Wallace v Hermans

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

For the reasons which I have given in Sargent v. A.S.L. Developments Ltd. [4] , I consider that cl. 16 conferred a right on the respondent to rescind the contract on the ground that the property was affected by interim development otherwise than as stated in the 4th Sch. to the contract. The question which then arises is whether the respondent was precluded from exercising the right of rescission which the clause conferred by reason of an election to affirm the contract.

The case made in this respect for the appellants is that the respondent elected to affirm the contract in correspondence from her solicitors to the appellants' solicitors. Two letters are relied upon: first, a letter dated 21st January 1969 furnishing particulars of title in accordance with a provision in the contract; secondly, a letter of 16th March 1973 stating "We shall notify you when transmission has been effected" at a time when the appellants were in possession. Although the respondent had no actual knowledge of the planning scheme or the order it is submitted that there should be imputed to the respondent at all material times from the making of the contract a knowledge that the land was zoned under the Interim Development Order. The submission is based on the circumstance that her solicitors were a long-established firm in Coffs Harbour and that they should therefore be presumed to know of the existence of the Interim Development Order and that the land fell within the purview of the scheme. His Honour was prepared to draw that inference but declined to infer that any member of the firm was aware of the actual zoning applicable to the property.

In my view the knowledge of the actual zoning under the Order is immaterial. All that need be established under cl. 16 is that the property was "affected by interim development otherwise than as stated in the Fourth Schedule". To bring the clause into operation it is not necessary to show that the property is subject to a particular zoning unless the statement made in the 4th Sch. makes that circumstance relevant.

However, I can see no basis for inferring that the respondent's solicitors had knowledge that the property was affected by the Interim Development Order before they ascertained this fact from the Shire Council in June 1973. The order did not apply to all land in the Shire and there is nothing to identify the land which was exempt or to demonstrate that the respondent's solicitors probably knew that the property was situated in that part of the Shire which was not exempt. Moreover, there are some indications that the solicitors until June 1973 thought that the property was in the neighbouring Shire of Bellingen. The contract described the property as being situate within the latter Shire and on 18th May 1973 the respondent's solicitors, when seeking information as to the Interim Development Order, wrote to the Shire of Bellingen which advised them that they should make inquiry from the Shire of Coffs Harbour. Accordingly, the evidence does not establish that the solicitors knew that the Interim Development Order applied to the property.

An alternative submission of waiver or election was made, based on the respondent's delay in rescinding the contract after the solicitors received the letter from the Coffs Harbour Shire Council advising of the existence of the Interim Development Order on 25th June 1973. It is clear that the time which elapsed after 25th June was taken up in obtaining counsel's advice. Rescission took place promptly after that advice was furnished. There is therefore no foundation for the suggestion that there was a waiver or election by the respondent after receiving the advice from the Shire Council.

High Court of Australia McTiernan A.C.J. Stephen and Mason JJ. Wallace v Hermans [1974] HCA 42

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