Luna Park (NSW) Limited v Tramways Advertising Pty Ltd [1938] HCA 66

High Court of Australia|1938-07-01|Before: McTiernan JJ, Dizon J

TRAMWAYS ADVERTISING PROPRIETARY LIMITED PUM the EES 18 PLaINTIFr,

ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES.

H.C. or A, Contract - Construction - * At least eight hours per day" - Whether actual or a

eat weeks, distributed over the three summer seasons beginning in D aen ose 1935 and ending in the earlier part of 1938, cause fifty-three roof boards per Mcrenan tising B's amusements to be displayed upon tram-cars running upon routes in Sydney. The agreement consisted of a letter and a cont The letter, which had been written and forwarded by A to B, contain

statement that "the average time that each car is on the track is ei

will be on the tracks at least eight hours per day throughout your During the first two seasons, the average period of display excee hours per roof board per day, but each and every roof board was not dis for at least eight hours on each and every day.

Held, by Latham C.5., Rich and McTiernan JJ. (Dizon J. dissenti upon the true construction of the contract A's undertaking was that every roof board would be displayed for at least eight hours on each am day; that this undertaking was a condition of the contract; and th

reason either of the breach of the condition, or of A's renunciation of the con- H. C. or A.

tract in that it was prepared to continue performance only on the basis of the erroneous construction that an average display of eight hours per roof board

per day was all that was required, B was entitled to determine the contract. Luna Park

Held, further, that in the absence of proof of the extent of the breach of contract committed by A or of evidence of actual damage, B could recover no

more than nominal damages in respect of such breach. 'Tramways ADVERTISING

Decision of the Supreme Court of New South Wales (Full Court): Tramways Pr Advertising Pty. Ltd. v. Luna Park (N.S.W.) Ltd., (1938) 38 S.R. (N.S.W.) 632 ; 55 W.N. (N.S.W.) 228, reversed.

An action was brought in the District Court of New South Wales by Tramways Advertising Pty. Co. Ltd. against Luna Park (N.S.W.) Ltd. for the recovery of the sum of £86 13s. 4d. for work done and materials provided by the plaintiff for the defendant at its request. The action was defended.

The material facts were as follows : - On 7th December 1935 the plaintiff caused to be sent to the defendant a letter in the following terms : - ' We will be prepared to accept a contract from you for toof boards on Sydney trams. under the following conditions : - (i) quantity: 50 - 16 ft. boards; 3 - 38 ft. boards; (ii) we to supply boards with exception of 10 - 16 ft. and 3 - 38 ft. boards already supplied by you. All painting. erection and maintenance of boards to be carried out by us; (iii) contract to operate for the duration of two or three seasons. The average time that each car is on the track is eight hours per day, and we would recommend all toutes serving the industrial suburbs. A list of depots and areas served will be found detailed on the back of the contract." The language of the letter suggested that a copy of a printed form of a contract note was also supplied. ~ At some stage a Mr. Caton on behalf of the plaintiff wrote at the bottom of the letter the sentence : '* We guarantee that these boards will be on the tracks at least eight hours per day throughout your Season."

On 10th December 1935 a contract note in a printed form with manuscript and typewritten additions was signed on behalf of the defendant. which was described as having the business of an amuse- ment park at an address at Milson's Point. A memorandum agreeing to the contract was signed on behalf of the plaintiff by its secretary.

The printed form was addressed to the plaintiff. It was app! ca to a contract for advertising by means of both inside posters a1 outside roof boards. In the present case the contract a

portions of the printed matter relating exclusively to inside p being omitted, although they were not struck out in the o

me/us with twelve months' service consisting of the following three full seasons with a minimum of 52 weeks. Preparation ay display in the Sydney metropolitan tramways system of 53 boards measuring 50 at 16 ft., 3 at 38 ft. Depots from which: boards are to be routed - all industrial routes. A list of Sy metropolitan tram depots from which the various districts ar served is printed on the back hereof. This contract provides routing by depot only, not by individual lines and districts. Ey endeavour will be made by the contractor to meet the routing nee of the advertiser, but departure from such routing shall not be deem a breach of this contract. All material provided in connection wit this contract remains the absolute property of the contractor. contract cannot be cancelled without the consent of the contract in writing, except upon payment of the full amount of the completed contract. In the event of any payment being in arrears more th

the contractor unless and until received and ratified by indo thereon in writing by one of the directors or the secretary. I/ agree to pay for such service at the rate of £20 per week from date of the first appearance of complete number of boards, 53 in al payable monthly. This contract automatically cancels any p contract."

On the back of the form was a list of the Sydney metrop' tram depots, and the districts served therefrom.

There was written on to the side of the letter of 7th Decer 1935, apparently at or about the time when the contract note W signed by the plaintifi's salesman, a memorandum signed by and by Mr. Phillips on behalf of the defendant, in the followi terms: " This letter is part and parcel of the contract."

It was admitted by both parties that the contract between them was made up of the contract form as supplemented by the letter.

This action was commenced in February 1938 to recover a sum of £83 13s. 4d. claimed to be due for displaying the roof boards from 6th January to 5th February 1938, a period of one month, at the rate of £20 per week.

The defences raised by the particulars of defence were : - 1. (a) That it was a condition of the agreement under which the money was claimed that each of the 53 roof boards attached to 53 tram-cars should be displayed for eight hours on each day throughout the period of 52 weeks, that the plaintiff did not so display each (that the moneys sought to be recovered were alleged to be due for pre- tended performance of the agreement and notwithstanding the afore- said non-performance of the condition, and that the defendant prior to 6th January 1938 refused to be bound by the agreement by reason of such non-performance); (b) (a defence of non-assumpsit which was struck out); 2. A cross-action alleging a promise by the plaintiff that each of the 53 roof boards would be displayed for cight hours in each day throughout the period of 52 weeks, but that each of them was not displayed for eight hours in each day through- out the said period of 52 weeks, whereby the defendant lost the benefit of the plaintiff's said promise and the moneys paid by it to the plaintiff pursuant to the agreement and the profits which it otherwise could and would have made as a result of the display of the said advertising matter as aforesaid and whereby the defendant was otherwise damnified, and claiming £400 damages.

It appeared from a letter written by the plaintiff's solicitor on 27th May 1938 that the defendant's solicitor desired to raise amended grounds of defence, because in that letter it was stated that the amended grounds were not objected to, although a right to argue that terms should be imposed as to costs was reserved. Of the amended grounds, ground | (c) was the same as 1 (a), except that it alleged that the condition broken was a condition that the 53 roof boards should be displayed daily throughout the period of 52 weeks instead of that each of them should be displayed for eight hours each day throughout the period ; and ground 3 was the same as ground 2 with a similar alteration. The trial judge directed that

< with respect to the corresponding portion of ground 1 (c),

the portion of ground of defence 1 (a), which is shown above enel in parentheses, be struck out; but no such direction was

defendant was granted leave to add a defence of ' never indeb on the ground of non-performance of conditions precedent.

In the District Court, except in cases where a default si has been issued, it is not necessary for the defendant to file a1 grounds of defence, unless he desires to set up one of the defences specified in sec. 75 of the District Courts Act 1912 (N81 Apart from this, it is sufficient for him to state what his defen when the case is called on (sec. 84 and rule 236). If. how default summons has been issued, verified grounds of defence m he filed (sec. 66). A default summons was issued in the p case, so that the defendant was restricted to the grounds of def which it had filed, subject to any amendments allowed at the tri

Counsel for the defendant stated at the hearing of the a

1937 respectively, giving summarized information as to the of trams bearing the boards. From the first of these letters

per day per tram. The average miles run per hour was 9.5, showi that each car had run 8.2 hours per day on a gross average. letter of 10th March 1937 similar figures were given as supplied | the Department of Road Transport and Tramways for the pe October 1936 to January 1937, showing a gross average of ¢i hours twenty-four minutes per day per car. In the earlier letter! had been stated that thirty-six of the trams bearing boards had ev numbers and seventeen had odd numbers. In the later letter it w stated that odd and even numbered cars were out on alternate da assisted by even and odd numbered cars at peak periods. each being thus the same time on the track except in cases of ov and repair, the average time lost for overhaul and repair being 0 and one-half days per car per month.

Counsel for the plaintiff made the admission that each board was 4. ©. o

It appeared from the evidence that the defendant's first season L was from 21st January 1936 to 22nd April 1936, and its second season from 15th October 1936 to 11th March 1937 ; and that early Te ares in September 1937, when the third season was approaching, a repre- aaa ae

sentative of the defendant told the representative of the plaintiff - ag

that unless it could give better service than in the past the defendant would not continue, to which the plaintifi's representative replied that it would not be possible for the plaintiff to give better service than had been given in the past; the defendant's representative retorted: "If that is so, your best is not good enough." On 16th November 1937 the defendant, by letter, alleged that under the contract fifty-three boards should be on the road at least eight hours per day throughout the season ; that it was quite clear that nothing like this service had been given ; and that for this reason it did not regard itself as bound by the contract any further. The plaintiff offered to discuss making any desired alterations to the form of the advertisements, but the defendant refused to discuss the matter. The plaintiff then proceeded to display the boards when the defen- dant's third season began. The defendant protested against the boards being displayed at all, and, in particular, objected that some of the advertising matter had become misleading; but it refused to give any instructions for alterations, with the result that the plaintiff continued the display and sued to recover the amount provided for by the contract after the lapse of one month.

It was proved in evidence that in respect of the first season the defendant paid sums totalling £280 on dates between 9th March and 28th April 1936, and in respect of the second season the defendant paid sums totalling £420 on dates between 26th November 1936 and 23rd March 1937.

The trial judge held that the contract imposed on the plaintiff the obligation of causing each board to be displayed for eight hours each and every day, and that since it was admitted that this had not been done there must be a verdict for the defendant in the action. His Honour also ruled that in any event, assuming the plaintiff to be entitled otherwise to succeed, it could not recover in the present

action. His Honour ruled further that he could not amend {

« on the ground that there was no jurisdiction to entertain a

particulars of claim so as to introduce a claim for unliquidated dam

for unliquidated damages in an action in which a default summo had issued. In the defendant's cross-action, his Honour found

The Full Court of the Supreme Court of New South Wales, | majority, allowed an appeal by the plaintiff, set aside the verdi and judgment for the defendant in the action and cross-action, a1 entered a verdict for the plaintiff in the action for the amount clain and also for the plaintiff in the cross-action. As regards the po of amendment of the District-Court judge all the members of the Court agreed that not only did the trial judge have power to an the proceedings so as to admit of a claim for unliquidated damag but, if such an amendment were necessary for determining the n question in controversy between the parties, it was his statutory du under sec, 96 of the District Courts Act 1912 (N.S.W.), to m subject to the imposition of such terms as it might be reasonab impose: Tramways Advertising Pty. Ltd. v. Luna Park (N.S Ltd. (1).

From that decision the defendant appealed to the High Cou

Windeyer K.C. (with him R. Lindsay Taylor), for the apy The agreement properly construed means that each board s be displayed either (a) every day for at least eight hours, or (b) some part of every day averaging eight hours. The use of the word "per day" shows that it was not intended to have an ave

performance, that is, that there should not be a comparativel sporadic display but a massed display of fifty-three boards each

The principle as to repudiation was considered by the cout Bowes v. Chaleyer (2) and Hochster v. De La Tour (3). This

[Drxon J. referred to Ripley v. M'Clure (1) and Wilkinson v. 4. (. oF A. 1938,

If repudiation. be communicated to the other party that party re te may accept it immediately. He then has a right in damages. aan

When there is an unaccepted repudiation the contract remains on prayways

[Drxon J. referred to Aerial Advertising Co. v. Batchelors Peas = - Ltd. (3):]

The conduct of the respondent was not set up by the appellant as repudiation of the contract ;. it was set up as'a breach of a term of the contract. The evidence shows that there was a very sub- stantial breach of the contractual obligation. The words" per day " mean "each day " (Taylor v. Laird (4) ), and the meaning of the words "day" and "daily " was dealt with in London County Council v. South Metropolitan Gas Co. (5). The words used should be given their natural and literal meaning (Bowes v. Chaleyer (6) ). A test is: What would business men understand by the words used in the contract (Clifton v. Coffey (7); Hillas & Co. Ltd. v. Arcos Ltd. (8))? The appellant regarded as valuable a massed display over a wide area as required under the contract ; greater patronage, doubtless, would have resulted from such a display. This obligation was not fulfilled by the respondent, therefore the appellant is entitled to substantial damages for such non-performance, and this is so even though the quantum of damage suffered may be difficult to ascertain (Chaplin v. Hicks (9) ; Tolnay v. Criterion Film Productions Ltd. (10) ; Marbe v. George Edwardes (Daly's Theatre) Ltd. (11) ; Herbert Clayton and Jack Waller Ltd. v. Oliver (12) ; Simpson v. London and North Western Railway Co. (13); Howe v. Teefy (14) ).

{Ricu J. referred to Withers v. General Theatre Corporation Ltd.

(1) (1849) 4 Bx. 345; 154 E.R. 1245. (8) (1932) 147 L.T. 503, at p. 511. (2) (1871) L.R. 6 C.P. 206, at pp. 209 (9) (1911) 2 K.B. 786.

et seq. (10) (1936) 2 All E.R. 1625. (3) (1938) 2 All E.R. 788. (11) (1928) 1 K.B, 269, at p. 281. (4) (1856) 1 H. & N. 266, at p.273; (12) (1930) A.C. 209.

156 E.R. 1203, at p. 1206. (13) (1876) 1 Q.B.D. 274. (5) (1903) 2 Ch. 532. (14) (1927) 27 S.R (N.S.W.) 301, at (6) (1923) 32 C.L.R., at p. 167. p. 306 ; 44 W.N. (N.S.W.) 102, (7) (1924) 34 C.L.R. 434, at pp. 437, at p. 104.

H.C.or A. The performance or otherwise of conditions precedent, and y eS and repudiation by parties were dealt with in Bentsen v. Taylor,

Lowa Park & Co. (No. 2) (1); Mersey Steel and Iron Co. Ltd. v. Naylor, a & Co. (2), and Fullers' Theatres Ltd. v. Musgrove (3). Here

Pry. Lrp. = E. M. Mitchell K.C. (with him Snelling), for the respondent.

contract should be construed in the light of the general knowl as to the way in which the tramway system is operated, and greater or lesser number of cars used having regard to the or lesser demand therefor during certain periods of each day. Inj circumstances under which the contract was made the con relating to posters are, so far as they are capable of being applie also applicable to roof boards. It was the obvious intention of parties, which are business concerns familiar with commercial ( tracts, that the contract was not to be a rigid and inflexil and that failure strictly to comply with some of its terms to be a ground for cancelling the contract. As the appellant knew, the respondent was merely a licensee and, as such, had control over the running of the cars in general or of any p cars orcar. Thus it follows that the periods of display were int to be, and must have been accepted by the appellant as, average: not precise. The intention was that each car upon which a board

was displayed should during a period be used for transport

the outset and the fact that despite its knowledge of this the appellant continued for a long time to make payments the contract constitutes a waiver of any supposed breach in t respect. The contract was so performed during a period of years without complaint on the part cf the appellant (Watchar East African Protectorate (4); Van Diemen's Land Co. v. Cape Marine Board (5); Bacchus Marsh Concentrated Milk

(1) (1893) 2 Q.B. 274. (3) (1923) 31 C.L.R. 5 (2) (1884) 9 App. Cas. 434. (4) (1919) A.C. 533. (5) (1906) A.C. 92, at p. 98.

Lid. (in Liquidation) v. Joseph Nathan & Co. Ltd. (1); Farmer vy. 4.0. oF A.

Honan and Dunne (2) ). ne [Drxon J. referred to Forbes v. Watt (3).] Luna Park

The evidence shows that the display per car, that is, per board, oe

averaged an excess of eight hours per day. In construing two ppsways contemporaneous documents the court should adopt a construction paar ole which will reconcile them rather than one which will render them = - inconsistent (In re Phoenix Bessemer Steel Co. Ltd. (4); Halsbury's

Laws of England, 2nd ed., vol. 7, pp. 330, 331). The respondent was

entitled to continue the performance on its part of the contract notwithstanding that the appellant purported to repudiate it

(Ahmed Angullia Bin Hadjee Mohamed Salleh Angullia v. Estate

and Trust Agencies (1927) Ltd. (5); Mayne on Damages, 10th ed.

(1927), p. 123). The appellant did not put on a defence that there

had not been performance according to the appellant's construction

of the contract. On the question of the proceedings, the pleadings,

the right to an amendment and the jurisdiction of the District Court,

see the District Courts Act 1912 (N.S.W.), sees. 41-46, 62, 64, 84, 96 ;

Spencer, Whatley & Underhill v. Forster & Co. (6) ; O'Brien v. Smith

(7); Farmer v. Upton (8). Sec. 96 does not go to jurisdiction.

Default summons and procedure thereon is merely an alternative

method of procedure in respect of liquidated claims.

[Drxon J. referred to Best v. Best (9), and Charlton v. Opie (10).]

In the circumstances the appellant is not entitled to rely upon the non-performance of which it complains. Reasonable notice of the purported cancellation of the contract was not given (Panoutsos v. Raymond Hadley Corporation of New York (11) ). In a claim for damages the onus is upon the claimant to prove the quantum of damages suffered. The appellant has not proved the extent of the alleged breach. Assuming that the respondent gave a guarantee in the sense contended for by the appellant that is not a term which went to the root of the contract, but is merely a warranty which

(1) (1919) 26 C.L.R. 410, at pp. 433, (6) (1905) 1 K.B. 434, at p. 438. 436. (7) (1931) 48 W.N. (NS.W.) 96. (2) (1919) 26 C.L.R. 183, at p. 197. (8) (1930) 46 'T

. & Div. 214. (9) (1908) V.L. Ch. 683. (10) (1916) 37 A. 624, at p. 639. (11) (1917) 2. K.B,

H.C. or A. would be the subject of damages in so far as the appellant could 1938. ad va Park

W.) R. Lindsay Taylor, in reply. The method of calculating an averag "was discussed in Doyle v. Sydney Steel Co. Ltd. (1). Decisions dealir Aptarersy With documents partly printed and partly written are. collected |

Pry. Lev. Smith's Leading Cases, 13th ed. (1929), vol. 2, p. 491. a

Dec. 23. The following written judgments were delivered : - Larnam C.J. The appellant, Luna Park (N.S.W.) 'Ltd., is company which conducts an amusement enterprise in Sydney. The nature of the business of the respondent, Tramways Advertisin, Pty. Ltd., is shown by its name. On 10th December 1935 the ty companies made an agreement for advertising the Luna 1 entertainments in Sydney by means of fifty-three boards to be displayed on the roofs of tram-cars. The contract was to operat for three seasons ; a season begins about October and ends about March. One of the terms of the contract was as follows: "W guarantee that these boards will be on the tracks at least eight hours per day throughout your season." . After the second season the Luna Park Co. objected that thi display contracted for was not being provided. The compan) contended that the provision quoted meant that each of the fi three boards would be on the tracks for at least eight hours on ever} day during three seasons. It is admitted that this service was not

each season each board was displayed for an average time of at le eight hours per day. According to this view of the meaning of th provision there would be no breach if no boards at all or only as number of boards were shown on some days, provided that th display on other days was such as to bring the average for each board over a season to at least eight hours per day. It is admitted if the provision bears this meaning the advertising company ha performed its contract.

advertising company which stated : - "' We have on a number of occasions pointed out to you that we have never had the service for which we contracted. It was intended, and is a term of the contract, that the fifty-three boards should be on the road at least eight hours per day throughout the season. From checks we have made from time to time and from the information contained in several of your letters it is quite clear that this service is not being given or anything like it, and as you have failed to carry out the contract we have to inform you that we do not consider ourselves bound by it any further."

The advertising company. however, on 6th January 1938, informed the Luna Park Co. that on that day the display of the full fifty-three boards had been completed, and that payment would be required for them. The Luna Park Co. immediately replied stating that the boards were being displayed " without our authority and notwith- standing the cancellation of the contract," and complained also that the information on the boards was incorrect.

The advertising company, after displaying the fifty-three boards for a month, sued the Luna Park Co. for £86 13s. 4d. upon a default summons in the District Court in respect of the period 6th January 1938 to 5th February 1938. The Luna Park Co. gave notice of defence, in which it was alleged that it was a term and condition of the contract that advertising matter should be displayed on fifty- three roof boards and that each of the said roof boards should be displayed for eight hours on each day throughout the contract period. The defendant also by way of cross-action claimed damages for breach of the contract. The learned District-Court judge agreed with the defendant upon the construction of the contract, dismissed the plaintiff's claim and gave judgment for £300 for the defendant on the cross-action. The plaintiff appealed to the Full Court which, by.a majority (Jordan C.J. and Davidson J., Nicholas J. dissenting) (1), ordered that judgment be entered for the plaintiff for the amount claimed and that the cross-action be dismissed. Nicholas J. was of opinion that the plaintiff's action should be dismissed and that

(1) (1938) 38 S.R. (N.S.W.) 632; 55 W.N. (N.S.W.) 228.

there should be a new trial of the cross-action limited to the qu of damages. The defendant has now appealed to this court. The determination of the appeal depends upon the interpretatic of the clause which has already been quoted. The agreem consists of two documents, a letter and a contract note. The k dated 7th December 1935, was written by the advertising company to the Luna Park company. It stated that the advertising compan would be prepared to accept a contract for fifty-three roof boar on Sydney trams, the advertising company to supply certain of boards, to paint, erect and maintain them, the contract " to op for the duration of two or three seasons." No rate of payment wa of which could result in the making of a contract. The contained the following statement: "The average time that ' car is on the tracks is eight hours per day, and we would recom all routes serving the industrial suburbs." It is upon this statemé that the argument of the plaintiff principally depends. The en of the letter show that a form of contract note was forwarded w the letter. % On 10th December 1935 a contract note, which is the oth document constituting the contract, was signed on behalf of th parties. It consisted of a printed form filled up in writing. provided for what was described as a twelve months' service 0 three full seasons, with a minimum of fifty-two weeks. The provided for (a) inside posters, and (b) roof boards. The refer to inside posters was struck out, but various provisions in the body of the note relating to posters as distinct from roof boards re uncancelled. It was suggested for the plaintiff that these p ; should be applied to roof boards, but it is quite clear that the contre note draws a distinction between posters and roof boards and it is not possible, upon ordinary principles of construction, to ap} the poster provisions to roof boards. The contract note contained the following provision: "I/We agree to pay for such service al the rate of twenty pounds (£20) per week from date of first appeal ance of complete number of boards 53 in all, payable monthly." the time when the contract note was signed the parties made memoranda on the letter of 7th December. The first memora

signed on behalf of both parties, was: " This letter is part and parcel of the contract." The second memorandum, signed on behalf of the advertising company, consisted of the provision already men- tioned, namely: '"' We guarantee that these boards will be on the tracks at least eight hours per day throughout your season."

The plaintiff contends that the reference to the average time for which the cars of the tramway service are on the tracks affects the construction of the "guarantee," which should accordingly be regarded as providing only for an average time of display. In my opinion this contention is opposed to the natural meaning of the words. What is called the guarantee is a guarantee as to each and every board. It is an undertaking that each board will be on the tracks for at least eight hours on every day all through each season. The statement in the body of the letter is a statement which indicates the nature of the service which the normal running of the cars would be expected to provide. It is clear, however, that the Luna Park company was not satisfied with a mere statement that the average time that each car was.on the track was eight hours per day. It required something more definite. The guarantee is an under- taking which is not in any way inconsistent with the statement of fact contained in the letter. The effect of the undertaking, read with the statement in the letter, is that, whatever might be the average time that cars were on the track, the roof boards were to be displayed for at least eight hours on every day. The guarantee contains no reference to averages, and it is apparent that there may be business reasons why the defendant required regular and con- tinuous publicity. I agree with what Nicholas J. says in his reasons for judgment - the guarantee "was an assurance to the advertiser that, whatever might be the ordinary practice of the Tramway Department, the boards advertising Luna Park would be on the track not only for an average period of eight hours but for eight hours on every day, and that by this means a proclamation of the allurements of Luna Park would continuously be thrust upon the attention of residents of the industrial suburbs" (1).

It follows that in my opinion the plaintiff must fail upon the claim because the plaintiff sues upon the special contract and has not

performed the contract in accordance with its terms. The plaintiff could not by any amendment succeed upon a common count services rendered at the request of the defendant, because alleged services were not so rendered. The defendant had not not asked the plaintiff to display the boards but had asked plaintiff not to display the boards. Thus there is no possibility « implying a request from the communications between the p Nor can a request be implied from a voluntary acceptance of b in fact provided though not in a¢cordance with the terms of special contract. The plaintiff displayed the roof boards, hut defendant did nothing which amounted to an acceptance of services rendered. i me 4 F In the cross-action, the defendant claimed damages for breach of contract by the plaintiff in not displaying the fifty-three roof b daily throughout the whole contract period of fifty-two wee The claim therefore was based first upon the actual failure display the roof boards as required by the contract during the first and second seasons, and secondly, as to the third season, upon discharge of the contract alleged to have been rightfully broug

It is admitted by the plaintiff that if the defendant's cons' of the clause is adopted the contract has been broken by the plaintiff Therefore, as a matter of course, the defendant is entitled to nominal damages. This right does not in any way depend upon whether the defendant was entitled for any reason to determine the contré Thus, according to the construction of the clause which I regard as correct, there is no doubt whatever as to the defendant's right action for damages for breach of contract in respect of the first seasons. But the extent of the breach is quite uncertain. It app from statements contained in letters written by the adver company that seventeen of the trams bearing roof boards bore numbers and thirty-six of them bore even numbers. According the system governing the trams, odd and even numbered cars were out on alternate days, assisted by even and odd numbered cars at peak periods. The letter from the advertising company conta

the statement that this system ensures each car in the various depots the same time on the track except in cases of overhaul and repair which are required periodically in the case of all cars. The facts stated are consistent with no display whatever of some, or even of all, of the roof boards on particular days. But it is quite impossible to ascertain from the evidence available the number of days upon which particular boards were not shown or, if shown, were shown for less than eight hours. Thus the extent of the breach 'is undetermined.

_ It is true that there are many authorities which establish that substantial damages can be awarded where a breach of contract is established, even though the calculation of the damages is " not only difficult but incapable of being carried out with certainty or precision " (Chaplin v. Hicks (1) ): See also other cases dealing with damages for loss of publicity, Marbe v. George Edwardes (Daly's Theatre) Ltd. (2); Herbert Clayton and Jack Waller Ltd. v. Oliver (3); Withers v. General Theatre Corporation Ltd. (4). In all these cases, however, the extent of the breach was established. There was a complete failure on one side to perform the contract. In the present case, however, there has not been a complete, but only a partial, failure to perform the contract. The extent of the failure is unascertained. Thus the evidence which the defendant was content to put before the court does not make it possible to reach any estimate of damage suffered. I can see no reason why the defendant should be allowed to fight the matter over again. If a party chooses to go to trial with incomplete evidence he must abide the consequences. The fact that his evidence might have been strengthened affords no reason for ordering a new trial. Thus the defendant must be content, so far as the first and second seasons are concerned, with nominal damages.

In the Supreme Court a great deal of attention was devoted to the consideration of the question whether the particular clause in question was a condition or a warranty. As I have already stated, this question is unimportant in relation to the right of the defendant to claim damages for past admitted breaches. The defendant

(1) (1911) 2 K.B., at p. 791. (3) (1930) A.C. 209, (2) (1928) 1 K-B. 269. (4) (1933) 2 KB. 536.

Ww Luna Park (N.S.W.) Lr. v. 'Tramways ADVERTISING Pry. Lrp.

cannot, however, claim damages in respect of the third season he was entitled to determine the contract. If he was not so enti then he has been guilty of a breach of contract for which the p is entitled to recover damages. The plaintiff, however, has n sued for such damages, although it was intimated before the Di Court judge that the plaintiff desired, if necessary, to make an ment in order to claim such damages. The learned judge held tl as such damages could be claimed only upon an ordinary s and not upon a default summons, it was not possible to allo amendment, because a default summons could not be a as to carry a claim which could not be made upon such

for two reasons : first, by reason of the plaintiff's actual bi the contract, and, secondly, by reason of the plaintiff's e intention (notwithstanding the challenge by the defendant) continue to perform the contract in the future in the same as in the past. In the past the plaintiff had given and had intend to give only a display of an average of eight hours per day per board and it was clear that the plaintiff intended to continue to pi the contract in the same way. I agree with the Full Court th guarantee clause was a condition and not a warranty in the se in which those words are used by Fletcher-Moulton L.J. in Wall Son & Wells v. Pratt & Haynes (1). It was a term of the contt which went so directly to the substance of the contract or "essential to its very nature that its non-performance may fi be considered by the other party as a substantial failure to pi the contract at all." The breach of such a term by one party enti the other party not only to obtain damages but also to re perform any of the obligations resting upon him. The essential character of the clause in question appears from its own terms and from the circumstances in which the contt was made. In the first place the words "we guarantee" particularly suited, in a contract drawn by laymen, to emphas

the importance of the clause which they introduce. In the next place, the payment of £20 per week was not to begin until the

complete number of roof boards, namely, fifty-three, were all dis- Lu

played at the same time. The money is made payable " from date of first appearance of complete number of boards 53 in all." Thus,

if the advertising company displayed even as many as fifty-two ae

boards on every day throughout a whole season, it would never become entitled to recover any payment. This provision in the contract therefore supports the view that the parties regarded the completeness of the display contracted for as an essential element in the contract. Further, the preliminary correspondence shows that the advertising company represented continuity of display as an important feature. In a letter of 27th November 1935 the company emphasized the offer as an offer of "an exclusive full- powered type of publicity that is continuous day in day out and gets 100 per cent attention all the time." Reference was made in the same letter to the advantages of the " tremendous full-attention coverage available continuously over the entire week." (The words italicized were typed in large print in the letter.) Reference to these state- ments is permissible because, when the question is whether a promise is a condition or a warranty, "there is no way of deciding that question except by looking at the contract in the light of the surround- ing circumstances, and then making up one's mind whether the intention of the parties, as gathered from the instrument itself, will best be carried out by treating the promise as a warranty sounding only in damages, or as a condition precedent by the failure to perform which the other party is relieved of his liability. In order to decide this question of construction, one of the first things you would look to is, to what extent the accuracy of the statement - the truth of what is promised - would be likely to affect the substance and foundation of the adventure which the contract is intended to carry out" (per Bowen L.J. in Bentson v. Taylor, Sons & Co. (No. 2) (1)); and see Halsbury's Laws of England, 2nd ed., vol.7, p.333. A discon- tinuous and irregular display is a different thing from a guaranteed continuous and regular display. For these reasons, in my opinion,

1938, ss Luya Park (N.S.W.) Lr. ® Tramways ADVERTISING Pry. Lrp.

the clause was a condition and not a mere warranty. Accordin, any breach of the clause would entitle the defendant to dete the contract. t But it is still necessary to consider what default will amo a breach of the clause. The clause used the words:" at least hours." but, in my opinion, such a phrase;should not be inte! with absolute mathematical exactitude in a commercial conti this class. In some contracts it may be proper to construe refe to time with absolute and precise accuracy down to minutes seconds, but;in a contract dealing with the display of roof board on trams for at least eight hours per day the words " eight hou per day" should -be. understood as meaning substantially eig hours per day. The clause would not, inmy opinion, be broken by small occasional deficiencies. I give to this clause the same construction which was given in Bowes v. Chaleyer (1) to su phrases as," half" the goods and " two months later." The e read these provisions as conditions but interpreted them as if word " substantially " had been introduced into them. I take th admission that each board was not exhibited for at least eight a day as an admission that it was not the case that each board wé exhibited for substantially eight hours each day. I am accordi of opinion that the defendant was entitled to determine the con by reason of the past breaches of the plaintiff. But further, apart from any right of the defendant to determ the contract on account of breach of a condition in the past, t defendant was entitled to determine the contract on another gi

tract only upon the basis of the plaintiff's construction of the cont!

that is, by giving an average daily eight hours' display of the ro

boards. _ Probably this was the only way in which the plaintiff could perform the contract, because the plaintiff did not control the rum of the trams. The position, therefore, was that the plaintiff h given the defendant the right to believe that the contract not be performed according to its true construction. The cit stances were such as to justify the inference that breaches suc those which had already been committed would be committed

the future. The plaintiff, therefore, must be regarded as renouncing the contract which it had in fact made, even though it was contended by'the plaintiff that the contract would be properly performed: See Withers v. Reynolds (1); Martin v. Stout (2); Miullar's Karri & Jarrah Co. (1902) v. Weddel Turner & Co. (3); Morris v. Baron & Co. (4). The defendant can justify the repudiation of the contract upon any ground which in fact existed whether or not such a ground was previously relied upon by him (Shepherd v. Felt and Textiles of Australia Ltd. (5) ).

It follows that the defendant, having rightfully determined the contract, was entitled to claim damages for the non-performance by the plaintiff of the contract for the third season. Damages claimed in respect of that season must depend upon an estimate of the difference between what the defendant was bound to pay for that season, namely, £20 per week, and the benefit which the defen- dant would have obtained from the proper performance of the contract. That estimate would measure the loss suffered by the defendant by reason of non-performance of the contract. But no evidence whatever was given with respect to this subject, and there is therefore no basis upon which other than nominal damages can be estimated in respect of the third season. Accordingly in the cross-action there should be judgment for the defendant for one shilling as nominal damages, without costs.

The only question which remains outstanding is the question whether the plaintiff was entitled to amend the summons so as to claim unliquidated damages in respect of the repudiation of the contract by the defendant. As already pointed out, however, this question does not arise if the defendant was entitled to determine the contract. As in my opinion the defendant was so entitled it is not necessary to consider the question.

I think that the appeal should be allowed, the judgment of the Supreme Court set aside, and the claim of the plaintiff dismissed ; the judgment for the defendant on the cross-action should stand except as to the amount of damages, which should be reduced to one shilling. The defendant is entitled to the costs of the action

(1) (1881) 2 B. & Ad. 882; 109 E.R. (3) (1908) 100 L.T. 128, 1370. (4) (1918) A.C. 1, at p. 41. (2) (1925) A.C. 359, at pp. 363, 364. (5) (1931) 45 C.LLR. 359.

H.C or A. and of the appeal to this court. There should be no order ps the costs of the cross-action or as to the costs of the appeal t

Lexa Park Supreme Court, in which, in the opinio® of this court, the plai it oe Tramways 7 a enaas Ricu J. The foundation of this case is the meaning to be att

buted to two documents to which the parties committed their tions. The subject is that of advertising upon trams by mean boards affixed thereto. Whatever skill may be claimed by h parties or one of them in the composition of clear and telling

tisements, it does not extend to the lucid exposition of their tractual intentions, Although their infelicity of style is accompani by some lack of attention to grammar I think that the only sal course is to attribute that intention which the prima-facie grat matical meaning of their language expresses. The contractual on which the case turns is expressed in the following terms: ")

guarantee that these boards will be on the tracks at least 8 h per day throughout your season." It is a bold undertaking to der the possibility of any words bearing a secondary meaning and 1 not prepared to say that they are incapable of referring to the a performance of trams to which advertising boards were We live in a day when statistics and averages and other unre!

realists as advertising agents and amusement proprietors. conceivable that the parties were thinking in such terms, my mind the natural meaning of their language is that the adve

context or subject matter to give another meaning I prefer to a to this. A consideration of context and subject matter disclo

not unusual number of doubts and difficulties as to what the par did mean, but provides me with no satisfactory evidence that had any definite meaning other than that which the natural const tion of the words expresses. I, therefore, hold that the unde' of Tramways Advertising Pty. Ltd. was that throughout the se

of Luna Park (N.S.W.) Ltd. each of the boards borne upon the roof of the tram would be seen upon the tracks for at least eight hours oneach day. This undertaking was not fulfilled and, in my opinion, the Tramways Advertising Pty. Ltd. was not entitled to recover

the amount it claimed under the contract. I agree, however, with

the view taken by the Full Court and all my colleagues that the Avensis

amount of £300 awarded to Luna Park (N.S.W.) Ltd. for breach of this undertaking is not supported by the facts proved.

I think that the appeal should be allowed and the judgment of the Full Court varied by discharging so much thereof as enters judgment for the plaintiff upon the plaintiff's claim and by entering judgment thereon for the defendant. I think there should be no order for costs of the appeal from the District Court to the Supreme Court but the respondent should pay the costs of the appeal to this court.

Dixon J. This litigation depends primarily upon the meaning to be placed upon a contract composed of a letter and a printed form, which is neither well expressed nor altogether appropriate for the particular purpose of the parties. The substance of the contract is that the respondent, which is an advertising agent, agrees with the appellant, which is described as an amusement proprietor, that in consideration of a weekly sum of £20 payable monthly, it will for fifty-two weeks, distributed over the three summer seasons beginning in December 1935 and ending in the earlier part of 1938, cause a specified number and kind of roof boards advertising the appellant's amusements to be carried upon tram-cars running upon certain lines or routes in Sydney. The chief point of dispute about the meaning of the contract arises upon a clause or provision describing the amount of time which the roof boards, or the trams carrying them, are to appear upon the tramway tracks. The letter formed part of the negotiations resulting in the contract which the printed document was intended to embody. It bears a memorandum signed by the parties stating that it is part and parcel of the contract. The letter itself contains a statement that the average time that each car is on the track is eight hours a day ; but at the foot of the letter another memorandum or note has been added by which a more explicit

< throughout your season." The respondent interprets this

undertaking is given by the respondent. It runs: " We guaran that these boards will be on the tracks at least eight hours per d

meaning that, if an average is taken over each season of the runn time of all cars bearing the roof boards, it should be found to wor out at not less than eight hoursa day a car. The appellant inte it to mean that on every day during a season every car b roof board must spend not less than eight hours in running the tracks. E. In the Supreme Court Jordan O.J., with whom Davidson J concurred, gave the provision an intermediate meaning. He te it as requiring a daily running time of eight hours upon an avera; only and not an actual running time of that duration upon each nd every day of a season, but he did not interpret the clause as allowin, the average to be taken over all the tram-cars collectively. ing to his Honour's interpretation, the average of each car be a roof board must be taken separately over the season and work out at an average running time of eight hours a day. In th interpretation I agree. The reasons for it, a statement of whicl contained in his Honour's judgment, may be summarized as follows

(1) The form of expression adopted in the memorandum or 1 t saying that the boards would be on the tracks eight hours per da throughout the season, appears to me to be capable of meaning tha the duration of the appearance of the boards upon the tracks ld amount upon an average to eight hours a day. (2) The body of the letter represents that the average that each car is on the trad is eight hours per day, and that form of statement (a) implies sometimes a car is more and sometimes less time upon the tracks but (b) limits the average to the performance of each separate © and does not admit of taking the average over all the cars. (3) ' Th respondent which gave the guarantee or promise is not in cont of the tramways, and upon the face of the documents it plainly appears that what it is purporting to do is to warrant the tin during which, in the usual course of management of the upon the routes concerned, the advertisements will be exhibite the public streets. During a season the withdrawal for a day 0 so of one at least of a number of tram-cars is almost certain tol

found necessary. If routine examination and repair do not require it, some accident or mishap is almost sure to do so. To make the guarantee absolute in respect of every day for every car appears an unreasonable construction. (4) At the end of the 1935-to-1936 season the respondent made it clear to the appellant that the perform- ance or fulfilment it was giving was according to an average only, and the appellant took no objection to the assumption thus impliedly made as to the meaning of the clause. (5) The addition to the letter of the memorandum or note is sufficiently explained by a desire on the part of the appellant for an explicit promise or guarantee of what had only been stated as a matter of information, viz., the average time on the tracks of a tram-car bearing a board.

The three interpretations which I have already mentioned do not exhaust the meanings to which the contract is open in reference to the duration of time for the appearance of the boards in the streets. A fourth view makes the respondent promise that on each and every day during a season an average taken over all the trams carrying boards will work out at not less than eight daily hours a tram.

Nicholas J., who dissented, mentioned a fifth meaning as suggested, but only to reject it. The suggestion was that the provision required the display of the roof boards for an average period of eight hours a day during a season, but so that some portion of every day during the season must be included. Nicholas J. himself adopted the appellant's interpretation of the contract, an interpretation which he based upon the primary meaning of the language used in the added memorandum or note expressing the obligation.

Tn choosing among the various meanings proposed, it is impossible to do more than attach that interpretation to the contract which to the individual mind appears most favoured by the evidential con- siderations comprised under the three heads of grammatical construc- tion, context and subject matter, when brought into combination. My own choice may be the result of giving greater weight to context and subject matter than to the exact grammatical construction which the language of the clause, isolated from other considerations, might seem presumptively to bear. But we are not dealing with phrases or expressions of a fixed prima-facie import. The clause is inartificial, an unstudied production in ordinary words. "A word

is not a crystal, transparent and unchanged ; it is the skin living thought and may vary greatly in colour and content acco to the circumstances and the time in which it is used" (Towne
Eisner (1), per Holmes J.). It may be suspected that in the case no in hand the living thought was itself incomplete and ill-consider But the actual intention of the parties and the implications wl are involved must be discovered from the entirety of the writi The verbal skin in which the particular meaning has been e does not appear to me incapable of containing either of the two ri intentions which respectively commended themselves to Jordan © and Davidson J., on the one hand, and to Nicholas J. on the othe That is to say, as I have already stated, I think that, as a matter of ordinary English, the language of the memorandum or note a to the letter is susceptible of the construction which the majo1 of the Supreme Court have placed upon it and the weight of probability favours that construction as the true meaning of th parties. s

Once this meaning is placed upon the contract, the decision the appeal rests upon matters of evidence and of procedure.

The respondent sued by a default summons in the District to recover payment for one month from 6th January to 5th Februa 1938 at £20 a week. But it gave no evidence that, constru the manner stated, the guarantee contained in the added memor: dum or note had been fulfilled or complied with. On the other h the appellant, who was defendant in the action, filed no notice 0 defence which denied performance or compliance either simplic or according to the meaning I have placed upon the provision. -

Sec. 69 (2) of the District Courts Act 1912 (N.S.W.) enacts that a

compliance. The defences which it did file placed upon the contrat what I may call the appellant's construction, or a cons ' analogous thereto, and stated a discharge by breach, by rea which, before the period in respect of which the respondent s the appellant had refused to be further bound by the cont Owing to an amendment the reason for which has not been expl: one of these defences somewhat lost its form and significance.

(1) (1918) 245 U.S, 418, at p. 425; 62 Law. Ed. 372, at p. 376,

By way of cross-action, the appellant sought to recover damages from the respondent for non-performance of the contract. Again the appellant assigned to the contract the interpretation which I have called its, or one analogous to it. Upon the cross-action it recovered £300 damages ; but I agree in the view taken by all the judges of the Supreme Court that, even adopting that interpretation, the assessment of damages could not stand, for the reason that the extent and character of the breach was not proved and no evidence of actual damage was given.

In this state of affairs, the respondent in strictness is entitled, assuming the correctness of the interpretation I have adopted, to judgment upon the claim and upon the cross-action. But it seems highly probable that it has not performed the contract so interpreted, or at all events that, if it has done so, it is only by chance and it would be difficult for it to establish performance.

The trial in the District Court was unsatisfactory. When the respondent proposed to go into evidence of performance on its part, that is, as I understand it, performance according to the meaning which the respondent placed upon the contract, its evidence was rejected on quite untenable grounds.

It would, I think, have been open to the Supreme Court to direct a new trial, giving the appellant leave under secs. 68, 69, 75 (2) and 96 of the District Courts Act to file fresh defences in lieu of those of which it gave notice and giving the respondent leave to amend.

Although on the view I take I would not have substituted such an order for that actually made by the Supreme Court, I would not have been prepared in the circumstances to dissent from an order for a new trial upon such terms, if such an order had found favour. As it is, I think the appeal should simply be dismissed.

McTiernan J. In my opinion the appeal should be allowed, and the verdict given for the appellant in the District Court restored, the verdict in that court for the appellant in the cross-action for £300 set aside, and a verdict for nominal damages in the sum of Is. be entered for the defendant in lieu of that verdict.

In my opinion the correct construction of the contract is that the respondent undertook that the roof boards would be displayed for at least eight hours during each day of each season. That construction is the one which most closely follows the words of the contract itself. It was admitted on behalf of the respondent that

Lowa Park (N.S.W.) Lr. Y Tramways ADVERTISING Pry. Lr.

each board was not on the road for eight hours each day. Moreo it was proved that early in September 1937, when the appell third season was approaching, its representative told the dent's representative that unless it could give better service than i had given in the past the appellant would not continue the ser any longer. and that the respondent's representative said would not be possible for it to give better service than it had in past. The appellant's representative is proved to have said what the respondent had done was not good enough. This evider shows that the respondent repudiated its obligation under th tract to display the roof boards for at least eight hours durin, day of the season. I agree with the Chief Justice that this v essential condition of the contract. Its repudiation justified appellant in terminating the contract. The termination of contract effectively barred the respondent from claiming a payment for any advertising which did not fulfil the above tioned conditions of the contract. It follows that the respon action should fail.

The appellant in its turn claimed damages in a cross-action { breach of the condition. It was admitted that there was a bi of the condition. But there is no evidence of the extent of breach. It might, so far as the evidence goes, have depri appellant of much or an insignificant amount of the advertisen which the respondent had on the true construction of the conditi promised. The verdict on the cross-action assessing damages f the loss of advertising at £300 should not, in my opinion, stat The evidence does not justify a verdict in the cross-action for 1 than nominal damages.

Appeal allowed with costs. Order of the Su Court discharged. Judgment for defe with costs in the action restored. J' for defendant in the cross-action set a judgment entered for defendant therein , one shilling without costs. No order costs of appeal to the Supreme Court. -

Solicitors for the appellant, Primrose & Primrose. Solicitor for the respondent, H. N. Chippendall.

At a glance

Court

Decision date

Before

Source

Judgment (161 paragraphs)