Sargent v ASL Developments Ltd

High Court of Australia|1974-07-01|Before: Mason JJ, Stephen J, Mahoney J

High Court of Australia McTiernan A.C.J. Stephen and Mason JJ. Sargent v ASL Developments Ltd [1974] HCA 40

I agree substantially in the reasons for judgment of my brother Stephen. Accordingly I would dismiss these appeals.

The advent of town planning legislation and the control of land uses which it involves has meant that if sales of land are to be undertaken to the satisfaction of both vendor and purchaser the planning status of the land being sold must be known; attention must be paid to restrictions upon the use to which it may be put and to any disadvantages to which it may be otherwise subject because of the announced intentions of local planning and construction authorities. In New South Wales the position has been sought to be met by the inclusion in standard forms of contracts of sale of a clause concerned specifically with this question of the disclosure of such restrictions or burdens.

Unfortunately such provisions have given rise to much litigation due, in large measure, to the failure of those concerned with the drawing of contracts of sale to ensure that the contemplated machinery for disclosure is allowed to operate as it was intended. The standard forms contemplate the annexure to the contract of a certificate obtained from the local municipal council which will contain information about such matters. If contracts are prepared and exchanged without such a certificate being annexed then, in the absence of any appropriate amendment to the standard form of contract, the apparent object of this feature of the standard form miscarries and the effect upon the rights of the parties may be both doubtful and curious.

These three appeals are just such cases; their facts sufficiently appear in the reasons for judgment of my brother Mason. Two other appeals which have come before this Court and in which judgment is now to be given also arise out of a similar failure to annex the contemplated certificate; they give rise to problems similar to those encountered in the present cases and make it desirable that I should now state in some detail my conclusions concerning the consequences in law of the omission of such a certificate.

Two quite distinct questions arise. The first concerns the interpretation and effect of the relevant contract clause, numbered 16 in the 1965 edition of the standard form of contract. The second question only arises if, as I consider to be the case, that clause operated adversely to the present respondent by affording to the vendors a right of rescission because of the failure to have any certificate annexed to the contracts; this question is whether or not the vendors by their conduct thereafter lost their right to rescind.

The first question is exclusively a matter of construction; it has been the subject of decisions in the New South Wales Supreme Court, the leading case being that of Wolczyk v. Barr [1] . There the Court of Appeal Division held that, despite the failure to annex any certificate or make any appropriate amendment of the form of contract, cl. 16 nevertheless operated according to its terms so that if the subject land was in fact affected by, in that instance, interim development the right of rescission arose.

The learned primary judge, Mahoney J., applied the decision in Wolczyk v. Barr [1] and the appellants rely upon it, their complaint being that his Honour, having held that they acquired a right of rescission under cl. 16, also held that by their subsequent conduct they lost that right. It is the respondent which attacks Wolczyk v. Barr and it does so upon three grounds. First it contends that when to the printed contents of the 4th Sch. nothing is added, the certificate to which that schedule refers not being annexed, this is tantamount to a blank in that schedule, to the making of no statement at all as to any affecting of the land by any town planning; there is a non-statement rather than the statement of a negative. Although such a situation might, it is said, amount to non-disclosure it cannot amount to a statement and it is to "stated" rather than to "disclosed" that the relevant part of cl. 16 refers.

I reject this submission; had the 4th Sch. been wholly blank the terms of cl. 16, that the property was affected "otherwise than as stated in" that schedule, would, in my view, convey that the property was entirely unaffected, just as the appearance of scheduled affecting matters would constitute a statement of what did affect the property. No different result flows from the schedule's printed reference to a certificate; if none be annexed the result is a situation in which any affecting town planning provision will be one by which the land is affected "otherwise than as stated " This would clearly be the result had that phrase been followed by words such as ", if stated at all"; the absence of such words does not, I think, affect the meaning.

The second ground taken by the respondent is to treat cl. 16 as concerned with instances of common mistake because it confers the right of rescission upon both parties; then it is said that the omission of the certificate amounts to a failure to state the basis of the parties' common belief and in its absence the clause has no operation. Whatever may have been the reason for the granting of a right of rescission to the vendor as well as to the purchaser I see no reason for attributing to cl. 16 any operation other than that which its plain meaning calls for; it permits of rescission if the land be affected otherwise than as stated in the schedule so that, so long as the clause is not struck out of the contract, a failure to state any affecting matters in the schedule will permit of rescission whenever in fact the land is relevantly affected.

The respondent's final submission in its attack upon Wolczyk v. Barr [2] treats the affixing of a certificate as a mere ministerial act, the omission of which can be made good by deeming an appropriate certificate to have in fact been annexed to the contract. Because certificates originate with a disinterested third party, the council, their contents are not, it is said, debatable; the parties have agreed that that which the council certifies shall be the subject of the annexure and where, as here, no question of recent change in zoning arises the missing certificate may be deemed to have in fact been annexed.

This misconceives, I think, the function of the clause, which is to set out in the contract the planning status of the land so that the contracting parties may agree upon its sale and purchase on the footing of the status thus revealed; there is to be an agreed, disclosed statement of any affecting of the land by planning provisions, anything not so stated giving rise to a right of rescission. Fundamental to this concept is that the parties should have before them, when executing the contract, an agreed statement of planning status, which of course may indicate the total absence of all planning. This is a quite different concept from that which the respondent's contention would achieve, wherein the parties, perhaps in ignorance of planning status, would leave to a third party's certificate the determination of planning status. Clause 16 aims at a statement of the basis upon which the parties contract and inherent in it is the element of knowledge, at the time of contract, of what is that basis; to leave that to the unknown determination of the council radically alters the concept fundamental to the clause. The case of Bosaid v. Andry [3] , relied upon by the respondent in this connexion, is a very different case and does not appear to me to lend any support to the contention.

In my view the decision of Wolczyk v. Barr [4] stands unaffected and unless distinguishable ought to be followed. It cannot, I think, be distinguished on the particular facts of the present appeals. It was sought to do so upon the ground that in these three appeals the three rescinding vendors had either direct or imputed knowledge of the zoning of their land at the date of contract. It does not in fact appear what was the relevant situation in Wolczyk v. Barr but it is said that the opening words of cl. 16 - "Should it be established that " - render the clause inapplicable where a party knows before contract what is the correct planning status of the land. This phrase, so it is said, contemplates a case in which at some time after the date of contract it is learned for the first time that the property is relevantly affected in a manner not disclosed in the 4th Sch.; where a vendor knows all along that the property is so affected nothing, it is said, has been "established" and cl. 16 never begins to operate.

This contention has obvious attractions; it would prevent the clause from being employed in the curious circumstances of which the vendors have availed themselves, circumstances which are not likely to have been contemplated by the framer of the clause. Nevertheless the contention, in my view, fails. "Should it be established prior to completion" means, in my view, no more than "Should it be the fact, known prior to completion", coupled also, I think, with the concept that it is such a fact as the rescinding party must be prepared to establish by evidence before a court if his rescission be challenged. The language of the clause is such that its operation is in no way made to depend upon the prior state of knowledge of either of the parties; it is expressed to apply whenever, following any legal challenge to the validity of a rescission notice given under the clause, the party giving it can satisfy a court that the property was in fact relevantly affected at date of contract in a respect not stated in the schedule. It is not without significance that the relevant fact is inherently incapable of being known before date of contract, for that fact has a precise temporal limitation, it is the state of being affected by planning provisions "at the date of this agreement". A rescinding party's knowledge may, when combined with his subsequent conduct, deny him the right to rely upon the clause, as will hereafter appear, but his prior knowledge of existing zoning will not, in my view, prevent the initial operation of the clause.

It follows that I consider cl. 16 to be applicable whenever a rescission notice purports to have been given under it so long as in any proceedings in which its validity is brought into question the rescinding party can then satisfy the court that at date of contract the land was relevantly affected in a manner not disclosed in the schedule.

I turn now to the second main question raised by these appeals; whether the vendors, having had conferred upon them a right of rescission as a result of the absence from the 4th Sch. of any statement that the lands were affected by a planning scheme, lost that right at some time before seeking to exercise it some thirty-two months after the right first arose.

It is not by mere delay that it is said that the right of rescission was lost but rather by conduct evincing an intention to keep the contracts on foot at a time when the alternative, but inconsistent, right of rescission had become available. The vendors having two inconsistent rights were, it is said, bound to elect as between them and having elected to treat the contracts as subsisting they were thereafter bound by their election and thus forfeited their right of rescission.

The doctrine of election as between two inconsistent legal rights is well established but certain of its features are not without their obscurities. The doctrine only applies if the rights are inconsistent the one with the other and it is this concurrent existence of inconsistent sets of rights which explains the doctrine; because they are inconsistent neither one may be enjoyed without the extinction of the other and that extinction confers upon the elector the benefit of enjoying the other, a benefit denied to him so long as both remained in existence. As Williston points out (Contracts , 3rd ed., vol. 5, par. 683) the doctrine is not out of harmony with the general rule that a binding surrender of a right requires a sealed release or consideration; by surrendering one right the elector thereby gains an advantage not previously enjoyed, the ability to exercise to the full the other inconsistent right.

In many instances what may pass for an application of the doctrine is in truth but the inevitable consequence of the party's conduct, a consequence that would follow even if no such doctrine existed. Thus in the common case of avoidance of a contract for breach it is not any doctrine of election that prevents the avoiding party subsequently from enforcing the contract but rather the fact that the contract has, by his act of avoidance, ceased to exist; such a situation is revealed by the facts discussed by Lindley J. in Evans v. Wyatt [5] . On the other hand if he chooses instead to keep the contract on foot and sue for damages rather than rescind for breach recourse must be had by the other party either to election or, if the facts will support it, to an estoppel if that breach should later be sought to be relied upon so as to avoid the contract. All this is made clear in the judgment of Jordan C.J. in O'Connor v. S.P. Bray Ltd. [6] . In the present appeals the doctrine of election is directly in question since the issue is not whether following rescission the vendors may enforce the contracts but rather whether acts on their part consistent with the continued existence of the contracts prevent their subsequent purported rescission from being effective.

(1880) 43 L.T. 176. 2. (1936) 36 S.R. (N.S.W.) 248, at pp. 258-261.

For the doctrine to operate there must be both an element of knowledge on the part of the elector and words or conduct sufficient to amount to the making of an election as between the two inconsistent rights which he possesses (Craine v. Colonial Mutual Fire Insurance Co. Ltd. [7] ; United Australia Ltd. v. Barclays Bank Ltd. [8] ).

(1920) 28 C.L.R. 305, at p. 326. 2. [1941] A.C. 1, at p. 30.

The nature of the knowledge which an elector must possess is a matter upon which the authorities are somethat at variance. An elector must at least know of the facts which give rise to those legal rights, as between which an election must be made; without that knowledge the doctrine of election will not be available to make irrevocable his choice of one particular right, although in appropriate circumstances an estoppel may still arise which produces that very consequence and this without any such requirement of knowledge on the part of the party who is estopped. The extent of knowledge of relevant facts necessary for the doctrine of election to apply has been described as "full knowledge of the material facts" (Bennett v. L. & W. Whitehead Ltd. [9] ). In Elder's Trustee & Executor Co. Ltd. v. Commonwealth Homes & Investment Co. Ltd. [10] a knowledge of circumstances such as will provide information from which the decisive fact giving rise to the legal right is "a clear if not a necessary inference" was held to be sufficient [11] .

[1926] 2 K.B. 380, at p. 410. 2. (1941) 65 C.L.R. 603. 3. (1941) 65 C.L.R., at p. 617.

The extent of knowledge will no doubt usually give rise to little difficulty; it is when the nature of the requisite knowledge is in issue, whether knowledge of the facts giving rise to the legal rights suffices or whether, on the contrary, there must also be knowledge of the right of election as between two available, inconsistent legal rights, that contrariety exists. Some authorities, such as Scarf v. Jardine [12] , omit all discussion of the nature of the requisite knowledge; others speak simply of knowledge of the facts from which the legal rights arise (Matthews v. Smallwood [13] ); some expressly deny the need for knowledge of legal rights, knowledge of the facts alone sufficing (Jordan C.J. in O'Connor v. S.P. Bray Ltd. [14] ); others again, especially in the field of election of remedies by an injured worker, require actual knowledge of the right to elect (Young v. Bristol Aeroplane Co. Ltd. [15] , but see also [16] ; Dey v. Victorian Railways Commissioners [17] ).

(1882) 7 A.C. 345. 2. [1910] 1 Ch. 777. 3. (1936) 36 S.R. (N.S.W.), at pp. 263-264. 4. [1946] A.C. 163, at p. 186. 5. [1946] A.C., at p. 191. 6. (1949) 78 C.L.R. 62.

In Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [18] , where the right of a lessor to rely upon a defect in his lessee's statutory application for the grant of a new tenancy was in question, Lord Reid and Lord Pearson formed a minority on the issue whether the lessor had, by its conduct, waived that defect but their treatment of the knowledge requisite to establish such a "waiver" did not differ in substance from the views of Lord Diplock, one of the majority. Lord Pearson, in whose views Lord Reid concurred, concluded [19] that the only knowledge which must be shown so as to bind the lessor to its act of waiver was knowledge of the relevant facts, it being unnecessary to show that there was also knowledge of "the legal position resulting from the relevant facts". Lord Pearson and Lord Reid each spoke in terms of "waiver" but their observations were, I think, directed to the doctrine of election. Of the members of the majority on this issue Viscount Dilhorne, who spoke of the question as one of election [20] , appears to have regarded knowledge of the legal position as necessary before a binding election could have arisen [21] ; Lord Diplock on the other hand spoke of the making of an election between inconsistent rights in distinguishing that from the case in hand and regarded it as enough that an elector should there know "of the facts which give rise in law to these alternative rights" [22] .

[1971] A.C. 850. 2. [1971] A.C., at p. 878. 3. [1971] A.C., at p. 873. 4. [1971] A.C., at pp. 872-873. 5. [1971] A.C., at p. 883.

In this Court, in the Elder's Trustee Case [23] , their Honours dealt with this question in some detail and after referring to the judgment of Jordan C.J. in O'Connor v. S.P. Bray Ltd. [24] and to Mr. J. S. Ewart's book on the subject, both of which sources deny the need for more than knowledge of the facts giving rise to the legal right, expressed a clear preference for this view in those cases in which the conduct of the elector is unequivocal; as where, despite knowledge of a breach going to the root of the contract, he exercises rights by virtue of the contract which rights would not exist unless that contract remained in force. Only where the conduct is not so unequivocal, amounting to no more than some evidence of election to affirm, will knowledge of the right of election be relevant and then only because, viewed in its light, his conduct may, as a matter of "natural inference", be regarded as constituting an affirmation of the contract [25] .

(1941) 65 C.L.R. 603. 2. (1936) 36 S.R. (N.S.W.) 248. 3. (1941) 65 C.L.R., at p. 618.

In Coastal Estates Pty. Ltd. v. Melevende [26] the members of the Full Court of the Supreme Court of Victoria, conscious of the apparent conflict of authority, each undertook an analysis of the cases and concluded that where the right of rescission for misrepresentation was in question an election to treat the contract as remaining on foot rather than to rescind could only arise if there was knowledge both of the relevant facts and of the inconsistent legal rights from which a choice was to be made. Both Sholl J. [27] and Adam J. [28] regarded the presence of some detriment to the other party, a form of estoppel, as necessary before acts of affirmation of the contract could, in the absence of any knowledge of the alternative legal right to rescind, destroy the right of rescission.

[1965] V.R. 433. 2. [1965] V.R., at p. 443. 3. [1965] V.R., at p. 453.

As might be anticipated in the multi-jurisdictional American scene, the United States authorities on the there much litigated topic of election of remedies and election in pais disclose a similar absence of unanimity concerning the knowledge necessary to create an irrevocable election, although the clear weight of opinion appears to require knowledge only of the relevant facts and not of the legal rights - American Jurisprudence, 2d., vol. 25, pp. 663-664.

The present appeals are concerned only with the vendors' choice between rescission of the contracts under cl. 16 and affirmation of the contracts. The right of rescission here in issue is, therefore, quite different from that under consideration in the Coastal Estates Case [29] , a distinction made by Herring C.J. who refers to the view of Mr. Ewart concerning an express right of rescission conferred by the contract and concludes that in such a case "the parties to a contract are to be deemed aware of the elections that the terms of their contract give them or at any rate are to be precluded from denying knowledge of them" [30] .

[1965] V.R. 433. 2. [1965] V.R., at p. 435.

Not only is this distinction, with respect, well founded but it provides a measure of reconciliation of conflicting authority as well as resolving the matter so far as concerns the present appeals. Where election is in question between contracting parties and, as in these appeals, the contract itself confers the inconsistent rights there can be no question whether a party had knowledge of his choice of rights. He is deemed to know the terms of his own contract and the rights it confers, at all events he cannot take advantage of his own ignorance (L'Estrange v. F. Graucob Ltd. [31] ); moreover he must take his contract as bearing whatever meaning the court will assign to it when it is called upon to interpret it, he is bound "by the interpretation which a court of law may put upon the language of the instrument." (Stewart v. Kennedy, per Lord Watson [32] ).

[1946] 2 K.B. 394, at pp. 403, 406. 2. (1890) 15 App. Cas. 108, at p. 123.

With other instances of election, not involving a choice between contractually conferred rights, these appeals are not concerned, but it may be that a failure to give weight to the distinction between those instances and the case of contractually conferred rights has led to misunderstanding; thus where Jordan C.J., in O'Connor v. S.P. Bray Ltd. [33] , insists upon the need for knowledge only of the facts he illustrates the point by reference to cases of contractually conferred rights whereas Sholl J. when, in the Coastal Estates Case [34] , he regards that insistence as unsound, is concerned with a quite other right, the right conferred by law to rescind ab initio for fraudulent misrepresentation. Again in the Kammins Ballrooms Case [35] , where the "legal right" was a consequence of the non-observance of a statutory requirement, Viscount Dilhorne [36] refers to Matthews v. Smallwood [37] , a case of contractually conferred rights, immediately before the passage in what I take his Lordship to regard knowledge of more than the relevant facts as being necessary to give rise to an election situation. I am not to be taken as concluding that where contractually conferred rights are not in issue there can be no binding election without knowledge of the right to elect. It is not necessary for me to decide the point and I do no more than draw attention to the distinction made by Herring C.J. in the Coastal Estates Case [38] as explanatory of some of the conflict of authority on this topic.

(1936) 36 S.R. (N.S.W.), at p. 264. 2. [1965] V.R., at p. 444. 3. [1971] A.C. 850. 4. [1971] A.C., at p. 873. 5. [1910] 1 Ch. 777. 6. [1965] V.R. 433.

In the present appeals I conclude that, contrary to the appellants' contentions, all that need be established in order for the doctrine of election to apply is knowledge by the vendors of the facts giving rise to inconsistent legal rights; the appellants are to be taken to know of their rights of rescission conferred by cl. 16 and, of course, of their right to enforce the contracts according to their terms. If they then knew of the relevant facts giving rise to the rights of rescission, that is, the existence of a planning scheme affecting the lands sold, that is enough to invoke the doctrine. Their own interpretation or understanding of the nature or extent of their contractual rights will be irrelevant, so that it matters not at all whether they were aware of the existence of cl. 16 or of its effect as it came to be enunciated in Wolczyk v. Barr [39] ; it is enough that they knew of facts which have brought cl. 16, as so interpreted, into operation.

The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease (Viscount Dilhorne in the Kammins Ballrooms Case [40] ; Herring C.J. in the Coastal Estates Case [41] ; Kitto J. in Tropical Traders Ltd. v. Goonan [42] ). However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election (Elder's Trustee Case [43] ). There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right (Croft v. Lumley [44] ; Matthews v. Smallwood [45] ). For an election there need be no actual, subjective intention to elect (Scarf v. Jardine [46] ), an election is the effect which the law attributes to conduct justifiable only if such an election had been made (per Kitto J. in Tropical Traders Ltd. v. Goonan [47] ); cf. S. Kaprow & Co. Ltd. v. Maclelland & Co. Ltd., per Wrottesley L.J. [48] .

[1971] A.C., at p. 873. 2. [1965] V.R., at p. 436. 3. (1964) 111 C.L.R. 41, at p. 56. 4. (1941) 65 C.L.R., at p. 618. 5. (1858) 6 H.L. Cas. 672 [10 E.R. 1459]. 6. [1910] 1 Ch., at p. 786. 7. (1882) 7 A.C., at p. 361. 8. (1964) 111 C.L.R., at p. 55. 9. [1948] 1 K.B. 618, at pp. 629-630.

On the question of detriment to the other party as an ingredient in election there exists, again, a divergency of views. Many of the leading cases on the topic make no reference to detriment and, in speaking of the irrevocability of an election, seem to treat that as arising, regardless of whether or not the other party has acted upon it to his detriment, as soon as the fact of election is communicated to the other party (e.g. Scarf v. Jardine, per Lord Blackburn [49] ) or indeed regardless perhaps of communication (e.g. Matthews v. Smallwood [50] ). On the other hand, in Spencer Bower and Turner: Estoppel by Representation (1966), at pp. 323-325, election is treated as necessarily involving detriment, although detriment is there given a wide meaning. It may be that in very many of the decided cases involving election some detriment to the other party can be discovered on an examination of the facts but the authorities in this Court are consistent in their silence as to detriment, regarding the elector's act of disaffirmation or adherence to the contract as itself completing the election without more (Craine's Case [51] ; Fullers' Theatres Ltd. v. Musgrove [52] ; Elder's Trustee Case [53] ; Tropical Traders Ltd. v. Goonan [54] ). Perhaps Newbon v. City Mutual Life Assurance Society Ltd. [55] throws most light upon the matter. There this Court dealt with two distinct issues, election and estoppel, and their treatment of the former, when contrasted with that accorded to the latter, satisfies me that no question of detriment was thought to be a necessary ingredient in election.

(1882) 7 A.C., at p. 361. 2. [1910] 1 Ch., at pp. 786-787. 3. (1920) 28 C.L.R., at pp. 325-326. 4. (1923) 31 C.L.R. 524, at pp. 540-541. 5. (1941) 65 C.L.R., at pp. 616-617, 618. 6. (1964) 111 C.L.R., at p. 55. 7. (1935) 52 C.L.R. 723.

Mr. Ewart's book on Waiver Distributed points in a like direction; he concludes, at p. 93, that, despite what was said by Lord Blackburn in Scarf v. Jardine [56] , which was a case of election as between possible defendants, in the case of an election irrevocably to affirm a contract the election need not be communicated to the other party; where there is no need for communication there can scarcely be room for detriment suffered by the uninformed party. In the case of disaffirmation of a contract the terms of the contract will usually themselves, either expressly or by necessary implication, require communication (Ewart, op. cit., pp. 91-92), but where they do and the giving of notice determines the contract then, as Jordan C.J. has explained in O'Connor v. S.P. Bray Ltd. [57] , the notice itself puts an end to the contract, "the communicated choice is conclusive The alternative right necessarily vanishes". There can then be no question of detriment having to be shown before the elector is prevented from seeking to enforce the alternative and vanished right. I conclude that at least in the case of election between affirmation of a contract or its disaffirmation pursuant to rights conferred by that contract detriment to the other party is not a necessary element in election, whatever may be the position in other election situations. Although concerned with election in quite different circumstances, the judgment in Myers v. Ross [58] , makes the point succinctly when it is said that an election "knowingly made, cannot be withdrawn even though it has not been acted upon by another to his prejudice" and this because "Estoppel depends upon what a party causes his adversary to do. Waiver by election depends upon what the party himself intends to do, and has done".

(1882) 7 A.C., at p. 361. 2. (1936) 36 S.R. (N.S.W.), at p. 261. 3. (1935) 10 F. Supp. 409, at p. 411.

If the foregoing principles be applied to the present appeals they readily provide an answer in the case of Mrs. Sargent's contract and that in which Mr. and Mrs. C. T. Sargent were vendors. In these two cases the vendors knew at the date of contract that the lands they were selling were affected by a planning scheme, being zoned as "rural and non-urban" or "non-urban". This is enough to satisfy the requirement that an elector should have knowledge of the facts giving rise to his legal rights. The right of rescission conferred by cl. 16 arose, inter alia, should the property be "affected by any town and country planning scheme" made under Pt XIIA of the Local Government Act 1919 as amended and the planning scheme of which these vendors were aware was in fact such a scheme. Their two inconsistent rights were either to insist on continued performance by the purchaser of its obligations under the contracts of sale or instead to rely upon the right of rescission under cl. 16. Their conduct which amounted to an election in favour of the former right consisted of the receipt over a period of some thirty-two months of quarterly interest payments under the contracts, their demand for and receipt of certain payments of moneys in recoupment of increases in rates paid to the vendors and which it had been agreed under the contracts that the purchaser should bear, and their involvement in the steps taken by the purchaser to have the lands brought under the provisions of the Real Property Act.

These constitute unequivocal acts affirming the contracts and it follows that these vendors, having thereby made their election, could not thereafter rely upon the right to rescind conferred by cl. 16. Were detriment, contrary to my view, a necessary element it is clear that it would be satisfied in these appeals. I would accordingly dismiss the appeals by these two vendors.

The position of the third appeal is different only because there was in the case of the Turnbulls no evidence that either of them had at any material time any knowledge of the matters referred to in cl. 16; they otherwise are in the same position as are the three Sargents save that they received no reimbursement of rate moneys, and their receipt of moneys under the contract was of instalments of the purchase price rather than of interest.

While the Turnbulls had no knowledge of the applicable town planning provisions their solicitor did; before the date of contract he had applied for and had received an appropriate certificate for annexure to the contract, although in fact it did not come to be so annexed. The question is, then, whether this knowledge on the part of their solicitor will operate so as to attract to the acts of affirmation the irrevocability of an election.

The answer to this question may, I think, be approached in either of two ways and with the same result. Election as between inconsistent contractual rights does not call for any conscious choice as between two sets of rights, it being enough that there should be intentional and unequivocal conduct together with knowledge of the facts giving rise to the legal rights. There need not, therefore, be a consciously "choosing mind", as there must, in fraud, be a "wicked mind". Now where, as in this case, a vendor employs a solicitor to attend to the carrying out of the legal aspects of a sale he necessarily authorizes that solicitor to attend to all the usual aspects of conveyancing practice; that authority will here extend to the obtaining of the necessary planning certificate and the solicitor's knowledge, gained from that certificate, may properly be imputed to his clients since it was acquired both for the purpose of that transaction and in the course of it (Bradley v. Riches [59] ; Re Philip-Stephan Photo Litho and Typographic Process Co. Ltd. [60] ; Dixon v. Winch [61] ; Ayrey v. British Legal and United Provident Assurance Co. Ltd. [62] ).

(1878) L.R. 9 Ch. D. 189, at p. 196. 2. (1891) 12 N.S.W.R. (Eq.) 4. 3. [1900] 1 Ch. 736, at p. 747. 4. [1918] 1 K.B. 136, at pp. 140, 142.

Again, where a vendor so arranges matters that his solicitor undertakes on his behalf the carrying out of a conveyancing transaction as a whole he thereby not only authorizes his solicitor to perform all necessary steps but also places the solicitor in the position of acquiring at first hand knowledge of relevant facts, at the same time depriving himself of the opportunity of acquiring such first hand knowledge. If any such steps taken by the solicitor happen to constitute acts of affirmation of the continued existence of the contract they will be binding upon the client (Provincial Insurance Co. of Canada v. Leduc [63] ). If they be unequivocal and are performed at a time when the solicitor has himself acquired knowledge of facts giving rise to a right to rescind the contract the client will, without the need to attribute to him the knowledge of his solicitor, be bound by those acts of affirmation as on an election; the duly authorized conduct of the solicitor, who has acquired the relevant knowledge, will, without either conduct or knowledge on the client's part, constitute an effective election not to rescind the contract (Hough v. Guardian Fire and Life Assurance Co. Ltd. [64] ; Ayrey's Case [65] ).

(1874) L.R. 6 P.C. 224, at p. 239. 2. (1902) 18 T.L.R. 273. 3. [1918] 1 K.B., at p. 142.

On the findings of fact of the learned trial judge it is not clear whether the payments of instalments of purchase price made by the purchaser were received by the Turnbulls' solicitor, who by the terms of the contract was expressly authorized to receive them, or by the Turnbulls personally. But whichever was the case one or other of the foregoing approaches to the matter will result in an irrevocable election affecting them. It is clear that the Turnbulls' solicitor, then having knowledge of the zoning of the land, received from the purchaser's solicitor a form of application to bring the land under the Real Property Act for his perusal and, if approved of by him, for completion and execution by the Turnbulls. This form he later returned to the purchaser's solicitor duly completed and executed. This too was conduct consistent only with the contract then remaining on foot and it is conduct which the Turnbulls, by their execution of the application, can be seen to have authorized. It constitutes, in my view, a further act of election binding upon the Turnbulls.

I would accordingly also dismiss the Turnbulls' appeal.

Each of these three appeals from orders for specific performance made by the Supreme Court of New South Wales in favour of the respondent purchaser raises questions as to the validity of the exercise by a vendor of a contractual right of rescission conferred by a contract of sale of real property. In each instance the contract was in the form approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales (1965 edition) with certain additions and modifications. The contracts related to adjoining parcels of land in the vicinity of Castle Hill, near Sydney.

By the three contracts entered into in November-December 1969 the appellants Mrs. V. M. Sargent, Mr. and Mrs. C. T. Sargent and Mr. and Mrs. K. D. Turnbull agreed to sell to the respondent the land respectively owned by them. The purchase price payable under the contracts was $95,296, $50,281 and $86,000 respectively; in the case of the Turnbulls it was payable by instalments; in each case provision was made for payment of interest.

The contract of sale between Mrs. V. M. Sargent and the respondent was made on 6th November 1969; that between Mr. and Mrs. C. T. Sargent and the respondent on the same day; and that between Mr. and Mrs. K. D. Turnbull and the respondent on 24th December 1969.

Clause 16 in each contract was in the following form:

Should it be established prior to completion that at the date of this Agreement the property was affected by any town and country planning scheme or interim development prepared or prescribed under the provisions of the State Planning Authority Act or Part XIIA of the Local Government Act 1919 as amended otherwise than as stated in the Fourth Schedule hereto or was affected by any Residential District Proclamation under Section 309 of the Local Government Act 1919, or by any existing proposals for re-alignment widening or siting of a road by any competent authority otherwise than as disclosed in the said Fourth Schedule, either party shall be entitled to rescind this Agreement by notice in writing to the other.

The 4th Sch. to the contract stated, "The property is affected as shown in the copy certificate under Section 342AS of theLocal Government Act 1919 annexed hereto". Opposite the 4th Sch., in the margin, were the words "Delete if not applicable". No certificate was annexed to the contract.

At the times when the contracts were entered into and at all material times since then the lands the subject of the contracts were zoned as "Non-Urban Zone No. 1 (a) (County Green Belt)" under the Shire of Baulkham Hills Planning Scheme Ordinance made under Pt XIIA of the Local Government Act, 1919 N.S.W., as amended (and were affected by the County of Cumberland Planning Scheme).

The primary judge held that cl. 16 conferred on each vendor a right of rescission on the ground that the properties were affected by a town planning scheme otherwise than as stated in the 4th Sch. and in so doing followed a decision of the Court of Appeal in Wolczyk v. Barr [66] . However, he went on to hold that the appellants had waived their rights to rescind by acts affirming the contracts after they (and in the case of the Turnbulls, their solicitor) had acquired knowledge of the zoning of the land.

It was found that Mrs. Sargent and Mr. and Mrs. C. T. Sargent knew when they entered into the contracts that the lands were zoned as "rural and non-urban" or "non-urban" under the local planning scheme and that although this circumstance was not known to the Turnbulls in December 1969 their solicitor, Mr. C. R. Sweeting, was aware of it by reason of his receipt of a s. 342AS certificate from the Baulkham Hills Shire Council on or about 12th November 1969. He had obtained the certificate for the purposes of the contract. Why he failed to annex it to the contract is not clear. However, it was not until June and July 1972 that the appellants became aware, in consequence of legal advice, that the contracts gave them a right to rescind on account of the lands being affected by the local planning scheme.

The acquisition of this knowledge came about when a third party made an approach to some or all of the appellants. Mr. Turnbull on or about 28th April 1972 obtained legal advice to the effect that he was not entitled to avoid the contract. He then sought advice from other solicitors who on 7th July 1972 sent to the solicitors for the respondent a notice of rescission. His Honour found that it was not until 7th July 1972 or thereabouts that Mr. and Mrs. Turnbull were authoritatively informed and personally became aware that they had a right of rescission under the contracts. The other appellants obtained unfavourable advice from a solicitor, Mr. Cartwright, some few weeks before notices of rescission were sent on their behalf on 20th June 1972. However, in the meantime they were also advised that they were entitled to rescind. His Honour found that it was not until 20th June 1972 or thereabouts that Mrs. Sargent and Mr. and Mrs. C. T. Sargent were authoritatively informed and personally became aware that they had a right of rescission under the contracts.

His Honour held that the knowledge obtained by Mr. Sweeting in consequence of his receipt of the s. 342AS certificate was deemed to be the knowledge of his clients. He went on to hold that acts affirming the contracts, committed when the appellants had knowledge of the facts giving rise to a right of rescission, although they were unaware of the existence of a right to rescind, were sufficient to constitute a waiver.

I turn now to the subsequent acts upon which his Honour relied. After the contracts were exchanged, payments were made by the respondent of interest (and in the case of the Turnbulls, of instalments of purchase price) as provided for in the contracts. In the case of Mrs. Sargent and Mr. and Mrs. C. T. Sargent, small additional amounts were paid in respect of increased rates levied upon the properties, these payments being made at the request of the appellants in accordance with special conditions in the contracts.

The respondent prepared forms of application under the Real Property Act, 1900, as amended, to bring the lands within the provisions of that Act. Forms of application were signed by each of the appellants and they were lodged by the respondent with the Registrar-General. The appellants were aware that the respondent took these steps in reliance on its rights under the contracts.

On 17th December 1971 Mr. and Mrs. Turnbull mortgaged the contract of sale and the land to Associated Securities Ltd. and gave notices under s. 12 of the Conveyancing Act, 1919, as amended, so as to assign their rights under the contract of sale. Subsequently, by a document dated 4th February 1972, Mr. and Mrs. Turnbull authorized Associated Securities Ltd. to receive payments from the respondent under the contract of sale. The company received such payments from time to time and applied them in partial satisfaction of liability under the mortgage.

The first question is whether Wolczyk v. Barr [67] , a decision to which I was a party, was correctly decided. It is an important question as is evident from the many cases which have come before the courts in consequence of vendors exercising the right to rescind which, according to that decision, is conferred by cl. 16 when a s. 342AS certificate is not annexed to the standard form of contract and no steps are taken to complete the 4th Sch. Having considered the question afresh in the light of the argument advanced in this appeal, I see no reason to depart from the conclusion then reached.

The standard form of contract makes provision in the schedule by means of annexing the statutory certificate or otherwise for indicating whether the property is affected by planning schemes and road proposals, and, if so, in what respects, with the consequence that either party will have a right to rescind in the event that there is a discrepancy between what is stated or disclosed, or what appears, in the schedule and the actual state of affairs as they are established to exist. Whether the right of rescission is confined to discrepancies between what is stated or disclosed in a certificate and the actual state of affairs or extends to the case in which the parties have omitted to attach the statutory certificate and fill in a schedule depends not so much on one's view of what is fair and reasonable as upon the language of cl. 16 and the purpose which it serves.

The right to rescind is expressed to arise, not when there is a discrepancy between the certificate and the state of affairs as they are established to exist, but when the property is relevantly affected "otherwise than as stated" or "disclosed" in the 4th Sch. If no statement or disclosure is made in an annexed certificate or in the schedule and the property is relevantly affected, it may with accuracy be said that the property is affected otherwise than as stated or disclosed. I do not doubt that in a different context the words in question could be so read as to presuppose the existence of a statement in the schedule as an indispensable condition of the operation of the clause. However, this is not the significance that I would ordinarily attribute to them.

Nor is there anything in the purpose which in my view underlies the clause that circumscribes the right of rescission which it confers. If, as I apprehend, the purpose of the clause is to protect each party against the consequences which may flow from a discrepancy between the town planning characteristics of the property as they are established to exist and as they appear from the contract, this supplies no reason for adopting the respondent's construction in preference to that which I favour. It would have the effect of limiting the protection thereby conferred, but this is as much an argument against, as an argument for, the respondent's submission.

An attempt was made to draw a distinction between "stated" and "disclosed" and to say that the latter word, unlike the former, imports a positive obligation to disclose. The result, so it was urged, would be that in the absence of a certificate attached to the schedule a party would have a right to rescind if the property were affected by road proposals, but not if the property were affected only by a planning scheme or interim development. The slight difference in the language of the two parts of cl. 16 does not in my view justify such a marked difference in their operation. Indeed, for present purposes I am not inclined to draw any distinction between the two words. Certainly no distinction was drawn in Wolczyk v. Barr [68] where the Court in its judgment referred to the words in the second part of the clause, although it was in fact a case which arose under the first part of the clause. Nor do I think that anything turns on the words "Should it be established". They mean no more than "Should it be ascertained".

Implicit in the respondent's argument is the notion that it would be unfair to concede the existence of a right to rescind to either party merely because the parties omitted to make a statement or disclosure in the 4th Sch. of the kind which the standard form of contract contemplated would be made. It should not be overlooked that there will be other cases in which a property is relevantly affected in a manner not contemplated by one of the parties and yet the 4th Sch. is inadvertently left blank. It would be equally unfair to deny the clause an operation in these circumstances.

I would reject, therefore, the notion that the clause is no more than a "mutual mistake" clause. Likewise, it is implicit in what I have said that I would reject the submission that the court will read the contract as though there was annexed to it a certificate accurately stating the manner in which the property was relevantly affected for the purposes of cl. 16. There are cases in which the court has overlooked the failure of an agent to attach a document to a contract on the ground that there has been an omission to carry out an act merely ministerial in character. See Macrory v. Scott [69] ; Bosaid v. Andry [70] , but they are cases in which it was shown that the parties intended to annex documents which were in existence.

(1850) 5 Ex. 907 [155 E.R. 396]. 2. [1963] V.R. 465.

The clause, as I read it, confers on each party a right to rescind at any time before completion unless the manner in which the property is relevantly affected is accurately stated or disclosed in the schedule. Once this is accepted it provides an answer to the respondent's submission that to rescind merely because the certificate was not attached was arbitrary and unreasonable and therefore was not authorized by cl. 16. Whether the principle that a unilateral right of rescission by a vendor must not be arbitrary and unreasonable is confined to clauses which commonly confer a right to rescind on a vendor who is unwilling or unable to comply with requisitions and objections made by a purchaser (see Godfrey Constructions Pty. Ltd. v. Kanangra Park Pty. Ltd. [71] ) or is of more general application need not be answered here. If, in accordance with the view which I have expressed, cl. 16 confers on either party a right to rescind in the circumstances already discussed, there can be no basis for making an implication which, in the absence of other conduct disentitling, would preclude an exercise of the right.

However, there are convincing reasons for concluding, as did the primary judge, that the appellants were precluded by their subsequent acts from exercising the right of rescission. Although in these cases it is perhaps not of much importance whether one ascribes this result to the doctrines of election, waiver or estoppel, in my view the three cases may be conveniently and securely regarded as instances of election.

Any discussion of the principles governing the circumstances in which a party's words or conduct may preclude him from exercising a legal right which he possesses is beset with difficulties. They have their origin in the differences to be found in the various doctrines (election, waiver and estoppel) which may come into operation and in the differing concepts which each doctrine has at times been thought to embrace.

As Lord Wright observed in Ross T. Smyth & Co. Ltd. v. T. D. Bailey, Son & Co. [72] , " "waiver" is a vague term used in many senses". It may signify the legal grounds on which a person is precluded from asserting one legal right when he is entitled to alternative rights inconsistent with each other. The loss of the right in such a case is, as Lord Diplock said in Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [73] , "better categorized as "election" rather than as "waiver" ". Or it may mean the legal grounds on which a person is precluded from raising a particular defence to a claim against him - the very situation which arose in Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [74] .

[1940] 3 All E.R. 60, at p. 70. 2. [1971] A.C., at p. 883. 3. [1971] A.C. 850.

Likewise with "estoppel". It may signify common law estoppel by representation or that kind of estoppel which Jordan C.J. in Franklin v. Manufacturers Mutual Insurance Ltd. [75] , described as "estoppel based merely on one's own acts", or the species of quasi-estoppel referred to by Lord Diplock in Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [76] .

(1935) 36 S.R. (N.S.W.) 76, at p. 83. 2. [1971] A.C., at pp. 883-884.

It will make for greater certainty, therefore, if the present cases are regarded as cases of election. A person is said to have a right of election when events occur which enable him to exercise alternative and inconsistent rights, i.e. when he has the right to determine an estate or terminate a contract for breach of covenant or contract and the alternative right to insist on the continuation of the estate or the performance of the contract. It matters not whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach - in each instance the alternative right to insist on performance creates a right of election.

Essential to the making of an election is communication to the party affected by words or conduct of the choice thereby made and it is accepted that once an election is made it cannot be retracted (R. v. Paulson [77] ; Tropical Traders Ltd. v. Goonan [78] ). No doubt this rule has been adopted in the interests of certainty and because it has been thought to be fair as between the parties that the person affected is entitled to know where he stands and that the person electing should not have the opportunity of changing his election and subjecting his adversary to different obligations.

[1921] 1 A.C. 271, at p. 284. 2. (1964) 111 C.L.R. 41, at p. 55.

A person confronted with a choice between the exercise of alternative and inconsistent rights is not bound to elect at once. He may keep the question open, so long as he does not affirm the contract or continuance of the estate and so long as the delay does not cause prejudice to the other side. An election takes place when the conduct of the party is such that it would be justifiable only if an election had been made one way or the other (Tropical Traders Ltd. v. Goonan [79] ). So, words or conduct which do not constitute the exercise of a right conferred by or under a contract and merely involve a recognition of the contract may not amount to an election to affirm the contract.

The central problem in these cases lies in ascertaining what in the eye of the law are the elements essential to the making of a binding election, in particular whether knowledge of the existence of the alternative right is a prerequisite in the party against whom election is alleged. The question is complicated because in some instances election may take place as a matter of conscious choice with knowledge of the existence of the alternative right and in other cases it may occur when the law attributes the character of an election to the conduct of a party.

Lord Blackburn said in Kendall v. Hamilton [80] , "there cannot be election until there is knowledge of the right to elect". The rule then enunciated has been applied so as to preserve to an injured worker his statutory option to claim compensation under Workers' Compensation Acts or to sue for damages at common law when he has received workers' compensation in ignorance of his alternative remedy (Young v. Bristol Aeroplane Co. Ltd. [81] ; O'Connor v. S.P. Bray Ltd. [82] ; Dey v. Victorian Railways Commissioners [83] ). However, as between lessor and lessee it has been said that election may take place in the absence of knowledge on the part of the person electing of the existence of the alternative right, so long as he has knowledge of the facts giving rise to the existence of that right. Thus, a lessor by accepting rent with knowledge of a breach of covenant by the lessee may elect to affirm the lease though unaware that the breach entitled him to forfeit the lease (Matthews v. Smallwood [84] ; Fuller's Theatre and Vaudeville Co. Ltd. v. Rofe [85] ). In Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd. [1] conflicting opinions were expressed as to the necessity for the existence of knowledge of the right to object that there had been a noncompliance with the statute in a case which was not so much a case of election as a suggested case of waiver of a defence.

(1879) 4 App. Cas. 504, at p. 542. 2. [1946] A.C. 163, at pp. 169, 173, 186. 3. (1937) 56 C.L.R. 464. 4. (1949) 78 C.L.R. 62, at pp. 78, 94. 5. [1910] 1 Ch. 777, at pp. 786-787. 6. [1923] A.C. 435. 7. [1971] A.C., at pp. 860, 873, 878-879, 883-885.

Whether in other situations it is the general rule that a person may be held to have elected with knowledge of the facts giving rise to the existence of the alternative right, though unaware of the existence of that right, has been the subject of controversy. Jordan C.J. thought that was the rule (O'Connor v. S.P. Bray Ltd. [2] ; reversed on other grounds [82] ). On the other hand, in Coastal Estates Pty. Ltd. v. Melevende [3] , Herring C.J. drew a distinction between termination of a contract pursuant to a power thereby conferred and rescission for fraudulent misrepresentation. In the latter, but not in the former case, knowledge of the right, as well as of the facts, was in his opinion essential to the making of a binding election. In the same case, Sholl and Adam JJ. expressed the view that knowledge of the alternative right was essential to the making of a binding election in the absence of acts amounting to an estoppel [4] .

(1936) 36 S.R. (N.S.W.) 248, at pp. 262-263. 2. (1937) 56 C.L.R. 464. 3. [1965] V.R., at p. 435. 4. [1965] V.R., at pp. 443, 453.

In so saying their Honours were influenced by what this Court said in Elder's Trustee and Executor Co. Ltd. v. Commonwealth Homes and Investment Co. Ltd. [5] where, having referred to the observations of Jordan C.J. in O'Connor v. S.P. Bray Ltd. [6] , Rich A.C.J., Dixon and McTiernan JJ. drew a distinction "between cases where the party's conduct is unequivocal in its effect and cases where this conduct does not necessarily amount to a waiver but is merely some evidence that he has in fact elected to affirm" [7] . The instant case, they thought, was not in the first category and in the absence of knowledge that he had a right of election, no inference could be drawn that the plaintiff had made an actual election, although it was pointed out that his conduct was such that "it might be considered a natural inference, if he knew that he had a right of election, that he had resolved to affirm".

(1941) 65 C.L.R. 603. 2. (1936) 36 S.R. (N.S.W.), at pp. 262-263. 3. (1941) 65 C.L.R., at p. 618.

The Court did not give its assent to the general principle enunciated by Jordan C.J.; nor did it state positively that in those cases in which the party's conduct was unequivocal in its effect it constituted an election without knowledge of the alternative right. However, it conceded that "it may well be" the result where rights are exercised in virtue of an estate in property, or by virtue of a contract, and the rights so exercised were such as would not exist unless the estate or contract subsisted on foot. Although this concession does not amount to a final and authoritative expression of opinion, it does perhaps indicate a disposition to accept the proposition that in the circumstances mentioned knowledge of the existence of the alternative right, as distinct from knowledge of the facts giving rise to the right, is not essential to the making of a binding election.

For my part this proposition correctly states the law in its application to contracts as well as interests in property. If a party to a contract, aware of a breach going to the root of the contract, or of other circumstances entitling him to terminate the contract, though unaware of the existence of the right to terminate the contract, exercises rights under the contract, he must be held to have made a binding election to affirm. Such conduct is justifiable only on the footing that an election has been made to affirm the contract; the conduct is adverse to the other party and may therefore be considered unequivocal in its effect. The justification for imputing to the affirming party a binding election in these circumstances, though he be unaware of his alternative right, is that, having a knowledge of the facts sufficient to alert him to the possibility of the existence of his alternative right, he has acted adversely to the other party and that, by so doing, he has induced the other party to believe that performance of the contract is insisted upon. It is with these considerations in mind that the law attributes to the party the making of a choice, though he be ignorant of his alternative right. For reasons stated earlier the affirming party cannot be permitted to change his position once he has elected.

Whether any distinction should be drawn between this class of case and fraudulent misrepresentation, as Herring C.J. suggested, need not be determined. However, it should be kept firmly in mind that the doctrine of election is of general application and that no good purpose is to be served by drawing distinctions in its various applications unless considerations of justice make it necessary or expedient so to do.

Whether the knowledge of a solicitor is to be attributed to his client arises in the Turnbulls' case. As against a third party the law imputes to a principal knowledge gained by his agent in the course of, and which is material to, a transaction in which the agent is employed on behalf of the principal, under such circumstances that it is the duty of the agent to communicate it to the principal. In the words of James L.J. in Vane v. Vane [8] , "the actual knowledge of the agent through whom an estate is acquired is equivalent to the actual personal knowledge of the principal". In my view this principle applies to information acquired by a solicitor in the course of acting for his client in a conveyancing matter (Dixon v. Winch [9] ). The solicitor is to be regarded as the alter ego of the client and the rights of the other party to the contract cannot be made to depend upon the diligence or lack of diligence exhibited by the solicitor in his dealings with his client.

(1873) 8 Ch. App. 383, at p. 399. 2. [1900] 1 Ch. 736.

Consequently, as the information as to zoning which Mr. Sweeting acquired was within the ambit of his authority from the Turnbulls and as he was under a duty to communicate it to the Turnbulls once he received it, his knowledge is to be imputed to them.

Once this question is disposed of, the issue of election must be resolved adversely to the appellants. Their actions over a period of two and one half years in receiving the payment of interest and, in the case of the Turnbulls, instalments due under the contract and in calling on the respondent to pay rates were unequivocal actions, adverse to the respondent, justifiable only on the basis that the contracts were continuing on foot. At the time when these acts took place the Sargents had actual knowledge, and the Turnbulls had imputed knowledge, of the facts giving rise to a right of rescission.

The payment of interest, instalments of the purchase price and rates constituted a detriment suffered by the respondent which would in any event bring into play the doctrine of estoppel and provide an additional reason why in the circumstances of this case it was proper to conclude that the appellants made a binding election to affirm, though personally unaware of the existence of the right of rescission when the election was made.

At a glance

Court

Decision date

Before

Source

Judgment (104 paragraphs)

Parties