Court of Appeal (Qld)|2006-11-03|Before: McMurdo P, Holmes JA and Cullinane J, Separate reasons for judgment of each member of the Court, each concurring, as to the order made
McMurdo P, Holmes JA and Cullinane J, Separate reasons for judgment of each member of the Court, each concurring, as to the order made
Catchwords
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND
INTERPRETATION OF CONTRACTS - where dispute arose over an agreement
to develop
land between appellant investor and respondent developer - whether a party can
Source
Original judgment source is linked above.
Catchwords
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION ANDINTERPRETATION OF CONTRACTS - where dispute arose over an agreementto developland between appellant investor and respondent developer - whether a party cantake advantage of its own non-compliancewith a contract - whether principle inMackay v Dick applies - whether offer of finance conditions related toformation of the contract to provide finance or to its performance - whetherthese conditions satisfied the relevant clause of the contract - whethernon-compliance with clause 8.2 automatically terminatedthe contract - whetherprinciple in Suttor v Gundowda Pty Ltd appliesAlghusseinEstablishment v Eton College [1988] 1WLR 587, citedDoe d Bryan vBancks (1821) 4 B & ALD 401106 ER 984, citedElectronicIndustries Ltd v David Jones Ltd (1954) 91 CLR 288, consideredGangev Sullivan [1966] HCA 55(1966) 116 CLR 418, consideredHavenbar Pty Ltd vButterfield (1974) 133 CLR 449, consideredJackson Nominees Pty Ltd v
Hanson Building Products Pty Ltd [2006]
QCA 126
Appeal No 6093 of 2005, 21 April 2006, consideredM K &
J A Roche Pty Ltd & Ors v Metro Edgley Pty Ltd & Anor [2005]
NSWCA 39, citedMackay v Dick & Anor (1881) 6 App Cas 251,
consideredNew Zealand Shipping Co Ltd v Société des
Ateliers et Chantiers de France [1919] AC 1, citedRede v Farr
[1817] EngR 293
(1817) 6 M & S 121
105 ER 1188, citedRudi's Enterprises Pty Ltd
& Anor v Jay & Ors (1987) 10 NSWLR 568, citedSecured Income
Real Estate (Australia) Ltd v Saint Martins Investments Pty Ltd [1979] HCA 51
(1979) 144
CLR 596, cited
Suttor v Gundowda Pty Ltd [1950] HCA 35
(1950) 81 CLR 418, considered
Judgment (93 paragraphs)
[1]
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - where dispute arose over an agreement to develop land between appellant investor and respondent developer - whether a party can take advantage of its own non-compliance with a contract - whether principle in Mackay v Dick applies - whether offer of finance conditions related to formation of the contract to provide finance or to its performance - whether these conditions satisfied the relevant clause of the contract - whether non-compliance with clause 8.2 automatically terminated the contract - whether principle in Suttor v Gundowda Pty Ltd applies
[2]
Alghussein Establishment v Eton College [1988] 1WLR 587, cited
A J H Morris QC, with I A Erskine, for the appellant
[16]
D J S Jackson QC, with J K Meredith, for the respondent
[17]
[1] McMURDO P: I agree with Cullinane J's reasons for dismissing the appeal with costs to be assessed.
[18]
[2] HOLMES JA: I agree with the reasons for judgment of Cullinane J and with the order proposed.
[19]
[3] CULLINANE J: The appellant appeals against a judgment in favour of the respondent directing it to pay to the respondent such amount as is found due by an expert appointed for that purpose by the court.
[20]
[4] The dispute arose out of an agreement between the parties to develop certain land on the Sunshine Coast. The purpose of the expert's enquiry was to establish the amount due by the appellant to the respondent under what is described as an equalisation clause (clause 8.1) in the agreement. Clause 8.1 appears hereunder.
[21]
[5] The appellant is an investor and the respondent a developer.
[22]
[7] The lands which were developed as part of stage 1 were not able to be profitably sold and the venture is now at an end.
[23]
[8] The grounds of appeal relate to a number of questions of construction of clause 8 of the agreement entered into between the parties.
[24]
[9] Clause 8 of the agreement provided as follows:
[25]
"8. Equalisation of Contributions
8.1 Subject to satisfaction of the conditions contained in Sub-Clause 2, Mulherin shall pay to the Owner the sum of $400,000.00 in order to equalise the capital contribution of the Parties to the Agreement. The Owner agrees to defer payment required under this Clause so as to enable Mulherin to make the payment from repayment of the Advance. Mulherin agrees that all funds payable to him by way of repayment of the Advance shall instead be paid to the Owner to satisfy the payment required by this Clause. Mulherin shall authorise the Project financier to make payments direct to the Owner in order to help give effect to this Clause.
8.2 Mulherin shall not be required to make the capital contribution referred to in Sub-Clause 1 until such time as the following conditions have been met:-
[26]
(a) The Management Committee receives a copy of an offer of finance produced by Ashe Morgan Winthrop, Finance Brokers, or any other finance broker or financier for an amount sufficient to facilitate the carrying out of the Project being an amount sufficient to pay all the Project Costs and any other costs or expenses incurred in carrying out the Project and the terms of that finance approval being accepted by the Management Committee. If the finance offer is subject to the sale of a certain specified number of Developed Lots in the Project, then this condition is not satisfied until those Developed Lots are sold as specified in the finance offer.
(b) The Management Committee is furnished with a copy of a valuation of the unimproved Land of $1,100,000.00-$1,250,000.00 from a respected and recognised valuation company;
(c) The Management Committee is furnished with a detailed marketing plan for the sale of the Developed Lots on an off the plan basis to third party buyers and that marketing plan being accepted by the Management Committee;
(d) The Management Committee is furnished with a budget detailing all the anticipated costs of carrying out the Project and such budget being accepted by the Management Committee ("the Project Budget").
[27]
8.3 For the purposes of Sub-Clauses 2(a), (c) and (d), the Parties shall act in the utmost good faith (as contemplated by Clause 36) in determining their acceptance or otherwise of the terms of the finance approval, the marketing plan and the Project Budget. The Parties shall not unreasonably withhold their acceptance. If in the opinion of either Party, the other Party is unreasonably withholding its acceptance then the matter shall be referred to expert determination in accordance with Clause 34.
8.4 If, within 12 months from the date of execution of this Agreement, the requirements of Sub-Clause 2(a) to (d) have not been fulfilled, then this Agreement shall be at an end. In those circumstances, all capital contributions made by Mulherin shall be deemed to be an advance by Mulherin to the Owner together with the Advance already made under Clause 7. The total amounts advanced shall be secured by the Mortgage contemplated by Clause 23. The advance shall be for a period of 9 months from the date of this Agreement coming to an end and shall accrue interest at a rate which is 2% above the Commonwealth Bank of Australia 90 day bill rate. For avoidance of doubt, the Owner shall be required to repay the advance together with any interest accrued thereon within nine (9) months from the Agreement coming to an end.
8.5 The contribution of capital made in accordance with this Clause shall form part of the capital contribution contemplated by Clause 4."
[28]
[10] For the appellant to succeed on this appeal it will be necessary for it to not only satisfy this Court that the learned trial judge erred in his construction of at least one of two points of construction of clause 8.2(a) on which the appellant failed, but also to succeed on the effect of clause 8.4, something to which I will return later.
[29]
[11] The first of the two issues of construction upon which the appellant failed relating to clause 8.2(a) arose out of the failure of a management committee to consider an offer of finance as provided for by the clause. The conduct of the project was to be managed by the management committee (see clause 22.1).
[30]
[12] It was common ground that no meeting of the management committee was held which received a copy of the offer of finance from the financier as countenanced by the clause.
[31]
[13] The issue was whether in these circumstances clause 8.2(a) was not satisfied and thus clause 8.4 operated.
[32]
[14] Either party could, pursuant to clause 22.5 of the agreement, call a meeting of the management committee.
[33]
[15] His Honour disposed of this issue upon the principle in Mackay v Dick(1881) 6 App Cas 251.
[34]
[16] In that case Lord Blackburn said at page 263:
[35]
"... as a general rule, ... where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances."
[36]
[17] His Honour concluded that since either party could have called a meeting of the management committee and had failed to do so, this principle prevented the appellant from terminating the contract on this basis.
[37]
[18] It is worth noting that clause 22.10 (which is concerned with the management committee) provides that all decisions of the management committee must be unanimous. Provision is made for a mechanism to resolve a difference of opinion in certain circumstances. The committee comprised one representative of each party (clause 22.3).
[38]
[19] In Secured Income Real Estate (Australia) Ltd v Saint Martins Investments Pty Ltd[1979] HCA 51; (1979) 144 CLR 596 Mason J (as he then was) elaborated upon the principle in Mackay v Dick at page 607:
[39]
"It is not to be thought that this rule of construction is confined to the imposition of an obligation on one contracting party to co-operate in doing all that is necessary to be done for the performance by the other party of his obligations under the contract. As Griffiths CJ said in Butt v M'Donald:
[40]
'It is a general rule applicable to every contract that each party agrees, by implication, to do all such things as are necessary on his part to enable the other party to have the benefit of the contract.'"
[41]
[20] It is difficult to see how in the present case the failure of the appellant to call a meeting of the management committee meets the test set out above. Nothing which the appellant did or failed to do made it impossible for the respondent to satisfy this aspect of clause 8.2. It could have called a meeting of the management committee itself.
[42]
[21] Nor was the calling of a meeting by the appellant necessary to enable the respondent to have the benefit of the contract.
[43]
[22] Whatever the precise nature of the principle is (and some authorities suggest that it is really a matter of what the parties' intention is presumed to be: see Electronic Industries Ltd v David Jones Ltd(1954) 91 CLR 288 and Jackson Nominees Pty Ltd v Hanson Building Products Pty Ltd[2006] QCA 126), I do not think that the respondent can rely upon the appellant's failure to call a meeting of the management committee in this case as constituting a breach of his implied obligation to the respondent arising from the application of this principle.
[44]
[23] Whilst the respondent in argument on this issue relied upon Mackay v Dick and his Honour referred to this judgment in his reasons, it seems to me that in dealing with this matter he invoked a broader principle, namely that a party cannot take advantage of its own non-compliance with the contract.
[45]
[24] This principle has the support of high authority and is of long standing and predates Mackay v Dick. In Alghussein Establishment v Eton College[1988] 1 WLR 587 Lord Jauncey of Tullichettle (with whom the other members of the House of Lords agreed) surveyed the authorities on this subject. The earliest cases to which His Lordship referred were Rede v Farr[1817] EngR 293; (1817) 6 M & S 121; 105 ER 1188 and Doe d Bryan v Bancks(1821) 4 B & ALD 401; 106 ER 984. It is noteworthy that Mackay v Dick was not amongst the cases referred to. See also the judgment of the Privy Council in New Zealand Shipping Co Ltd v Société des Ateliers et Chantiers de France[1919] AC 1.
[46]
[25] In Gange v Sullivan[1966] HCA 55; (1966) 116 CLR 418 the High Court dealt with the effect of a clause in a contract which provided that in a certain eventuality the contract was "at an end" (the principle is referred to in these reasons when dealing with the effect of clause 8.4 in this case) and said on this subject at page 441 (per Taylor, Menzies and Owen JJ):
[47]
"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." (emphasis added)
[48]
[26] In the present case the conduct of the project was vested in the management committee. Each party provided a member of the management committee and each had the power to call a meeting of the management committee.
[49]
[27] The management committee was central to the undertaking the parties had agreed upon. To function, it was necessary that the management committee meet.
[50]
[28] By virtue of clause 17 the parties had imposed upon them the obligation to arrange a development loan. Clause 8.3 required the parties to act in the utmost good faith in determining their acceptance or otherwise of the terms of the finance approval. As well as being subject to an implied obligation to do all things necessary to give effect to the contract, each of those obligations necessarily carried with it the obligation to call a management committee meeting for the purposes of considering the offer of finance and if acceptable to approve it so as to enable the undertaking to proceed.
[51]
[29] In my view the circumstances here meet the language used by the High Court in Gange v Sullivan. The non-compliance relied upon is the failure to hold a management committee meeting as provided for in clause 8.2(a) to receive a copy of the offer of finance. Such non-compliance arises because neither party called a management committee meeting. Had either done so there would have been no such non-compliance. Each of the parties therefore must be taken to have contributed to the non-compliance.
[52]
[30] In the above circumstances neither party is entitled to rely upon such non-compliance.
[53]
[31] In my view the conclusion which his Honour reached in relation to this issue is correct.
[54]
[32] The second question of construction related also to clause 8.2(a) and in particular his Honour's findings that clause 8.2 had been satisfied insofar as the adequacy of the offer of finance is concerned.
[55]
[33] The terms of the offer of finance are set out in paragraph 15 of the reasons for judgment. The conditions upon which finance was offered were:
[56]
"'Facility Amount: Stage 1: $3,728,000 and Stage 2: $3,102,000
...
All advances would be made as and when [Capital Finance] considers fit. Funds will generally be made available in accordance with the attached ... table.
Repayment Date: The Facility must be repaid in full 24 months from the date the Facility is first provided.
Conditions Precedent: Advances will only be provided when the following conditions are satisfied.
[57]
(a) The project auditor is to be selected and instructed by [Capital Finance] ...
(b) [Capital Finance's] solicitors are to be provided with copies of exchanged contracts with an aggregate sale price of $2,337,000 before any funding and $5,306,000 before the commencement of any Stage 2 funding ... The aggregate value of sales to non-Australian resident purchasers must not exceed $250,000 in either stage. All contracts must be to bona fide arms length purchasers, must provide for 10% deposits and be on terms satisfactory to [Capital Finance] and its solicitors.
[58]
(f) Fixed price building contract on terms ... satisfactory to [Capital Finance] for a price of not more than $3.249M for Stage 1 and $2.872M for Stage 2 ...
[59]
...
Ongoing Conditions: The following ongoing special conditions must be complied with throughout the term of the facility:
[60]
(a) A full set of development documentation must be provided ...
(b) The borrower must provide written authorisation for all draw-downs.
[61]
...
Loan Terms:
3. General Conditions ...: The Facility Amount will only be advanced when [Capital Finance] is prepared to do so and all matters relating to the Facility are to [Capital Finance's] satisfaction. ...'
Acceptance:
Despite anything else, [Capital Finance] reserves the right to withdraw from this transaction if this Facility Agreement is not accepted within 14 days from the date of this letter ..."
[62]
[34] It was common ground that sales of a total value of not less than $5,305,000 had not been achieved by the relevant date. Nor had those contracts which had been signed (which exceeded $2,337,000) been provided to the financier's solicitors by that date.
[63]
[35] His Honour concluded that the conditions (b) of the offer of finance were conditions not to the formation of the contract to provide finance but to its performance. He also found that clause 8.2(a) was not concerned with such conditions.
[64]
[36] The appellant challenges these findings arguing that however the conditions are characterised the fact is that the conditions imposed by the financier were not satisfied by the relevant date and thus no offer of finance in the relevant sense had been obtained. His Honour's approach, as the argument ran, failed to give any effect to the last sentence of clause 8.2(a).
[65]
[37] The reasons for the learned trial judge's conclusions on this subject appear at paragraphs 30 and 31:
[66]
"[30] The first is that the condition specified in cl 8.2 concerned matters which might be described as preliminary to the defendant's becoming a participant in the project. They were not concerned with whether or when the project should actually start. The defendant was to be satisfied that finance was available to complete the development; that the land had a certain minimum value; that there were detailed plans to sell the lots and that there was a budget for the development which indicated its profitability. These matters were all concerned with demonstrating whether or not the development was viable from the point of view of profitability. Their satisfaction determined whether the defendant became a participant in the project but did not commit the project to going ahead. The management committee was to decide whether there was an acceptable offer of finance. The 'conditions precedent to draw-down' contained in the offer of finance were not relevant to the management committee's enquiry for the purposes of cl 8.2(a). That clause was concerned with whether, by 13 January 2000, the plaintiff could obtain project finance, on acceptable terms. That required an offer of finance capable of acceptance. It did not require the advance of money by 13 January 2000. Acceptance of the offer was not conditional on a specified level of pre-sales.
[31] The second point concerns the terms of condition precedent (b) of Capital Finance's offer. It strongly suggests that funding would be made available to construct stage 1 of the project before $5,305,000 worth of contracts had been executed. It contemplated advances for stage one if a lesser value of pre-sales were achieved. It follows that there was a binding contract to lend money before the higher level of pre-sales had been achieved. The provision of funds was conditional upon a level of pre-sales, but funds would be advanced for stage one if, as had happened, contracts totalling in value more than $2,337,000 had been executed. I think the proper conclusion is that condition precedent (b) was not, and was not meant to be, a condition precedent to the acceptance of the offer of finance. The offer of finance, as has been mentioned, was one which required sufficient finance for the whole project. Condition precedent (b) would allow advances for stage one only of the project. It was aimed at something different to that which condition 8.2(a) was intended to achieve. I think it right that the conditions precedent were directed towards performance of the contract, not its formation."
[67]
[38] I think that his Honour's reasons for the conclusions he reached are convincing.
[68]
[39] The appellant's failure on these two points is sufficient to dispose of the appeal. However as a good deal of argument was advanced on either side as to the effect of clause 8.4 I propose to make some comments on this issue.
[69]
[40] For the appellant it was contended that the effect of clause 8.4 was to bring the contract to an end in the event of any non-compliance with clause 8.2(a) to (d) inclusive although in fact only non-compliance with clause 8.2(a) was relied upon.
[70]
[41] His Honour applying the principles found in cases such as Suttor v Gundowda Pty Ltd[1950] HCA 35; (1950) 81 CLR 418 and Gange v Sullivan concluded that notwithstanding the language of clause 8.4 the contract was in the event of such non-compliance voidable and not void and that in the events which happened here the appellant with full knowledge of the non-compliance alleged had elected to affirm the contract. His Honour found, and there was no dispute about this, that any non-compliance in relation to the offer of finance occurred without fault of either party. Since both had failed to call a management committee meeting neither could terminate on this ground.
[71]
[42] The oft-stated principle is found in the joint judgment of Latham CJ, Williams and Fullagar JJ in Suttor v Gundowda Pty Ltd at pages 440 - 441:
[72]
"In the second place, although cl. 12 in terms provides for an automatic avoidance of the contract on the occurrence of a specified event, that is (even if no agreement for an extension of time were made) by no means the end of the matter. The effect of contractual provisions of this character was discussed and explained in New Zealand Shipping Co Ltd v Société des Ateliers et Chantiers de France (1). Lord Atkinson said:- 'It is undoubtedly competent for the two parties to a contract to stipulate by a clause in it that the contract shall be void upon the happening of an event over which neither of the parties shall have any control, cannot bring about, prevent or retard. For instance, they may stipulate that if rain should fall on the thirtieth day after the date of the contract, the contract should be void. Then if rain did fall on that day the contract would be put to an end by this event, whether the parties so desire or not. Of course, they might during the currency of the contract rescind it and enter into a new one, or on its avoidance immediately enter into a new contract. But if the stipulation be that the contract shall be void on the happening of an event which one or either of them can by his own act or omission bring about, then the party, who by his own act or omission brings that event about, cannot be permitted either to insist upon the stipulation himself or to compel the other party, who is blameless, to insist upon it, because to permit the blameable party to do either would be to permit him to take advantage of his own wrong, in the one case directly, and in the other case indirectly in a roundabout way, but in either way putting an end to the contract.' (1).
Where the event in question is one which cannot occur without default on the part of one party to the contract, the position is clear. The provision is then construed as making the contract not void but voidable: only the party who is not in default can avoid it, and he may please himself whether he does so or not. In the present case the happening of the event (not obtaining the Treasurer's consent) may be brought about by failure on the part of either party to take certain necessary steps (provision of particulars by the vendor or making of application by the purchaser) to obtain the Treasurer's consent, or it may be brought about without any default on the part of either party. In fact, although there was some argument to the contrary, it was, we think, brought about without any default on the part of either party. Such a case is perhaps not quite so clear as the simpler case where the event cannot occur without default on one side or the other. But we are of opinion that the (2) requires the same construction to be given to the contract in both classes of case. The provision in question is to be construed as making the contract not void but voidable. The question of who may avoid it depends on what happens. If one party has by his default brought about the happening of the event, the other party alone has the option of avoiding the contract. If the event has happened without default on either side, then either party may avoid the contract. But neither need do so, and, if one party having a right to avoid it does not clearly exercise that right the other party may enforce the contract against him."
[73]
[43] The matter was revisited by the High Court in Gange v Sullivan. The relevant passage in the joint judgment of Taylor, Menzies and Owen JJ at 441 already appears in these reasons at paragraph 25.
[74]
[44] It was said that Gange v Sullivan represented a weakening of the principle in Suttor v Gundowda Pty Ltd. It may be accepted that a court will if the language is sufficiently explicit give effect to a clause bringing a contract to an end in the eventualities for which it provides. There is nonetheless a plain disposition to treat such a clause as rendering the contract voidable and not void.
[75]
[45] It should be noted that the High Court has more recently affirmed these principles in Havenbar Pty Ltd v Butterfield(1974) 133 CLR 449. The relevant clause in that case was virtually identical in its critical part with the clause in Suttor v Gundowda.
[76]
[46] The appellant relied upon two judgments of the Court of Appeal in New South Wales in which clauses were accepted as having the effect of bringing a contract to an end upon the occurrence of a stipulated event. These cases are Rudi's Enterprises Pty Ltd & Anor v Jay(1987) 10 NSWLR 568 and M K & J A Roche Pty Ltd & Ors v Metro Edgley Pty Ltd & Anor[2005] NSWCA 39.
[77]
[47] In the most recent of these the Court of Appeal has sought to attach a qualification (see paragraph 49 of these reasons) to the approach of the High Court which does not in my view find any support in the judgments of the High Court. We were told that leave to appeal was sought in this case but refused by the High Court. The relevant clause provided that the contract was deemed to be "automatically rescinded and of no force or effect" if the conditions were not satisfied by a nominated date.
[78]
[48] In Rudi's Enterprises Pty Ltd, Samuels JA expressed the view that the High Court in Suttor v Gundowda Pty Ltd did not intend to lay down a proposition that the parties could not stipulate for automatic termination of a contract except upon the occurrence of an event which lay beyond their control. His Honour saw no reason why provided the principle preventing a blameworthy party from taking advantage of his default is observed the parties cannot make such a provison and have it given effect to by the court.
[79]
[49] In M K & J A Roche Pty Ltd & Ors v Metro Edgley Pty Ltd & Anor, Hodgson JA with whom the other members of the court agreed said at paragraph 47:
[80]
"In my opinion, the Suttor principle of construction applies most powerfully if the invalidating event can occur only through a breach of contract by one or other party. The lesser the likelihood that the disabling event occur through the breach of one or other party, as distinct from some cause outside the control of the parties, the less powerfully does the principle apply."
[81]
[50] However, as I have said, I do not think this qualification finds any support in the judgments of the High Court. If this approach be valid then in the present case a number of the events for which clause 8.2 provides could have occurred with the default of one or both of the parties or without fault of either of the parties.
[82]
[51] The relevant portion of the clause under consideration here is in identical terms to the relevant portion of the clause considered in Gange v Sullivan and of a type which his Honour justifiably concluded has been construed in accordance with Suttor since the judgment in that case.
[83]
[52] The fact that his Honour thought that high authority bound him to the conclusion he reached in this case is therefore unsurprising.
[84]
[53] Whatever justification might have existed for reaching a different conclusion in the particular circumstances of the two Court of Appeal cases in New South Wales, no such justification, in my view, existed here.
[85]
[54] Nor in my view does the fact that the parties provide elsewhere in the agreement that one of the parties (or in one case both of the parties) had the right to determine the contract in a certain eventuality justify taking a different view.
[86]
[55] The appellant was of course well aware that there had been no management committee meeting called for the purposes of considering the offer of finance and in any case would not have been entitled to avoid the contract for non-compliance with this clause since both it and the respondent were in default in relation to this.
[87]
[56] His Honour went on to find that the appellant had made a binding election to affirm the agreement being fully aware of the alleged non-compliance with clause 8.2(a) so far as the conditions of finance were concerned.
[88]
[57] The actions which constituted the election on the part of the appellant were the making of some 28 additional advances of money towards the cost of completion of the project between October 2000 and October 2001 and the execution by the appellant of a deed of priority subordinating its rights as mortgagee to those of the financier as countenanced by clause 23.7 of the agreement.
[89]
[58] The appellant contended that the finding that it knew of the alleged non-compliances with clause 8.2(a) so far as the terms of finance were concerned was not open on the evidence. However I am satisfied there was evidence before the learned trial judge which justified such findings. See the affidavit of Quinn, the principal of the respondent, paragraphs 20 to 23 (pp 642 to 644 of the record) and the cross-examination of Mulherin, the principal of the appellant, at pages 100, 110, 111 and 115.
[90]
[59] The respondent has given a notice of contention raising an estoppel by convention in the event that the appellant succeeds in its argument that in the events that have happened the contract came to an end. Leave was granted to raise this matter, the notice having been given out of time.
[91]
[60] It is unnecessary in view of the above findings to say anything on this issue beyond observing that had the appellant succeeded there seems to be a strong case that the parties, aware of the non-compliance with clause 8.2(a) on which the appellant relies, elected to continue their relationship upon the basis that the agreement continued to bind them.
[92]
[61] The appellant also appealed against the finding of the learned trial judge that it had no interest in the land remaining after the stage 1 development but an agreement between the parties makes it unnecessary to consider this ground.
[93]
[62] I would dismiss the appeal with costs to be assessed.