Gange v Sullivan

High Court of Australia|1966-07-01|Before: Owen JJ

High Court of Australia Barwick C.J. Taylor, Menzies, Windeyer and Owen JJ. Gange v Sullivan [1966] HCA 55

The appellant and the respondent on 12th March 1965 entered into a contract for the sale by the respondent to the appellant of certain land at Belrose, a suburb on the north side of Sydney Harbour. The land, less than half an acre in area, has a principal frontage to a thoroughfare known as Forest Way and a frontage to a street running off the thoroughfare called Dawes Road.

The respondent had used the portion of the land nearest to the junction of Forest Way and Dawes Road for a garage and petrol station, including a motor workshop, which use extended over approximately two-thirds of the depth of the land along Dawes Road. A newsagency was conducted on the land in a shop which fronted on to Forest Way to the south of the petrol station. Behind the shop was a residence which occupied some substantial part of the depth of the land. There remained a considerable area of the land behind the motor workshop and the newsagency residence which at the time of the sale was not being used for any purpose.

The land is within the Shire of Warringah. A planning scheme for this shire had been proclaimed on 5th June 1963 in an ordinance called The Warringah Planning Scheme Ordinance (the ordinance) which zoned the land in the shire. The possible use of land without the consent of the Warringah Shire Council was in substance by a conjunction of several portions of the ordinance pegged to its use as at 5th June 1963: see cll. 28, 30, 32 and 36 of the ordinance. The uses of the land which I have described were the uses to which the land was put at that date. Thus, at the date of the contract, the land could not have been used without such consent for any other purpose than, as to the portions being used for garage and newsagency purposes, those purposes, and as to the rear portion for any purpose.

Having in mind the existence of these limitations upon the user of the land, the contract between the parties contained a special clause around the terms and operation of which their contest in the courts has centred. The clause is in these terms:

This Contract is subject to the purchaser obtaining development approval from the Warringah Shire Council for the following purposes: -

(a) Belrose garage to continue as a garage and service station with improvements.

(b) The existing newsagency to continue on the same site, and

(c) For the redevelopment of the residue of the property sold hereunder for business and commercial purposes with the right to improve the same subject to Council's building regulations. The purchaser agrees to make application to the Warringah Shire Council for such approval within seven (7) days of the date hereof and in the event of the said Council not granting such approval for the purpose aforesaid by the 31st day of May 1965, then this Contract shall be deemed to be at an end and all moneys paid by the purchaser to the vendor shall be refunded but in the event of Council granting the approval aforesaid then the purchaser will complete the contract within twenty days of the granting of such consent.

The facts which preceded the suit for specific performance which the appellant commenced against the respondent are few and can be very simply stated. Apparently when the contract had been signed, the respondent by letter addressed to the shire clerk authorized the appellant to make application "for building and/or development consent to Council in respect of the subject land". The appellant by his architect on 29th March wrote to the shire clerk of the Warringah Shire Council a letter in the following terms:

Re: Proposed Service Station, Cnr. Forest Way and Dawes Road, Belrose

We attach hereto 2 copies of Drawing No. 1/2 which sets out to 1/16″ scale my client's proposal which, briefly, include service and petrol station.

The particular approval which we request at this stage concerns the dispositions of our crossovers along the two frontages concerned. This, as you will appreciate, determines more or less the actual planning of the service station.

You will note that we have suggested the newsagency detached building facing on Dawes Road frontage.

Your early advices would be appreciated and would permit then of our submitting at an early date the working drawings of this project.

Included with this letter was a plan which provided for the use of the whole frontage of the land to Forest Way for ninety feet of its depth along Dawes Road for the purpose of a service station the area involved being slightly less than 10,000 sq. ft., and for the use of the remainder of the land, part of which had formerly been used for the purposes of the garage and perhaps of the residence of the newsagency, for the purpose of erecting thereon two buildings - one to be used as a newsagency with a residence above it and the other to be used as a general store with possibly a residence above it, these buildings being set back some twenty feet from the alignment of the land to Dawes Road.

On 2nd April a letter over the typed signature of the shire clerk, to which was attached the word "per" with handwritten initials, which were in fact the initials of the council's planning officer, was sent from the shire council's chambers to the appellant. The letter was in the following terms:

Lots 1 and 2 D. P. 20287 Cnr. Forest Way and Dawes Road, Belrose

With reference to your letter B/1 dated 29/3/65, it is advised that the proposal to re-arrange the existing usage of the subject land is approved, in principle, subject to:

(1) The Service Station area being not less than 10,000 sq. ft.

(a) Kerb and gutter to be constructed with the approval and to the requirements of the Department of Main Roads.

(b) Construction of pavement between edge of existing pavement and lip of gutter for full length of frontage with the approval and to the requirements of the Department of Main Roads.

(a) Kerb and gutter to be constructed on a 12′ line to Council's requirements.

(b) Construction of pavement between edge of existing pavement and lip of gutter for full length of frontage to Council's requirements.

It now appears that the council did not at any time consider the appellant's application for consent or resolve to give any such approval as the letter suggests. Further, the delegation by the council to the planning officer was not sufficient to authorize him to give any such approval or to sign the letter of 2nd April. But it is not established by the evidence that either party was aware at any relevant time of these circumstances.

However, the respondent's solicitor, having ascertained, presumably from the officers of the shire council, that, as he understood the matter, consent to the re-development of the land had been communicated to the appellant on 2nd April, claimed that the respondent was entitled to completion on 23rd April, in accordance with the special condition. To this demand the appellant's solicitor replied, denying that the letter which I have quoted was an approval of his client's "development application", meaning thereby the letter of 29th March with its enclosed plan. But he said that "it would appear from the council's letter that approval in principle had been given to his client's application". He indicated that on receipt of the council's "unconditional approval" which was expected within the following twenty-eight days further communication with the respondent's solicitor would take place. This evoked from the respondent's solicitor an assertion that his client contended that the special condition of the contract had been fulfilled and that the letter of 2nd April was an approval which amounted to a development consent for relevant purposes.

Thereafter, the two solicitors had a conversation on 25th May in which the appellant's solicitor still maintained that no consent in accordance with the special condition was yet to hand and the respondent's solicitor said in substance, as I understand the evidence, that he was content to go along with that view of the matter for the time being and wait to see whether anything further happened by 31st May.

On 1st June, the two solicitors had a further conversation in which the appellant's solicitor, still maintaining that the approval had not been given by the council, sought to obtain what, as I read the evidence, was an extension of time within which to obtain the approval of the council in conformity with the special condition. This the respondent would not grant without some re-arrangement of the contractual conditions. Failing to obtain the extension he sought, the appellant's solicitor said that it appeared that that was the finish of the whole thing - meaning the contractual relationship of the parties. On 2nd June the respondent's solicitor wrote a letter to the appellant's solicitor in the following terms:

Reference is made to the writer's telephone conversation with you in this matter yesterday regarding extension of time of contract.

Our instructions are that no extension of time will be given unless on terms of an immediate payment of 50% of the purchase price accountable forthwith to the vendor, and also subject to revision of price. As you have intimated that the first of these terms is unacceptable, we must therefore treat the contract as at an end.

The parties thereafter maintaining, as I will assume, their respective rights in relation to the subject contract, negotiated for a new contract. This they failed to achieve. The appellant then commenced a suit in equity for specific performance, contending in substance that approval in conformity with the special condition had been given by the council before 31st May and denying that he had rescinded the contract or abandoned his right to its performance by the respondent.

The Supreme Court in equity dismissed the plaintiff's suit. The learned trial judge thought that the special condition was inserted in the contract for the purchaser's benefit; that failure to obtain the approval for which the condition called within the time stipulated did not automatically bring the contract to an end; that the clause gave to the appellant the right to decide for himself within the broad boundaries of the condition the detail of the application he would make to the council; that he was entitled to refuse to go on with the contract, if the council was not prepared to agree to the particular requirements which he expressed in that application. The learned trial judge seems to have thought that the appellant was bound to indicate by or before 31st May whether or not he was satisfied with what the council was prepared to approve and that he could not hold the respondent to his performance of the contract unless he had done so. It was the failure of the appellant to indicate in due time his satisfaction with what appeared in the council's letter which, as I understand his Honour's view, released the respondent of any obligation to complete the sale.

I agree with the learned trial judge that the special condition was included in the contract for the benefit of the appellant. There is no suggestion that the respondent was retaining any interest in the subject land, or that he had any interest in any other land, or in any other respect which would be affected in the least by what the appellant was able to do, or did do with or upon the subject land. The expression "This contract is subject to" in the special condition means in this contract, in my opinion, "The performance of this contract by the purchaser is subject to". Consequently, as the learned trial judge held, the contract would not automatically come to an end, so that both parties were released from performance, if no approval in conformity with the condition was obtained before 31st May. This is so, in my opinion, notwithstanding the words of the clause deeming the contract in that event to be at an end: cf. Suttor v Gundowda Pty Ltd [1] .

But, though the condition was for the benefit of the appellant, it was not, as it were, open ended. The appellant was required to make an application for the requisite approval within a stated time and to complete the purchase within a time computed from the date of receipt of such approval. Thus, in my opinion, the appellant could not be compelled to complete if no approval conformable to the condition was received by 31st May, if he made the appropriate application within the stipulated time and took all other necessary steps to obtain that approval. If he failed in these respects he could be compelled to complete, unless the respondent had waived the appellant's breach in not having applied in time, or in otherwise failing to take necessary steps. But, being a condition for his benefit, the appellant, in my opinion, could waive it and require the vendor to complete notwithstanding that no approval satisfying the condition had been received in time.

On the other hand, upon grant of such an approval within time, both parties would be bound to perform. The respondent's obligation to complete would not in that event be dependent upon any notification by the appellant nor would the appellant's obligation to do so depend upon his own choice. It would follow that if there were such approval, the respondent would not have been entitled on 2nd June to treat the contract as at an end because of the appellant's default in not having completed within twenty days of the date of that approval. Before the respondent could unilaterally determine the contract for that reason, he would have had to give the appropriate notice to make time for completion of the essence and to fix a reasonable time for such completion. This the respondent did not do. Although the appellant undoubtedly took the stand that no approval in conformity with the special condition had been given at any time, this attitude would not require any finding that the appellant was not in the relevant sense ready and willing to complete: see Mehmet v Benson [1] . Therefore if there was an approval given on 2nd April which satisfied the terms of the condition, the appellant was entitled to succeed in the suit, unless the contract had been rescinded.

Three questions, in my opinion, remain. First, was there an approval as required by the clause given by 31st May: second, if not, did the purchaser choose to go on with the contract notwithstanding the want of such approval; and, third, if there was an approval, was there a rescission of the contract.

There are in connexion with the ordinance two distinct concepts - one is that of consent to a change in the purpose for which land or a building may be used and the other is that of approval of a specific plan of a proposed building which doubtless carries out some particular purpose in the use of the land. The special condition in this case, in my opinion, relates only to the consent of the council to a change in the purposes for which the land might be used. It was apparently considered by the parties, and probably rightly so, that the land which was already being used for the purposes of the garage and newsagency could continue to be used for those purposes, though it would be necessary to obtain building approval for any change in the nature of or addition to the buildings or structures upon the land. It was also considered by the parties, it seems to me, that the land at the rear of the service station and newsagency residence which was not being employed for the purposes of a garage and newsagency and residence would be regarded under the ordinance as land which had no use at the time of the institution of the planning scheme and that therefore there would need to be approval for any use of it. The clause containing the special condition therefore provided for obtaining the approval of the shire council for development of the land for specified purposes. Those purposes were expressed in par. (c) as being business and commercial purposes, having regard to the continuance of the use of some part of the land for a garage and service station and some other part for a newsagency, as set out in pars. (a) and (b).

There was some discussion before the court as to whether or not the reference to the word "site" in cl. (b) of the special condition was a reference to the land subjacent to the newsagency as it existed at the date of the contract and it was suggested that the changed uses of the land contemplated by the condition involved the retention of the newsagency precisely where it then was. In my opinion, this is far too narrow a meaning of the word "site" in the circumstances. The condition contemplated the retention of the newsagency at some position on the land along with the garage and service station, the balance of the land not used for these purposes being devoted to other business and commercial purposes. In any case, it seems to me that this question would only be material if the purchaser was insisting in the suit that the approval which he obtained was inadequate to satisfy the condition. This he has not sought to do.

It is to my mind quite clear that the approval for which the clause provided was not a building approval, nor was it an approval of a specific layout of structures on the land to be employed for the stated purposes. It was as I have indicated, in my opinion, an approval of proposed uses of the land expressed in terms of purpose. But, of course, one method of applying for approval to put the land to specified uses is to indicate to the council by a plan, as was in fact done in this case, the particular layout of the relative position of structures on the land which is in mind to carry such uses into effect.

The appellant undoubtedly thought of his application of 29th March as a development application; he refers to it as such in the letter of 11th May. The council's officers regarded it as such, for the approval purported to be given in the letter of 2nd April was quite clearly an approval of the proposed rearrangement of the uses of the land as indicated in the letter of 29th March with its enclosed plan.

In my opinion, the requirement as to the minimum area to be employed for the purpose of a service station was not a condition which precluded such approval being an approval of the use of the land for that purpose, nor was the condition that only one residence would be permitted on the land a denial that the land was approved for use for business and commercial purposes within the special condition. If the appellant had intended that he would only be bound to complete if the specific building project which he put to the council were approved by it, then, in my opinion, the language of the clause was singularly inapt to effect this intention. It did not express any such condition. Upon its proper construction, it refers only to the approval of the shire council of the use of the land for business and commercial purposes including a garage and a newsagency.

It was argued that the council could not approve the use of the land for such purposes as the condition contemplated except by approving a specific plan of the buildings to effect such uses. In my opinion, the ordinance clearly contemplates that a council can grant such approval.

The use of land and the use of buildings are differentiated in the planning ordinance, though it has been found convenient to relate the permissible uses of land to the uses to which buildings could be put in the case of land not devoted to agriculture: cl. 28. The ordinance specifically provides for a consent by the council to a proposed user of land as distinct from its consent to a specific proposal for the construction of a building on land: see cll. 35 and 36. Of course, these consents may be given concurrently. Consent to a proposed user by reference to purpose can be given upon the submission of detailed plans of structures to carry out the stated purpose. But a council may not approve a type of building or structure as distinct from a plan of a specific building, either as, or as a step binding the council in the process of granting an approval of a specific plan of a building. So much was decided in Rocca v Ryde Municipal Council [1] where the application was not merely to use the land to achieve a purpose, and, as I read the decision, no more was decided. If, as was submitted in this case, it did decide that a council could not grant an effective approval in the terms of the letter of 2nd April, I could not agree with the decision.

The approval contained in the letter of 2nd April, had it communicated an approval by the council, would, in my opinion, have been an approval which satisfied the terms of the special condition. The second of the questions I posed earlier in these reasons therefore arises, but the third does not.

But I have reached the firm conclusion that there was in truth no consent or approval by the council at all to the proposed change in the uses of the land. There is no doubt that the council did not itself consider the application made on behalf of the appellant and did not resolve to give its approval to it. It is also clear that the planning officer of the council had no authority in his own or in the council's name to give or to communicate any such approval to the appellant. Some debate took place on the hearing of the appeal as to whether or not the letter of 2nd April might not raise some estoppel against the council. But that question does not arise in this suit. The appellant did not act upon the letter of 2nd April. What the position between these parties might have been if the appellant had acted upon the letter need not be considered in deciding this appeal.

There was not, therefore, in my opinion, any consent by the council to any change in the uses of the land. Thus, though the appellant might not have known that the letter of 2nd April was not authorized and that the council had not in fact granted any approval, the appellant was in law in a position to be relieved of his obligation to purchase if he so chose on or before 31st May.

In this situation the appellant was not prepared to waive the benefit of the special condition and perform the contract on his part. The respondent's solicitor was prepared to accept this stand of the appellant's solicitor. Both of them were at that stage content to treat the contract as at an end without any remaining obligation upon either appellant or respondent except the obligation of the respondent to refund to the appellant the deposit which the appellant had paid. It seems to me that the legal effect of these attitudes on the part of the solicitors, mutually communicated, depends upon whether or not there had been in fact an approval to satisfy the condition before 31st May. If there had been such an approval, it seems to me that the contract would have been unconditional from that time onwards, and that neither solicitor would have had authority to rescind it. On the other hand, if there was, as I think there was, in fact no approval, it seems to me that the appellant's solicitor was authorized to communicate to the respondent's solicitor the fact that the appellant was not prepared to proceed with the contract without such an approval and that the contract would then be resolved by the purchaser's choice at that stage.

Thus the appellant, being entitled to do so, did choose not to proceed with the contract and, in my opinion, he thus brought the respondent's obligation to perform to an end. In my opinion, therefore, for this reason, the suit was rightly dismissed, and this appeal fails.

The appellant sued the respondent for specific performance of a contract dated 12th March 1965 for the sale of land by the respondent to the appellant. Jacobs J. dismissed the suit and it is from his decree that an appeal has been brought to this Court.

Although a number of matters were canvassed in argument, it appears to us that the decisive question for determination is whether the contract came to an end, or was brought to an end, by, or by virtue of, the non-fulfilment of a special condition in these terms: -

This Contract is subject to the purchaser obtaining development approval from the Warringah Shire Council for the following purposes: -

(a) Belrose garage to continue as a garage and service station with improvements.

(b) The existing newsagency to continue on the same site, and

(c) For the redevelopment of the residue of the property sold hereunder for business and commercial purposes with the right to improve the same subject to Council's building regulations. The Purchaser agrees to make application to the Warringah Shire Council for such approval within seven (7) days of the date hereof and in the event of the said Council not granting such approval for the purpose aforesaid by the 31st day of May 1965, then this Contract shall be deemed to be at an end and all moneys paid by the Purchaser to the Vendor shall be refunded but in the event of Council granting the approval aforesaid then the Purchaser will complete the Contract within twenty days of the granting of such consent.

Fulfilment of this condition required, we think, approval by the council: -

(a) of the use of part of the land to carry on the existing Belrose garage and service station, with improvements;

(b) of the continuance of the newsagency upon its existing site - that is, where it stood at the time of the contract; and

(c) of the redevelopment of the remainder of the land - that is, land not used for the garage or newsagency - for any purpose falling within the description of "business and commercial purposes", or such specified purpose falling within this description as the purchaser might nominate.

On 29th March an architect, on behalf of the purchaser, wrote to the shire clerk of the Warringah Shire in these terms:

Re: Proposed Service Station, Cnr. Forest Way and Dawes Road, Belrose.

We attach hereto 2 copies of Drawing No. 1/2 which sets out to 1/16″ scale my client's proposal which, briefly, include service and petrol station.

You will note that we have suggested the newsagency detached building facing on Dawes Road frontage.

Your early advices would be appreciated and would permit then of our submitting at an early date the working drawings of this project.

The drawings enclosed showed that the purchaser's proposals were:

(1) to build a new service and petrol station at the corner of Forest Way and Dawes Road and occupying the whole of the Forest Way frontage upon that part of the land which was, at the date of the contract, occupied by the Belrose garage and newsagency and a residence;

(2) to build a new newsagent's shop and residence upon the Dawes Road frontage next to the new service and petrol station; and

(3) to build a general store with a "possible residence" next door to the newsagent's shop and fronting on Dawes Road.

On 2nd April the purchaser's architect received a letter as follows:

Lots 1 and 2 D. P. 20287 Cnr. Forest Way and Dawes Road, Belrose

With reference to your letter B/1 dated 29/3/65, it is advised that the proposal to re-arrange the existing usage of the subject land is approved, in principle, subject to:

(1) The Service Station area being not less than 10,000 sq. ft.

(3) The Shire Engineer's requirements, as follows: -

(a) Kerb and gutter to be constructed with the approval and to the requirements of the Department of Main Roads.

(b) Construction of pavement between edge of existing pavement and lip of gutter for full length of frontage with the approval and to the requirements of the Department of Main Roads.

(a) Kerb and gutter to be constructed on a 12′ line to Council's requirements.

(b) Construction of pavement between edge of existing pavement and lip of gutter for full length of frontage to Council's requirements.

The initials "H. T. W." appearing in type at the top, and in manuscript at the bottom, of this letter were the initials of the council's town planner, who held a delegation from the council in these terms: "That in respect of applications made to Council under the Shire of Warringah Planning Scheme for the "development" having the meaning ascribed to it under Section 342T of the Local Government Act, 1919, as amended, the Council's Town Planner or any person acting in that capacity for the time being is hereby delegated power under Section 530A of the Local Government Act, 1919, as amended, to refuse on the Council's behalf all "development" applications that clearly do not comply with the provisions of the said Planning Scheme Ordinance; all applications refused under this delegated power are to be listed for the Council's information on the business papers submitted from meeting to meeting to the Town Planning Development Committee or to any other Committee or meeting of the Council which may hereafter be charged with the functions of the present Town Planning Development Committee; and the Council hereby acknowledges that the Town Planner shall be vested, as a normal administrative function, with the authority to endorse compliance on any "development" application which does not require the Council's consent." The letter of 2nd April was written without any consideration by the council of the purchaser's application of 29th March.

On 30th April 1965 the defendant's solicitor wrote to the plaintiff's solicitor as follows:

Re: Sullivan to Gange Lots 1 and 2 Forest Way, Belrose.

Further to exchange of Contracts herein, we have ascertained from Warringah Shire Council that Consent for the redevelopment of the land the subject of this Contract was communicated to your client by letter dated 2nd April, 1965. This being so, the vendor was entitled to completion of the Contract on the 23rd April, 1965.

Accordingly, we would be pleased to hear from you regarding completion within the next seven days, failing which the vendor will take such action as he may be advised in the circumstances.

To this letter the following reply was received on 11th May: Re: Gange from Sullivan - Ppty: 157 Forest Way, Belrose.

We are instructed by our client that contrary to the advice contained in your letter of 30th ult., the letter dated 2nd April, 1965, from the Warringah Shire Council to the Purchaser was not an approval of our client's Development Application.

We are instructed further to say that it would appear from Council's letter that approval in principle has been given to our client's application.

On receipt of Council's unconditional approval of the application, which is expected within the next twenty-eight days, we will communicate with you further.

On or about 25th May, the vendor's solicitor spoke to the purchaser's solicitor on the telephone. In evidence he gave the following account of the conversation: "I phoned Mr. White and I said to him, "I had seen the letter from the council and it appeared to me to be O.K. as far as the application was concerned" and Mr. White said that as far as his instructions went, it was not a consent, that his client was actually seeking - it did not go as far as he wanted it to. I think I said "We have only to the 31st, and that is only about a week away. I do not think much could happen in that time and there would have been one council meeting and as far as consent was concerned, we would go along and wait to the 31st and see what happened" and Mr. White said, "We will do that". I said that I would ring him again on the 2nd or 1st June to find out what happened in the meantime."

It is common ground that on 1st June there was a further telephone conversation between the two solicitors. According to the version of the vendor's solicitor, this conversation was as follows: "I rang him in the morning and asked whether he had anything further from the council. He said - no that he had not and he asked me - "would your client agree to an extension of the contract". I said that from his instructions I knew that he probably would not, but if he did, it would only be on the basis of a revision of the price with provision for about half of it to be paid over to him forthwith and accounted to and Mr. White said that his client could not agree to this provision and he said - I do not know how he put it - it looks as though that is the finish of the whole thing. I said "I will tell my client" and that was about the conversation." This was elaborated in cross-examination as follows:

Q. Did you ask him whether he had got the consent? A. Not in those words. I said, "Have you got anything further from the council in this matter".

Q. Did he say to you "My client would like an extension of time for completion?" A. No, I think he put it "Would your client agree to an extension of time". He did not say "completion". I took it that was an extension of time for getting consent.

Q. He said "Would your client agree to an extension of time?" A. For the contract. I think the words were something like that.

Q. What did you say? A. I said that it was doubtful in view of the instructions I had, but if it was on the basis of a revision of the price with payment of about half the purchase price straight away and in such a way that Mr. Sullivan could use that money straight away.

Q. Did you say you would get your client's instructions on that? A. No. I was basing that answer on what I knew before of my client's existing or continuing instructions.

Q. Did you say during this conversation of 1st June that the only basis on which you would think he would agree to an extension of time would be on the basis of payment of an extra sum, for the payment of half of the price straight away - would that put it fairly? A. It was approximately half. He had a particular need at the time for a substantial part. I think a figure of half was referred to.

Q. Did Mr. White say he thought his client would agree to an increase in price? A. No, he said his client could not agree to the first of those terms, I think he referred to.

Q. The first or second? A. The terms requiring the 10½ - I think it was the revision in price - it could have been - he may have been referring to the 10½, but he could not agree to the terms. I think he did mention the first of the terms.

Q. Did he say that his client would probably agree to the increase in price - he did not think he would agree to the payment of half of the price straight away? A. I cannot recall - I do not remember him saying he would agree to an increase in price.

The purchaser's solicitor's account was somewhat different. His evidence was as follows:

Q. Can you tell his Honour what was said? A. Mr. Wilkins rang me on 1st June and he said that the contract was at an end as the matter had not been completed by 31st May, that being the latest day. I didn't concur in that view, but I didn't express that view that I was in disagreement to Mr. Wilkins. I did, however, ask him if his view was right would his client perhaps consider giving us an extension of time for the completion of the contract.

Mr. Mahoney: Q. Could you, to the best of your recollection, give us the conversation? A. I said to Mr. Wilkins: "Would your client consider an extension of time to enable us to complete the contract?" Mr. Wilkins said he would get instructions from his client. He did state that any extension of time would be subject to a revision of the purchase price, and a payment of a large amount of the purchase price forthwith. I think that is all I can recollect of that conversation.

Q. Did you get in touch with Mr. Toohey then? A. Yes, later that morning, and he instructed me that Mr. Gange would be prepared to pay a further sum of £1,000 if Mr. Sullivan agreed to extend the time for completion, but that he would not be prepared to pay a substantial amount of the purchase money forthwith.

A. I spoke to Mr. Wilkins, I think, in the afternoon of June 1st. I told him that my client would pay a further £1,000 for an extension of time, but that my instructions were that he would not pay any large amount of purchase money forthwith.

Q. What did Mr. Wilkins say to that? A. My recollection is that he said he would convey that to Mr. Sullivan and that he would let me know.

Q. Then subsequently did you receive a letter of 2nd June 1965? A. Yes.

Q. I think you wrote a further letter of 9th June 1965 which is already in evidence? A. Yes.

Q. Mr. White, when he spoke to you on 1st June 1965, you mentioned that he referred to the 31st May 1965 as being the latest day for completion. Do you recollect any more that was said about that precise aspect of the conversation? A. No, Mr. Mahoney, I don't.

It does not seem to us that anything turns upon such differences as there are between these two accounts of the conversation of 1st June, for both make it clear that, on that day, the vendor's solicitor made known to the purchaser's solicitor that, because nothing had been received from the council beyond the letter of 2nd April, the contract was at an end. The purchaser's solicitor, for his part, whilst maintaining his stand that the letter of 2nd April was not an approval from the council fulfilling the condition of the contract, did not forego the purchaser's right under the condition and insist upon performance of the contract of sale regardless of the condition or its fulfilment. Part of the conversation related to the possibility of making a fresh arrangement covering an extension of the time for the council's approval beyond 31st May; the payment of an increased price; and the fixing of new times for the payment of the purchase money. However, nothing which then occurred (a) amounted to a waiver by the vendor of any right which he may have had to rescind: Petrie v Dwyer [1] ; or (b) gave rise to an estoppel against the vendor; or (3) amounted to a decision on the part of the purchaser to complete notwithstanding his rights under the condition.

On 2nd June, the vendor's solicitor wrote to the purchaser's solicitor as follows:

Reference is made to the writer's telephone conversation with you in this matter yesterday regarding extension of time of contract.

From the evidence which we have set out, it seems to us that, unless the letter of 2nd April did constitute the granting of approval by the council for the purposes of the special condition, the contract either came to an end when 31st May passed without the council's approval, or was brought to an end by what happened between the two solicitors on the first and second days of June.

As a first step to deciding this decisive question, it is necessary to understand the condition and its significance to the parties. Without doubt, it was intended to safeguard the purchaser by making the continuance of the contract depend upon his obtaining the council's approval for using the land for the three purposes therein set out. Yet, although the condition was for the protection of the purchaser, it nevertheless affected the vendor, for it obliged the purchaser to make his application for the council's approval within seven days; it provided for the contract coming, or being brought, to an end if the council's approval was not granted by 31st May; and it fixed the date for the completion of the contract by reference to the only event which could give rise to any obligation to complete - that is, the council's approval.

It was argued for the appellant that the condition did not mean that the contract was brought to an end automatically when the council had not granted approval by 31st May. Suttor v Gundowda Pty Ltd [1] , together with other cases, was relied upon to support the conclusion that non-fulfilment of the condition did not of itself bring the contract to an end but did no more than render the contract voidable at the instance of a party not responsible for the non-fulfilment of the condition. Whilst the effect of a condition must in every case depend upon the language in which it is expressed and a decision upon the meaning of one condition cannot determine the meaning of a different condition, the authorities cited do show a disposition on the part of courts to treat non-fulfilment of a condition such as that here under consideration as rendering a contract voidable rather than void in order to forestall a party to a contract from gaining some advantage from his own conduct in securing, or contributing to, the non-fulfilment of a condition bringing the contract to an end. Accordingly, notwithstanding that the language of the condition here is susceptible of meaning that the contract came to an end if 31st May passed without the council's approval, we are prepared to treat non-fulfilment of the condition as rendering the contract voidable rather than void. So understood, non-fulfilment of the condition could, in the absence of default contributing thereto, be relied upon by either party as a ground for determining the contract. An examination of what took place on 25th May and the first and second days of June leaves us in no doubt that, unless the condition had been fulfilled by the letter of 2nd April, the contract was brought to an end by the vendor's positive rescission in the absence of a communicated readiness on the part of the purchaser to complete without some further approval from the council.

Looking now at the correspondence between the purchaser's architect and the council, it seems to us that, in strictness, the letter of 29th March was not an application complying with the condition because it sought, at most, an approval of "the dispositions of our crossovers along the two frontages concerned" and it put forward for such limited approval a plan showing a new newsagency building facing the Dawes Road frontage. The circumstance that the application was not a fulfilment of the purchaser's obligation under the condition is, however, of little significance now; what is important is whether the approval which the council gave was an approval fulfilling the condition as we understand it. In our opinion, it was not. Unfortunately for the purchaser, the approval did correspond in one particular with the application. Approval in principle was given to a newsagency fronting Dawes Road, whereas the newsagency referred to in cl. (b) of the condition was one fronting Forest Way, as appears from Ex. "P2". Moreover, the approval of a service station of not less than 10,000 sq. ft. in area was in fact a rejection of the purchaser's actual proposal as set out in the architect's letter and drawings, for the station as shown was less than 10,000 sq. ft. in area. Finally, the stipulation that only one residence would be permitted was a rejection of the proposal that there should be a "possible residence" attached to the general store.

The conclusion that the letter of 2nd April did not constitute an approval for the purposes of the condition makes it unnecessary for us to consider whether that letter should be regarded as a grant by the council of the approval in principle which the letter stated was given. We therefore say no more about this than it seems seriously open to doubt that the letter constituted an approval by the council, having regard to (1) the fact that the purchaser's application had not been considered by the council and (2) the limited extent of the authority which the planning officer had from the council. It is not, however, necessary to pursue this or to consider whether the letter was written with the authority of the council or, if not, whether the council was nevertheless bound thereby.

For the foregoing reasons, we would dismiss this appeal.

I agree that this appeal should be dismissed. I am not able to concur wholly in either of the judgments that have been delivered. But no good purpose would be served by my tracing through all the complications of the case every step which leads me to my conclusion.

I therefore merely summarize my view of some aspects of the matter as follows:

The special condition of the contract was, I think, inserted primarily for the benefit of the purchaser and could be waived by him. But unless before the date set for obtaining the council's approval of the proposed development that approval was in fact given or the purchaser either expressly waived the condition or expressly accepted the communication which he had received as a sufficient fulfilment of it, the vendor could I think avoid the contract. That is because the time within which the approval must be had was stipulated and unless that stipulation was expressly waived by the purchaser it would enure, I consider, for the benefit of both parties, the vendor being interested to know for how long his liability was to remain unresolved.

The terms of the special condition are loosely expressed. There is more than one ambiguity, at least in a literal sense, in the requirement that the purchaser obtain "development approval from the Warringah Shire Council for the following purposes: (b) the existing newsagency to continue on the same site". This phrase may mean that the existing newsagency shop, the building, was to remain standing where it was: or it may mean that the local newsagency, that is the business of a newsagency as distinct from the building, should be conducted on the same site: and "the same site" may mean exactly the same location as it, the newsagency shop, had although literally read it means the same site as the Belrose garage. The latter reading is in conformity, it seems to me, with the context, the site then meaning the whole of the land the subject of the contract. The council's approval was, as I read the clause in the contract, required for the development of this land for use for the several purposes stated - a garage and service station, a newsagency and the residue for business and commercial purposes - such development to be subject to the council's building regulations. I am unable to accept the view that, because the project for which approval was sought involved moving the newsagency to a different part of the land, approval if given would not have fulfilled the contractual requirement.

But it seems to me that the attitudes which the parties took, the tentative and qualified terms of the approval which the letter of 2nd April conveyed and, most importantly, that it was not in truth an approval given after a consideration of the matter by the council mean that the purchaser cannot assert that approval was given by 31st May. The vendor was, I consider, entitled to treat the contract as having come to an end.

The authority of the town planner was to refuse approval of development applications that clearly did not conform to the Planning Scheme Ordinance. And he could endorse on others which did not require the council's consent that they complied with requirements. But I do not read his authority as enabling him to give consent for the council when its consent was required. I need not consider what estoppel against the council could arise from a letter which mistakenly purported to convey a decision of the council but which was without authority signed by an officer of the council. This is not a proceeding in which the council is a party, and the purchaser was not led into any action or inaction in the belief that he had received the council's approval in accordance with the contract. His attitude at relevant times is that he had not obtained the requisite approval.

At a glance

Court

Decision date

Before

Source

Judgment (126 paragraphs)

Parties