PANGEA RESOURCES LTD v GENERAL CREDITS LTD [1992] NSWCA 178

PANGEA RESOURCES LTD v GENERAL CREDITS LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

KIRBY P, MAHONEY and CLARKE JJ 10 April 1992, 24 December 1992

[1992] NSWCA 178

CONTRACT — commercial agreement — condition or warranty — proper construction of contract — alleged breach of term of — promise of "due performance of its obligations" by one party to contract — compromise of legal obligations upon default under lease and debt of almost $870,000 — promise to discharge liability by taking certain steps — steps to be taken include payment of $10,000 for certain equipment and plant — equipment and plant sold for nett sum of $9,800 and such sum duly paid — default in payment of $200 — such sum later tendered after proceedings commenced — whether default of $200 constitutes breach of agreement avoiding compromise and rendering initial debt due and owing — no equitable defences raised — held (1) The consequence of the default was to be determined upon a proper construction of the agreement, being a commercial agreement between the parties; (2) The promise of "due performance" was not breached by a deficit in the performance of an appropriately minor nature. Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632 (FC); 61 CLR 286 applied;(3) The failure to pay $200 in time was, in the circumstances, such a minor deficit as not to constitute a failure of "due performance" of the promises of the contract. Bowes (Carrying on Business as the British Company) v Chaleyer (Carrying on Business as J Chaleyer and Company) (1923) 32 CLR 159 considered; (4) However, (Kirby P dissenting) the failure to pay the full $10,000 by the date fixed and for some months thereafter did not constitute "due performance" of the agreement as required; (5) Decision of Brownie J (upon different grounds) affirmed; appeal dismissed.