Construction Argument
64 Mr Harper argued that the primary Judge had been wrong in concluding that the Purchaser had breached the Warranty. He contended that the Warranty should be given a narrow construction. In particular, the Warranty should not be interpreted as requiring the Purchaser to provide information of a kind that the Landlords might reasonably require for the purposes of considering whether to consent to an assignment of the lease.
65 Mr Harper submitted that the obligations imposed on the Purchaser by the Warranty were qualitatively different from and directed to an entirely different subject matter than cl 27.2.1. In particular:
the Warranty was to do all things necessary to secure the " Landlords Consent ", while cl 27.2.1 required the Purchaser to supply references and other information reasonably required for the Landlords to consider the proposed assignment of lease;
the obligations imposed by the Warranty were directed to the grant and execution by the Landlords of the Mortgage of Lease and the Right of Entry agreement; and
cll 27 and 29 were directed to the quite different issue of the assignment of the lease to the Purchaser.
66 Mr Harper argued that the Warranty could not be construed literally, since there were some matters beyond the power of the Purchaser to procure, such as the consent by the mortgagee of the Premises to the execution of the Mortgage of Lease and of the Right of Entry agreement. The Warranty could only require the Purchaser to do all things within his power to place the Landlords in a position to grant, consent to and execute (as the case may be) the relevant documents: Neeta (Epping) Pty Ltd v Phillips [1974] HCA 18; 131 CLR 286, at 309, per Stephen J.
67 Mr Harper relied on these considerations to support his submission that the Warranty did not extend to the obligations imposed on the Purchaser by cl 27.1.2. On his submission, the Purchaser's obligation to supply references and any information reasonably required by the Landlords for the purpose of determining whether to consent to the assignment of the lease was exclusively covered by cl 27.1.2. It followed, so Mr Harper argued, that the Warranty, insofar as it required the Purchaser to do all things within his power to obtain the "Landlords Consent", did not include an obligation to supply references or other information reasonably required by the Landlords for the purpose of obtaining their consent to the assignment of the lease. The Warranty, on its proper construction, only required the Purchaser to take such actions as were necessary to obtain the "Landlords Consent" but which were not already required by cl 27.1.2.
68 There is no obvious textual reason to adopt the Purchaser's construction of the Warranty. On the contrary, the language of Special Condition 12 is strongly against the Purchaser's construction. The obligation under the Warranty is to do all things necessary to obtain the "Landlords Consent" (a defined term). It may be accepted that the obligation is confined to all things that are within the Purchaser's power to do. But it is certainly within the Purchaser's power to provide the Landlords with such financial information as may reasonably be required by them for the purposes of determining, for example, whether to execute the Right of Entry agreement. There is nothing in the language of the Warranty to indicate that it is to be read down so as to exclude any requirement that might also be imposed by cl 27.1.2.
69 As a matter of language, both the Warranty and cl 27.1.2 are capable of covering the same or similar ground. The language of the Warranty imposes an obligation that might well go beyond providing references and information reasonably required by the Landlords for the purpose of determining whether to consent to an assignment of the lease. Nonetheless both provisions are perfectly capable of operating together. Clause 27.1.2 obliges the Purchaser to give the Landlords references and information reasonably required to enable them to consider whether to consent to an assignment of the lease. The Warranty obliges the Purchaser, among other things, to give the Landlords information reasonably required by them to determine whether they should execute the Right of Entry agreement.
70 The context in which both the Warranty and cl 27.1.2 appear supports a broader interpretation of the Warranty than that contended for by the Purchaser. Any landlord asked to execute a document whereby a third party lender, in the event of default by an incoming tenant, can remove "Secured Property" from the leasehold premises has a strong interest in ascertaining, for example, the financial strength and business acumen of the incoming tenant. Indeed, the Landlords implicitly made this point in their solicitor's email of 29 August 2008 to the Vendor's solicitor. In the context of a reference to Special Condition 12, the email pointed out that the Purchaser had not responded adequately to the Landlord's request for financial information.
71 Moreover, the Purchaser's construction of the Warranty could lead to a commercially extraordinary result. On the Purchaser's construction, if he wished to rescind the Contract he could simply decide to provide no financial information to the Landlords. That would prevent him from rescinding under cl 29.4 of the Contract, but the refusal to provide the information of the contract would not constitute a breach of the Warranty. Accordingly, so far as the terms of the Contract are concerned, the Purchaser would remain free to rescind pursuant to Special Condition 12.
72 It may be that this result could be avoided by applying the principle that a party to a contract is not entitled, as against the other party, to rely on an event (the failure to obtain the Landlord's consent to execute the Right of Entry agreement) caused or materially contributed to by the first party's own default: Suttor v Gundowda Pty Ltd [1950] HCA 35; 81 CLR 418, at 440-443, per Latham CJ, Williams and Fullagar JJ; Hunyor v Tilelli (1997) 8 BPR 15, 629 (McLelland J). However, it is not entirely clear whether, on the Purchaser's construction, that principle would apply in the circumstances of the present case. The possibility that the principle may not apply strongly suggests that the Purchaser's construction of the Warranty is not correct.
73 For these reasons I reject the Purchaser's construction argument. The primary Judge correctly held that the Warranty required the Purchaser to provide to the Landlords references and financial information reasonably required by them for the purpose of determining whether to consent to or execute the draft Right of Entry Agreement.