983 the solicitor for the purchasers rang the solicitor for the vendors, told him that finance had been arranged for Wednesday 22 June and asked: "What time can we settle on that day?" The vendors' solicitor said:
We have a problem here. We won't be able to settle on Wednesday 22 June because the right of way which we are required to give under one of the special conditions in the contract is not registered as yet. He offered an excuse for the vendors' inability to complete on the due date in strict accordance with the terms of the contract. When the purchasers' solicitor asked: "What stage has the registration of the right of way reached?" the vendors' solicitor replied: "I don't know. I'll have to check that. What is your attitude to settling this matter some time after Wednesday when the right of way will be registered? We can't settle without the right of way." The purchasers' solicitor said: "You realise that time is of the essence in the contract. I cannot say anything in relation to that and will have to seek instructions. I can't enter into any further discussions in relation to settlement."
After this conversation, there was no further communication between the parties or their solicitors until 24 June. At no time prior to 22 June 1983, the stipulated day for completion, did the purchasers purport to rescind the contract. On 22 June neither the purchasers nor the vendors tendered performance. On 24 June the purchasers executed a notice of rescission which was duly served, apparently on the same day. The notice of rescission was based not on an anticipatory breach by the vendors on 20 June, but on the vendors' actual breach in failing to complete the contract on 22 June 1983. The vendors refused to recognize the validity of the notice of rescission.
Thereafter the purchasers issued a summons out of the Supreme Court of New South Wales seeking declarations, inter alia, that they had validly rescinded the contract and that they were entitled to the return of the deposit. The vendors cross-claimed, seeking declarations that the purchasers were not themselves able to complete the agreement for sale and on that account were not entitled to rely upon the essential time condition in the contract. While the proceedings were pending, the vendors gave the purchasers a notice to complete and, after the time limited by that notice had expired, they purported to rescind the contract. By an amended cross-claim, the vendors sought declarations that they had validly terminated the agreement, that they were entitled to forfeit the deposit and that the purchasers were liable to the vendors for damages for breach of contract. Needham J. found: "that on 20 June 1983 the [vendors] indicated that they could not settle on the 22nd. The [purchasers] in my opinion were then entitled to treat that statement as a repudiation and to rescind, even though the time for completion had not arrived." On this finding, his Honour held that the purchasers were entitled to accept the vendors' repudiation on 20 June, although the day for completion had passed. His Honour made the declarations sought by the purchasers and dismissed the vendors' cross-claim. However, his Honour also made an observation about readiness to complete by the purchasers who had been searching for finance. He said:
It is my view that if the plaintiffs bore the onus of proving [readiness to complete], and it does seem that the onus would be on the plaintiffs to prove that fact, I would not have been satisfied that the plaintiffs had discharged that onus.
The judgment for the purchasers was set aside by the Court of Appeal. Street C.J. concluded that, as the purchasers had not rescinded the contract before the day fixed for completion, the contract had remained on foot and, as both parties had failed to perform their respective obligations, both were in default and neither could treat the other's failure to complete on the day fixed for completion as a breach founding rescission. Therefore, his Honour reasoned, the time stipulation lost its essential character, the purchasers' notice of rescission was ineffective and the contract remained on foot until it was rescinded by the vendors. McHugh J.A. was of the same opinion. Referring to earlier decisions of the Supreme Court of New South Wales, his Honour said [8] :
The principle of those cases is that a party who cannot perform his own contractual obligation on the date fixed for settlement cannot rescind because of the breach of the obligation of the other party irrespective of which obligation arose first. This is because the contract imposes concurrent obligations on each party, and one who is unable to perform his concurrent obligation cannot take advantage of the other party's inability to perform. Kirby P. in dissent said that the vendors' argument contained an "essential flaw" for it ignored that the vendors' intimation on 20 June relieved the purchasers "of the obligation to continue the search for finance". By majority, the Court of Appeal held that the purchasers had not validly rescinded the contract, the vendors had validly terminated it and the vendors were entitled to retain the deposit and recover damages for the purchasers' refusal to perform. 1. (1987) 11 N.S.W.L.R. 470, at p. 489.
When the appeal was argued in this Court, the vendors were not represented but written submissions on their behalf were received. The first question for determination is whether the contract was subsisting on 22 June despite the intimation by the vendors' solicitor on 20 June that the vendors could not complete on 22 June. It is clear that the vendors' solicitor did not wish the sale to go off; he sought no more than a postponement of the day for completion in order that he could procure the registration of the easement over the land before conveyance. The vendors did not offer to complete on 22 June; the vendors' solicitor had intimated that they were unready to complete on the day fixed for completion. As the parties had made completion on the day fixed an essential term of the contract, the intimation that the vendors were not ready to complete on 22 June was capable of amounting to a repudiation which would confer on the purchasers a right to rescind. When a promise is an essential term of a contract, an announcement by the promisor before the time for performance arrives that he will not perform the promise is an anticipatory breach amounting to a repudiation of the contract conferring on the promisee a right to rescind the contract: see Laurinda Pty. Ltd. v. Capalaba Park Shopping Centre Pty. Ltd. [9] . It is unnecessary, in my opinion, that an anticipatory breach be classified as "fundamental" in any other respect in order to amount to a repudiation: but cf. per Lord Diplock in Afovos Shipping Co. v. Pagnan [10] .
However, a repudiation by anticipatory breach does not affect the subsistence of a contract unless the promisee elects to rescind: Frost v. Knight [11] ; Heyman v. Darwins Ltd. [12] . Absent an election by the promisee to rescind, both parties remain bound by the contract, and the promisor may take advantage of any supervening circumstance which justifies him in refusing to perform when the time for performance arrives: Bowes v. Chaleyer [13] ; Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. [14] ; and see, e.g., Avery v. Bowden [15] ; Arcos, Ltd. v. E. A. Ronaasen & Son [16] . The purchasers did not elect to rescind for repudiation by anticipatory breach and the contract was subsisting on 22 June, the day fixed for completion. The purchasers elected to rescind for an actual breach by the vendors in failing to complete on 22 June. The question is whether the failure by the vendors to complete on that day was a breach of contract.
The effect of an intimation of non-performance on mutually dependent obligations under a subsisting contract.
The obligation of a vendor to deliver a conveyance and the obligation of a purchaser to pay the price on completion are mutually dependent and concurrent obligations in the absence of any contrary stipulation; each obligation is to be performed in exchange for the other: Palmer v. Lark [17] . Where the respective obligations of parties to a contract are mutually dependent and concurrent, the primary rule is that neither party who fails to perform his obligation when the time for performance arrives can rescind for the other party's failure at that time to perform his obligation. Each party's obligation is conditional on performance by the other; neither can complain of non-performance by the other when the condition governing the other's obligation goes unfulfilled. But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed from a nugatory tender of performance. Lord Mansfield said in Jones v. Barkley [18] :
The defendant pleads, that the plaintiff did not actually execute an assignment and release; and the question is, whether there was a sufficient performance. Take it on the reason of the thing. The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act. This passage was cited with approval by Dixon C.J. in Peter Turnbull [19] . In that case, Dixon C.J. pointed out that acting upon an intimation that tender of performance will be nugatory is equivalent to being prevented from performing one's obligation. He said [20] : Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co. [21] . But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention. 1. [1945] Ch. 182, at pp. 184-185. 2. (1781) 2 Dougl. 684, at p. 694 [99 E.R. 434, at p. 440]. 3. (1954) 90 C.L.R., at p. 247. 4. (1954) 90 C.L.R., at pp. 246-247. 5. (1787) 1 T.R. 638 [99 E.R. 1295].
In Laird v. Pim [22] purchasers, who had been let into possession before completion, refused to pay the purchase price. The vendor, suing in assumpsit for the price, pleaded that he was ready, willing and able to complete had not the purchasers discharged him from so doing in that the purchasers "did not regard their promise" [23] . It was held on demurrer that the vendor was entitled to succeed. Parke B. said [24] :
Upon the facts alleged in this declaration, the plaintiff is substantially in the same situation, for the purpose of recovering the money, as if all had been done on his part which he engaged to do. It does not follow that he shall recover the whole purchase-money, but he is in the same situation for the purpose of recovering damages for the non-payment of the price, as if all had been done by him. In Cort v. Ambergate Rly Co. [25] , Lord Campbell C.J., explaining Ripley v. M'Clure [26] , said [27] : There being an executory contract, whereby the plaintiff agreed to sell and the defendant to buy, on arrival, certain goods, to be delivered at Belfast at a certain price, payable on delivery, it was held that a refusal by the defendant before the arrival of the cargo to perform the contract was not of itself necessarily a breach of it, but that such refusal, unretracted down to and inclusive of the time when the defendant was bound to receive the cargo, was evidence of a continuing refusal and a waiver of the condition precedent of delivery, so as to render the defendant liable for the breach of contract. This passage, cited with approval by Dixon C.J. [28] and by Kitto J. [29] in Peter Turnbull, illustrates the governing principle which Kitto J. stated thus: The principle, which applies whenever the promise of one party, A, is subject to a condition to be fulfilled by the other party, B, may, I think, be stated as follows. If, although B is ready and willing to perform the contract in all respects on his part, A absolutely refuses to carry out the contract, and persists in the refusal until a time arrives at which performance of his promise would have been due if the condition had been fulfilled by B, A is liable to B in damages for breach of his promise although the condition remains unfulfilled. A's refusal to perform is an intimation to B that a tender of performance by B will be nugatory. (I shall hereafter follow the terminology of "A" and "B" - "A" to refer to a party who has declared that he will not perform his obligation under a contract containing mutually dependent and concurrent conditions; "B" to refer to the party to whom the intimation is given and who in reliance thereon omits to tender performance of his obligation.) Where A refuses to complete and thereby intimates to B that he need not trouble to fulfil a concurrent condition on which A's obligation to complete is dependent, B may be entitled to sue for A's actual breach though B elected not to terminate the contract before the time for completion arrived. Kitto J. said in Peter Turnbull [30] : What does it matter for the purposes of that action that the refusal was not treated as ending the contract and as founding an action for anticipatory breach? The damages claimed are not for loss of the contract by premature termination, but for loss of the benefit which performance of the contract in accordance with its terms by both parties would by now have produced to B but for the fault of A. It is a cause of action which the facts I have assumed make out, unless the non-fulfilment of the condition is an answer to it; and as to that the inescapable fact is that A's refusal was a continuing intimation that the condition need not be observed, and it did not become any the less an intimation to that effect because B chose not to determine the contract before its time. The intimation having continued until the time came when A would certainly have been in default if the condition had been fulfilled, the law, as I understand it, treats A's obligation as absolute, and holds B entitled to damages for not having got what A promised he should have in the event of the condition being fulfilled. (Emphasis added.) Following Peter Turnbull, this Court held inMahoney v. Lindsay [31] that a purchaser is not in breach of his obligation to complete on the day fixed for completion if he abstains from tendering the price on that day because of an intimation by a vendor that it is useless to do so since the vendor does not intend then to perform his part of the contract. 1. (1841) 7 M. & W. 474 [151 E.R. 852]. 2. (1841) 7 M. & W., at p. 484 [151 E.R., at p. 856]. 3. (1841) 7 M. & W., at p. 485 [151 E.R., at p. 857]. 4. (1851) 17 Q.B. 127 [117 E.R. 1229]. 5. (1849) 4 Exch. 345 [154 E.R. 1245]. 6. (1851) 17 Q.B., at pp. 147-148 [154 E.R., at p. 1237]. 7. (1954) 90 C.L.R., at p. 247. 8. (1954) 90 C.L.R., at p. 250. 9. (1954) 90 C.L.R., at p. 251. 10. (1980) 55 A.L.J.R. 118; 33 A.L.R. 601.
The reference by Dixon C.J. in Peter Turnbull to one party's "requesting" of the other party not to perform a condition suggests that the dispensing of the other party from his obligation is effected by acceptance of the request. A consensual variation of the contract may be the inference to be drawn in some cases but, more frequently, the facts will show no more than that the party to whom the intimation is given abstains from tendering performance in reliance on the intimation that he need not trouble to perform and that it will be useless for him to do so. It would be inequitable for A, having induced B to abstain from tendering performance, to assert that B's failure to tender performance when the time for completion arrives is a breach of contract by B or constitutes a failure to fulfil a condition on which A's obligation depends. The basis on which a party is dispensed from tendering performance is that an equity is raised against the party giving the intimation which is satisfied by treating him as though he had prevented the innocent party from tendering performance: see Waltons Stores (Interstate) Ltd. v. Maher [32] . Such an equity enures for the benefit of the party who has acted on the intimation, but it does not impair the contractual obligation of the party giving the intimation.
A purchaser who is thus dispensed from his obligation to pay the price at the time stipulated for completion is not thereby discharged from his obligation to pay the price at some later time. A stipulation for completion on a fixed day creates both a substantive and a temporal obligation; an obligation to complete and an obligation to do so on the fixed day. A purchaser who acts on an intimation from the vendor that the vendor will complete but not on the fixed day is dispensed from his temporal obligation, so that his omission to tender the price on that day is no breach; but, unless the contract is terminated, his obligation to pay the price remains after the day fixed for completion is past. When a promisor's intimation of non-performance relates only to the temporal aspect of the promise and the promisee either cannot rescind or elects not to rescind on account of that intimation, the promisee is not forever released from the substantive obligation; he is dispensed from performance only until the promisor gives him reasonable notice that the promisor has performed or is ready, willing and able to perform his obligation. (If it were otherwise, it would be pointless for a party who has once been in default in the timeous performance of his obligation under a contract which continues to bind both parties to give to the other a notice to complete.) When no time is fixed for performance of mutually dependent and concurrent obligations and B abstains from tendering performance in reliance on A's intimation that he will not perform the contract, B must give A a notice to perform before A will commit an actual breach - as distinct from an anticipatory breach - of the contract: Carr v. J.A. Berriman Pty. Ltd. [33] . (I leave aside cases of delay so gross as to amount to repudiation: see Laurinda Pty. Ltd. v. Capalaba Park Shopping Centre Pty. Ltd. [34] .) But it is otherwise when the time for performance is fixed by the contract. In such a case, A's temporal obligation is breached by non-performance at the stipulated time.
I would hold, in accordance with Peter Turnbull and Mahoney v. Lindsay [35] , that an intimation of non-performance of an essential term of a contract amounts to repudiation and dispenses a party who acts upon it from performance of his dependent obligation though he does not rescind the contract. Therefore, I am unable, with respect, to agree with Lord Ackner's rejection of what his Lordship described as a "third choice" in Fercometal S.A.R.L. v. Mediterranean Shipping Co. S.A. [36] :
When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind, the right to take advantage of any supervening circumstance which would justify him in declining to complete. The proposition that, if repudiation by anticipatory breach is not accepted, the contract subsists is undoubted; but it does not follow that an intimation by one party that tender of performance by the other will be nugatory cannot, if acted on, dispense the other from his obligation of performance under the contract by raising an equitable estoppel. It may be that Lord Ackner acknowledges some role for estoppel in this context for he said [37] : it is always open to [B], who has refused to accept [A's] repudiation of the contract, and thereby kept the contract alive, to contend that in relation to a particular right or obligation under the contract, [A] is estopped from contending that he, [A], is entitled to exercise that right or that he, [B], has remained bound by that obligation. If [A] represents to [B] that he no longer intends to exercise that right or requires that obligation to be fulfilled by [B] and [B] acts upon that representation, then clearly [A] cannot be heard thereafter to say that he is entitled to exercise that right or that [B] is in breach of contract by not fulfilling that obligation. 1. (1980) 55 A.L.J.R. 118; 33 A.L.R. 601. 2. [1989] 1 A.C. 788, at p. 805. 3. [1989] 1 A.C., at pp. 805-806.
In my view, an equity created by estoppel arising from an intimation by A that he does not intend to perform which conveys to B that performance by him would be nugatory absolves B "from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform".
The governing principle, stated by Kitto J. in Peter Turnbull [38] , holds that the party giving the intimation (A) is liable in damages for actual breach subject to the qualification that "B is ready and willing to perform the contract in all respects on his part". If this be a valid qualification upon B's right to a remedy for A's actual failure to perform his obligation when the time for performance arrives, then, in a case where B is not ready and willing, A's failure to perform cannot be a breach of contract. If A's failure to perform where B is not ready and willing were a breach of contract, the qualification would raise logical and practical difficulties. Logically, it would be difficult to see why, given A's breach, B would not be entitled to the remedy to which a party not in breach is entitled under the general law of contract. Practically, if A were in breach of an essential term but B did not have the right to rescind, there would be no means by which either party might unilaterally terminate the contract. In that event, if B, who had not repudiated the contract, had parted with money or property pursuant to the contract, he would be left to bear the loss: B could not rescind for A's breach while A could point to no breach by B to support rescission. The contract would continue to subsist unless and until termination by express agreement or ultimate abandonment: Summers v. The Commonwealth [39] ;D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. [40] . In truth, the qualification of B's readiness and willingness relates to the character of A's failure to perform his contractual obligation: is A's failure a breach or not? We are concerned here not with an anticipatory breach by A but with what B asserts to be A's actual breach.
Where there are mutually dependent and concurrent obligations, an intimation by one party that he does not intend to perform or that he will be unable to perform when the time for performance arrives does not necessarily mean that that party is the only party at fault. The other party may be the party at fault or both may be at fault. The other party may have announced that he does not intend to perform or that he will be unable to perform when the time for performance arrives and that announcement itself constitutes an anticipatory breach (Frost v. Knight [41] ) which justifies the giving of notice of rescission by the first party. Or the other party may already be disposed not to perform but he makes no announcement of his disposition (and thus avoids committing a breach) or he may already be unable to perform when the time for performance arrives and that disposition or incapacity would prevent the fulfilment of the condition on which the first party's obligation depends: see Stickney v. Keeble [42] . The qualification of readiness and willingness ensures that the party who gives an intimation of non-completion is not visited with liability for actual breach of contract merely because he had given an intimation of non-performance when the intimation amounts to notice of rescission for the other party's repudiation or when he would not have been obliged to perform in any event. There are two situations in which the qualification applies: rescission of an executory contract before the time for performance arrives and dispensation from performance of an obligation on which an obligation of the opposite party depends.
A party to an executory contract is entitled to rescind not only if the other party announces his intention not to perform his essential obligations but also if the other party is incapable of performing his essential obligations under the contract: see British and Beningtons Ltd. v. N.W. Cachar Tea Co. [43] ; Universal Cargo Carriers Corporation v. Citati [44] ; Trade Inc. v. Iino Ltd. [45] . It is not necessary to consider whether such an incapacity is a breach: see Rawson v. Hobbs [46] . It is sufficient to identify such incapacity as a repudiation which entitles the opposite party to rescind. By giving notice of rescission on the ground of anticipatory breach of an essential term or on the ground of incapacity, the first party may procure his release from his executory obligations (Ogle v. Comboyuro Investments Pty. Ltd. [47] ) provided that, until he gives notice, he was ready and willing to perform them. Moreover, he can justify rescission by reference to an announced repudiation or incapacity which he discovers after rescinding provided the repudiation occurred before or the incapacity existed when the notice to rescind was given: Shepherd v. Felt and Textiles of Australia Ltd. [48] . That principle was affirmed by Lord Sumner's speech in British and Beningtons Ltd. In that case, the buyers of three consignments of tea wrongly repudiated the sale, and the question arose whether the buyers were liable in full for damages for non-acceptance if the sellers were not then ready, willing and able to deliver in accordance with the contract. In the result, it was found that the sellers would have been ready, willing and able to deliver in accordance with the contract but the relevant passage from Lord Sumner's speech is this [49] :
I do not see how the fact, that the buyers have wrongly said "we treat this contract as being at an end, owing to your unreasonable delay in the performance of it" obliges them, when that reason fails, to pay in full, if, at the very time of this repudiation, the sellers had become wholly and finally disabled from performing essential terms of the contract altogether. 1. [1923] A.C. 48, at p. 72. 2. [1957] 2 Q.B. 401, at p. 445. 3. [1973] 1 W.L.R. 210, at p. 219; [1973] 2 All E.R. 144, at p. 152. 4. (1961) 107 C.L.R. 466, at pp. 481-482, 491. 5. (1976) 136 C.L.R. 444, at pp. 459-460. 6. (1931) 45 C.L.R. 359, at pp. 370-371, 373, 377-378. 7. [1923] A.C. 48, at p. 72.
Where a party claims to be entitled to rescind an executory contract on account of the other party's repudiation (whether by way of anticipatory breach or incapacity), the first party must show not only the other's repudiation but his own readiness and willingness up to the time of rescission to perform his essential obligations under the contract: Rawson v. Hobbs [50] . Readiness or willingness imports capacity to perform as well as disposition to perform: De Medina v. Norman [51] . Since a party's right to rescind an executory contract for the other party's repudiation is limited to cases where the first party is ready and willing to perform, neither party is treated as without fault where both would be at fault were the contract to continue until the time for performance arrives. In Cort v. Ambergate Rly Co. [52] Lord Campbell pointed out that that is the effect of requiring the party rescinding to be ready and willing to perform [53] :
In common sense the meaning of such an averment of readiness and willingness must be that the noncompletion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete it if it had not been renounced by the defendants. 1. (1961) 107 C.L.R., at pp. 480-481. 2. (1842) 9 M. & W. 820, at p. 827 [152 E.R. 347, at p. 350]. 3. (1851) 17 Q.B. 127 [117 E.R. 1229]. 4. (1851) 17 Q.B., at p. 144 [154 E.R., at p. 1236].
Readiness and willingness is ascertained at the time of rescission and on the assumption that the other party was then ready and willing to perform. In Psaltis v. Schultz [54] Dixon J. said:
To be ready and willing to perform a contract a party must not only be disposed to do the act promised but also have the capacity to do it. But the tenor of the promise will show when and how the act is to be performed and it is to that time and mode of performance that the capacity and disposition to fulfil the promise are to be directed. It is enough that he is not presently incapacitated from future performance and is not indisposed to do, when the time comes, what the contract requires. (Emphasis added.) In Rawson v. Hobbs [55] Dixon C.J. expressed a caution against lightly finding a party not to be ready and willing: One must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness. On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete. 1. (1948) 76 C.L.R. 547, at p. 560. 2. (1961) 107 C.L.R., at p. 481.
To speak of an incapacity which is "substantial" and of a resolve or decision which is "definitive" is to import a test of degree. A test of degree inevitably gives rise to differences in the evaluation of facts and produces some uncertainty in the resolution of concrete cases. Yet, in the great variety of circumstances to which the test might be applied, it is impossible to posit terms of greater precision. Lord Sumner's phrase - "wholly and finally disabled" - is too demanding a test of incapacity to accord with reasonable commercial practice but it is indicative of the range which the test of substantiality connotes. The test of incapacity, either as a ground of rescission or as an element in readiness and willingness, is an exacting test though it must be expressed as a matter of degree.
Where an executory contract creates mutually dependent and concurrent obligations, the dispensing of one party from performance of his obligation by reason of the other's intimation of non-performance produces a situation analogous to that produced by rescission for repudiation. A party who gives the intimation (like the party who repudiates) exposes himself to liability for breach though the party who is dispensed (like the party who rescinds) does not have to perform. If a need to identify the party at fault imposes a requirement of readiness and willingness on the party who seeks to rescind, it imposes a like requirement on the party who seeks relief on the footing that he has been dispensed. In Forrestt and Son Ltd. v. Aramayo [56] Lord Halsbury L.C. said:
The sole point which I intend to decide upon this appeal is that whenever there are concurrent obligations the party who seeks to recover against the other must show that he has always been ready and willing to perform the obligation upon him. 1. (1900) 83 L.T. 335, at pp. 337-338.
When a party gives an intimation of non-performance to another and the other acts upon it, the other is dispensed from performing his obligation but if the other would not have completed his obligation in any event, liability for breach cannot be visited on the party who gave the intimation. And so, before the dispensation of the other party is treated as the equivalent of performance so as to satisfy the condition on which the obligation of the first party depends, the other party must himself have been ready and willing to perform.
In Cohen & Co. v. Ockerby & Co. Ltd. [57] Isaacs J. said:
In my opinion Byrne v. Van Tienhoven [58] goes to show that a party so absolved [that is, from a nugatory tender of performance], though he may defend an action against him, by merely showing he was so absolved, yet, if he sues the other party whose refusal he relies on, he must show he was ready and willing to perform his part, had he not been absolved from actual performance. "Readiness and willingness" is in that case a condition precedent. Of course, it is possible that a party who is not disposed to perform or capable of performing in any event may not be dispensed from his obligation by receipt of an intimation of non-performance: he may not have acted in reliance on the intimation at all. But, whether or not he placed some reliance on the intimation in abstaining from performance of his own obligation, a disposition not to perform or an incapacity to perform when the intimation was given denies the character of breach to a failure to perform by the party giving the intimation. 1. (1917) 24 C.L.R. 288, at p. 298. 2. (1880) 5 C.P.D. 344.
Where a contract continues to subsist after A gives an intimation of non-performance, B continues to be bound except to the extent that he is dispensed by acting in reliance on A's intimation. If A has recanted his intimation and B is ready and willing to perform when the time for performance arrives, B is bound to complete. But where A has not recanted or where B is not ready and willing because he has relied (at least to some extent) on A's intimation, B is dispensed from being ready and willing at the time for performance. Where B is so dispensed and B was ready and willing to perform when the intimation was given, A's failure to perform is a breach of contract. B's readiness and willingness, so far as it is an element in B's cause of action against A, corresponds with the readiness and willingness of a party who is entitled to rescind for repudiation or incapacity. It is readiness and willingness up to the time when the intimation is given and it relates to B's then disposition and capacity to perform his obligation when the time for performance arrives. The caution which Dixon C.J. expressed in Rawson v. Hobbs against finding an absence of readiness and willingness too lightly must be observed. Unless B is ready and willing in this sense, A's failure to perform his obligation when the time for performance arrives is no breach of contract.
In the light of this discussion, I would state the relevant principles thus: if an executory contract creates obligations which are mutually dependent and concurrent and, before the time for performance of the obligations arrives, one party, A, gives the other party, B, an intimation that it will be useless for B to tender performance and B abstains from performing his obligation in reliance on A's intimation, B is dispensed from performing his obligation and A's obligation is absolute provided that B had not repudiated the contract and he was ready and willing to perform his obligation up to the time when the intimation was given. It is immaterial that A's intimation amounts to a repudiation of the contract unless B terminates the contract by accepting the repudiation. If, at the time when the intimation was given, B was substantially incapable of future performance of his obligation or had already definitively resolved or decided not to perform it, B was not ready and willing. If B was not then ready and willing, A's failure to perform his obligation when the time for performance arrives is no breach of contract.
These principles are, I think, consistent with the cases except Braithwaite v. Foreign Hardwood Co. [59] . That is a difficult case. It was analyzed by Lord Ackner in Fercometal [60] . In Braithwaite , buyers of rosewood wrongfully repudiated a contract of sale for 100 tons of rosewood while the first consignment of 63 tons was on the water. After the consignment reached London, the seller tendered or offered to tender the shipping documents in exchange for the price, but the tender or the offer was rejected. (It does not clearly appear from the report whether there was only an offer to tender or an actual tender.) The seller then sold the consignment for the best price obtainable and sued the buyers for damages for non-acceptance. It turned out that a proportion of the consignment of 63 tons was not of the stipulated quality. The trial judge (Kennedy J.) found that the defect in quality was such as to entitle the buyers to reject the whole consignment. Kennedy J. assessed substantial damages against the buyers, making an allowance for the defective timber. The Court of Appeal dismissed the appeal.
Salmon L.J. in Esmail v. J. Rosenthal & Sons Ltd. [61] and Lord Ackner (citing Salmon L.J.) in Fercometal [62] treat Braithwaite as a case of acceptance by the seller of the buyers' repudiation by anticipatory breach. Treating the buyers as having repudiated by committing an anticipatory breach and the seller as having accepted the repudiation, Lord Ackner thought that no question of actual breach by the buyers had arisen and that the quality of the timber in the first consignment was relevant only to the issue of damages. Had Lord Ackner regarded Braithwaite as a case of actual breach, he would have thought it to have been wrongly decided for the seller could not and did not perform its obligation under the contract by delivering a consignment of the stipulated quality. His Lordship rejected a proposition which (subject to the proviso of readiness and willingness) I accept, namely, "that where a party repudiates, the non-repudiating party, who does not accept the repudiation and affirms the continued existence of the contract, is thereby absolved from tendering further performance under the contract while the repudiatory attitude is maintained" [63] . If that proposition (subject to the proviso) be correct, it is immaterial whether the buyers' breach be treated as anticipatory or actual. In my view, the critical issue in Braithwaite was whether the seller, at the time when the buyers intimated that they would refuse to accept the consignment of 63 tons, were substantially incapable of delivering rosewood of a quality which the buyers were bound to accept. If the seller were so incapable, the buyers' refusal to accept - whether it be treated as an anticipatory or an actual non-acceptance - was justified and the buyers were not in breach; if the seller were not so incapable, the buyers' refusal to accept was a breach of contract. On one view of the facts, the quality of the rosewood in the consignment practically determined the seller's capacity to deliver rosewood of the stipulated quality; on another view, if the quality of the consignment was defective the seller still had an opportunity to acquire and tender rosewood of the stipulated quality. On the former view, the quality of rosewood in the consignment was the issue. Mathew L.J. in the Court of Appeal held [64] that: "there was, in my opinion, abundant evidence to shew that the first consignment was sound and was merchantable as rosewood, and would have been properly described as rosewood in the trade, though it would have been subject, as regards a portion of the consignment, to a small reduction in price." But that view of the facts was not adopted by Collins M.R., with whom Cozens-Hardy L.J. agreed. Collins M.R. did not consider the finding of the trial judge that, had the buyers not wrongfully repudiated the consignment before delivery, they would have been entitled "to repudiate the whole" [1] . Yet the majority in the Court of Appeal upheld the trial judge's award of damages. His Lordship said [2] :
The [buyers] are not in a position now, by reason of their after-acquired knowledge, to set up a defence which they previously elected not to make. We must in such a case look to see whether, at the time of each alleged breach, each side was ready and willing to perform the conditions of the contract which it lay upon them to perform, and there was clearly a breach by the [buyers], for they had by their own act absolved the [seller] from the performance of the conditions of the contract. The proposition that the buyers could not set up the defence of the seller's incapacity to deliver a consignment of the stipulated quality because they did not know of it at the time is inconsistent with the principle stated in Shepherd v. Felt and Textiles of Australia Ltd. [3] and by Lord Sumner in British and Beningtons Ltd. [4] cited above. And Collins M.R. appears to have disregarded the requirement that, if the seller was entitled to recover substantial damages, it had to be ready and willing to deliver a consignment of the stipulated quality at the time when the buyers "absolved" the seller from its obligation to deliver. On the approach to the facts which the majority adopted, the case was wrongly decided. 1. [1964] 2 Lloyd's Rep. 447, at p. 466. 2. [1989] 1 A.C., at p. 805. 3. [1989] 1 A.C., at p. 801. 4. [1905] 2 K.B., at p. 553. 5. [1905] 2 K.B., at p. 550. 6. [1905] 2 K.B., at p. 552. 7. (1931) 45 C.L.R. 359. 8. [1923] A.C. 48.
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 being broken: see Hochster v. De la Tour [5] .
Where B, being otherwise ready and willing to perform his part of mutually dependent and concurrent obligations, acts on A's intimation of non-performance and does not tender performance of his own obligation, he is entitled to damages for A's non-performance. 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, as in this case, a purchaser who has made no announcement that he will not complete and who 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 than 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 become entitled to the benefit of the completed contract. The onus is on the purchaser to establish his damages on the balance of probabilities. The readiness and willingness which must be shown by a purchaser in proof of his damages for the vendor's breach in failing to complete at the stipulated time is readiness and willingness to pay the price at that time: Hensley v. Reschke [6] . There, Isaacs and Rich JJ. pointed out that: "it must never be forgotten that readiness and willingness in this sense means readiness and willingness in the event of the vendor being able to carry out the contract as the purchaser insists by his action it should have been carried out, and claims damages on that basis." The distinction between readiness and willingness up to the time of an intimation of non-performance and readiness and willingness when the time for performance arrives is not drawn by Isaacs J. in Cohen & Co. [7] . There he cited Hensley v. Reschke although the latter case is concerned not with the elements of a cause of action for breach but with proof of damage. Readiness and willingness to pay the price when the time for completion arrives is a condition precedent to the recovery of substantial damages, but proof of that kind of readiness and willingness is not essential to establish that a vendor who has given an intimation of non-performance and who fails to perform is in breach.
The problem of assessing damages does not arise in this case, where the purchasers have purported to rescind for the vendors' breach and seek merely to recover the deposit. The finding, albeit obiter, of Needham J. that the purchasers had not discharged the onus of proving readiness to complete seems to relate to the likelihood of the purchasers' having in hand on 22 June the finance needed to settle. That question does not fall for determination. Had the purchasers sought to recover substantial damages from the vendors for the vendors' failure to complete on 22 June, the purchasers' inability to prove on the balance of probabilities that they would have been able to pay the price on that day would have been fatal to the claim. But the purchasers abandoned a claim for damages for the vendors' breach.
The true question is whether, when the vendors intimated on 20 June that they could not complete on 22 June, the purchasers were already "substantially incapable" of raising the needed finance to tender on 22 June. The purchasers were undoubtedly encountering grave difficulties in raising the finance they needed - on 20 June they were perhaps $10,000 short of the amount needed to complete - but their difficulties were not so grave that in their view it was futile to continue the effort. The male purchaser's evidence not only contains an assertion that he was able to complete; it contains an expression of confidence that his mother and his bank would make up the shortfall. Though Needham J. was not convinced that either source would produce the finance needed, the male purchaser apparently had a good relationship with both prospective sources neither of whom was shown to be without lending capability. Those circumstances preclude a finding that, when the vendors' solicitor intimated on 20 June that the contract could not be completed on 22 June, the purchasers were substantially incapable of raising the finance needed to complete. After the vendors' solicitor intimated that completion would not take place on 22 June, the purchasers apparently acted upon the intimation of 20 June, suspended the arrangements with the finance company which was to provide the major part of the finance, and did not tender the balance of the price on 22 June. The facts support the inferences that the purchasers acted on the vendors' solicitor's intimation and were, up to the time when the intimation was given, ready and willing to complete. In those circumstances, the vendors' failure to complete on 22 June was a breach of contract which entitled the purchasers to rescind. The purchasers were content with the declarations made by the trial judge that the contract was validly rescinded and that they were entitled to a return of the deposit.
Upon rescission of the contract, the consideration for which the purchasers had paid the deposit failed totally. The purchasers became entitled to recover the deposit not as damages but in quasi-contract as money paid for a consideration that had totally failed: see Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [8] ; Christie v. Robinson [9] ; Casson v. Roberts [10] . The purchasers' claim for the deposit was not founded on the contract which they rescinded.
The appeal should be allowed, the judgment of the Court of Appeal should be set aside and the judgment of Needham J. restored.
The facts and issues involved in this appeal are set out in other judgments.
On the trial judge's findings, the respondents ("the vendors") unambiguously informed the appellants ("the purchasers"), through their respective solicitors, that they would not complete the sale of the subject block of land within the time which the contract made of its essence. That advice constituted repudiation of the contract by anticipatory breach of an essential term. The purchasers did not, at that stage, elect to rescind the contract. As they were entitled to do, they allowed it to remain on foot. The vendors neither withdrew nor qualified their advice that they would not complete within the stipulated time. For so long as that time had not expired, that advice constituted a continuing repudiation by anticipatory breach. When that time expired without any tender of settlement by the vendors or withdrawal or qualification of their advice that they would not complete within it, the continuing repudiation of the contract by anticipatory breach had run its course. The question arises whether, notwithstanding the failure of the purchasers to tender performance or to be ready and able to complete on the stipulated date, the vendors' repudiation of the contract by anticipatory breach was translated into repudiation by actual breach. In my view, it was.
In the ordinary case of a contract for sale of land, the contractual obligations of the parties to complete the sale are concurrent and conditional in the sense that the vendor is not obliged to convey the land and the purchaser is not obliged to pay the purchase price otherwise than upon concurrent performance by the other party. Neither vendor nor purchaser will be guilty of breach of contract if he fails to complete within the time or upon the day fixed by the contract unless the other party tenders performance of his concurrent obligations. The position is, however, different if one party has unambiguously informed the other party that he will not perform his obligations within the time made of the essence of the contract. In such a case, the refusal to perform constitutes an intimation to the other party that the tender of performance of his concurrent obligations will be nugatory and futile. If the refusal continues until after the time allowed for performance, the refusing party's failure to complete within the stipulated time will constitute an actual breach of the contract notwithstanding that the other party has acted on the information and refrained from going through the motions of tendering performance (see Mahoney v. Lindsay [11] ). In Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. [12] Dixon C.J. explained that position by saying that, in such a case, the innocent party, who "acts upon" the express or implied intimation that "it is useless to perform" is "dispensed from" performance. Kitto J. [13] explained that what was meant "by saying that fulfilment of the condition has been dispensed with is that" [the refusing party's] "conditional obligation is to be treated, for the purposes of an action for non-performance, as if it had been made absolute by a fulfilment of the condition". Elsewhere in his judgment, Kitto J. stated that he was "supposing a case where in all the circumstances the refusal necessarily conveys to [the other party] that he need not trouble to fulfil a condition " [14] . Both Dixon C.J. and Kitto J. referred, with approval, to Lord Campbell C.J.'s statement in Cort v. Ambergate Rly Co. [15] which identified the applicable doctrine as "waiver". The line between the somewhat arbitrary doctrine of waiver and the doctrine of estoppel by conduct has always been a vague one (see Craine v. Colonial Mutual Fire Insurance Co. Ltd. [16] and the former doctrine is being increasingly enveloped and rationalized by the latter. At least in cases such as Peter Turnbull & Co., where the focus is upon action by one party "upon" what was conveyed to that party by the other party, the applicable primary doctrine should be seen in a modern context as that of estoppel. The present is such a case.
In the present case, the unequivocal and unqualified advice that the vendors would not complete the contract until after the stipulated date was in response to a request by the purchasers' solicitors to the vendors' solicitors to nominate a time for completion on that day. To adapt words used by Kitto J. in Peter Turnbull & Co. [14] that advice necessarily conveyed to the purchasers that it would be pointless for them to trouble to fulfil the condition of performance of their concurrent obligations within the time which the contract made of the essence: it was "a continuing intimation that the condition need not be observed, and it did not become any the less an intimation to that effect because [the purchasers] chose not to determine the contract before its time". The purchasers acted on the faith of that intimation that performance within the stipulated time would be futile and was unnecessary. They ceased their efforts to arrange finance with the consequence that they were neither ready nor able to complete the purchase within the time allowed by the contract.
In these circumstances, the law will not allow the vendors to depart from the state of affairs upon the basis of which they had, by their conduct, induced the purchasers to act. The doctrine of estoppel by conduct explained by Dixon J. in Thompson v. Palmer [17] , and Grundt v. Great Boulder Pty. Gold Mines Ltd. [18] , is applicable to preclude the vendors from asserting that the purchasers' failure to tender performance or to have the purchase price ready and available on the stipulated day either constituted a failure to discharge a contractual obligation upon the performance of which the vendors' own obligations remained conditioned or placed the purchasers themselves in breach of contract. In that regard, it is unnecessary to decide whether the vendors' representation related to a present or future state of affairs or whether the purchasers are seeking to use estoppel as a sword rather than a shield. In Waltons Stores (Interstate) Ltd. v. Maher [19] , I explained in detail the reasons which led me to conclude that the assumed state of affairs under an estoppel by conduct can provide the factual foundation of a cause of action and that estoppel by conduct (in its emanation commonly described as "promissory estoppel") may preclude departure from a represented or assumed future "state of affairs" in at least certain categories of case. A case such as the present which involves a representation between parties in a pre-existing contractual relationship that one party is dispensed from strict performance of the contract clearly falls within one such category of case (see Legione v. Hateley [20] ). In any event, I am now prepared to take the step which I refrained from taking in Waltons Stores [21] and to accept that the doctrine of estoppel by conduct extends, as a matter of general principle, to a representation or induced "assumption of fact or law, present or future" (cf. Moorgate Mercantile Co. Ltd. v. Twitchings [22] ). Once it is recognized that promissory estoppel is properly to be seen as no more than an emanation of the general doctrine of estoppel by conduct (see Waltons Stores [23] ), there remains no valid reason in principle why that general doctrine should not apply to a representation of future fact. Nor is there any valid reason why that general doctrine should be inapplicable to a case where the representation relates to the state of the law. In that regard, the distinction between a representation of fact and a representation of law is, in the context of the principles constituting the doctrine of estoppel by conduct, essentially illusory unless one subscribes - and I do not - to the view that law has no factual existence at all. In the area of estoppel by conduct, the essential distinction which must be observed if the doctrine is to be kept confined within what is justified by the notions of good conscience which inspire it is not the distinction between present and future fact or between fact and law. It is the distinction between a representation of fact and a representation of opinion. A representation can found an estoppel by conduct only to the extent that it is clear. It can, however, be reduced to what is clear by discarding so much of its content as is equivocal or ambiguous. That being so, a representation of future fact and a representation of law will often, upon analysis, involve no more, for the purposes of the doctrine of estoppel by conduct, than a representation of present opinion. In a case where that is so, any estoppel founded upon the representation will ordinarily be of no use to the representee since it will extend no further than precluding a denial that the represented opinion was truly held (cf. Waltons Stores [24] ).
In Thompson v. Palmer [25] , Dixon J. identified the object and operation of estoppel by conduct as being "to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment". His Honour went on to stress that the party who has induced the assumption is not bound to adhere to it "unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted" [27] . In the present case, the learned trial judge found that the purchasers had not proved on the balance of probabilities that, were it not for the vendors' intimation that it was unnecessary that they do so, they would have been able to arrange the balance of the purchase price in order to be ready and able to complete within the stipulated time. On the appeal, the purchasers sought to impugn that finding. However, it is unnecessary to pursue that question. It is clear from the evidence that there was, at the least, a real chance that, if they had not been induced to cease their efforts to arrange finance by the vendors' intimation, the purchasers would have been able to obtain the balance of less than $10,000 of the purchase price ($75,000) which was not already covered by the deposit ($7,500), the arranged loan ($56,000) and the money available in Mrs. Foran's bank account (at least $1,783). In these circumstances, the purchasers would be placed in a position of significant and unjust material disadvantage if the vendors were permitted to depart from that intimation in that they would have been induced to lose the benefit of a real chance that they would have actually tendered performance within the time fixed by the contract and thereby avoided any need to establish what might have happened but for the vendors' intimation. The detriment of the loss of that real chance which would be sustained by the purchasers if the vendors were permitted to assert that the purchasers remained obliged to tender performance or to become ready and willing to perform within the stipulated time is adequate to sustain the estoppel upon which the purchasers rely to establish their right to rescind. The operation of that estoppel is, as has been said, to preclude departure by the vendors from their intimation that it was unnecessary that the purchasers tender performance or be ready and able to perform on the day fixed for completion. As has been seen, one of the effects of that estoppel is that, as between the parties, the condition of concurrent performance by the purchasers can be disregarded with the result that the vendors' refusal to complete the sale on or before that day constituted a repudiation of the contract by breach of an essential term. Another is that the purchasers were effectively relieved of any obligation to be ready and able to perform on the day fixed for completion. That being so, it was not a prerequisite of the purchasers' right to rescind that they establish on the balance of probabilities that they would in fact have been ready and able to perform or have tendered performance in the hypothetical situation which would have existed in the event that the vendors' intimation had not been given.
In these circumstances, it is strictly unnecessary that I express any view on the question whether one party to a contract is precluded from rescinding it by accepting a repudiation of the contract by the other party if he is not in a position to prove that he is, or but for the repudiation would have been, ready, willing and able to perform the contract. However, in view of the discussion of that question in other judgments, it would seem desirable that I indicate that, notwithstanding some statements of authority to the contrary, I do not accept the proposition that a party must incur the expense necessary to put himself in a position where he can positively demonstrate actual or potential readiness and willingness to perform a contract before he can accept the repudiation of the other party and thereby rescind. In my view, that proposition is unjustified by either principle or common sense. Absence of actual or potential readiness or willingness to perform a contract will prima facie preclude a successful action against the other party for specific enforcement of the contract or for the recovery of damages for its breach. It does not, of itself, preclude rescission of the contract by acceptance of the other party's repudiation. Were it otherwise, the law would require the useless and futile expenditure by an innocent party of whatever time, effort or money was necessary to place himself in a position where he could positively demonstrate actual or potential ability to perform a contract in order to be able to bring it to an end on the ground that it had already been repudiated by the other party. Indeed, it is difficult to see why, as a matter of principle or common sense, actual breach or even repudiation by one party to a contract should prevent that party from rescinding the contract by accepting a repudiation of the contract by the other party. Put differently, it is difficult to see why the law should insist that, even though both parties to a contract have repudiated it, the contract must hang like an albatross around their necks unless and until they can reach a new agreement about its termination. The point can be illustrated by the hypothetical example of express repudiation by each party to a contract followed by acceptance of the other's repudiation and unilateral rescission of each of them. How can it be said that, in those circumstances, the law continues to require that each perform the contract?
It follows from what has been said above that the purchasers were entitled to rescind the contract. This they did. Upon rescission, the purchasers were entitled to obtain restitution of the deposit which they had paid. Their claim for the return of the deposit was not founded on the rescinded contract. Nor did it represent a claim for damages for the vendors' breach of its terms. It was a claim founded in the equitable notions of fair dealing and good conscience which require restitution of a benefit received as, or as part of, the quid pro quo for a consideration which has failed (cf. per Lord Wright, Fibrosa Spolka Akcyjna v. Fairbairn, Lawson, Combe, Barbour Ltd. [26] ; Muschinski v. Dodds [27] ). If it be necessary to clothe that claim in a nomenclature, the appropriate one in a modern context is "restitution" for, or of, "unjust enrichment". The benefit whose receipt falls into one of the categories of case which the law characterizes as unjust enrichment may be actual. Alternatively, it may be constructive as, for example, where it involves full or partial performance of something requested to be done. The benefit constituting the unjust enrichment in the present case was actual in that it would seem to be common ground that the deposit which the purchasers seek to recover was actually received by or on behalf of the vendors.
If the purchasers had sustained other loss caused by the vendors' repudiation of the contract, it would have been open to them to claim damages for breach of contract. Such a claim would, however, have succeeded only if the purchasers could discharge the onus of establishing that such further loss had been in fact sustained by them and had been caused by the vendors' breach. The learned trial judge's finding that the purchasers had not established on the balance of probabilities that they would, but for the vendors' repudiation, have been able to complete the contract would, while it stands and subject to the possible effect of any relevant estoppel, preclude them from discharging that onus. They do not, however, seek to recover such additional damages.
I would allow the appeal, set aside the judgment of the Court of Appeal and restore the judgment of Needham J.
The appellants were the purchasers and the respondents were the vendors under a contract dated 24 December 1982 for the sale of land at Ebenezer in New South Wales for the sum of $75,000. The contract provided for completion on or before 22 June 1983 and further provided that "in this respect" time should be of the essence. A special condition of the contract required the vendors to attend to the registration of a right of way before completion.
The purchasers experienced some difficulty in obtaining finance, but, having obtained a loan from National Westminster Finance Australia Ltd., instructed a solicitor to act on their behalf. On 20 June 1983 the purchasers' solicitor rang the vendors' solicitor and informed him that finance had been arranged for Wednesday, 22 June 1983. He asked "What time can we settle on that day?" The vendors' solicitor replied "We have a problem here. We won't be able to settle on Wednesday 22nd June because the Right of Way which we are required to give under one of the Special Conditions in the Contract is not registered as yet." The purchasers' solicitor then said "What went wrong? You had six months or more in which to register the Right of Way." The vendors' solicitor replied "We have had problems with the neighbours of Mr. Wight and his solicitor has mucked us around." The purchasers' solicitor asked "What stage has the registration of the Right of Way reached?" and the vendors' solicitor replied "I don't know. I'll have to check that. What is your attitude to settling this matter some time after Wednesday when the Right of Way will be registered?" The purchasers' solicitor responded "You realize that time is of the essence in the contract. I cannot say anything in relation to that and will have to seek instructions. I can't enter into any further discussions in relation to settlement."
It appears that no attempt was made upon either side to settle on 22 June 1983. As they had intimated, the vendors were unable to settle on that day. On 24 June 1983 the purchasers served a notice of rescission upon the vendors based upon the vendors' default in failing to register the right of way, to provide a good title to the property and to complete the sale in accordance with the requirements of the contract.
The right of way was not registered until 22 July 1983 and there was correspondence between the solicitors in which the vendors' solicitor sought completion of the contract and the purchasers' solicitor maintained that the purchasers had rescinded the contract. On 30 November 1983 the purchasers filed a summons claiming a declaration that the contract had been rescinded by them and the return of the deposit of $7,500 paid under the contract. Subsequently the purchasers added a claim for relief from forfeiture of the deposit pursuant to s. 55(2A) of the Conveyancing Act 1919 N.S.W.. The purchasers also claimed damages, but apparently this claim was not pursued upon trial. The vendors filed a cross-claim seeking an order for specific performance of the contract together with declarations that the purchasers were not able to complete the contract, that by reason thereof they were not entitled to rely upon the essential time condition in the contract, and that the notice of rescission of 24 June 1983 was invalid. By an amended cross-claim the vendors sought a declaration that they had validly terminated the contract and that they were entitled to forfeit the deposit. They also claimed damages.
The reference in the cross-claim to the purchasers' inability to complete was a reference to the financial position of the purchasers upon the date fixed for completion. The loan from National Westminster Finance Australia Ltd. was for $56,000, $11,500 less than the whole of the purchase price minus the deposit, and the purchasers had to find the balance. The learned trial judge found that they did not have the whole of the balance nor was it available to them by 22 June 1983, the date fixed for completion.
The trial judge found that on 20 June 1983 the vendors indicated to the purchasers that they could not settle on 22 June 1983. He regarded this as a repudiation of the contract which was accepted by the purchasers, albeit after the time for completion had passed and notwithstanding the purchasers' inability to complete for lack of finance. Thus he regarded the purchasers as having validly rescinded the contract. Upon this basis he ordered the return of the deposit to the purchasers and it was unnecessary to consider the claim under s. 55(2A) of the Conveyancing Act.
The term of the contract requiring completion on or before 22 June 1983 was, by express provision, an essential term. Clearly enough, by indicating on 20 June 1983 that they would not be complying with it, the vendors were in anticipatory breach of the contract and had thereby repudiated it.
In Afovos Shipping Co. v. Pagnan [28] , Lord Diplock suggested that anticipatory breach of a contract by one party occurs only where "the threatened non-performance would have the effect of depriving [the] other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the primary obligations of the parties under the contract then remaining unperformed. The non-performance threatened must itself satisfy the criteria of a fundamental breach." Perhaps Lord Diplock was intending to suggest that an anticipatory breach of an essential (or fundamental) term need not necessarily amount to repudiation. On the other hand, perhaps he was recognizing that an anticipatory breach must be fundamental before it can amount to repudiation, whether it is fundamental because it is the breach of an essential term or for some other reason. An essential term is a term which the parties have agreed, or which the law says, goes to the root of the contract. See Suisse Atlantique Société d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale [29] ; Shevill v. Builders Licensing Board [30] ; Hongkong Fir Shipping Co. Ltd. v. Kawasaki Kisen Kaisha Ltd. [31] ; D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. [32] . In Laurinda Pty. Ltd. v. Capalaba Park Shopping Centre Pty. Ltd. [33] , Brennan J. thought that anticipatory breach may amount to repudiation whether it is of an essential term or otherwise goes to the root of the contract. I see no reason to doubt that view. It is in accordance with the decision of this Court in Huppert v. Stock Options of Australia Pty. Ltd. [34] and the observation of Dixon C.J. in Rawson v. Hobbs [35] .
Repudiation by way of anticipatory breach by a party to a contract does not put an end to the contract unless the other party accepts the repudiation and rescinds the contract. Although he may do so, the other party does not have to accept the repudiation. He may continue to treat the contract as on foot and hold the party guilty of repudiation to the performance of his obligations. If those obligations remain unperformed when the time for performance arrives, the anticipatory breach will be converted into an actual breach. If the other party keeps the contract alive, he does so not only for his own benefit but also for the benefit of the party guilty of repudiation. The latter may, upon giving reasonable notice, withdraw his repudiation and complete the contract and, subject to a qualification with which I shall deal, the other party remains bound by the contract, enabling the repudiating party to take advantage of any breach by the other party or any supervening event which would discharge him from liability. If the other party elects to rescind, the rescission is, of course, not ab initio. He is entitled to maintain an action for damages for the anticipatory breach, the damages being calculated by reference to the loss which he would suffer by the breach becoming actual, subject to any opportunity to mitigate his loss in the meantime. See Hochster v. De la Tour [1] ; Frost v. Knight [2] ; Avery v. Bowden [3] ; and Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. [4] .
It is, I think, clear that the anticipatory breach of a contract amounting to repudiation cannot, if the repudiation is not accepted, continue beyond the time for performance. At that point, the failure to perform becomes an actual and not an anticipatory breach and the remedies available are for actual, rather than anticipatory, breach. See Peter Turnbull [5] .
I have said that there is a qualification to the proposition that a party who elects not to accept the repudiation of a contract remains bound by the terms of the contract to perform the obligations which it imposes upon him. Whilst the contract remains on foot for both parties, if the repudiation by one party makes it futile or pointless for the other party to attempt to perform an obligation, the law does not require him to do so. The obligation remains - it does not disappear from the contract - but the other party is treated as if he had performed it in the limited sense that he is absolved from the consequences which would otherwise flow from his non-performance. This principle, which emerged before the doctrine of anticipatory breach was formulated in 1853 in Hochster v. De la Tour, was originally justified as being common sense, although it has latterly been seen as the early recognition of the now developed notions of estoppel.
In Jones v. Barkley [6] , which preceded the doctrine of anticipatory breach, the plaintiffs were under a contractual obligation to assign an equity of redemption and execute a release in consideration of a sum of money to be paid by the defendant. The defendant refused to perform his part of the bargain. Lord Mansfield said [7] :
If ever there was a clear case, I think the present is. One needs only state what the agreement, tender, and discharge, were, as set forth in the declaration. It charges, that the plaintiffs offered to assign, and to execute and deliver a general release, and tendered a draft of an assignment and release, and offered to execute and deliver such assignment, but the defendant absolutely discharged them from executing the same, or any assignment and release whatsoever. The defendant pleads, that the plaintiff did not actually execute an assignment and release; and the question is, whether there was a sufficient performance. Take it on the reason of the thing. The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act. 1. (1781) 2 Dougl. 684 [99 E.R. 434]. 2. (1781) 2 Dougl., at p. 694 [99 E.R., at pp. 439-440].
In Ripley v. M'Clure [8] , also decided before the doctrine of anticipatory breach had emerged, the plaintiff had agreed to sell and the defendant to buy part of a cargo of tea to be exported from China. The goods were to be delivered to Belfast at a certain price, payable on delivery. It was held that a refusal by the defendant before the arrival of the cargo to perform his part of the agreement would dispense with the plaintiff's obligation to deliver the goods. Parke B. put it in terms of waiver, saying [9] :
By an express refusal to comply with the conditions of the contract of purchase, the defendant must be understood to have said to the plaintiff, "You need not take the trouble to deliver the cargo to me, when it arrives at Belfast, as purchaser, for I never will become such;" and this would be a waiver, at that time, of the delivery, and, if unretracted, would dispense with the actual delivery after arrival. 1. (1849) 4 Ex. 345 [154 E.R. 1245]. 2. (1849) 4 Ex. 345, at pp. 359-360 [154 E.R., at p. 1251].
And in Cort v. Ambergate Rly Co. [10] , the plaintiffs, who jointly manufactured railway chairs, sued for breach of a contract to manufacture and supply certain chairs to the defendants. The defendants, having accepted and paid for some of the chairs, told the plaintiffs not to supply any more as they would not accept or pay for them. The plaintiffs averred that they were ready and willing to perform the contract but were prevented from doing so by the defendants, an allegation which was traversed by the defendants. Lord Campbell C.J. observed [11] :
In common sense the meaning of such an averment of readiness and willingness must be that the noncompletion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete it if it had not been renounced by the defendants. What more can reasonably be required by the parties for whom the goods are to be manufactured? If, having accepted a part, they are unable to pay for the residue, and have resolved not to accept them, no benefit can accrue to them from a useless waste of materials and labour, which might possibly enhance the amount of damages to be awarded against them. Lord Campbell continued [12] : Upon the whole, we think we are justified, on principle and without trenching on any former decision, in holding that, when there is an executory contract for the manufacturing and supply of goods from time to time, to be paid for after delivery, if the purchaser, having accepted and paid for a portion of the goods contracted for, gives notice to the vendor not to manufacture any more as he has no occasion for them and will not accept or pay for them, the vendor having been desirous and able to complete the contract, he may, without manufacturing and tendering the rest of the goods, maintain an action against the purchaser for breach of contract; and that he is entitled to a verdict on pleas traversing allegations that he was ready and willing to perform the contract, that the defendant refused to accept the residue of the goods, and that he prevented and discharged the plaintiff from manufacturing and delivering them. It may be thought that in that passage there are indications that the final destination of the principle would be found to lie in estoppel. There could be no claim by the plaintiffs based upon the delivery of the goods, but the defendants were, by reason of their representation, precluded (or estopped) from alleging that the plaintiffs were not ready or willing to deliver them. 1. (1851) 17 Q.B. 127 [117 E.R. 1229]. 2. (1851) 17 Q.B., at p. 144 [117 E.R., at p. 1236]. 3. (1851) 17 Q.B., at p. 148 [117 E.R., at p. 1237].
Similar indications are to be found in Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. In that case the defendant had contracted to sell oats to the plaintiff to be loaded in Sydney, during the months of January and February 1951, on a ship or ships to be nominated by the plaintiff. The defendant was having difficulty supplying the oats but persisted up to 28 February in saying that it could perform the contract by shipment in Melbourne, thus intimating to the plaintiff that it was useless to pursue the conditions of the contract applicable to shipment in Sydney and that the plaintiff need not do so. Dixon C.J. pointed out that in the court below the case was treated as "one in which the contract had been kept open by the plaintiff notwithstanding the defendant's intimation of its inability to perform it, with the consequence that the plaintiff was bound to fulfil the conditions on its part to be fulfilled" [13] . But, as Dixon C.J. noted, the case was not as simple as that. The intimation by the defendant and the course pursued by it was an "additional element" [14] which brought into application other principles of law. Although he did not speak in terms of estoppel, clearly enough what Dixon C.J. was referring to as an additional element was the representation by the defendant that it was pointless for the plaintiff to nominate a ship for shipment in Sydney and the reliance of the plaintiff upon that representation in not making such a nomination. That was the circumstance which brought into play the principle of law which Dixon C.J. [15] expressed as follows:
Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention. 1. (1954) 90 C.L.R., at p. 245. 2. (1954) 90 C.L.R., at p. 246. 3. (1954) 90 C.L.R., at pp. 246-247.
In the course of his concurring judgment, Kitto J. referred to the case of Laird v. Pim [16] where the vendor of land sued for damages for non-payment of the purchase price. The defendants had been let into possession by the plaintiff vendor but had refused to pay the purchase money or complete. The plaintiff pleaded that he was ready and willing to make a good title and would have tendered a proper conveyance had the defendants not discharged him from doing so. A plea in response by the defendants that no conveyance had ever been made or executed to the defendants was held to be bad. Parke B. said [17] that "the plaintiff is substantially in the same situation, for the purpose of recovering the money, as if all had been done on his part which he engaged to do. It does not follow that he shall recover the whole purchase-money, but he is in the same situation for the purpose of recovering damages for the non-payment of the price, as if all had been done by him."
It is necessary to deal with the decision inBraithwaite v. Foreign Hardwood Co. [18] , more for the difficulty which it has caused than for the light which it shed upon the relevant principles. In that case, the plaintiff, who lived in British Honduras, contracted to sell a quantity of Honduras rosewood to the defendants by instalments. Payment was to be by cash against bill of lading. While the first consignment was on the sea, the defendants repudiated the contract and refused to accept any rosewood upon the ground that the seller had committed a breach of a collateral oral agreement not to supply rosewood to any other person in the trade. Ultimately the trial judge found that there was no such collateral agreement. After the defendants' repudiation of the contract, the plaintiff's agent informed the defendants that he had received the bill of lading for the first instalment, but the defendants again wrote refusing to take the bill of lading on the basis of their previous repudiation. When the first consignment of rosewood arrived, the plaintiff sold it as against the defendants and sought to recover the difference in price from them by way of damages. The trial judge, Kennedy J., found that the repudiation of the contract by the defendants was wrongful and that it was accepted by the plaintiff, presumably when the first consignment was sold. But he also found that a portion of the first consignment was not in accordance with the contract and that the defect would have entitled the defendants to repudiate the contract with respect to that consignment had they not previously wrongfully repudiated it. He awarded damages to the plaintiff, making allowance for the defective wood. No question arose with respect to a second consignment which was, in the absence of any collateral agreement, wrongly rejected by the defendants.
On appeal, Collins M.R., somewhat inexplicably in view of the finding of Kennedy J. to the contrary, treated the defendants' repudiation of the contract as not having been accepted by the plaintiff. Upon that basis he expressed the view that the act of the defendants in refusing to take the bill of lading absolved the plaintiff from the obligation of delivering rosewood in accordance with the specifications of the contract. Cozens-Hardy L.J. agreed with Collins M.R.
Mathew L.J., who purported to be of the same opinion, dealt with the matter (as appears from the report in (1905) 74 L.J. K.B. 688, at pp. 693-694) upon the basis that the plaintiff accepted the defendants' repudiation of the contract. He then described as "astonishing" the suggestion made by the defendants that, having discovered that their repudiation was wrongful, "they are entitled to fall back upon and to re-open the matter of the first consignment, and to say that, as they have since discovered that the plaintiff would have been in a difficulty as to the delivery of that consignment, he was not in a position to perform the conditions precedent with respect to that consignment, and therefore cannot claim any damages with respect of it".
There have been various explanations of the decision in Braithwaite : see, e.g., Taylor v. Oakes, Roncoroni and Co. [19] ; British and Beningtons Ltd. v. N.W. Cachar Tea Co. [20] ; Bowes v. Chaleyer [21] . Whatever explanation is the correct one, the reasons of the majority in Braithwaite may be interpreted as offering support for the proposition that where a contract is repudiated by a party to it, the other party, if he does not accept the repudiation and affirms the contract, is thereby absolved from tendering further performance under the contract, at all events unless and until the repudiation is withdrawn. Put in that way, that proposition has now been found unacceptable by the House of Lords in Fercometal v. Mediterranean Shipping Co. [22] . In that case, Lord Ackner, whose reasons were those of the House, favoured an interpretation of Braithwaite whereby after the first general repudiation by the defendants, there was an offer by the plaintiff to tender the bill of lading in relation to the first consignment, which was refused. Upon this view that refusal constituted a second repudiation by the defendants "which was accepted by sale in the market, thereby making it irrelevant to consider any question of waiver of conditions precedent" [23] . Upon that basis, Braithwaite does not support the above proposition for which it appears to be authority. On the other hand, if that explanation is incorrect and Braithwaite does support that proposition, then, in the opinion of Lord Ackner, it is wrong. In his view, the correct exposition of the law is as follows [24] :
When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind, the right to take advantage of any supervening circumstance which would justify him in declining to complete. 1. (1922) 127 L.T. 267. 2. [1923] A.C. 48. 3. (1923) 32 C.L.R. 159. 4. [1989] 1 A.C. 788. 5. [1988] 1 A.C., at p. 803. 6. [1989] 1 A.C., at p. 805.
This statement of the law, by itself, does not accommodate the earlier cases beginning with Jones v. Barkley [25] to which Lord Ackner had earlier made reference. These cases "were concerned to absolve the "innocent party" from the need to render useless performance, which the repudiating buyer had indicated he no longer wanted" [26] . The principle established by these cases may or may not be thought to provide a via media, but it is not possible to ignore them. Nor did Lord Ackner do so. However, in recognizing them, he categorized them as cases of estoppel. Thus he says [27] :
Of course, it is always open to A, who has refused to accept B's repudiation of the contract, and thereby kept the contract alive, to contend that in relation to a particular right or obligation under the contract, B is estopped from contending that he, B, is entitled to exercise that right or that he, A, has remained bound by that obligation. If B represents to A that he no longer intends to exercise that right or requires that obligation to be fulfilled by A and A acts upon that representation, then clearly B cannot be heard thereafter to say that he is entitled to exercise that right or that A is in breach of contract by not fulfilling that obligation. 1. (1781) 2 Dougl. 684 [99 E.R. 434]. 2. [1989] 1 A.C., at p. 797. 3. [1989] 1 A.C., at p. 805.
Turning to Fercometal itself, it is not difficult to see why Lord Ackner chose to deal first with the doctrine of anticipatory breach as a separate issue and then to introduce a qualification by way of estoppel. Indeed, it may be inaccurate to speak of estoppel as a qualification for it rests upon its own principles, irrespective of whether those principles have previously been given express recognition in the context of anticipatory breach. In Fercometal , charterers entered into a charterparty with the owners of a vessel for the carriage of a cargo of steel from Durban to Bilbao. There was no time stipulated for the loading of the vessel, but the charterers were given the option of cancelling the charterparty should the vessel not be ready to load on or before 9 July 1982. Upon forming the view that the vessel would not be available for loading by 9 July, the charterers on 2 July purported to cancel the contract. That cancellation was premature and constituted a repudiation of the charterparty by way of anticipatory breach. The owners continued to assert the availability of the vessel. On 8 July, despite the owners' assertion that the vessel was available for loading, it was clear that it was not and on 12 July the charterers sent a further cancellation notice. The owners advanced a claim for dead freight against the charterers, based upon a contention that the repudiation constituted by the first and wrongful cancellation, although not accepted, absolved the owners from any responsibility of having their vessel ready by the cancelling date, thus disentitling the charterers from cancelling on or after that date and enabling the owners to pursue their claim.
Clearly in that situation, there was, to use the words of Dixon C.J. in Peter Turnbull [28] , no "additional element" which, the contract having been kept alive, could have relieved the owners of their obligations under it. Thus, speaking in the language of estoppel, Lord Ackner concluded that there was no finding of any representation by the charterers that they no longer required the owners' vessel to arrive on time let alone that the owners were induced thereby not to make the vessel ready to load by 9 July.
There is, in truth, no difference between the "additional element" of which Dixon C.J. spoke and the requirements of the law of estoppel, even taking the strictest view of those requirements. It is, perhaps, curious that this has not been spelt out before in the cases, but promissory estoppel is involved and the influence of the decision in Jorden v. Money [29] has been strong. The preservation of the doctrine of consideration was thought to depend upon the maintenance of a distinction between a representation of existing fact and a representation as to future conduct (or promise), allowing estoppel based upon the first and denying it based upon the second. But even if the notion of promissory estoppel was thought to undermine the doctrine of consideration, it never entirely disappeared. The principle which survived was expressed by Lord Cairns in Hughes v. Metropolitan Railway Co. [30] , in a familiar passage as follows:
it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties. The same principle was expressed by Bowen L.J. inBirmingham and District Land Co. v. London and North Western Railway Co. [31] , as follows: if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before. 1. (1854) 5 H.L.C. 185 [10 E.R. 868]. 2. (1877) 2 App. Cas. 439, at p. 448. 3. (1888) 40 Ch.D. 268, at p. 286.
Certainly so much as is contained in those passages has been accepted in Legione v. Hateley [32] and, even within those limits, the doctrine of promissory estoppel requires no adaptation to describe the situation of a party to a contract who has been led, by an intimation of the other party who has committed an anticipatory breach, to believe that it is useless to perform his obligations under the contract and has accordingly refrained from doing so. Of course, this Court has gone further in Waltons Stores (Interstate) Ltd. v. Maher [33] in discerning a broader foundation for promissory estoppel and in giving it an application beyond the context of pre-existing contractual rights. For present purposes it is unnecessary to rely upon that case. It is enough to say that the principles of promissory estoppel as they were accepted in Legione v. Hateley are indistinguishable from the principles expounded in the line of cases beginning with Jones v. Barkley. There would seem to be little point in maintaining a distinction any longer.
I should add that although the purchasers were the plaintiffs in the action, this does not offend against the traditional view that estoppel cannot found an action - can be used only as a shield and not as a sword. Even upon that view, a plaintiff may rely upon an estoppel if he has an independent cause of action and the estoppel upon which he relies is in answer to a defence raised by the defendant rather than part of the cause of action itself: see Waltons Stores (Interstate) Ltd. v. Maher [34] .
Under the contract, the obligation of the purchasers to pay the purchase price or the balance of the purchase price was simultaneous with the obligation of the vendors to deliver a conveyance. That is to say, they were mutual or concurrent obligations, the performance of each being conditional upon the performance of the other: Palmer v. Lark [35] ; Dainford Ltd. v. Smith [36] ;Sunbird Plaza Pty. Ltd. v. Maloney [37] . Not only were there concurrent obligations to settle but, an essential time having been fixed for settlement, there was an obligation on each side to settle within that time. The vendors intimated, however, that they could not settle within that time and impliedly intimated that it would be useless for the purchasers to attempt to do so. Unless there was some reason preventing them from doing so, the purchasers were entitled to rely upon the representation of the vendors as absolving them from tendering the purchase price within the stipulated time. In Mahoney v. Lindsay [38] , Gibbs J., relying upon Peter Turnbull [39] , expressed the situation as follows:
The main argument submitted on behalf of the appellant was that in the circumstances it was not proved that the respondents had been absolved from their obligation to seek out the vendor and tender the purchase money. However, if one party to a contract prevents the other from fulfilling a condition of the contract, that is equivalent to performance by the latter. 1. [1945] Ch. 182, at pp. 184-185. 2. (1985) 155 C.L.R. 342, at p. 365. 3. (1988) 166 C.L.R. 245, at pp. 275-276. 4. (1980) 55 A.L.J.R. 118, at p. 119; 33 A.L.R. 601, at p. 603. 5. (1954) 90 C.L.R. 235.
The reason why it is said that the purchasers were not entitled to rely upon the vendors' representation is that they, the purchasers, were not ready and willing to perform their obligations because they did not then have the finance to enable them to do so. Of course, the date for settlement had not arrived at the time the vendors repudiated the contract and, as will appear, it is necessary to consider the purchasers' obligation at that time with that fact in mind. I shall return to that aspect of the matter shortly. First it is necessary to settle the question whether the purchasers were under any obligation to prove, as plaintiffs, that, notwithstanding the vendors' repudiation, they were ready and willing to perform their obligations under the contract. Of course, readiness and willingness implies not only disposition, but also capacity: De Medina v. Norman [40] .
In any action for breach of contract, the readiness and willingness of the plaintiff to perform those mutual obligations remaining to be performed on his part under the contract is a condition precedent to his right to recover: see Hensley v. Reschke [41] . Under the old rules a plaintiff was required to plead that he was ready and willing but under the present rules that fact is implied with the effect that he is not required to prove it unless the defendant puts it in issue. In that event, the burden of proving readiness and willingness rests upon the plaintiff. See Supreme Court Rules 1970 (N.S.W.) Pt 15, r. 11.
But what if the breach is anticipatory rather than actual? The authorities have given conflicting answers to this question, but it is now clear that in cases of repudiation as well as actual breach, readiness and willingness on the part of the plaintiff is part of his cause of action. The position was clearly stated in D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. [42] :
A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation. Otherwise he is not an innocent party, the common description of a party entitled to rescind for anticipatory breach 1. (1978) 138 C.L.R., at p. 433.
Nevertheless there are those who have held a contrary view. In Bowes v. Chaleyer [43] , Starke J. said: "No doubt, if a party repudiates a contract and the repudiation is accepted and acted upon by the other party, then the latter is relieved from proving readiness and willingness on his part to perform the contract." See also per Higgins J. [44] . A similar view was expressed in Taylor v. Oakes, Roncoroni and Co. [45] , and by Lord Atkinson in British and Beningtons Ltd. v. N.W. Cachar Tea Co. [46] . And support for the proposition is to be found in the judgment of Collins M.R. in Braithwaite v. Foreign Hardwood Co. [47] and in Y.P. Barley Producers Ltd. v. E.C. Robertson Pty. Ltd. [48] .
The error in these cases lay, I think, in attempting to carry too far the principle that the repudiation by one party of a contract may absolve the other party from the obligation of tendering useless performance. No doubt that principle, when it applies, may reduce the extent, or alter the nature, of the readiness and willingness which a plaintiff is required to show, but there is no reason why it should eliminate the requirement entirely. A party should not be able to sue for breach if he is unable or unwilling to carry out his part of the bargain; where, in other words, he is not the innocent party. Even where a party has been absolved by the repudiating party from performing his future obligations under the contract he must show that at the time of the repudiation he was ready and willing to complete the contract had it not been repudiated. But in proving his readiness and willingness where he has been absolved from tendering performance he may not have to prove a great deal. For example, in Cort v. Ambergate Rly Co. [49] the plaintiffs could and did prove that they were ready and willing to manufacture railway chairs in accordance with their contract at the time it was repudiated by the defendants. But they were not required to prove that they had taken steps to manufacture the chairs in order to be able to tender them.
Dixon J. recognized the limited scope of the readiness and willingness required of a plaintiff in the case of anticipatory breach of a contract. In Psaltis v. Schultz [50] , he expressed it in this way:
To be ready and willing to perform a contract a party must not only be disposed to do the act promised but also have the capacity to do it. But the tenor of the promise will show when and how the act is to be performed and it is to that time and mode of performance that the capacity and disposition to fulfil the promise are to be directed. It is enough that he is not presently incapacitated from future performance and is not indisposed to do, when the time comes, what the contract requires. And in Rawson v. Hobbs Dixon C.J. returned to the question. He said [51] : It is hardly necessary to say that once there has been a renunciation of a contract or of future performance of an essential obligation thereof by one contracting party, the other if he elects to treat that as an anticipatory breach discharging the contract is relieved from all further obligation to perform on his side and in consequence need not thereafter be ready and willing to do what would otherwise be his part. But that is not the question. What is the question is whether up to that point he must not be ready and willing to proceed with the contract and, as and when the time comes to do his part, so far as it is of the essence, to perform the contract on his side. One must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness. On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete. 1. (1948) 76 C.L.R. 547, at p. 560. 2. (1961) 107 C.L.R., at pp. 480-481.
In this case, the purchasers did not accept the vendors' repudiation of the contract but terminated the contract for actual breach. But the vendors' implied intimation to the purchasers that there was no point in their attempting to tender the purchase price on the due date was sufficient to alter the nature of the readiness and willingness which the purchasers were required to prove, that being put in issue by the vendors. They were not required to show that upon the day stipulated for settlement they were ready and willing to tender the purchase price. They were absolved from the obligation of placing themselves in a position to be able to tender the purchase price upon that day by reason of the representation of the vendors two days earlier. All that the purchasers were required to show was that at the time of the repudiation, that is, at the time they were absolved from future performance, there was not a "substantial incapacity" on their part or a "definitive resolve or decision" against the performance of their obligations.
The question whether the purchasers satisfied this onus is not without some difficulty because the trial judge directed his attention to the situation on the date stipulated for settlement rather than the situation two days before. However, the purchasers did not have to prove that they could have raised the amount needed to complete the financing of their purchase by the time stipulated for settlement. They merely had to prove that, at the time of the defendants' repudiation, two days before the settlement date, they were not incapacitated from raising that amount and had not resolved or decided against doing so. That was a relatively light burden to discharge and, upon the evidence, I think that the plaintiffs did discharge it. There is nothing in the trial judge's findings which requires a contrary conclusion.
Treating the situation as one giving rise to an estoppel, it can be seen that the vendors, by indicating their inability to settle and their intention of not doing so, represented to the purchasers that they did not require them to tender the purchase price and would not hold them in breach of contract for not doing so. The purchasers in reliance upon that representation did not tender the balance of the purchase price and would, upon the date fixed for settlement, have been in breach of contract if the vendors had not been estopped from denying the truth of their representation. Thus, in relying upon the vendors' representation the purchasers placed themselves at risk of non-performance - in a position of detriment - unless the vendors were kept to their word. The vendors were estopped.
Had the purchasers pursued their claim for damages, the question may have arisen whether, notwithstanding that at the time of the vendors' repudiation they were ready and willing to proceed with the contract and to perform their future obligations as they fell due, the purchasers were nevertheless unable to prove their loss. Subsequent events may have established that the balance of the purchase price was unavailable to them by the time settlement was due: cf. The Mihalis Angelos [52] . Had the purchasers claimed damages and been unable to prove their loss for this reason, they would have been entitled only to nominal damages.
But the purchasers seek only to recover the deposit paid by them. That is not a claim for damages: Christie v. Robinson [53] . It is a claim for money had and received and is based upon an imputed promise to repay, the money having been paid for a consideration that has wholly failed: Blackburn v. Smith [54] ; Sinclair v. Brougham [55] ; Christie v. Robinson [56] . The purchasers are entitled to the return of the deposit.
The facts are comprehensively set out in the judgment of Brennan J. Those facts reveal that the vendors under a contract for sale of land were unable, and thus failed, to convey title on the stipulated day made essential for settlement by the contract. The purchasers, who had previously been informed of the vendors' inability, did not tender performance on the stipulated day but thereafter purported to rescind the contract. The purchasers were not themselves ready and able to settle on the stipulated day.
On behalf of the purchasers (the appellants in this Court) it was contended that, by failing to settle on the stipulated day, the vendors committed a breach of an essential term of the contract and that that breach entitled the purchasers to bring the obligations under the contract to an end and to recover the deposit paid.
Settlement of a contract for sale of land ordinarily involves, as was contemplated by the contract in the present case, the contemporaneous performance by vendor and purchaser of their obligations under the contract. Those obligations are concurrent and dependent. Thus, there is no actual breach by one party of an obligation to settle unless the other party tenders performance of his or her obligation to settle. See Dainford Ltd. v. Smith [57] ; Sunbird Plaza Pty. Ltd. v. Maloney [58] . In point of principle that must be so, whether or not the time of settlement has been made essential. Accordingly, the vendors could only be regarded as in breach of their obligation if their intimation to the purchasers that they would be unable to complete on the stipulated date relieved the purchasers of their obligation to tender settlement and had legal operation as if such tender had been made.
When one party to a contract intimates to the other that the latter's performance of a contractual obligation will be futile the latter is not required to tender performance of that obligation. See Peter Turnbull & Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. [59] . Thus, following an intimation by one party that a tender of settlement of a contract for sale of land will be futile, the failure of the other party to tender settlement at the time made essential will neither defeat a claim by the latter party for specific performance (Mahoney v. Lindsay [60] ), nor put that latter party in breach of his or her obligation (Sunbird Plaza [61] ).
Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co. [63] . But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention. It is, I think, clear from that passage that his Honour contemplated that the particular result there identified was effected by operation of an estoppel. It seems likely that the operation of that estoppel precluded an assertion of non-fulfilment of the condition precedent - "it was equal to performance" - although the same effect would have been achieved by waiver. See also per Kitto J. [64] . 1. (1954) 90 C.L.R., at pp. 246-247. 2. (1787) 1 T.R. 638 [99 E.R. 1295]. 3. (1954) 90 C.L.R., at p. 252.
It may be appropriate in some, if not all, cases of condition precedent to treat an intimation that performance will be futile as conduct capable of creating an estoppel which operates to preclude an assertion of non-performance. However, it is otherwise in the case of an intimation that it will be futile to tender performance of a concurrent obligation to settle a contract for sale of land. If an intimation that it is futile to tender performance were to operate to preclude an assertion that performance had not been tendered, it would operate to enable a person who had not in fact tendered performance to recover damages on the basis that he or she had done so. Such a result is contrary to long-standing authority: Hensley v. Reschke [1] . See also Henry Dean & Sons (Sydney) Ltd. v. P. O'Day Pty. Ltd. [2] ; Forrestt and Son Ltd v. Aramayo [3] , especially per Lord Halsbury [4] .
In Mahoney v. Lindsay, Gibbs J. (with whom the other members of the Court agreed) cited with approval [5] the passage from the judgment of Dixon C.J. in Peter Turnbull set out above. However, the decision in Mahoney v. Lindsay is based on the impermissibility of drawing an inference of unreadiness or inability from the failure to tender performance and not on the operation of an estoppel. Similarly, in so far as Sunbird Plaza was concerned with the effect of an intimation that tender of performance would be futile, the issue was whether there had been an actual breach of contract rather than whether an estoppel operated to preclude the assertion of such a breach.
In Waltons Stores (Interstate) Ltd. v. Maher [6] I expressed the view that an estoppel may operate by reference to an assumption as to legal rights as well as by reference to an assumption as to a matter of fact. See also per Brennan J. [7] and per Deane J. [8] . It may be that an intimation that it is futile to tender performance on the day made essential for settlement could ground an assumption that a right of election as between rescission and affirmation of the contract will come into existence as if performance had been tendered. If so, it would remain necessary to ascertain whether that assumption was adopted as the basis of the failure to tender performance. Questions of readiness, willingness and ability to settle would not be irrelevant to that issue. However, in my view, a consideration of estoppel is unnecessary in the present case.
If a party entitled to insist on the essentiality of a stipulated time in a contract for sale of land leads the other to assume that that essentiality is not being maintained time thereupon ceases to be essential: Mehmet v. Benson [9] , per Barwick C.J. In such a case, it is said that there has been a waiver of the benefit of the essentiality of the provision. See Green v. Sommerville [10] , especially per Wilson J. [11] . Thus, if both parties to a contract for sale of land in which time of completion is made essential allow the date fixed for completion to pass without tendering performance, they may, and ordinarily will, be taken to have each waived the essentiality of the requirement as to time of performance. That waiver is ordinarily inferred from the failure of one to tender performance on the stipulated day and the failure of the other to insist upon performance on the date fixed for completion or a combination of both. In such a case it is said that the contract continues on foot. But it continues on foot in what is, in effect, varied form. It is transformed from one requiring performance at a specified time to one requiring performance within a reasonable time. That transformation follows from the waiver by each party of the essentiality of the requirement as to time of performance.
In the present case the vendors, by their intimation that they were unable to settle on the day made essential by the contract, waived any benefit accruing to them from that essentiality and freed the purchasers from the obligation to tender settlement on that day. Being freed of the obligation, no inference of the purchasers' waiver of the benefit of that essentiality can be drawn from their failure to tender performance. The purchasers' notice of rescission, forwarded to and received by the vendors two days after the day stipulated for settlement, precludes any inference of waiver which might have been drawn if there had been mere silence on the part of the purchasers. Unless an inference of waiver is to be drawn from the purchasers' failure to accept the vendors' repudiation, evidenced by the communication of their inability to settle on the day stipulated for settlement, the situation which arose once the stipulated settlement date had passed was one in which the contract could no longer be performed according to its essential term and there existed no consensual basis for a variation of that term.
A party to a contract which has been repudiated may either terminate the obligations under the contract or affirm the contract. See Bowes v. Chaleyer [12] , per Knox C.J.; [13] , per Higgins J.; Carr v. J.A. Berriman Pty. Ltd. [14] ; Peter Turnbull [15] , per Kitto J.; Tropical Traders Ltd. v. Goonan [16] , per Kitto J. A party is taken to have affirmed the contract if he or she does an act which is consistent only with its continued existence: Sargent v. A.S.L. Developments Ltd. [17] , per Stephen J. and [18] , per Mason J. However, there may be situations in which delay by the party having the right to repudiate will give rise to an assumption on the part of the other party that the contract has been affirmed and in which departure from that assumption will cause detriment so that, by operation of estoppel, the former is treated as having affirmed the contract. See Sargent [19] , per Mason J., although his Honour dealt with the matter on the basis of prejudicial delay rather than in terms of an estoppel.
It was said by Lord Ackner in Fercometal v. Mediterranean Shipping Co. [20] , that "[t]here is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until [the other party] gives reasonable notice that he is once again able and willing to perform". Subject to the operation of an estoppel or waiver (as was seemingly recognized by his Lordship [20] and as operated in Peter Turnbull), that is an accurate statement of the law. Thus, in the present case it was possible for the purchasers to affirm the contract and yet to be freed from tendering performance on the essential day by the vendors' waiver of the benefit of that essentiality. However, it should be emphasized that affirmation is no more than an acknowledgment of the continued existence of the contract.
In the present case the purchasers did not rescind upon receipt of the communication that the vendors were unable to settle on the stipulated day made essential for settlement by the contract. Even if it be accepted that this amounted to an election to affirm the contract, the obligations affirmed were the obligations brought into existence by the contract, namely, to settle on the day made essential by the contract. Nothing that the purchasers did following receipt of the communication amounted to a waiver of that essentiality. The consequence was that, once the day made essential had passed, the contract could no longer be performed according to its essential term and there was no consensus, as in the case of mutual waiver, to support a variation of that term. The conclusion to be drawn from that situation is that the contractual obligations had come to an end, and the notice of rescission operated to put the matter beyond dispute such as might arise in the event that no action were taken and it were to be asserted that that inaction amounted to waiver of essentiality. That being so, I agree with Brennan J. that the deposit was recoverable as money paid for a consideration that wholly failed.
The appeal should be allowed, the orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside and in lieu thereof it should be ordered that the appeal to that court be dismissed with costs.
Foran
Wight