Appl Cons: Ahdowny J Boag & Son Kirk QAR! Brewin (1559}2 Brewing v Investments 2001) 10 ras 26 H. C. or A. 1958. — Sypney, Mar. 28. Dixon C.5., 'McTiernan, Williams, 'YLaylor JJ. HIGH COURT [HIGH COURT OF AUSTRALIA.) COOPER ; é . ; : 3 s DEFENDANT, AND UNGAR . ni d 3 5 Butte PLAINTIFF, ON APPEAL FROM THE SUPREME COURT OF NEW SOUTH WALES. Vendor and Purchaser—Sale of land—Terms and conditions of sale—Fa purchaser to comply therewith—Provision for vendor to resell and recover (if any) as liquidated damages—Contractual right and not one in der contract—Resale at less than contract price—Action to recover deficiency—| implied that power to resell and recover deficiency conditional upon resale reasonable time—Defence that resale not within reasonable time and r recover lost—Resale within reasonable time established if such condition Vendor entitled to recover. In a contract dated 4th May 1951 for the sale of land wherein U. was v and C. purchaser, cl. 14 provided :— If the purchaser shall fail to o with these conditions or any of them, or with the terms of sale, all m which the purchaser shall have paid . . . on account of the purchase sh absolutely forfeited to the vendor, and the vendor shall be at t without any notice to the purchaser, to resell the property by publi or private contract, together or in lots, for cash or on credit, and rescind any contract for sale, buy in at any auction and resell, and the det (if any) arising on such sale and all expenses of and incidental to any or attempted sale shall be recoverable by the vendor from the pu liquidated damages." pletion not later than 31st January 1952. U., acting in relia cl. 14, attempted to sell the property against him, first by auction by private treaty. Notwithstanding persistent efforts by U. all a} resale proved abortive until a private sale was effected in June 1953. U sued C. pursuant to cl. 14 to recover the sum of £6,125 being the between the price contracted to be paid by C. and the price ol resale in 1953. C. claimed that the right given to the vendor to subject to an implied condition that it should be exercised within the vendor, for breach of which a cross-action for damages would lie. Held, that whichever term (if either) was to be implied, it was not open 'toa jury to find that the re-sale had not taken place within a reasonable time. Decision of the Supreme Court of New South Wales (Full Court), affirmed. from the Supreme Court of New South Wales. ben Cooper appealed to the High Court of Australia from a it of the Full Court of the Supreme Court of New South (Roper C.J. in Eq., Clancy and Hardie JJ.) disallowing an by Cooper against a verdict and judgment in the sum of 1125 obtained by Harriet Ungar in an action tried by Richardson J. nd a jury which had been instituted by the said Harriet Ungar o recover the sum mentioned as and for liquidated damages upon failure of Cooper to complete a contract for the purchase from r of land and premises at Cranbrook Road, Rose Bay, Sydney. relevant facts are sufficiently set forth in the judgment of urt hereunder. Smyth Q.C. and L. G. Gruzman, for the appellant. W. Asprey Q.C. and H. H. Glass, for the respondent, were not, 'upon. oral judgment of the Court was delivered by Dixon C.J.:— is an appeal from the judgment of the Full Court of the Court of New South Wales, affirming a verdict and judg- for the plaintiff at a trial before Richardson J. The action was m upon a contract of sale of land. The plaintiff was the and the defendant was the defaulting purchaser. The ct of sale was made on 4th May 1951. The subject of the et was a piece of land in Cranbrook Road, Rose Bay, with a upon it. The purchase price named in the contract was Of the purchase price, ten per cent or £1,875 was payable deposit and it was so paid. The balance was to be paid in cash completion. The contract was expressed in a long form con- conditions and terms of sale of a more or less familiar Many of the conditions are of no importance in this That governing completion was cl. 22 which said: " Com- n of the sale and purchase hereby agreed upon shall take place | ten days of the completion of the purchase by the vendor roperty as comprised in Certificate of Title " number so and d the purchaser shall not make any objection to any delay 1958. Cz Coorer v. Unaar. 'McTiernan J Williams J Fullagar J Taylor J H.C. or A. 1958. — CoorEer v. Uncar. Dixon C.J. MeTiernan J. Williams J. Fullagar J. Taylor J. HIGH COURT. thereby occasioned in completion of the sale and purchase agreed upon." In that part of the contract which is deserj "Terms of Sale" it was provided that upon signing the e the purchaser should pay into the hands of the vendor a che a deposit of £1,875 of the whole amount of the purchase money, the balance of purchase money should be paid to the vendo follows : in cash on completion. Of the other provisions one is of considerable importance, cl. 14 of the contract. I shall not read the text in full because has been examined during the argument but I shall make so comments upon it. The first part of it provides for the case of the purchaser fail to comply with the terms and conditions of the sale. In that the money paid by the purchaser by way of purchase money is be absolutely forfeited to the vendor and the vendor is to be | liberty to rescind the contract. I shall not pause to con the word "rescind". The use of it in that context is the of discussion in cases which are perhaps well enough known alt perhaps the observations which they contain are not all in ha: Cf. Grassmere Estates Co. Ltd. v. Illingworth (1); Jeeves (N.S. Ltd. v. Rogers Bros. Ltd. (2) ; National Trustees Executors & Co. of A/Asia Ltd. v. Dwyer (3) and cases there cited. Then there is an alternative. It is to sue the purchaser breach of contract. That, I imagine, was introduced into th clause, which is an old one, at a time when there was a notion thi after a rescission at common law for breach of contract a cause action for damages no longer continued in the vendor. It view based perhaps on a confusion between a rescission for s01 extrinsic collateral cause, such as misrepresentation, and one breach. Cf. McDonald v. Dennys Lascelles Ltd. (4). Then there is another alternative and it is that with which we a concerned. The text of that alternative I will read. It say: ".. . without any notice to the Purchaser, to resell the prope by public auction or private contract, together or in lots, or on credit, and upon such other terms and conditions as he ma' think proper, with power to vary or rescind any contract for buy in at any auction and resell, and the deficiency (if any) on such sale and all expenses of and incident to any such attempted sale shall be recoverable by the Vendor from the Purehai as liquidated damages." . (1) (1889) 15 V.L.R. 687. (3) (1940) 63 C.L.R. 1, at pp. (2) (1936) 36 S.R. (N.S.W.) 430, at (4) (1933) 48 C.L.R. 457, at p. 445. 470, 476-478. L.R.] OF AUSTRALIA. visions of the character of the third limb of this clause have the subject of discussion in decided cases and it has been inted out that such a provision gives a contractual right to the It is a right in the nature of a power and when he pursues it he is acting under the contract and not in derogation of the contract on the footing that it is discharged completely. In the present case the purchaser made default. The default d, with the result that on 12th December the vendor's icitor wrote a letter to his solicitor dealing with the situation it arose. The earlier part of it is concerned with certain grounds dispute between the parties which are not material to the problem with which we have to deal. After dealing with these the writer hat your client is evading these issues. The matter cannot be allowed to drift on as at present. There is no valid reason why the raft transfer should not be submitted immediately and the purchase eupon completed. By this letter I notify your client through that if the purchase is not completed by your client before or ing Tuesday 15th January, 1952, my client will exercise her hts under cl. 14 of the contract that your client's deposit become ited to her, to resell the property and take steps to recover any ciency. This time is more than reasonable and has been given that no possible question can arise as to your client's real inten- s. Would you please favour me by acknowledging receipt of letter." it I take to be an express statement of an intention to act the third alternative which is contained in cl. 14 of the contract, t portion which I read. After a lapse of a month, namely on 14th January 1952 the vendor's solicitor wrote another letter to the purchaser's solicitor on the same subject. The material part says: '' To give your client opportunity for further considering this matter, the time for completion by your client of the purchase is hereby extended n the date Tuesday 15th January 1952 named in my letter of 12th December, until 31st January 1952 after which later date your client's completing the purchase by that later date as juired in mine of the 12th December except as to alteration of of completion, the deposit paid by your client under the act will become forfeited to my client and my client will take . Will your client please regard this notice as a final ne." It will be noticed that the last words of the letter follow the 513, H. C. or A. 1958. we CoorER ». Unear. Dixon 0.5. MeTiernan J. Williams J. Fullagar J. Taylor J. 5l4 H. C. or A. 1958. Ww Coorrr v. Unaar. Dixon 0.J. MeTiernan J. Williams J. Pullagar J. 'Taylor J. HIGH COURT words of the latter part of cl. 14 and it is clear that that is a expression of intention to act under that portion of cl. 14, In fact the vendor proceeded to attempt to sell the prop auction. The auction sale was abortive. The abortive auction took place on 11th March 1952. A reserve price was fixed advice of the agents or auctioneers of £17,000. It appears sale was duly advertised, no fault could be found with the y on that ground. Only one bid, however, was obtained and £10,000. After the auction sale the property was placed in the h estate agents for sale and it appears that there were attemp find a purchaser which were continued and of which it is not plained that they were inadequate for the purpose of selling property. However, there was a tendency to fix a price higher than might be thought to be readily obtainable. One can see that a vendor acting under a provision such as last part of cl. 14 may be rather in a dilemma. If he sells h at the price which is obtainable from the first purchaser he find it, he may throw the sale open to an objection from the p who must pay the difference, on the ground that it has been m too promptly and without sufficient care and inquiry into' possibility of obtaining a higher price. If, on the other ha vendor delays for a very long time he may, of course, lay hims open to the objection that he waited too long, until in fact there been a fall in prices. What actually happened seems to h involved a reasonably persistent effort on the part of the p to sell. In the end a sale took place. The sale took place in Ju 1953. When the deposit had been taken into account the } obtained left a deficiency of £6,125. The action was bro recover that amount as liquidated damages under the last w of cl. 14. { It is hardly necessary to point out after what I have said so suing the plaintiff was suing upon the contract, that is on @ of the contract and not for unliquidated damages as for a wron repudiation of the contract or for a breach in failing to comple The difference may not always be of importance, but, if the nal of the cause of action is to be understood it is as well to bear in that the cause of action under such a provision as the last part cl. 14 is for the balance of money the title to which is reset the contract. To the claim in the action the defendant made or attempt make a number of answers. There is no present purpose in d ing them. So far as they attacked the contract collaterally, R.] OF AUSTRALIA. defence upon the merits that gives rise to the points which y have had debated before us. It is argued, as it was argued trial, that in cl. 14 there is to be implied a term that the sale the latter part of cl. 14 provides shall take place within a onable time. There are two possible versions of such an impli- if it were to be made. On the one hand the proposed impli- might take the form of a condition governing the exercise power given by cl. 14 to sell with a view of recovering the y from the defaulting purchaser. It would mean that the of sale which is thereby given could be exercised only within easonable time ; time must not be allowed to run on indefinitely. t would be a condition of the power upon which its existence epend. If it were broken it would lead to the determination power to sell and recover the deficiency under the last words eclause. But that would not mean any breach of obligation part of the vendor. her implication, however, is suggested, namely an implication the vendor who is acting under the provision to sell and to ithin a reasonable time, so that if he does not sell within a ible time he has done more than lose the power which he would have possessed if he had broken the contract ; he himself to a liability to the purchaser for a breach of et sounding in damages. the hearing the defaulting purchaser as defendant strove to set lea based on such an implication as I have described in the of what I have said. Before the judge at the trial it was d whether it was possible to raise such implication or whether ication must not be, if it existed at all, of the latter kind. plaintiff's counsel took the position that there was no implica- n, but that if it existed it must be of the latter kind. The 's contention were right the implication would of course ve supplied a defence to the action provided that the essential made out, namely that when the sale did take place, more teasonable time had elapsed. For the appellant, the defend- , it is said that at one point of the trial the learned © appeared to be prepared to accept the view of the supposed plication which his counsel put forward. He applied to file a bar setting it up as a defence. It is said that at first his aur was prepared to allow the plea. In the end, however, the d judge adopted the view that the proposed implication would eee, CoorER v Unaar. Indeed they all failed and upon this appeal there is really H- ©- or A. Dixon C.J. McTiernan J Williams J Fullagar J Taylor J. Dixon C.J. roan J. Williams J. Fullagar J. Taylor J. HIGH COURT not support a plea as an answer to the action, that is to Honour was not prepared to allow a plea to be pleaded setti an implied condition upon which the exercise of the power s depend, but only a plea by way of cross action claiming da for breach of an implied term that the sale would be made y reasonable time. 6 We can, I think, pass by the controversy which I have th briefly described, for the reason that in our view on the facts was no breach of such a condition, if it ever existed in either sen: We think that more than a reasonable time was not allowe pass before the power to sell was exercised. In our opinion facts were not such as to entitle the jury to hold that the actual sa made was made after a reasonable time had elapsed. What i reasonable time is of course a question of fact. But in ju what is you must look at the circumstances, the nature of tl supposed condition and the duties which it would impose. Althoug it is a question of fact, the court must decide whether more th: one view is reasonably open to a jury. In the present case it complained that although the vendor persisted in attemptin sell the vendor demanded too high a price. There was a persi however, and after all the purchaser might well have compla he had had to pay too great a deficiency under cl. 14 because of tht opposite error on the part of the vendor. 4 In all the circumstances we do not think it would have b possible for the jury correctly to find that at the time the sale to place it was too late and outside the scope of the provision, ev one or other of the implications I have described were made cl. 14 limiting the vendor to a reasonable time. : It is hardly necessary to say that we do not suggest that of the implications should be made in cl. 14. It is a matter wh on the facts does not arise for our decision and it is better in sucl a matter to confine ourselves to the questions which the facts For the reasons I have given we think that the vendor's actio was bound to succeed and that the vendor was entitled to re the amount of £6,125. The action was of course tried with a jury. Unfortunately has been some confusion as to what the jury meant by their fi when they first brought in their verdict. I have not traversed the pleadings but it is a fact that there two counts in the declaration, the first of which was based the assumption that there had been a breach of contract ¢ the vendor as plaintiff to recover unliquidated damages ca ue on loss of his bargain, and the second of which dealt with the ca .R.] OF AUSTRALIA. 517 m under the last part of cl. 14 which I have discussed. The H- ©. oF A. of relief under the respective counts, that is to say the rae s recoverable under each, are by no means necessarily the io é . OOPER The learned judge had left to the jury a cross-action based v e view that there was an implication exposing the plaintiff Uncar. toa liability for damages for failing to sell within a reasonable time. Pixon OF. ill this led to the jury returning into court with findings which Williams J." to exhibit a considerable amount of confusion. In the end, 'ayer ie er, the jury did find a verdict on both counts for the same unt and that is the amount which I have mentioned. We need inquire whether it could be supported as representing a proper e of damages under the first count if the cause of action under count and not under the second had been made out. The nt should, in our view, have been on the second count and s that on which the verdict for the sum claimed should have found. , however, are matters not going to the merits but to the the proceedings took and we think that the appeal must be on the merits. We do not think that the confusion resulted 1 any real miscarriage having regard to the view we take of the Nor do we think that we are called upon further to notice it, ein our judgment, on the facts as stated, the learned judge's course was to direct the jury to find a verdict for the sum of 25. We will accordingly dismiss the appeal from the judgment Full Court of the Supreme Court. That judgment leaves ntiff entitled to recover the sum mentioned. Appeal dismissed with costs. itors for the appellant, Maurice Isaacs & Glass. icitor for the respondent, Sydney B. Glass. R. A. H.