Holland v Wiltshire

Holland v Wiltshire - [1954] HCA 42 - HCA 1954 case summary — Zoe

[6]

The facts are simple and so far as material are not now in dispute. It appears that before the date for completion named in the contract, viz. 14th January 1952, the purchasers informed the vendor that they had found difficulty in raising the purchase money and craved an extension of time. Time was granted, perhaps a fortnight, perhaps no definite period. Discussions went on until about the second week in March 1952, when the purchasers' solicitor informed the vendor that they would not proceed with the purchase. Their grounds for thus renouncing the contract proved untenable as the facts were found and they cease to be material. The vendor might have accepted this as a renunciation at once and put an end to the contract. But in fact he proceeded to give to the purchaser a notice which, after reciting the agreement, the date fixed for settlement and the purchasers' failure to settle, required them to make settlement by 28th March 1952, and informed them that if settlement was not made by that date the vendor would take proceedings against them for breach of contract. The date when this notice was given was 17th March 1952. It is now said by the defendants appellants that the period of ten days allowed by the notice was unreasonably short. This point was not taken in either of the courts below. If it had been taken in the Local Court there can be little doubt that in the circumstances of the case the finding would have been against the defendants. In any case we should not entertain the point. What is a reasonable time is a question of fact and it would not be in accordance with practice for this Court to allow an issue of fact even of that kind to be raised on appeal here for the first time. The notice should therefore be regarded as a notice calling on the purchasers to complete, and informing them that otherwise proceedings would be taken for breach of contract. In the circumstances that could only be understood to mean that the vendor would sue them for damages for loss of the bargain.

[22]

The initial proposition, that the contract was still in full force on 10th June 1952, must, I think, be accepted. That is not to say that in relation to the stipulation fixing 14th January 1952 as the date of settlement, I regard time as not having been of the essence of the contract. At common law such a stipulation would certainly have been regarded as of the essence, that is to say it would have been treated as a condition of the contract in the sense that failure of one party to adhere to it would be held to entitle the other to put an end to the contract: Noble v. Edwardes [1] . This is still the position when common law relief is sought, except in cases to which s. 16 of the Law of Property Act 1936-1945 S.A. applies. That section, which repeats s. 25 (7) of the Judicature Act 1873 Imp., provides that stipulations in a contract as to time which according to rules of equity are not deemed to be or to have become of the essence of the contract, are to be construed and have effect at law in accordance with the rules of equity. The qualification thus made upon the rule to be applied in the exercise of common law jurisdiction is, however, of limited application. It applies only in cases which are appropriate for the granting of equitable remedies by way of relief against the loss by a party of his contractual rights by reason of a failure on his part to perform the contract in precise accordance with its provisions as to time. This is so because only in such cases do the rules of equity treat as not of the essence of the contract time stipulations which are of the essence according to the traditional view of the common law: Stickney v. Keeble [1] . Cases appropriate for the type of equitable relief referred to are those only in which it is possible without injustice to the parties, notwithstanding that the party who approaches the court is himself in default under the contract, to decree specific performance on the basis that the stipulation as to time was presumably regarded by the parties as not being essential to the main purpose of the contract. One case in which that is not the position is the case in which it appears from a consideration of the terms or nature of the contract or from the surrounding circumstances that the parties did in fact intend the stipulation to go to the root of the contract. And generally, where circumstances over and above the disregard of the stipulated time make it unjust to relieve the party in default from the consequences of his failure in precise adherence to the agreed time, equity has no occasion to differ, and therefore does not differ, from the common law in its treatment of the time stipulation. In the present case, even if the rescission clause in the contract should not be regarded as bringing the case within the first of these two classes, it is clear that in view of the purchasers' conduct in the face of the vendor's demands for performance, including their explicit refusal through their solicitor to go on with the contract, a court of equity considering the matter at the date when the case came before the Local Court could not possibly have thought it just to decree specific performance at the instance of the purchasers. That being so, the stipulation for completion on 14th January 1952 would not be given by a court of equity, at any rate after 28th March 1952, an effect different from that which it had at law; and accordingly, after the latter date s. 16 of the Law of Property Act 1936-1945 would not require a court exercising common law jurisdiction to treat the stipulation as not being of the essence of the contract: cf. In re Sandwell Park Colliery Co.; Field v. The Company [2] ; Lock v. Bell [3] .

[26]

The express repudiation however, was only one incident in a course of conduct by which the purchasers confronted the vendor with a clear and continuing refusal to perform the contract. Even if the refusal conveyed by the solicitor had never been given, it might well have been that the inference would have arisen from the whole course of the matter that the purchasers were in truth refusing to proceed. Delay or neglect without more, if continued long enough, may amount to a refusal; and the other party is not bound to allow an unlimited time after the day named for performance of the contract: De Soysa v. De Pless Pol [2] ; see also Forslind v. Bechely-Crundall [3] ; Rhymney Railway v. Brecon & Merthyr Tydfil Junction Railway [4] . So here, the vendor might well contend, if he needed to do so, that in view of the delay of which the purchasers had been guilty before 17th March, their continued failure to complete within the time fixed by the notice of that date amounted to an intimation of their intention to have no more to do with the purchase, so that thereafter the vendor was in a position to put an end to the contract. But however that may be, it is at least clear that the express refusal through the solicitor to go on with the matter, though the vendor lost by his election the right to terminate the contract by reason of it, remained as a fact in the history of the matter and gave an unmistakeable colour to the continued inactivity of the purchasers after receiving the vendor's ultimatum. The only possible inference was that the purchasers were refusing, deliberately and finally, to complete the purchase. Consequently, when 28th March had gone by, the contract unquestionably stood repudiated by the purchasers, and the vendor, if his patience should become exhausted at any time while the repudiation continued, was entitled to treat the contract as no longer binding upon him: Cort v. The Ambergate, Nottingham & Boston & Eastern Junction Railway Company [1] . The case was similar to that with which Lindley J. was dealing when he said in Byrne v. Van Tienhoven [2] : "It was contended that by pressing the defendants to perform their contract the plaintiffs treated it as still subsisting and could not treat the defendants as having broken it, and a passage in Mr. Benjamin's book on Sales, p. 454, was referred to in support of this contention. But, when the plaintiffs found that the defendants were inflexible, and would not perform the contract at all, they had, in my opinion, a right to treat it as at an end and to bring an action for its breach. It would indeed be strange if the plaintiffs by trying to persuade the defendants to perform their contract were to lose their right to sue for its nonperformance when their patience was exhausted. The authorities referred to by Mr. Benjamin (viz., Avery v. Bowden [3] and others of that class), shew that as the plaintiffs did not, when the defendants first refused to perform the contract, treat that refusal as a breach, the plaintiffs cannot now treat the contract as broken at the time of such refusal. But I have found no authority to shew that a continued refusal by the defendants to perform the contract cannot be treated by the plaintiffs as a breach of it by the defendants" [4] .

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Judgment (35 paragraphs)

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