wealth Ge Lid v Sas Hills Pri Hospital v G i 7 les Pty

H.C. or A, Vendor and Purchaser - Crown leasehold - Terms of sale - Signed memorandu

1929, Whether concluded contract - Statute of Frauds (29 Car. c. 3). aw ADELAIDE, The appellant Company and the respondent were in negotiation for th

Sept. 26, 27, Sale by the appellant to the respondent of a Crown leasehold station

• and of cattle, 'Three directors of the Company and the respondent at

MELBOURNE, - _gimultaneously at the office of the Company's agerit for sale, After cer Nov. 7. written suggestions were communicated between the parties, a discussion to Knox CJ, place and points which had been raised were settled, As each was "Sia ana" it was noted by one of the agent's men. The result was a memorandi jixon JJ.

comprise all the detail necessary in a contract to meet such a sale as contemplated. Then a document was signed by the respondent by whi expressed himself as handing to the agent portion of deposit on purch the property for a specified price ''on terms as arranged between the v and the purchasers." The document concluded with an agreement b respondent "to sign the contract for sale as soon as the same is avai Subsequently the respondent conducted himself for a time as if a bai been made, but he repudiated the transaction before any formal contrac signed.

Held, by Knox C.J., Rich, Starke and Dixon JJ. (Isaacs J. dissenting), # the execution of a further contract was a condition or term of the bay and that no enforceable contract had been entered into.

Von Hatzfeldt-Wildenburg v. Alexander, (1912) 1 Ch, 284, applied.

Held, by Knox C.J., Rich and Dizon JJ. (Isaacs J. dissenting), that the "terms as arranged " mentioned in the document signed by the agent referred to the whole arrangement made at the interview between the parties and not merely to written terms, and that there was no sufficient memorandum in writing to satisfy the Statute of Frauds.

Judgment of the Supreme Court of South Australia (Piper J.): Sinclair : Scott Ltd. v. Naughton, (1929) S.A.S.R. 245, affirmed.

_ Aprzat from the Supreme Court of South Australia.

An action was brought in the Supreme Court of South Australia _ by Sinclair, Scott & Co. Ltd. (the vendor) against William Naughton (the purchaser) for specific performance of an alleged agreement to purchase a pastoral property in Queensland known as Mt. Leonard Station, together with stock and plant, and to take over a contract held by the plaintiff for the purchase of certain Calton Hills cattle _ and to pay interest thereon. The plaintiff alleged that the terms of the agreement were contained in two memoranda dated 18th December 1926 (exhibit E) and an undated document (exhibit D).

The plaintiff claimed specific performance of the agreement and : payment of the purchase price and interest thereon to date of

• judgment; alternatively the plaintiff claimed damages for breach of contract.

The defences, so far as material, were that no concluded agreement had been entered into, and that there was no memorandum in writing sufficient to satisfy the Statute of Frauds or the Sale of Goods Act

1895 (S.A.). The defendant counterclaimed the sum of £1,000 paid by him to the plaintiff as a deposit on the signing of the alleged agreement.

In the Supreme Court Piper J. held that no concluded contract had been entered into between the parties. He, therefore, dismissed the action and gave judgment for the defendant on the counterclaim or £1,000 : - Sinclair Scott Ltd. v. Naughton (1).

on this decision the plaintiff now appealed to the High Court.

is 'The material facts appear in the judgments hereunder.

Thomson (with him Stevens), for the appellant. The trial Judge did not take account of surrounding circumstances. Where it is a juestion whether there is a concluded contract or mere negotiation, (1) (1929) S.A.8.R. 245.

the whole of the conduct at material times must be looked is not merely a matter of construction (Rossiter v. Miller (1); B Wharfs Lid. v. W. Scott Fell & Co. (2); Niesmann v. Collingridge (3)

Even if all outside circumstances be excluded, as a mat sheer construction there is a concluded contract (Howard Smit Co. v. Varawa (5); Farmer v. Honan and Dunne (6)).

[Counsel for the respondent were now asked to address the Cou on the question arising under the Statute of Frauds.]

Cleland K.C. (with him Sutherland), for the respondent. It impossible to arrive at the "terms arranged" referred to in th document dated 18th December 1926 (exhibit E) without pa

respondent, is in no way connected with the other documents. a contract to be enforceable, there must be internal evidence on face of the signed memorandum either directly or ne incorporating another document.

[Drxon J. Is it not ambiguous whether the reference written or oral terms, and, if so, is not parol evidence admis: (See Long v. Millar (7); Stokes v. Whicher (8); Thoms McInnes (9).) ]

No, because the reference is to " terms," and not to a docum er An agreement to make an agreement is not recognized by the 1 (Von Hatzfeldt-Wildenburg v. Alexander (10) ). i

Thomson, in reply. For the purposes of the Statute of Fraud where there is in the signed memorandum a reference to someth else, evidence may be given to show that something els parol or in writing and, if in writing, identifying the

Cave v. Hastings (12); Boydell v. Drummond (13); Ridgwa Wharton (14) ; Harvey v. Edwards Dunlop & Co. (15) ).

(1) (1878) 3 App. Cas. 1124. (8) (1920) 1 Ch. 411, (2) (1908) 5 C.L.R. 647, (9) (1911) 12 C.L.R. 562. (3) (1921) 29 C.L.R. 17, (10) (1912) 1 Ch. 284. 'a

(4) (1878) 3 App. (11) (1890) 44 Ch. D. (5) (1907) 5 (12) (1881) 7 Q. a : (6) (1919) 26 . 183, (13) (1809) 11 Fast 142; 103 E.R. 958 (7) (1879) 4 C.P.D. 450. (14) (1857) 6 H.L.C. 238; 10 E.R, 128

{Isaacs J. referred to Bawnann v. James (1). _ [Srarxe J. referred to Thirkell v. Cambi (2).] If the ae can call this evidence, it clearly shows that ; exhibit D is the " terms arranged," and if the appellant must show : a connecting link on the face of the documents there is much of importance in the wording of exhibits E and D. If the Court 'is against the appellant on the Statute of Frauds, he is not liable to repay the £1,000 (Monnickendam v. Leanse (3); Thomas v.

Cleland K.C. referred to Coope v. Ridout (5) and Chillingworth v. _ Bsche (6).

Kyox 0.J., Ric anp Dixon JJ. This is an appeal by the plaintiff in a vendor's action for specific performance. Piper J., who heard the action, considered that the transaction was not a concluded _ contract but a provisional agreement intended to become binding when, and not before, a more formal instrument was prepared, _ agreed upon, and executed. Accordingly he dismissed the plaintiff's claim, and gave judgment for the defendant upon his counterclaim, ~ for £1,000, the amount paid in respect of the deposit. The subject of the transaction was a leasehold cattle station called '" Mt. Leonard," situated in South-Western Queensland close to the South ustralian border. It was to be a " walk-in-walk-out" sale, and the price for the concern was £24,000, of which £7,000 was ittributed to the leases, £3,000 to the plant and some horses, and £14,000 to the station cattle, 6,000 in number. An additional 1,060 cattle, called " Calton Hills" cattle, which the plaintiff had acquired just before the sale, were to be taken over at their purchase ice of £5 10s. per head, a further sum of £5,830.

; The plaintiff's agents, Dalgety & Co. Ltd., furnished the defendant ith particulars of the station, of the price sought and the terms

(1) (1868) 18 L.T, 424, (4) (1876) 1 Q.B.D. 714. (2) (1919) 2 K.B. (5) (1921) 1 Ch, 291. (3) (1923) 39 T.L. (6) (1924) 1 Ch. 97.

H.C. or A. offered; and after some correspondence the defendant caused a pe} inspection to be made on his behalf. The inspection took place at h srxcuarr, beginning of December 1926, and after some further communica & Goore. p, With Dalgety & Co. Ltd. the defendant came to Adelaide to discu: Naveurox, Matter with them there. He arrived on Saturday 18th Decemberand Kaoxcs, Wentat once to the office of Dalgety & Co. Ltd., where three dire

Rich J. of the i) autre Company also attended. The ebay: ron :

to the date of delivery, the proportion of cash to be paid on account of the cattle, the rate of interest on unpaid purchase-money, ascertainment of the numbers of the cattle by mustering or other the limitation of the time within which the plaintiff might b cattle, the removal of the cattle by the defendant and the payn of a price for cattle so removed, the adjustment of the rates an taxes, and the employment of the plaintiff's station manager. note of these proposals was made and taken to the plaintiff's direr who then made their suggestions upon these and other topics. - similar note was made of their suggestions and taken across to th defendant for his consideration. He proceeded to make counter suggestions, which were being noted down when one or more of plaintiff's directors came across to the room where the defendant They were called into the room and a discussion began in which points that had been raised were settled. As each was agreed upol the result was noted upon a fourth memorandum by one of Di &Co.'srepresentatives. The following is a copy of the notes which made : - " Delivery if bang tail muster 15th April 1927. Otherwise 1s April 1927. Price £10,000 for leases and plant. Leases to be held by vendors until possession is given and taken. Plant and horse £3,000 (300 horses £2 per hd.). Price for 6,000 cattle £14,000. Term for leases, 1/3rd cash. Balance 12 months, interest 649%. Lea remain in vendors' names until completion of deal. Terms terms for station cattle - 1/3rd cash, balance in 12 months at If in the event of purchaser removes any cattle before end 0 mos., all males to be paid for at the rate of £5 p. head and femal at £3p. head. Calton Hills cattle to take over to be taken over by purchaser at the price paid for by the vendor. Station to be d

the supervision of the present manager until possession is given and taken. Purchaser has the right to pay off the whole at any time during the 12 months at 6}%. Subject to consent of Commis- sioner. Vendors have right to brand until 31st January 1927. Rates Rents to be adjusted." Some discussion then took place as to the preparation of a contract of sale by solicitors who were to be instructed by the plaintiff. Dalgety & Co.'s representative wrote out two memoranda in the form of letters, which, when completed by signing, were as follows : - " Adelaide, 18th December 1926 [South Australian 1s. duty stamp]. Messrs. Dalgety & Co. Ltd., Adelaide. Dear Sirs - W. N. & Co. - We/I hand you herewith £1,000 pounds _ being portion of deposit on purchase of pastoral property known as Mt. Leonard Station in State of Queensland together with stock and plant for the price of £24,000 on terms as arranged between the _ vendors and the purchasers and we/I agree to sign the contract for sale as soon as same is available. - Yours faithfully, Wm. Naughton & Co. - Witness, Geo. F. Bruce Coulter. I confirm that the sale has been made by Messrs. Dalgety & Co. Ltd. as above. - For Sinclair, Scott & Co. Ltd., 8. B. Sinclair." "Adelaide, 18th December 1926 [South Australian 1s. duty stamp] - Messrs. Sinclair, Scott & Co. _ Ltd., Mt. Leonard Stn., Queensland. Dear Sirs, W. N. & Co. - We/I agree to take over your contract for purchase of Calton Hills cattle plus 7%, interest to date of delivery. - Yours faithfully, _ Wm. Naughton & Co." The alteration from "I " to " we" was made at the defendant's request because he was undecided whether he would form a company to complete the purchase. The defendant returned that day to Melbourne, and he and Dalgety & Co. Ltd. began at once _ to correspond with one another for the purpose of carrying the sale into effect. He commenced by telling them that he might form a company of which his family and another person would be members, he being a guarantor only. They responded with "a sketch of the different matters in connection with the agreement made between Sinclair, Scott & Co. and yourself regarding the purchase of Mt.

Leonard." He wired that he was posting a cheque for " £500 deposit leases," but this he failed to do. In January they wrote : "We enclose herewith copy of agreement as drawn up by Messrs. 'Sinclair, Scott & Co.'s solicitors, which we would be glad if you will

Scott's solicitors . . . was drawn up as between you persona and the vendors." This document, as might have been expe

in many particulars went beyond the matters upon which the parties had agreed on 18th December 1926. Beside clauses relating ti

purchase-money, and to requisitions upon title, it contained pro visions dealing with the disposal or removal of plant and buildi the payment of a high rate of interest (10 per cent) in the eve of default in completion, insurance, easements, the payment of by the purchaser, the assumption by the defendant of the and burden of certain agreements, the time when and the condi under which the purchaser might pay off purchase-money before it became due, and some details about stores and other matters, andit also included an arbitration clause. The defendant in the mea began to complain, unjustly as it has been found, that he had

consideration of the cases and having regard to the nature importance of the transaction, and the language of the letter on 18th December, I think the parties regarded a more comp contract as essential and I feel bound to hold that what was was subject to the preparation and execution of a further docun which would be the complete contract." We agree in this con

We do not think the parties gave their final consent to terms b which they were content to be bound as a complete and exha statement of their rights and liabilities. The transaction was on of some magnitude. It related to the transfer of an unde as a going concern, and unless the parties were entirely inexperi they must have known that many subsidiary questions would req attention and arrangement before such a piece of business could satisfactorily carried through. They could scarcely have re} the sale of Queensland Crown leases as a dealing needing no

he form which the letter takes reflects the minds of the parties. It

• first narrates the payment of the £1,000 as part of the deposit; it ext describes the general character of the transactions in relation o which it was paid, namely, the purchase of the station at the
• specified price and on the terms as arranged between the vendors nd the purchasers, and then proceeds to state what the tenor of the promise is, namely, to sign the contract of sale. We think, as a iter of construction, that the execution of the further contract was a condition or term of the bargain and not a mere expression of he desire of the parties as to the manner in which a transaction a eady agreed to will in fact go through (Von Hatzfeldt-Wildenburg ov Alexander (1) ). There was not a final consent of the parties

erms than those which appear from or are alluded to in the letter, _ which expresses an agreement to make an indeterminate contract. (See Rossdale v. Denny (2), per Lord Sterndale M.R., and Chilling- vy. Esche (3), per Sargant L.J.) The case is not one in which parties were content to be bound immediately and exclusively

further contract in substitution for the first contract, containing, y consent, additional terms. Such a possible case is mentioned y Lord Loreburn in Love & Stewart Ltd. v. S. Instone & Co. (4), nd perhaps it is contemplated by Mr. Ameer Ali in Harichand haram v. Govind Luaman Gokhale (5), when he speaks of the ry terms that a vakil might consider necessary for insertion 'ina formal document, although his allusion may be to terms implied ause usual. We think that the preliminary agreement of the

(1) (1912) 1 Ch,, at p. 2 (4) (1917) 33 T.L.R. 475, at p. 476. (2) (1921) 1 Ch. 57, at p. 67. (5) (1922) LR. 50 Ind. App. 25, a 3) (1924) 1 Ch., at p. 114. p. 31.

plaintiff and defendant was directed to the making of a contract which alone was to constitute and regulate the sale purchase of the station.

It follows that a contract binding in point of law was n concluded.

We have not overlooked the fact that the defendant after December for some time conducted himself as if he considered bargain had been made, but we think this is a matter which afford little or no assistance in forming an opinion upon the question «

when similar considerations were relied upon. Nor do we thinl any assistance is to be derived from an examination of the comme: propriety or impropriety of the defendant's conduct in retres from the transaction when he did.

What we have said is enough to dispose of the appeal. But think it right to add that, in our opinion, the plaintiff's action 0 in any case to fail, because the requirements of the Statute of Fraw are not satisfied. The plaintiff's contention that the signed of 18th December 1926 was sufficiently connected with unsi writings, and that these together contained all the terms of th agreement fails, we think, upon the facts. r

The "terms as arranged between the vendors and purchi to which this document refers are shown by the facts to be t orally agreed on, and the reference is to the whole arrangement at the interview, and not simply to the terms noted upon the fo memorandum. Moreover, this memorandum does not contain 4 complete statement of those terms. It does not state that the sal is " upon a walk-in-and-walk-out basis." It does not state that

only before 31st January 1927. It does not state the true a ment about the manager, nor, indeed, state any part of it intellig More important still there is no statement of the arrangement the deposit. To overcome this last difficulty it was contended thi a letter written by the plaintiff to the defendant on 26th Novemb

1926 in the course of the negotiations leading up to the discussions 18th December 1926 should be considered as covered by the reference to the "terms as arranged." In point of fact we cannot agree that this phrase in the document of 18th December 1926 was ended so to refer to the letter of 26th November; but, even if 'it did so, the difficulty would not be overcome. The letter of 6th November 1926 expresses the willingness of the vendor to accept 10 per cent deposit, and the balance of the purchase-money on completion of delivery. This is inconsistent with the terms ultimately arranged by which one-third was to be paid in cash, andthe balance in twelve months. The inconsistency cannot be meiled by anything but oral evidence showing the true terms actually agreed upon.

_ For these reasons we think that the requirements of the Statute of Frauds were not satisfied.

a We think that the appeal should be dismissed with costs.

• Isaacs J. Only two questions were argued on this appeal. They e of considerable importance, because the circumstances giving to them are typical of many transactions of magnitude. One whether, on the true interpretation of the signed documents, the parties had arrived at a concluded bargain, or had stopped while ill in negotiation only. That is to say, whether the documents, operly construed, constituted a bargain of sale and purchase, itaining a provision to reduce the briefly expressed terms of agree- nt to a formal contract, or by the reference to a contract to be ed indicated that no sale or purchase had yet been made. The other was whether, assuming there was a concluded bargain, it was evidenced as required by the Statute of Frauds.

_ In my opinion, the Court, in the proved circumstances of this e, having regard not merely to the justice of the present cause, but also to the science of the law and the business community ally, who expect honest bargains to be carried out as business n would understand them, should uphold the appellants' claim to enforce the contract. Indeed, as will presently be seen, the ndent's claim to have his deposit returned on the ground that contract exists, is a self-confessed fraud.

Perhaps I may with advantage at once make one or two obser tions on the law of the case, applicable to both branches. documents signed by the parties and to be construed by the Cour are not formal documents, prepared by lawyers and couched in s legal terms. They are informal business instruments, prepared it the hurry of business, purporting only to be memoranda of th agreement verbally arrived at by men engaged in selling and purchasing property. They are not required to be very exact (p Tindal C.J. in Acebal vy. Levy (1)). Even where more form documents are framed, '' the words must not be applied to everytl that might be said to come within a possible dictionary use of then but must be interpreted in the way in which business men w interpret them, when used in relation to a business matter of that " description'? (per Lord Herschell in Southland Fi Meat and Produce Export Co. v. Nelson Bros. (2)). But wher informal documents occur, a further precaution has to be obs

liberally for the purpose of carrying out the object of the parti And further, where, as here, the documents are on their face 1 memoranda of what has been definitely agreed to, and without words of condition such as " subject to " or "if approved, is made to what is called " the contract ' - the case being one wl a formal document would naturally be contemplated - then " contract" is primarily at all events merely in contrast with "memorandum " of the bargain, and the meaning is that the tet contained in the memorandum shall simply be reduced to form: expression with perhaps subsidiary provisions well understood. I is this doctrine of fair and liberal interpretation of what on tht face are memoranda, that pervades this class of case, including tl nature of the description sufficient in a signed document respectin the document said to be referred to therein.

(1) (1834) 4 Moo, & S, 217, at p. 220; (2) (1898) A.C. 442, at p. 444. 131 E.R. 949. (3) (1872) L.R. 4 P.C, 171, at p.

Now, before stating the precise difficulties attending each of the points mentioned, a short sketch of the material facts will be necessary. The appellants were owners of a cattle station in Queens- ~ land, called " Mount Leonard," and in September 1926 placed it in the hands of Dalgety & Co. Ltd. for sale. From October 1926 to 18th December 1926 the parties were in negotiation for a walk-in- walk-out sale and purchase. During those negotiations the respon- dent was expressly informed that in the event of a purchase two _ things would be required by the appellants, namely, (1) that certain Calton Hills cattle recently purchased by the vendors and placed on _ the station under offer would have to be taken over at cost price (letter of 17th November 1926) ; and (2) that there would be a deposit of 10 per cent, balance on completion of delivery, unless extended payments were arranged for (letter of 26th November 1926). Those i were, so to speak, made the basis of the negotiations and stood on record. On 18th December 1926 the respondent met directors of the appellant Company and certain officials of Dalgety & Co. at i Dalgety's office, and further negotiated. The learned trial Judge _ inferred, and I agree with him, that the requirement as to the

• deposit was included in the basis of negotiation. His finding inevitably connoted that the defendant had received the letter of
• 26th November. It could not well be otherwise. Indeed, the : "deposit" itself is specifically mentioned in the signed memorandum, _and is clearly referable to the letter of 26th November 1926, and to nothing else. Then, as Piper J. says, " proposals and counter- proposals were made and noted down, and ultimately plaintiff's directors and defendant came to terms, noted down in a memorandum, exhibit D." That exhibit sets out a number of terms stated in a typically mercantile way, as for instance : - ' Price £10,000 for leases and plant. Leases to be held by vendors until "possession is given and taken. . . . Terms for leases, 1/3rd eash. Balance 12 months, interest 63%. Leases to remain in vendors' names until completion of deal. Terms - Stock - terms for station cattle - 1/3rd cash, balance in 12 months at 64%. Calton Hills cattle . . . to be taken over by the purchaser at the price paid by the vendor." And so on. The evidence for the appellants, uncontradicted and even unchallenged

by cross-examination, as to the genesis and purpose of exhil leaves no doubt as to its having been written down in the p of vendors and purchasers as the written record of the terms a; upon, other than the basic term of deposit. It is proved that. 18th December Naughton desired to discuss matters with D: representatives, Coulter and Bolitho, apart from the vendo directors. This was done in a separate room, Coulter's room. Som proposals were written down, the writing brought into the where the directors were, and there discussed in Naughton's absenes Counter-proposals were written down and taken back to Nai

I went into room - Coulter's room. Naughton was and we went through the various points mentioned, and as they finalized Coulter wrote them on a sheet of paper. The exhibit Di the document Coulter wrote out." This is the evidence accepted the learned trial Judge, and it is to me incomprehensible how an conclusion other than that at which his Honor arrived is possible respect to exhibit D. If such a document, written in such cit stances, with the assent and in presence of buyer and seller, is no to be regarded as the written record of terms agreed on, business men will have no sense of security in their mutual tra tions. Of course, so far, such a document is only evidence, when identified, of the terms orally agreed to. But still it is evidence, and if in some way referred to in a signed memora proves the terms agreed to. Exhibit D having been thus bro into existence, obviously as a record, the next step was to ma a written agreement. Mr. Stanley Sinclair thus describes th process : - " Later a contract for sale of the station was written ot

• the Calton Hills property. The two letters, exhibit B, written by Mr. Coulter. I signed and saw the signatures put ther by others. Coulter signed as a witness." The process is tht referred to by the learned Judge : - ' Having come to these term

two memoranda in the form of letters were written out and si both by the defendant by his firm name, Wm. Naughton & and one by Mr. 8. B. Sinclair for plaintiff Company, and defen

paid the £1,000. The memoranda are as follows : - " Adelaide, 18th December 1926 [South Australian 1s. duty stamp]. Messrs. ; Dalgety & Co. Ltd., Adelaide. Dear Sirs, . . . We hand you herewith £1,000 being portion of deposit on purchase of pastoral property known as Mt. Leonard Station in State of Queensland together with stock and plant for the price of £24,000 on terms as _ arranged between the vendors and purchasers, and we agree to sign _ the contract for sale as soon as same is available - Yours faithfully, Wn. Naughton & Co. - Witness, George F. Bruce Coulter. I confirm that the sale has been made by Messrs. Dalgety & Co. Ltd. as above. - For Sinclair, Scott & Co. Ltd., S. B. Sinclair." " Adelaide, 18th December 1926 [South Australian 1s. duty stamp] - Messrs. Sinclair, Scott & Co. Ltd., Mt. Leonard Stn., Queensland. Dear Sirs, _W. N. & Co. - We agree to take over your contract for purchase of Calton Hills cattle plus 7% interest to date of delivery - 'Yours faithfully, Wm. Naughton & Co.' At this point Mr. 'Stanley Sinclair says: "When the matter was finalized Naughton gave Coulter his cheque for £1,000 . . . and said he would send the balance of deposit over as soon as he got to Melbourne." _ "The balance" could only mean one thing, namely, the balance of the 10 per cent stipulated in the letter of 26th November. That was a distinct reference to the required deposit, and leaves no doubt that the expression "deposit on purchase of pastoral property" &c. in exhibit E was understood by both parties as teferring to the written stipulation in the letter mentioned. In ruth, when Naughton reached Melbourne, he wired to Dalgety on

espondent at the interview of 18th December intimated " that might arrange for the purchase to be completed by a firm or by a mpany, and on 20th December he telegraphed and wrote Dalgety's ordelay (evidently meaning delay in drawing up a formal contract) ing his decision as to names with my (defendant's) guarantee." e delay requested was clearly for completion, not negotiation.

• On 23rd December Dalgety & Co. wrote to the respond the appellants were not " prepared to make any alteration arrangements already completed in connection with the sale." A

the recorded terms arranged on 18th December was this: "

bound by the contract. On 11th January Dalgety's sent Nau a copy of a formal agreement as drawn by appellants' solic i blanks to be filled in. Ultimately, respondent, as Piper J.

" objected that the leases were subject to certain government h of resumption and that he refused to go on with the p But in this connection two letters are of extreme import On 24th February the appellants' solicitors wrote to the re dent's solicitors, asking if it were true that he refused to proc further with the contract. His solicitor replied on Ist Mar acknowledging receipt of that letter, stating that he was in anotl State, and adding what, to my mind, is a decisive answer to ai suggestion that the respondent understood there was as y binding contract, namely, " At the last interview we had with ] on the subject, he stated that he intended to hold your client to contract." If that is a true statement - and its truth cannot

1927 to perform the contract. Reading that with his state his own solicitor, it means that he then believed the appe were responsible to him for breach of a concluded contract.

the legal position as to the two points referred to in order.

(1) The law on the first point is authoritatively expressed Privy Council in Harichand Mancharam v. Govind Luxman (1). In that case, which was even less clear than this, it W question whether there was a concluded bargain for the

ending purchaser, the plaintiff, and describing the vendor, the appellant, proceeded thus : - "' I agree.to give you in sale" the land for the price mentioned. It then gave the " conditions " of the sale in these terms : - " The conditions thereof are as follows: (1) The _ bargain paper in respect of the sale of the said immovable property shall be made through a vakil within two days from this day and at the time of making the bargain paper I am to take from you by way : of earnest money in respect thereof R's 10,000," &c. At the trial he learned Judge came to the conclusion that there was no constituted contract, chiefly relying on the use of the words "the onditions thereof are as follows,' and he considered that the bargain was subject to the conditions as to the making of the bargain paper." The High Court of Bombay in its appellate diction reversed that decision, holding that there was already a binding contract. From that decision an appeal came to the

d Carson and Mr. Ameer Ali, the judgment being delivered by . Ameer Ali. In that judgment, it is said (1) : - ' The learned ief Justice points out in his judgment that the word ' conditions' at the beginning of exhibit A in connection with the preparation the' bargain paper ' by a vakil, does not mean that it is a condition 0 which the bargain is subject, but that it is only one of the terms the contract. Their Lordships concur in that view." Note the word "subject." Then follows this passage : - " Whether an nt is a completed bargain or merely a provisional arrange- nt depends on the intention of the parties, as deducible from the nguage used by the parties on the occasion when the negotiations ake a concrete shape. As observed by the Lord Chancellor (Lord worth) in Ridgway v. Wharton (2), the fact of a subsequent eement being prepared may be evidence that the previous tiations did not amount to an agreement, but the mere fact that ms Wish to have a formal agreement drawn up does not establish : proposition that they cannot be bound by a previous agreement. Von Hatzfeldt-Wildenburg v. Alexander (3) Parker J. laid down that the acceptance by the plaintiff was subject toa condition that

(1) (1922) LR. 50 Ind. App., at p. 30. 10 E.R, 1287. -Q) (1857) 6 H.T.C,, ai pp. 363,364; (3) (1912) 1 Ch, 284.

the plaintiff's solicitors should approve the title to and the co contained in the lease, the title from the freeholder and the forr contract, the negotiations did not form a binding agreement be' the parties. The facts of that case were wholly different from present, but the judgment marks the difference between a co and binding agreement and one subject to a condition. Here A and Al show clearly that the parties had come to a defin complete agreement on the subject of the sale. They embodi the documents that were exchanged the principal terms of 1 bargain on which they were in absolute agreement, and reg which they did not contemplate any variation or change. - reservation in respect of a formal document to be prepared by a only means that it should be put into proper shape and in phraseology with any subsidiary terms that the vakil might consid necessary for insertion in the formal document." (Italics are n i Then reference is made to a letter of the defendant's attorney, three days later than the bargain, which their Lordships say shows the defendants regarded the document A as forming the foundat of the contract. Finally, reference is made to a clause of ex Al, stating: "This bargain is for the purchase of this im

Practically every above-quoted word of that judgment is ap to the present case, and every feature of importance in that ca has its counterpart here. There are here, however, a8 W presently seen, further confirmatory features. The words chase," " deposit," " terms as arranged," " vendors and pureh "sion the contract for sale," "'as soon as the same is ava "confirm that the sale has been made," "agree to take contract for purchase of Calton Hills cattle" and the le 1st March, are almost the replicas of " sale," "I give you," "t bargain paper," " through a vakil," " earnest money," the lette 1st December, and clause 7 of exhibit A. And the main ground' which the learned trial Judge arrived at his conclusion is singt

like that on which the primary judgment in the Indian case was 1. ©. or A.

chiefly founded. But there is one distinguishing feature in the oe

present case of high importance, and entirely in favour of the siyctam,

appellants: in the Indian case the word "conditions" gave rise fo

to difficulty ; here there is no such word. After the words "vendors v now,

and purchasers "' in exhibit E, the words are not words of qualifica- tion or limitation, but of addition, namely, "and we agree to sign

• the contract for sale as soon as same is available." If the agreement

uses the words " subject to," the primary signification is that a true eondition is prescribed, which the context or circumstances may reduce to a mere term of a concluded bargain. (See per Jessel M.R. in Winn v. Bull (1).) But the word " and " is primarily and almost certainly not conditional, but something added. Context or cireum- stances may alter it, but with difficulty, and the onus is on the one setting up the extraordinary meaning.

I do not in this case, reading the documents as a whole by the light of surrounding circumstances, think there is any ambiguity which lets in extrinsic evidence as to the construction of the plain words used. Conduct by which both parties concur in placing 'the same construction on words that are in themselves of doubtful _ construction, sometimes, but very rarely, may be accepted by the Court (see Forbes v. Watt (2) ). But here both parties (letters of 'th February 1927 and 1st March 1927) treat the bargain as concluded. The draft formal contract was at least consistent with that view, and as a mere endeavour on one side to attain formality _ with necessary subsidiary terms, which might or might not be justified. The appellants never suggested the lack of a concluded _ bargain. Nor did the respondent till much later - I think only by his pleader after action brought. Therefore we are left to the bare construction of the words used, having regard to their natural

• signification and the surrounding circumstances, confirmed by the Tespondent's own admission in March 1927 above referred to.

__ Inaddition to what I have already said, two or three observations seem desirable. The words "agree to sign" the contract for sale as soon as the "same is available" appear fairly free from doubt. They contemplate a formal contract embodying the agreed terms

(J) (1877) 7 Ch. D. 29, at p. 32. (2) (1872) L.R. 2 Se. App. 214.

of the memorandum to be prepared by or on behalf of the vendor: and then - assuming it correctly sets out the bargain - it is to be signed. There is no further negotiation contemplated, and "approval" is stipulated for, no new terms are suggested, "terms as arranged " are treated as complete after the prior reference to the deposit, and the signature is regarded as obligatory. Next,

definitely occurred, would hardly be a business operation. The payment of £1,000 and the subsequent step towards paying £ more before the "contract"? was prepared, are more stro indicative of a completed bargain than of mere negotiation. learned trial Judge thought that the postponement of payment of part of the deposit was of some significance that a final contrac had not been made, and his Honor relied on two cases. But, wi great respect, there is a vital distinction. In both the cases cited the agreement was to pay the deposit on the signing of the formal contract. There is nothing to outweigh the facts that £1,000 was paid and £500 further was intended to be paid before " the contract" was signed. Lastly, the absolutely expressed agreement to tak over the Calton Hills cattle contract is flatly inconsistent with state of freedom in respect of the station plant and other ca In one sense, it may be said the Calton Hills cattle was a separate transaction. That is the liability was taken over. But the lette of 17th November says that "in the event of a sale of Mt. Leona the buyer will be expected to take these over at cost price." 0 if there is a "sale," and the " buyer" is to take them over. On the whole, this case falls within the class of cases represe by the Indian case cited, and others which may be found quo for instance, in Williams on Vendor and Purchaser, 3rd ed., p- T note (k). It is innotable contrast with the class of cases exemplif in note 1, p. 18. Lord Westbury L.C. drew the line in Chinnock v. Marchioness of Ely (1). There is, in my opinion, no legal reason compelling me to as the respondent to commit a fraud. (2) The second point is, to my mind, equally clear. There can be no doubt that the Statute of Frauds requires that all the terms of the

(1) (1864) 4 DeG. J. & S, 638, at p. 646; 46 E.R. 1066.

contract sued on shall be in writing, and that the defendant's signature H. C. or A. shall govern all the terms. Where it is necessary to refer to some st document other than that actually signed, they must be properly srycrarr, connected. In Franco-British Ship Store Co. v. Compagnie des » ecu Chargeurs Francaise (1) the present Lord Chancellor (then Sankey J.) pre said : - " The rule is that the connection between several documents cae must appear on the face of the documents themselves. . . . The statute is not complied with unless the whole contract is embodied either in some writing signed by the party or in some paper referred to in a signed document and capable of being identified by means of the description of it contained in the signed paper." That is the tule of the interpretation of the statute established by Ridgway v. Wharton (2), Baumann v. James (3), Cave v. Hastings (4), Long v.

But two questions remain, and to prevent confusion need to be separately stated. One is as to the extent of description permissible, and the other as to the legitimate nature of the evidence of identifica- tion. While it is, according to the cases cited, an error to attempt by parol evidence to connect with the signed document another document not itself in some way referred to therein, it is equally in these days an error to exclude parol evidence merely because the teference to a document is not specific. As Holdsworth says in his History of English Law (vol. v1., at p. 393), the clauses of the statute "have remained amid changes, not only in legal, but also in social and commercial ideas. But case law is naturally influenced by these changes - that it is so influenced is not the least of the advantages which it possesses." Naturally that occurs most readily in relation to those rules of evidence which find their authority in the practice of the Court. The cases above referred to indicate the elasticity which the Court thinks consistent with a just amplification of the statute in modern circumstances. In Ridgway v. Wharton (2) the only reference was by the word "instructions"; in Bawnann v. James (3) it was by the words " terms agreed upon"; in Cave v. Hastings (4), by the word "arrangement " ; in Long v. Millar (5), by the word " purchase"; in the Franco-British &c. Co.'s Case (6),

(1) (1926) 42 'T.L.R. 735, at p 736. (4) (1881) 7 Q.B.D. 125.

(2) (1857) 6 H.L.C, 238; 10 E.R. 1287, (5) (1879) 4 C.P.D. 450. (3) (1868) L.R. 3 Ch. 508. (6) (1926) 42 T.L.R. 735.

by the word "agreement." It is clear to me that the description may be by any reference which the parties in the circumstances would consider capable of satisfactory identification. To apply The - "Teutonia" (1) doctrine to the present case: - With the knowledge - on both sides that a basic requirement of a deposit of 10 per cent - had been stipulated by letter, what other meaning, if exhibit E be - "construed fairly and liberally for the purpose of carrying out the 7 object of the parties" (2), could be attributed to the words "portion _ of deposit," &c., than the stipulation referred to? And in the - same way, what other meaning could be attached to the "terms as _ arranged between the vendors and purchasers" than the term as _ recorded in Coulter's memorandum? As to both these provisions, : they come directly within Lord Cranworth's formulation in Ridgway - v. Wharton, in the House of Lords (3), for altering the opinion he ; had expressed in the Court below (4), a formulation necessarily : framed after grave and careful consideration. It is in these words = A " The authorities lead to this conclusion, that if there is an agreement _ to do something, not expressed on the face of the agreement signed, - that something which is to be done being included in some other 3 writing, parol evidence may be admitted to show what that writing - is, so that the two taken together may constitute a binding agreement within the Statute of Frauds." There is no word in the Lord Chan- a cellor's formulation, nor in his whole judgment, requiring one writing : to be the only document containing the terms, nor excluding it so long as it does in fact contain the terms, and is in some way referred _ to in the signed document. All that is necessary is satisfactory proof _ of identity of a document referred to in a signed document containing - a statement of what is agreed to be done. For instance, in Bawnann v. James (5) the absence of other instructions than the document produced is not stated as a legal necessity, but as a circumstance affecting the conclusion of fact. That is made perfectly clear both by the reference to Ridgway v. Wharton (6) and by the reports of - Baumann v. James in the Law Times and in the Weekly Reporter (7). In both these reports (I quote from the former for the sake of

(1) (1872) L.R. 4 P.O. 171. (4) (1854) 3 DeG. M. & G, 67, at p- (2) (1872) LR. 4 P.C., at p. 694; 43 E.R. 266. (3) (1857) 6 FLL.G., at pp. 25 (5) (1868) LR. 3 C

one word) it appears that Wood L.J. said with reference to Ridgway y. Wharton (1): "It did not necessarily follow that the instructions "there given were in writing ; it was sufficient to identify them by parol evidence, and to show that there were instructions in writing: to which one ought to add that the case would be quite clear if there were no other written instructions." The case of Newell v. Radford (2) is most valuable on this point. It shows that the surrounding circumstances may be proved in order that the Court may by veasonable intendment gather the meaning the parties put upon the words of reference used in the signed memorandum. 'That case is approved in this point by Chitty L.J. in Sheers v. Thimbleby & Son (3), and followed by McCardie J. in Cohen v. Roche (4).

Tt becomes then a mere ordinary matter of evidence as to the identity of the document or documents referred to. The expression "terms agreed upon" in Baumann v. James (5) included the actual matters of agreement as much as the present case, but because those were in fact embodied in a document, that embodiment was taken to be what the parties understood by the expressions used. It is in that respect indistinguishable from this case. Similarly as to "deposit." Again in Bawmann v. James the expression referred to required reference to more than one document. That was even a _ stronger case than the present.

In this case, as Piper J. has found, the "' terms as arranged " and the term as to the " deposit " are included in two documents, both _ of which existed prior to the execution of the signed memorandum (Williams v. Jordan (6)), and are as identified covered by the signature of the respondent.

T entirely agree with the conclusion come to by the learned trial Judge on this part of the case, and I regret that an honest and plain A business transaction, deliberately entered into, should be considered as incapable of enforcement.

Starke J. Two questions were argued in this case, firstly, whether there was any concluded contract between the parties, and secondly, whether there existed any memorandum of the contract sufficient to satisfy the Statute of Frauds.

(1) (1857) 6 H.L.C, 238 ; 10 E.R. 1287. (4) (1927) 1 K.B. 169. (2) (1867) LR. 3 CP. 52. (5) (1868) L.R. 3 Ch. 508, (3) (1897) 76 LP. 709, at p. 712. (6) (1877) 6 Ch. D. 517.

The first question depends upon the proper interpretation of a document signed by Naughton and confirmed by Sinclair, Scott & | Ltd. The document reads as follows: " We/I hand you here 1,000 pounds being portion of deposit on purchase of past property known as Mt. Leonard Station in State of Quee together with stock and plant for the price of £24,000, on term arranged between the vendors and purchasers, and we/I agree te sign the contract of sale as soon as same is available. confirm that the sale has been made by Messrs. Dalgety & Co. " The "terms arranged " between the parties ref to certain heads or notes of arrangement, in writing but unsi

which I shall mention later, and to certain verbal communicat between the parties. In Von Hatzfeldt-Wildenburg v. Alexande (1) Parker J. said: - "It appears to be well settled by authorities that if the documents or letters relied on as consti a contract contemplate the execution of a further contract be the parties, it is a question of construction whether the executi on of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the mamne in which the transaction already agreed to will in fact go thro In the former case there is no enforceable contract either becaus the condition is unfulfilled or because the law does not recognize a contract to enter into a contract. In the latter case there is a bin contract and the reference to the more formal document may b ignored." In an arrangement for the sale of a station, together with stock and plant, a great many details must remain to be subse- quently settled - especially as to title, delivery, and so forth. In h present case the heads of the arrangement to which I have refe supply short notes of the terms of that arrangement, and the verb communications some further stipulations ; but between them they by no means comprise the detail necessary in a contract of character relied upon in this case. The parties therefore stipulated

"the contract of sale," and that it should be signed as soon a available. "It is one thing for two parties to settle what are to b the terms of an agreement, if it should be made; and quite 18

wulated for "the contract of sale" asa condition or termof the . S°°T™ n, without which there was no enforceable contract. Pe this view, it is unnecessary to determine whether there was

any memorandum of the contract sufficient to satisfy the Statute of Frauds, and I think it safer to refrain from any pronouncement on