Ray v Davies [1909] HCA 51

Ray v Davies [1909] HCA 51 - HCA 1909 case summary — Zoe

[13]

her in connection with the mortgage, and refused to compli until the amount was paid. The vendors thereupon declared their intention to rescind the contract, and issued a writ of eiectment against the purchaser, to eject her from the land the subject matter of the contract. The purchaser brought this suit to have the vendors restrained by injunction from proceeding with the - action of ejectment and to have it declared that the vendors were not entitled to rescind, and claiming specific performance of the contract. The vendors in their statement of defence set up that the written contract did not represent the real agreement between the parties, but that there was a term verbally agreed upon providing that, in the event of the vendors procuring at their own expense a loan to the purchaser upon mortgage over the - land sold of a sum sufficient to pay them the balance of the purchase money after payment of the deposit, and undertaking to pay one half the costs of discharging the mortgage when it should be discharged, the mortgage to provide for payment of - interest at 5 per cent. per annum and the repayment of principal and interest by weekly instalments payable quarterly, the - purchaser would pay the balance of the purchase money - immediately upon receiving the loan upon the mortgage and that, if the purchaser failed to comply with the terms of this agree- ment, all moneys, &c., paid on account of the purchase should be _ absolutely forfeited and the vendors should have power to resell - the land, and it was alleged that this agreement was not reduced to writing nor was there any note or memorandum sufficient to satisfy sec. 4 of the Statute of Frauds. 1t was also denied that the payment of deposit or entry into possession or payment of instalments was made in pursuance of the agreement, and it was alleged that the vendors had so far as they were able fulfilled - the agreement on their part and were ready and willing to complete in accordance with the agreement.

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meaning, ae The contention for the defendants is, first, that it imposed an obligation on the part of the plaintiff to execute a mortgage if the defendants could procure anybody to lend the money. If - that is the true construction, the defendants might, I suppose, procure the loan at any time during the currency of the agreed period of 18 years. I will assume that there is some such obliga- - tion imposed by implication. What, then, is the substance of the contract? First of all, an absolute agreement to which effect is to c be given by immediate delivery of possession. Then for a period - indefinite in time there is an obligation on the part of the purchaser to execute a mortgage if its terms are in accordance with the - contract. It is impossible to say that the obligation to execute a - mortgage at some time indefinitely subsequent to the obligation - of the vendors to put the purchaser in possession is a condition precedent to the right to have possession, No rule that has : ever been laid down for the interpretation of contracts would - justify holding these to be mutually dependent covenants, so that a wrongful refusal by one party after five years to fulfil one covenant would entitle the other party to re-open what had been completed five years before. It would not be so at law, and itis - not suggested that equity would apply a different rule. It - follows that the only remedy that the defendants could have if - the plaintiff wrongly refused to execute a mortgage would be a claim for damages. They might be large or they might be - very small. Whether they are entitled to any depends, first of all, upon the language of the contract, and secondly, on whether - the plaintiff has broken it. Assuming that the plaintiff did - break it and ought to have executed the mortgage, that is not a sufficient reason why she should not get specific performance of the contract on paying compensation. That was a matter for which the defendants might have been compensated if they had put it forward by counterclaim. If they had done so the whole matter would have been disposed of in the suit. Or they might possibly have obtained compensation by an action for damages. - Regarded from any point of view it is not a ground for prevent- ing the Court from granting discretionary relief. 2

[42]

construe it according to its terms. Now the first condition is Bay that a deposit of £100 is to be paid on execution of the contract he and the balance of the purchase money, according to the first and second conditions, in a specitied manner at specified times, £575 to be paid by quarterly instalments at the rate of twelve shillings a week, the first payment to be made on the day specified. Then the purchaser is to pay interest on the balance at 5 per cent. by four quarterly instalments on the dates mentioned. As between the vendors and the purchaser that represents the terms of the contract. We can see from the document that the purchaser is not willing or not in a position to pay the whole purchase money at once, and the contract gives her about 18} years to pay it off In paragraph 4 there was a provision for the benefit of the vendor in these words: - "If the vendors arrange a mortgage for the balance of purchase money owing by the purchaser on the terms hereinbefore contained as to rate of interest," that is 5 per cent., "and. time and manner of payment of principal and interest," that is upon 4th June and the other months mentioned in each year at 12s per week, "such mortgage to be for a term of not less than three years," it may be for any longer term, "the vendors agree to pay the costs of such mortgage and also half the costs of the discharge of the said mortgage." I take it that you have to give effect to every part of that clause and not to allow one part to outweigh another if you can possibly help it, unless there is some absolute inconsistency, some necessary inconsistency, between the different parts of the document. Now there is no inconsistency that I can see in having a mortgage of not less than three years, and mentioning the time and manner of payment of the unpaid purchase money. It may be for the whole unexpired time over which the payments are to be distributed, but it is provided that it is not to be for less than three years. Therefore I can see no reason for acceleration of payment of the purchase money at all if that became material. There is not in the clause any express provision that the purchaser shall execute a mortgage, but there

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Judgment (57 paragraphs)