Braham v Walker [1961] HCA 7

High Court of Australia Dixon C.J. Kitto and Windeyer JJ. Braham v Walker [1961] HCA 7

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1961, Mar. 7 Dixon C.J.

In this appeal the appellant, who is the defendant in an action for specific performance of an option for the sale of land, maintains that the contract arising from the exercise of the option cannot be enforced because the grant of the option was illegal and void. In the Supreme Court this and other defences were overruled by Pape J. and a decree for specific performance was made. The defendant's appeal is supported upon the single ground that to grant the option was illegal under s. 568 of the Local Government Act 1946 (No. 5203) of the State of Victoria because the transaction involved the subdivision of land and at the date of the option the plan of subdivision had not been submitted to the relevant municipality and approved and sealed by it. It is the appellant, the defendant in the suit, who granted the option and stands in the position of vendor. There is no difficulty in her giving effect to her grant and carrying out the purported contract resulting from the exercise of the option she granted: for the plan of subdivision was approved and sealed not long after the option was given: but she sets up the unlawfulness of her own conduct in giving the option before the plan was sealed and says that that was an incurable illegality vitiating the option. The defendant's case is that, as appears from collateral contracts to which the option refers, the plaintiffs respondents knew that the plan of subdivision had not yet been submitted and so they are affected by the illegality.

The date of the option is 9th March 1955. At that date the defendant, a married woman, was entitled, presumably under a contract of sale with the registered proprietor or someone claiming under the registered proprietor, to obtain an estate in fee simple in some thirty-seven acres of land at the junction of Boronia Road and Mountain Highway near Scoresby. The land in question was contained within one certificate of title and apparently was used and occupied as one parcel. The particular part with which we are concerned formed about six acres with a frontage to Boronia Road. It was decided by or on behalf of the defendant to subdivide this area into three or four blocks. Under instructions from the defendant a survey was made; it was completed on 26th February 1955 and a tentative plan of subdivision was forwarded to the defendant on 4th March 1955 by the surveyor. This formed the basis of a plan of subdivision which was submitted to the municipal council and approved and sealed by its authority on 4th April 1955. The tentative plan showed three lots and the final plan four; the substantial difference being that what was the centre block of the tentative plan was divided into two lots in the final plan. On 9th March 1955 the defendant entered into a transaction with the plaintiffs expressed in three instruments. One was a contract for the sale by the defendant to the plaintiffs of the most westerly of the blocks, another was a sale of the middle block, which later became in substance the second and third blocks. The third instrument consisted in the option now in suit and related to the third or most easterly block, the fourth lot as it became in the plan sealed. There is some discrepancy in measurement and area between the first or most westerly block as described in the contract and as shown in the sealed plan of subdivision and that is true of a comparison between the block described in the second contract and what corresponded with that block in the sealed plan of subdivision, namely the second and third lots taken together. But that did not affect the block shown in the option, which substantially corresponds with the fourth block in the sealed plan of subdivision. The option in terms was expressed to depend on the fulfilment of the two contracts and it is plain that the three instruments formed several parts of what the defendant was prepared to regard as one transaction when she entered into it. The contract relating to the most western lot gave the area as two acres, a considerable overstatement as it turned out. The price stipulated was £800 an acre and was payable by a deposit of £200 and the balance within five years. This provision was elucidated by a special condition enabling the purchasers to pay off the purchase money in multiples of £100 on any interest day. A printed note forming part of the contract stated that no plan of subdivision had been deposited in the Office of Titles Melbourne in respect of the land sold. A condition provided that the purchaser should be entitled to vacant possession upon acceptance of title and payment of the deposit. A printed special condition was altered so as to read "the purchaser shall admit the identity of the land sold with that comprised in the plan of survey hereinafter mentioned". There was a sketch plan of the land endorsed on the contract but it was agreed that measurements shown on the plan were approximate only. It was provided that if the municipality declined to approve of the survey plan of the land the contract should be cancelled and the purchasers should be entitled to a refund of all moneys paid under the contract. Finally there was a clause providing that the contract was conditional upon the purchasers completing the purchase of the land to be shown on the endorsed plan in accordance with the provisions of a contract of sale of even date therewith and made between the vendor and the purchasers. That contract is the second of the three instruments of 9th March 1955 which have been referred to. In most respects the terms of the contract were the same as those of the first contract. But the balance of purchase money was to be paid within thirty days of the date of contract or within seven days of the consent of the municipality to the survey plan of the lands sold by the contract. The purchase money was £800 an acre and the area was in fact approximately two acres; the deposit was £200. The purchasers became entitled to vacant possession upon acceptance of title and upon payment of the whole of the purchase money. There was the same statement that no plan of subdivision had been deposited in the Office of Titles and the same condition as to the contingency of the municipality declining to approve of the survey plan, a contingency upon which the contract was expressed to be cancelled and the moneys paid by the purchasers were to be repaid. There was too a provision that the contract was conditional upon the purchasers entering into a contract of sale with the vendor of even date for the purchase of the block shown on the plan on the west side upon the terms and conditions provided for, that is to say the contract that has already been described. The provision went on to make the contract conditional also upon the vendor's granting to the purchasers an option for a period of three years of purchasing approximately two acres of land immediately adjoining the land sold by the contract on the east for the sum of £1200 per acre. This option was granted and a few days before the end of the three years of its currency it was exercised but the vendor or optionor, that is the defendant, refused to carry out the purported contract resulting from the exercise of the option. The notice purporting to exercise the option was met by an acknowledgment from the defendant's solicitors which informed the plaintiffs that the solicitors had been advised by counsel that the option constituted an illegal contract under s. 568 of the Local Government Act 1946 and that in these circumstances their client was unable to enter into a contract, that is as the option stipulated for. The two contracts for the more westerly parcels of land were of course as much open to an objection of illegality as the option which bore the same date, but these contracts had long since been completed and the plaintiffs had become registered proprietors of an estate in fee simple in the respective lots which the contracts covered. Why the defendant should perform these contracts and two years later object to carry out the option is left by the evidence to conjecture.