Wendt v Bruce [1931] HCA 9

Wendt v Bruce [1931] HCA 9 - HCA 1931 case summary — Zoe

[22]

Cleland K.C. (with him Kearnan), for the appellant. Time was not originally of the essence of the contract, but the letter of 15th October 1928 made it so. The appellant was justified in making time of the essence of the contract by notice, and the notice given was reasonable. Upon the failure of the respondent to complete at the expiration of the time limited by the notice, he committed a breach of contract and thereupon a cause of action became vested in the appellant. The appellant could then forthwith have issued a writ for damages for breach of contract and return of deposit or, subject to the next proposition, for specific performance. The terms of the notice given by the appellant (that in the event of failure to complete he would treat the contract as at an end) may have amounted to an election by him to follow his common law remedy for damages, and, if that be so, his equitable remedy for specific performance was not open, but, be that as it may, the cause of action for damages and return of the deposit was not affected or prejudiced. The appellant was under no obligation after the respondent's breach of contract, by failure to complete, to do any- thing further to perfect his cause of action, or to formally or to further rescind the contract. The judgment appealed from, erroneously applies to this case the principles of law applicable to an " anticipa- tory breach " by refusal to perform before the time for performance has arrived. In such a case it is conceded that the other party has aright to elect whether he will treat the contract as at an end and at once sue for damages, or whether he will wait until the time of perform- ance has arrived and then proceed. Where, as here, an actual breach takes place at the time of performance there is a definite cause of action and (apart from the terms of the notice) the defendant can at once sue for damages or specific performance. The defendant (but not the plaintiff) could, no doubt, elect which remedy he would adopt to enforce his cause of action, that is, either to sue for damages

[46]

specified design and complete it before Ist March 1927, to lay on water, and to supply some fencing posts. Further, by another agreement of the same date, the vendor agreed that for the next wheat season, that of 1927-1928, the purchaser should cultivate 700 acres of the land as a share-farmer, and should be entitled to fallow the land which was under crop in 1926, the fallowing being "for his use after taking possession on the Ist day of March 1928 of the said block as purchaser thereof under an agreement for sale and purchase entered into simultaneously herewith by the parties hereto." Up to Ist March 1928 the parties substantially performed the provisions of these agreements. But the vendor was not then in a position to complete the contract, because his land was encum- bered with greater liabilities than the contract provided for. The purchaser, who had in fact used and occupied the land for the purpose of his share-farming agreement, remained in possession, and sowed 1,400 acres of wheat for the ensuing season. The vendor's solicitors made some efforts to rearrange the encumbrances, which included other land as well as the land sold, so that the sale might be completed according to the terms of the contract. The purchaser's solicitors, after some complaints of the delay and a request for an assurance that the sale would be completed, at length on 13th October 1928 served on the vendor a notice fixing 5th November 1928 as the date for settlement, and notifying him that if he failed to complete the sale upon that day, the purchaser would treat the contract as at an end and act accordingly. At this time the vendor's attempts to rearrange the encumbrances upon his various lands so as to enable him to complete the contract were proving successful, but when the residue of the purchase-money payable in cash was tendered to him by the purchaser's solicitors on 5th November 1928 he was not in a position to carry out his contract. The vendor's solicitors, however, asked the purchaser's solicitors whether the purchaser would sign some application forms for the purposes of taking over the mortgage liabilities contemplated by the contract in a way which, although convenient, he was not strictly required to follow. His solicitors did not at once determine the contract but agreed to consult the purchaser, and after failure to comply with the notice no election

[50]

has delayed in the performance of an act which he must do to carry out the contract and the other party notifies him that, unless he does the act within some specified time which in all the cireum- stances is in fact reasonable, he intends to put an end to the contract, the party not in default, if the notice is not complied with, may at his election treat the contract as at an end, so that he is discharged from its further performance, or may continue to insist upon its performance by the party in default, he himself remaining bound by the contract. But after failure to comply with a notice, the party not in default cannot himself exercise rights which he possesses only if the contract continues on foot and, after he has done so, treat the contract as nevertheless discharged by default. The law enables him to choose between rights ; and that choice is exercised, whatever he may desire, when he proceeds to do what he could only lawfully do in virtue of one of the two sets of rights between which he may elect. " Whether he intended it or not, if he has done an unequivocal act - I mean an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way - the fact of his having done that unequivocal act to the knowledge of the persons concerned is an election" (per Lord Blackburn, Scarf v. Jardine (1) ). In my opinion the purchaser had no right or title to harvest the crop and deal with it if the contract were at anend. If, however, the contract were on foot and still open, he was entitled to deal with the crop as he chose. What he did was justifiable if he had elected one way, namely, not to put the contract to an end, and would not be justifiable if he had elected the other way. Before the purchaser could again put the vendor in default and obtain a new election to determine the contract, the vendor became ready and willing to perform the contract according to its terms, and therefore, in my judgment, became entitled to insist upon its performance by the purchaser.

At a glance

Court

Decision date

Before

Source

Judgment (85 paragraphs)

Cited By (4)