Larking v Great Western (Nepean) Gravel Limited (in Liquidation) [1940] HCA 37

High Court of Australia|1940-07-01|Before: Dixon J

(MOTIGUIDATION) manager, "in an informal and inconclusive conversation," it, instead of insisting upon the immediate construction of the and gates, he allowed the matter to stand for the time being. e was no reason for constructing the gate and fences until the lent began actually to work in the river bed and upon the on the high bank. The purpose of the fences was to provide or the appellant's cattle while operations were going on; and to xclude his beasts needlessly from the site before work began would been a disadvantage to the appellant. It appears that the pany's use of the place for actual work began about May or June From that time until December 1939 is about two and one- years. During the period the appellant clearly had a right to lain of the respondent company's delay in performing its

s. It is not easy to be sure what actually passed between ppellant and the respondent company, but, upon the findings of the learned judge, the best interpretation of the discordant lence adduced appears to be that on one side there were requests performance of the covenants and on the other delay, but no | to perform, and statements that the absence of the particular Was not the cause of the cattle wandering.

Upon these facts, the first question for consideration is whether the covenants contained in clauses 12 and 15 operated to impose a continuing duty upon the respondent company so that a failure to fence involved new breaches for every day of default, thus including the period after 31st October 1939. If a covenantor undertakes that he will do a definite act and omits to do it within the time allowed for the purpose, he has broken his covenant finally and his continued

failure to do the act is nothing but a failure to remedy his past breach - and not the commission of any further breach of his covenant. His _ duty is not considered as persisting and, so to speak, being for ever _

renewed until he actually does that which he promised. On the other hand, if his covenant is to maintain a state or condition of affairs, as, for instance, maintaining a building in repair, keeping the insurance of a life on foot, or affording a particular kind of

lateral or vertical support to a tenement, then a further breach arises - in every successive moment of time during which the state or con-

dition is not as promised, during which, to pursue the examples, the building is out of repair, the life uninsured, or the particular support unprovided.

The distinction may be difficult of application in a given case, but

it must be regarded as one depending upon the meaning of the - covenant. It is well illusteated by the construction given to the

ordinary covenant that premises will be insured and kept insured against fire. Such a covenant is interpreted as imposing a. continuing

obligation to see that the premises are insured, so that the covenant -

cannot be broken once for all, but, on the contrary, failure to insure involves a continuing breach until the omission is made good. But in Doe d. Flower v. Peck (1), speaking of such a covenant in a lease that had been assigned with the covenant unperformed, Parke B. said : - " If this could be construed to be a covenant by the lessee to effect one policy of assurance immediately, and afterwards that he and his assigns should keep that particular policy on foot, by con- tinuing to pay the annual premiums on that policy, the assignee would not have been guilty of any breach of covenant, if the lessee had never insured, for the policy never could have existed, which the assignee was to continue ; and the distress for rent would have been

a waiver of the breach by the original lessee. In such a case the

lessor of the plaintiff could not have recovered. But if the covenant mean that the lessee and his assigns shall always keep the premises insured by some policy or another, then it is broken if they are unin-

sured at any one time ; there is a continuing breach for any portion' -

of time that they remain uninsured ; and we are of opinion that this

(2) (1830) 1 B. & Ad. 428 [109 E.R. 847].

is the true construction of the covenant: it is that which would have been put upon it if an action of covenant had been brought ; and it makes no difference that the consequence of the breach of it is a forfeiture " (1).

_ The same learned judge gave a like construction to a covenant by a debtor to insure or cause to be insured his life in one or other of the respectable offices in London or Westminster and to continue to keep the life so insured. He said: " We agree in the construction . . . that the defendant's covenant was not to keep alive the original policy, which covenant would have been broken once for all by neglecting to insure forthwith, but that there is a continuing covenant to keep insured by some policy in some office" (Hyde v. Watts (2) ). pang

A covenant by a lessor to put the demised premises in repair is broken once for all if a reasonable time for putting the. premises in repair elapses without his doing so (Coward v. Gregory (3), per Willes J.), But a lessee's covenant to keep them in repair is con- tinuing.

If the covenant names a time for the doing or completion of a definite act, it is clear that failure to do the act within the time involves a breach once for all, and, as appears from the foregoing statement of Wiles J., the same conclusion will follow where no time is limited but a specified thing is to be done and a reasonable time elapses for the performance of the covenant: Cp., further, Doe d. Baker v. Jones (4). In Morris v. Kennedy (5), where the principle was applied to a covenant in a building lease to construct within '4 specified time a new street bounding the demised land, Holmes J. in a very clear explanation of the reasons for holding that a final breach had occurred, referred to covenants depending on an implica- tion that the obligation should be fulfilled within a reasonable time. He said : - "I am of opinion, that the case before us depends upon whether the covenant sued on was broken finally and once for all before the assignment of the leasehold premises to the plaintiff. The covenantor undertakes by it that he will within one year from the date of the lease at his own cost and charges, make and construct and completely finish the street referred to. It would be difficult to suggest how finality could be more exhaustively expressed than by the three verbs, and the adverb, that occur in the portion of the covenant I have read. Then consider the limit of time. Even if

(1) (1830) 1B, & Ad., at p. 438 (109 (3) (1866) L.R. 2 C.P., at p. 171.

ER., at p. 850). (4) (1850) 5 Ex., at p. 504 [155 E.R. (2) (1843) hie & W. 254, at p. 270 'at p. 220]. {152 E.R, 1193, at p. 1200! (5) (1896) 2 LR. 247.

this were absent, it would occur to me that the language would that upon the expiration of a reasonable time the rights and liabilitic of the parties were to be ascertained once for all; but the fixing 0 the definite period of a year strengthens the argument for thi construction. What is there to suggest that if the lessor had, in words of the covenant, made, constructed, and completely fi the street within the time mentioned, he would have been under

the leasehold premises were to lose entirely the advantages of proposed street ?"" (1).

In covenants to build and then to keep the building in repair, obligation of the latter part of the covenant arises for performance only when the former is fulfilled and accordingly the contin nature of a covenant to repair cannot be used to avoid any of fl

of a breach once for all (Stephens v. Junior Army and Navy Ltd. (2) ). :

The distinction between a covenant to do a definite act capable only of a breach once for all and a continuing covenant has con quences not only in relation to waiver but also in the measure of damage, in the effect of lapse of time under statutes of limitati and, where the covenant runs with the land, in the liability of an assignee to sue or be sued for further breaches. 4

It vemains to apply these considerations to the interpretation the covenants contained in clauses 12 and 15 of the agree Under clause 12, the licensee, that is the respondent company, "fence the land": such fence must be stock-proof and erected in a form specified and to the satisfaction of the licensor, the appellant. All this reads like an immediate obligation to perform a definite or series of acts. The covenant goes on to say that, during the te the company must at its own cost and expense maintain the sa fences in good order and condition. Again} this form of expre looks as if a further duty, one of maintenance, is to attach wl the fence is erected. It may be that, under this latter part of

6th ed. (1924), at pp. 251, 252, and note at pp. 909, 910. even so, it does not mean that the duty to fence in the first continues indefinitely until actually fulfilled. It means that every time the fence falls into disrepair or is destroyed, then, within

(1) (1896) 2 T. R., at pp. 252, 253, (2) (1914) 2 Ch. 516.

e time, it must be restored. It still remains true that under earlier part of the clause a fence must be erected before the r part has anything upon which to operate. The erection of nee is a definite act which must be done within a reasonable , and failure to do it is a breach once for all. The failure to within a reasonable time would entitle the licensor, the appel- t, not simply to damages for delay, on the footing that the duty ined and might or would be performed by the company. It entitle the appellant to damages measured by the loss arising m his being deprived of a fence, and the damages would or might clude the cost to him of placing the fence there himself. ise 15 appears to me to bear the same interpretation. The to grect a gate within a reasonable time involved a breach all. If, therefore, a reasonable time elapsed and there was rangement or request by which performance was postponed or 'open, a definitive breach arose, and any unequivocal act recog- n the existence of the agreement after that time would amount )a waiver. On the facts, I am unable to agree that time for mance was given so that the obligation of the covenant was open and unbroken, No doubt the appellant renewed his for performance and expected that in the end fences would ed by the company. But he never meant to enlarge for performance of the covenant. The situation was that xcused delay on the side of the company and, on the appel- side, toleration accompanied by recurrent complaints. After 7 there was an immediate duty on the part of the respondent iy to fence and a reasonable time for performance expired ug before the end of that year.

he only remaining question is whether the appellant's acts ounted to waiver. In considering this question it must be remem- tt we are not dealing with a lease. There is no estate or t in land. The sole user of the dumping site does not, as I stand the agreement, mean exclusive possession on the part of mmpany for all purposes of a defined area of land. It therefore s not amount to a demise of the dumping site. There is not a 'of a profit & prendre for a term of years. For the sand, gravel

parcel of the appellant's land. It is a licence to transport gravel and stone over the appellant's land and to use part land for crushing and as a dumping site. The distinction ome importance in two respects. If there had been a lease corporeal or incorporeal interest in land, it would have been sary for the appellant, before he re-entered, to give notice to

the company specifying the breaches complained of and requiring the company to remedy such breaches: See sec. 129 of the Con. veyancing Act 1919-1932 (N.S.W.).

In the second place, acceptance of the royalty as rent accruing due after breach of condition would have been necessarily fatal as a waiver of the forfeiture. Rent issues out of the land demised and - is an incident of the tenure. To receive rent in respect of a peri later than the breach of condition, with notice of the breach, necessarily a waiver of the forfeiture because it recognizes that th tenure subsisted notwithstanding the liability to forfeiture. If money is received in respect of the tenant's use of the land but in its quality as rent, the forfeiture is not waived, as, for insta when it is paid and received as compensation to the landlord.

A tonnage rate payable under an agreement like the present stand in an analagous position, but it is not the same thing. ever, I do not think that the appellant can escape from the position that, by allowing the respondent company to go on for over years and by receiving royalties in respect of that period, he unequivocally intimated an intention that the agreement should b considered as subsisting after the reasonable time had lay within which the company was bound to fulfil clauses 12 and 15 and notwithstanding that to his knowledge the company had no done so. That amounted to a waiver of the right to determine the agreement : See Wendt v. Bruce (1).

I am therefore of opinion that the appeal should be dismissed.

Solicitors for the appellant, Harold T. Morgan & Sons. Solicitor for the respondent, Arthur J. P. Hall.

At a glance

Court

Decision date

Before

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Judgment (38 paragraphs)

Cited By (16)