Braidotti & Anor v Queensland City Properties Limited

[1990] HCATrans 275

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B30 of 1990

B e t w e e n -

AUGUSTO BRAIDOTTI and

MARY VILMA BRAIDOTTI

Appellants

and

QUEENSLAND CITY PROPERTIES

LIMITED

Respondent

MASON CJ
BRENNAN J
DEANE J
DAWSON J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 14 NOVEMBER 1990, AT 10.19 AM

Copyright in the High Court of Australia

Braidotti(2) 1 14/11/90

MR G.L.DAVIES, QC:  May it please the Court, I appear with

my learned friend, MR B.J. CLARKE, for the

appellant. (instructed by Bain Gasteen Smith)

MR D.F. JACKSON, QC:  May it please the Court, I appear with

my learned friend, MR T.W. QUINN for the

respondent. (instructed by Henderson Trout)

MASON CJ: Yes, Mr Davies.

MR DAVIES:  Your Honours, I think, have our outline of

submissions.

MASON CJ:	We do.
MR DAVIES:	Do Your Honours have copies of the relevant

sections to the Act?	We do have copies if Your
Honour do not.

MASON CJ: Yes, we seem to have copies, Mr Davies.

MR DAVIES:  Your Honours would have seen that the Full Court

dismissed an appeal by the appellants from a

judgment of Mr Justice McPherson, in which he

declared that the contract between the parties had

been rescinded by the respondent on 10 August,

1989.      The judgments appear at pages 83 and 84 and

100 and 101 of the appeal book. I will not take

Your Honours to them. There were two steps in

His Honour's reasoning at first instance, which was

really endorsed by the Full Court. The first was

that the contract between the parties was an

instalment contract within the meaning of
section 71 of the Property Law Act, because of

clause 42 of the contract, and I will take

Your Honours to that a little later, but in summary

it provided that the purchaser agreed to pay the

vendors the sum of 80 dollars a week to maintain

the property for farming purposes until the

contract came to an end, the vendors being farmers,

the purchasers being developers and that provision

for maintenance for farming purposes being of no

value to the purchasers.

That appears in Mr Justice McPherson's

judgment at page 76 point 20, and from about

page 76 line 34 to page 77 line 37. I do not think

I need take Your Honours to it in detail but that

is the part of His Honour's judgment in which

His Honour deals with that as being the first question.

The second step in his reasoning was that the

vendor appellants had repudiated the contract thus

entitling the purchaser to rescind by purporting to
give a notice of rescission without first giving a

notice of intention in accordance with section 72

Braidotti(2) 14/11/90

of the Act. His Honour dealt with that as the
question at pages 77 line 37 to 78 line 20.

In reaching that conclusion, Your Honours, His Honour assumed in the appellant's favour a fact

which would otherwise have had to be tried, that

is, that the respondent was obliged to complete on

or before 26 July in accordance with the

appellant's notice of completion. It was common

ground that the respondent had not completed on

that day and, of course, section 72 could have no

application unless there was a default. So

His Honour assumed default on 26 July 1989 for the

purpose of his conclusion.

The judgment was given on a motion either that

there be judgment on admissions in the pleadings

which was pursuant to Order 36 rule 5 of the rules

of the supreme court, or that certain legal
questions, points of law, be determined in advance
of the hearing of evidence, which was Order 38

rule 2. The consequence of His Honour's judgment

was that the respondent became entitled to damages
which are yet to be assessed but which are likely,

it appears from the pleadings, to be substantial.

Can I take Your Honours to the relevant contractual provisions first, or the ones which we

will be submitting are of some importance. The

contract commences on page 30 of the appeal book

and although the date at the head of that contract

is not clear, it was common ground because it is in

the pleadings agreed that it was made on

27 October 1988. Your Honours will then see in

clause N, about line 50, that the purchase price

was $1,500,000 and the deposit was $150,000, and it

contains a reference to clause 30 to which I will

be taking Your Honours shortly.

Then on the following page clause 1 deals with the deposit and the third line speaks of forfeiture of the deposit and the fourth line continues:

Whether or not the Vendor terminates this

contract the Vendor shall be entitled to

recover as liquidated debt from the Purchaser

so much of the deposit as has not been paid by

the Purchaser.

Then clause 11 at the bottom of the page gives a

contractual right to rescind on default, amongst

other things. It says:

If the Purchaser fails to pay the deposit or

any balance of purchase price or otherwise

fails to comply with terms of this contract

then the Vendor ..... may .....

Braidotti(2) 3 14/11/90

(c) terminate the contract and -

(i) elect to declare the deposit forfeited

and/or sue the Purchaser for damages for

breach -

and so on. Then, on the following page,

Your Honours, clause 21 is a non-merger provision.

Clause 23 makes:

Time of the essence -

and then one comes to the printed clauses on

page 34, annexure A, the first relevant one being

the first of those which is clause 30:

The deposit of $150,000 (One Hundred and Fifty

Thousand Dollars) shall be paid as follows: -

$1,000 (One Thousand Dollars) on the signing

hereof and the balance namely $149,000 (One

Hundred and Forty-nine Thousand Dollars) on

gazettal of the rezoning of the land to

Residential A.

The $1000 was paid but no other money under the

contract was ever paid.

. Clause 31 may be ignored - it was waived.

Then, clause 32 is of some importance,

Your Honours. Clause 32(a) says: In the event that the Redland Shire Council

does not consent to the rezoning of the land

sold within six (6) months from the date
hereof or the terms and conditions of the

consent are unsatisfactory to the

Purchaser ..... this Contract shall ..... ipso

facto determine and the deposit paid shall be

refunded to the Purchaser and neither party

shall have any further claim upon the other.

As I will indicate later that provision was

waived, then (b) assumes fulfilment of (a) but

provides a further condition then (c) says:

In relation to sub-clauses (a) and (b) it

is agreed by the Vendor that should the

Purchaser seek an extension of time within

which to satisfy either sub-clause the Vendor

shall allow the Purchaser an additional period

of thirty (30) days -

and (d) -

The Vendor acknowledges that sub-clauses

32(a) and (b) have been inserted for the

Braidotti(2) 14/11/90

benefit of the Purchaser and may be waived by

it by notice in writing to the Vendor.

And then perhaps the only other clauses which are of relevance to Your Honours are the last two, on

page 36. Clause 41 provides:

The date for completion is thirty (30) days after the date of publication in the

Queensland Government Gazette in accordance

with the provisions of Clause 32(b) hereof or

thirty (30) days after the waiving of the

provisions of either 32(a) and (b) hereof,

whichever shall be the former.

Then 42 is the clause which the respondents

contended and contend makes the contract an

instalment contract, it provides:

The purchasers acknowledge that a portion of

the vendors land is used for farming purposes

and is required to be maintained in a

condition ready to plant. In consideration

thereof the purchasers agree to pay to the

vendors for this purpose a sum of Eighty

dollars ($80.00) per week (payable weekly)

from the date of execution hereof until this

contract is at an end.

As I told Your Honours, the $1000 deposit was

paid and the next event which is of some relevance

is that by a letter of 24 May 1989, which is at

page 55 of the appeal book, the respondent wrote to

the appellant waiving the condition in clause 32(a)

and, as Your Honours will see, the letter also

calls for completion on a date which is stated to

be 23 June, which ·clearly seems to indicate also a

waiver of clause 32(b) in accordance with clause 41

of the contract. That letter is replied to on the

following page in which our side confirms that

23 June is the date of settlement.

Your Honours, there was an issue on the

pleadings which is still to be resolved as to

whether our side were ready and willing to complete

on that date, on 23 June. That appears from the

statement of claim, paragraphs 16, 17 and 18, on

pages 6 and 7 of the appeal book. I will not take

Your Honours to these pleadings but it is just sufficient to tell Your Honours that the question

was an issue. 16, 17 and 18 are the paragraphs on

pages 6 and 7 of the appeal book and the defence

put that in issue in paragraph 2 on page 19.

So that day passed, 23 June, without

completion of the contract and, as I have already

Braidotti(2) 5 14/11/90

mentioned, I think, the balance deposit of $149,000

had not been paid either.

Then, the next event is that on 11 July the

vendor appellants gave notice to complete

on 26 July. That appears from the documents on

pages 67 and 68 of the appeal book.

I am reminded that I should also, whilst on

that correspondence, take Your Honours to the
respondent's letter of 12 July in response to that
notice of completion, saying that they did not

think the time was reasonable. If we succeeded,

that would still be a question to be tried. It is

really, I think, common ground that on that date

fixed for completion by us - 26 July - the

purchaser failed to complete but it is deposed to,

in Mr Bain's affidavit, and I will just give

Your Honours the reference to it, paragraph 24 on

page 47.

On 27 July the vendors then purported to

rescind. That appears on pages 70A and 71; 70A is

the letter and 71 is the notice of rescission.

Can I then take Your Honours to what seemed to

us to be the relevant provisions of the Property Law Act. They are contained in Division 4 which

commences with section 71 and section 71 contains

in subsection (2) two relevant definitions.	The
first of them is in (2)(a), the definition of "deposit" and it says:

(2)	In this Division -
( a)	"deposit" means a sum -

(i) not exceeding ten per centum of the

purchase price payable under an instalment

contract;

(ii) paid or payable in one or more amounts;

and

(iii) liable to be forfeited and retained by

the vendor in the event of a breach of contract

by the purchaser.

And the second definition is that of instalment contract. It says:

"instalment contract" means an executory

contract for the sale of land in terms of

which the purchaser is bound to make a payment

or payments (other than a deposit) without

becoming entitled to receive a conveyance in

exchange therefor;

Braidotti(2) 6 14/11/90

And the other important provision for our purposes,

Your Honours, is section 72(1) which provides:

An instalment contract shall not be

determinable or determined by reason of

default on the part of the purchaser in

payment of any instalment or sum of money
(other than a deposit or any part thereof) due
and payable under the contract until the
expiration of a period of thirty days after

service upon the purchaser of a notice in

Form 2 of the Second Schedule.

But the other provisions are of at least passing relevance to the submissions we propose to make,

because the sections from 73 through to 76 provide

additional protection to a purchaser who is a

purchaser under an instalment contract as defined. sold or mortgaged by the vendor without the purchaser's consent. It gives, in section 75, after payment of a certain proportion of the
purchase price, a right to a conveyance and

mortgage back. It gives a right in section 76 to

deposit of title deeds. I have passed over, I am

sorry, section 74, it gives the purchaser a right

to lodge a caveat.	I will come to those again a
little later.

Your Honours, can I mention one other matter

about the Full Court judgment. We do not think in

the end it matters very much, but I should perhaps

mention it. It is that they seemed at least

initially in the Full Court to have misunderstood

the relevance of the contention that section 72

applied. Can I take Your Honours to page 92 of the

appeal book. In the last paragraph His Honour

Mr Justice Connelly, who in effect gave a judgment

of the court, said:

Obviously enough, the critical question

is whether the notice to complete of 11th July

was effective to ground rescission.

Well, the only question as to effectiveness of a

notice to complete was as to its reasonableness.

His Honour then went on:

If it was not, the vendors were in clear

breach of their contract by affecting to

rescind for failure to comply with the notice

and the purchaser was entitled to accept what,

on that view, amounted to a repudiation of the

contract by the vendors.

Well, if His Honour was talking simply about adequacy of a notice to complete, which was a

Braidotti(2) 14/11/90

factual question to be tried, we do not quibble

with what His Honour said there. His Honour

however went on to say:

The validity of the notice to complete of

11th July, 1989 was denied by the purchaser on

two bases. That which was litigated, although

not the first pleaded, was that the contract

was an instalment contract within the meaning

of section 71 of the Property Law Act 1974-86

so that the vendors were precluded by section

72 of that Act from determining the contract

until after the expiration of 30 days after

service on the purchaser of a notice under

that Act.

And Your Honours, it was not that it affected the

validity of the notice to complete. What it

affected was, assuming a valid notice to complete and a failure to complete in accordance with that

notice, the appellant was then entitled to rescind

without first giving a notice in accordance with

section 72.

Now, as I say, that perhaps does not matter in

the end because Their Honours seemed to state it

correctly a little later in their judgment on

page 94 where, after referring to section 72, they

say:

The vendors purported rescission of 27th July,

1989 is expressed to be "in consequence of

your failure to settle the transaction in

accordance with the notice to complete." This

would have required payment of the whole of

the purchase moneys and, if the contract was

an instalment contract, could not lawfully be

effected without a 30 day notice in the

statutory form. The question then is whether

the contract was in truth an instalment

contract within the meaning of s.71.

So they state that first question correctly there

in the end.

Your Honours, our submissions then are made on

the assumption that the correct issues before the

Court and the ones which certainly the trial judge

addressed and the Full Court seem to have

addressed, are first whether section 72 of The

Property Law Act applies to require a notice

pursuant to that section. The second of those

questions is: if it did, did the appellants'

attempted rescission on 27 July without giving such

a notice entitle the respondent to rescind?

Braidotti(2) 14/11/90

Can we deal with those questions in that

order, and so consequently first with the question whether section 72 of The Property Law Act applied

to this contract.

Your Honours, in our respectful submission, it

applied to this contract and applied to this
contract only if two circumstances existed: the
first is that the contract was an instalment

contract within the meaning of the definition in

section 71; and the second is that the rescission
on 27 July was for a default, first of all, in
payment of a sum of money and, secondly, in payment
of a sum of money which did not consist of or
include payment of part of the deposit - and that

is the words in parenthesis in section 72(1).

Can we deal with those questions in that

order, first with the question whether the contract

in this case was an instalment contract. Our

submission is that it was not an instalment

contract because when read in context an instalment
contract within the meaning of the definition in

section 71(2)(b) - or perhaps I should put it this

way: that when read in context, the "payment or

payments" referred to in the definition of

"instalment contract'' in section 71(2)(b) are

payments, failure to pay which on or before

settlement disentitle the purchaser to a

conveyance.

Your Honours, we say that really for two

reasons, I suppose: one is because of the

significance of those words in the definition

itself and then, also, because of the context in

which that definition is found in Division 4 and

the protection which Division 4 is intended to
give, on its face.

Your Honours, we derive some little support for the view which we submit to be correct from the

judgment of Justice Stephen in Wacal. What we say

receive a conveyance in exchange therefor really	is that those words without becoming entitled to	indicate the criterion which the definition adopts in defining instalment contract. His Honour said
that but His Honour said that to reach a conclusion
that the payments were limited to payments which
were made to the vendor or his agent.

Can I take Your Honours to Wacal for

His Honour's statement. Wacal, Your Honours, is

140 CLR 503 and His Honour's statement is at

page 515, and Your Honours will see that at the end

of the first paragraph on page 515, His Honour

reaches the conclusion that the payments:

Braidotti(2) 9 14/11/90

do not include those required by the contract

to be paid to third parties.

He then says in the first sentence of the following

paragraph:

That this is so emerges most clearly from

section 72 of the Act, but the terms of the

definition itself also suggest this to be its
true meaning.

And then, if you can go then to about seven or eight lines from the bottom of that paragraph,

His Honour said, going back to the definition of

"instalment contract", as Your Honours will see in

the sentence before, he then says:

The criterion which the definition adopts in

defining an instalment contract turns upon the
nature of payments which the purchaser is

obliged to make under it, the criterion being

whether or not there is an entitlement to

receive in return a conveyance. This appears

to assume that the .payment is to the vendor,

the only question being whether "in exchange

therefor" the purchaser becomes entitled to a

conveyance.

we say that from those words also may be inferred

that the payments were of a kind, failure to pay

which on or before settlement would disentitle the

purchaser to a conveyance.

BRENNAN J: Would disentitle?

MR DAVIES:. Yes, failure to pay which on or before

settlement would disentitle the purchaser to a

conveyance.

Your Honours, we submit that this really also

accords with the evident intention of Division 4

which is to protect purchasers of land who have

paid money which goes towards their right to a

conveyance - not necessarily restricted to

instalments of the purchase price - we are not

trying to reargue Wacal, but who have paid sums of

money which go towards their right to a conveyance

whether they are payments of purchase price, or

interest, or rate adjustments, or whatever,

protects those purchasers by relief against

forfeiture of their interest because of default in

payment of those moneys - that is section 72. It
prevents the vendor, in respect of those

purchasers, selling or mortgaging the land without

their consent - that is section 73. It gives the

purchaser a non-lapsing caveat - that is 74 - and

it provides the other protections to which I have

Braidotti(2) 10 14/11/90

referred in the other provisions - 75 to conveyance

after a certain payment, deposit of title deeds,

and so on.

Your Honours, the submission we are making

can, perhaps, be put another way and that is that

they are payments in respect of which the purchaser would be entitled to a purchaser's lien and, again, payments of that kind are not restricted to

instalments of the purchase price because it is

really the purchaser's lien which would be

defeated, for example, by a sale or mortgage
without, amongst other things, the consent of the

purchaser. That the purchaser's lien extends to

payments of that kind appears clearly,

Your Honours, from a decision of the House of Lords which is not on our list but can I hand up to

Your Honours some copies of it? I have nine

copies. It is a decision of Rose v Watson,

10 Ho.Lords C. 672 or 11 ER 1187. Your Honours, it

was argued in that case specifically that the

purchaser was not entitled to a lien in respect of

payments of interest. In fact, one can see that if

one goes to page 677 and 678. One can see that it

is argued, down the bottom of page 677, that:

These sums of interest are not part of the

purchase, and when paid, do not represent the

corpus of the estate -

and consequently it was urged there was no

purchaser's lien.

The Lord Chancellor, Lord Westbury, dealt with

that matter in some detail on page 682 and if

Your Honours look at the full paragraph on

page 682, Your Honours will see that His Lordship

rejected that submission. In fact, His Lordship

thought that interest upon interest was also

subject properly of a purchaser's lien and

Your Honours will see if you go to page 685 that

Lord Cranworth agreed with that view.

Your Honours, we should say, of course, that

we accept that in determining whether payments are

of that character - that is, whether they are

payments failure to pay which would disentitle the
purchaser to a conveyance - one looks at the substance of the matter not the form as, for example, was the case in another respect of these
provisions in Dainford Limited v Chan,

(1885) 155 CLR 533, because Your Honours may recall

in that case - I do not want to take Your Honours

to it - though the sums totalling more than 30 per

cent of the purchase price were in form partly

payable under a contract of sale and partly payable

under a document called a deed of loan, the Court

Braidotti(2) 11 14/11/90

said that was really in substance one transaction

and that was sufficient to make the contract for

that purpose an instalment contract. The reference

in the High Court judgment is at page 537, about

point 2 of that page.

Your Honours, the payments in this case, the

payments required by clause 42, were not in our

submission either in form or substance payments of

that kind. They were payments on any view of the

matter for work done by the vendor and they were

not for the purpose of completion, for the work was

of no value to the purchaser. The purchaser was a

developer; he did not want the land farmed but they

were really, in the end, to protect the vendor's

farming business if the contract should not

proceed.

So, the failure to pay those payments would

not have disentitled the purchaser to a conveyance.

It would merely have given rise to a money claim by

the vendor against the purchaser which because of

clause 21, if that were needed, would not emerge in

the conveyance and nor would it have entitled the

purchaser to a lien, to a purchase of a lien and

so, if there is an analogy, I suppose an analogy is

a purchaser who is paying rent to the vendor; that

they are not payments which go towards the

conveyance. They are not payments failure to pay

which would disentitle him to a conveyance and they

are not payments in respect of which the purchaser

would get a lien.

The construction which the Full Court adopted

of these provisions would mean that any amount

which was payable in the contract instrument the consideration for which was something other than

conveyance would make the contract an instalment

contract and, in our respectful submission, that is
in context and, really, when one looks at the

definition, too wide.

Your Honours, in our respectful submission,

the decision in Wacal is not inconsistent with that

contention. In that case, the Court, as

Your Honours will recall, held that interest on the

balance of purchase moneys was a payment within

that definition. We accept the correctness of that

and we accept the correctness of the other examples

which are contained in Your Honour the

present Chief Justice's judgment in that case; that

adjustments of rates and land tax and things of

that kind would be payments within the meaning of

the definition of section 71 because they are

payments failure to pay which would disentitle a

purchaser to a conveyance.

Braidotti(2) 12 14/11/90

The other thing perhaps I want to say about

Wacal, without really taking Your Honours to the

judgment in that case with which Your Honours are

familiar, is that the Court in giving judgment in

that case - there were, I concede, some wide dicta

in that case - the Court was really directed to

rejecting an argument that the payments referred to

should be limited to instalments of the purchase

price, and that is certainly not a contention which

we put today.

I accept that in rejecting that contention the

generality of the words in the definition were

mentioned and indeed emphasized, and I should at

least refer Your Honours to those passages in which

that is dealt with: in the judgment of

Justice Gibbs at page 506 commencing about point 7

to towards the bottom of page 507; in the judgment

of Justice Stephen at page 512 to page 513; in the

judgment of Your Honour the present Chief Justice

at page 518 to page 519, and it is in the middle

paragraph on page 519 that Your Honour gives the

examples to which I have just referred.

MASON CJ:	I do not give the example so much as deal with the submission that was made during the course of
argument.
MR DAVIES:	I think that is right, Your Honour, yes.
MASON CJ:	What is more, I do not even commit myself to it.
MR DAVIES:	No, I accept that, but we are prepared to

accept for the purpose of our argument that

that is·so.

MASON CJ:  Yes, I follow.

MR DAVIES:	The judgment of Justice Murphy at page 522; and the judgment of Justice Aickin at page 528.	I
should also mention I suppose, as I think I have

already said, that several members of the Court did

impose a limitation upon the definition and that

was that they should be payments made to the vendor

or his agent, and they did so because of the
provisions of section 72(2), and also in the case

of Justice Stephen in the passage I referred

Your Honours to, because of the definition itself.

Can I just give Your Honours those passages in

which three of the Justices of the Court imposed

that limitation: Justice Gibbs at page 507

point 9; Justice Stephen at page 515 about

point 2; and Justice Aickin at page 532 point 2

where he agreed with Justice Stephen.

Braidotti(2) 13 14/11/90

Your Honours, we really do not want to say anything about that limitation. It may be an

additional limitation. We do not wish to question

that as an additional limitation although perhaps

we could say that if that were the only limitation

it might provide an easy loophole for the vendors.

But that may be, in the end, neither here nor there in the construction of the section.

Can I then pass to the second point we really

wanted to argue and that is that the second

requirement for the application of these provisions

is that the default on 26 July had to either -

perhaps I should put it another way. Our

submission is this, that the default on 26 July

either included default in part payment of the
deposit or, alternatively, was not default in

payment of a sum of money.

DAWSON J: But it is clear, is it not, beyond question that

non-payment of the - were the payments made under

clause 42?

MR DAVIES:	I beg your pardon, Your Honour?
DAWSON J:	What was the position with the payments under clause 42? Were they made or not - whatever it
was, $80 a week?
MR DAVIES:	I do not know that there is any evidence about whether payments were made or not. I am told they
were paid but I do not know whether there is any
evidence about whether that is so or not.
DAWSON J:	And is. it clear that non-payment of those

payments would not disentitle the purchaser to a

conveyance?

MR DAVIES:  Your Honour is going back to the point I have

just been arguing?

DAWSON J: Yes.

MR DAVIES: We submit that is so, Your Honour, because - - -
DAWSON J:	The purchaser would be in breach of the contract?
MR DAVIES:	He would, Your Honour, but we say that these are provisions which do not go towards the
purchase - - -
DAWSON J:	Maybe they will not but does that mean that he is

still entitled to demand a conveyance

notwithstanding that he is in breach of the

contract?

Braidotti(2) 14 14/11/90

MR DAVIES: It is a separate provision for work done,

Your Honour, and it is a provision which, in our

respectful - I mean, if the answer to Your Honour's

question is that we could not demand a conveyance

then that, really, is the end of our argument on

that point.

DAWSON J:	I had a simple notion in my mind that the party that was in breach of the contract could not demand
performance from the other side but I could be wrong.
MR DAVIES:	Your Honour, I suppose we have eschewed in our argument, both in this and later on, a discussion
of Foran v Wight and the views of this Court there and I am aware of Your Honour's view in that respect but what I would say in answer to Your
Honour in this case is that clause 42 is a quite
separate provision dealing with a separate topic.
It really is, in effect, a collateral contract
contained within the contract dealing with work to
be done for certain purposes.  And a breach of that
contract, in our respectful submission, would
entitle the purchaser to do no more than sue.

In answer to Your Honour's earlier question,

we say the moneys were paid but that perhaps is not

the point because it is a question of whether it is

an instalment contract or not. But I do not think

I can say any more than I have said about it.

DAWSON J: Yes.

MR DAVIES:  Your Honours, I was going on to really the

second point which concerns section 72 rather than

section 71 and concerns the words in parenthesis.

Well, it concerns two things I suppose. First of

all, section 72(1) says that a:

contract shall not be determinable or

determined by reason of default on the part of

the purchaser in payment of any instalment or

sum of money.

One point we make there is default in compliance

with a notice to complete is not default in payment

of an instalment or sum of money. It is a default

of a different character. The other alternative

argument is that, if we are wrong in that view then

it was a default in payment of a sum which included

part of a deposit. So it was, although it was a

default in payment of other moneys as well, a
default in payment of the deposit, and it does not

matter, perhaps, for that purpose - for the purpose

of that argument - where the deposit was payable

upon waiver of the condition, as we argued below

and we advance here, or whether in fact the deposit

Braidotti(2) 15 14/11/90

did not become payable in the event of waiver until

the date of completion.

Can I perhaps deal with the second of those

arguments first, that is that if it was a default

in payment of a sum of money it was a default in

payment of the deposit, or part of the deposit, and

the question there, of course, is whether the
notice of rescission determined the contract by
reason of default in payment of part of the deposit

within the meaning of section 72(1).

Now in terms, of course, the notice was a

failure to comply with a notice to complete.	The
notice of rescission in terms said failure to

comply with a notice to complete, but in order to

complete the purchaser was required to pay

$149,000, which was the balance of the deposit, and

$1,350,000, which was the balance of the purchase

price, and in determining whether that sum of

$150,000 of which $149,000 was part, within the

meaning of the words in parentheses in section 42,

depends on whether it complied with the statutory

definition in section 71 because the statutory

definition says that if you comply with that at the

time presumably the contract is made, if it is a

deposit, then it is a deposit for all purposes of

Division 4 and it would follow, in our respectful

submission, at all stages of the contract.

So, in our respectful submission, it did so comply; it was 10 per cent of the purchase price;

it was payable in two payments; and it was liable

to be forfeited. Your Honours will recall that

both clauses 1 and 11 of the contract dealt with

forfeittire of the deposit. Consequently, each part

of it was part of the deposit for all purposes of

Division 4. It does not matter, in our respectful submission, if you say that, assuming that the default in compliance with the notice of completion

was a default in payment of money, that it was

default in payment of other moneys as well.	It was
deposit.
still default in payment of the part of the
The Full Court, Your Honours, seemed to seek

to engraft additional requirements on to the

statutory requirement for a deposit. They seem to

be saying that, for it to be a deposit it had to be
paid as an earnest of performance, a security for
performance, but the statutory definition does not

say that. I will not take Your Honours in detail

to their reasoning but they said that at page 98

about line 20.

They also said that if it was a deposit at an

earlier point of time, it had lost its character

Braidotti(2) 16 14/11/90

when it became merely part of the balance of

purchase price. In our respectful submission again

that is really ignoring the statutory definition.

Your Honours, if there is any substance in the Full Court's view that if it was a deposit it had

lost its character when it became payable at the

end, then it would be necessary to submit, and we

do, that the balance of deposit, in fact, became

payable on waiver. Now there is no doubt

contractually, that the balance of deposit,

$149,000, became payable on fulfillment of the

conditions in clause 32 and what we submitted below

and what we submit here is that one can really

construe waiver in one of two ways. One can say,

waiver of the condition means that the contract

goes on if that condition had never existed in the

contract or waiver has the same effect as

fulfillment of the condition in respect of other

provisions in the contract, including payment of the money, and we submit, with respect, that the

latter is correct.

Now on that view the $149,000 was payable when

the condition in clause 32 was waived and if that

is so it was a continuing default up until the time

of completion.

Your Honours, can I then deal with the anterior question which is really that, in fact,

failure to comply with a notice of completion is

not default in payment of a sum of money at all.

It has its own and quite separate character.

This Court dealt with the non-compliance with

a notice of completion in Ciavarella v Balmer,

153 CLR 438. Unfortunately, it is not on our list,

but I assume Your Honours have access to copies of

it. At page 446, the Court said:

We agree with the view expressed by

Glass J.A. in the Court of Appeal that the

effect of a valid notice to complete, once the

purchaser fails to comply, is to establish the	existence of an essential breach, the breach
which preceded the giving of the notice being
non-essential. The function of the notice is to fix a reasonable time for completion so
that non-compliance with its requirements evidences a fundamental breach or
renunciation. The effect of the notice is not
to convert a non-essential term into an essential term. In this respect what is
important for present purposes is that the
notice requires completion of the contract, notwithstanding -

Braidotti(2) 17 14/11/90

and so on.

Your Honours, in the context of these

provisions, this Court dealt with that question of,
in effect, repudiation in Sibbles v Highfern,

164 CLR 214. At page 225 just below point 5, this

Court said:

The argument advanced on behalf of the Sibbles was that the purported rescission by

Highfern was pursuant to cl. 11 of the

contract, which conferred upon Highfern a

right to rescind for failure on the part of

the Sibbles to pay moneys due under the

contract. The further particulars of

Highfern's statement of claim, so the argument continued, established that the breach of

contract relied upon by Highfern for the

purposes of rescission was the Sibbles'

failure to pay moneys due under the contract.

And before a contract can be determined for

the non-payment of moneys due under it, so it

was said, a notice under s.72 must be given.

That argument, in our view, adopts too

narrow an approach. The first thing to be

noticed is that the power of termination given
by clause 11 of the contract may be exercised
not only for default in the payment of sums

due, but also for failure to comply with any

agreement contained in the contract. Then it

is to be observed that the letter dated
20 November 1984 specified as the basis for

rescission the continuing failure of the

Sibbles to complete the contract. The

allegation of rescission contained in the

amended pleadings was made by reference to the

letter -

could I ask Your Honours to read to the end of that

paragraph on page 226?

Your Honours, we submit that on the view for

which we contended about the notice - and that is

the factual question - that we made time of the

essence of the contract by giving a notice to

complete requiring completion by a certain date.

The failure to complete by the purchaser was, in

the circumstances, a repudiation of the contract

and, in our respectful submission, is not within

section 72 of the Act.

DEANE J:  Why would that not apply to a notice to pay the

instalment on the basis that failure to pay it

would constitute repudiation and lead to

rescission?

Braidotti(2) 18 14/11/90

MR DAVIES:  I suppose, Your Honour, because that is in terms

a payment of an instalment and, therefore, in terms

within section 72.

DAWSON J:  Why is not the other in terms a payment of a sum

of money, and therefore, in section 72?

MR DAVIES:  No doubt there are other obligations upon the

purchaser in order to complete other than merely

payment of a sum of money. It is completion of the

contract in all respects, Your Honour.

DAWSON J:  Does the notice say "complete", not just payment

of the - - -

MR DAVIES:  I think so, Your Honour. The notice to complete

is on page 68, Your Honour. It is a general notice

to complete, Your Honour. It does not refer to

payment of sums of money.

Sibbles v Highfern seems to be based on the

ground, Your Honours, that repudiation does not

come within section 72.

DEANE J: Well then, take it to the instalment. What, say, the notice was not to pay the instalment, that the

failure to pay the instalment was treated as a

breach and then an ordinary notice to complete in

14 days was given. Would that not paragraph apply

on your argument then?

MR DAVIES:  Your Honour, if, in fact, the effect of a notice

to complete is to make time of the essence require completion of the contract as a whole then, in our respectful submission, it does not come within

subsection (1).

DEANE J:  What you mean is, if breach of the obligation to

pay the instalment gives rise to the right to give

a notice to complete the contract, it is a

convenient way of avoiding the rescission.

MR DAVIES:

Your Honour, an answer to that may be that the

default is the anterior default and the anterior
default is default which entitled the purchaser to

the relief which section 71 gives. I mean, that

may be an argument, Your Honour, but in our

respectful submission, if the relevant default is

the failure to complete then, in our respectful

submission, on Sibbles v Highfern, the provision

has no application.

Your Honours, can I then come to what is our

final argument and it assumes the application of

the Property Law Act to this contract but submits
that the appellants' purported rescission on

27 July did not constitute a repudiation of the

Braidotti(2) 19 14/11/90

contract, did not give rise to a right in the

purchaser to rescind.

Now, first of all, Your Honours, section 72

does not imply terms in a contract so it does not

make those statutory provisions terms of the

contract between the parties nor does it even

prohibit the vendor from giving a notice to

rescind, nor does it impose any obligation upon the

vendor to give a notice under the section. All it
does, and this for the benefit of the purchaser, of

course, is prevent a contract from being terminated

by the vendor forthwith upon default in payment of

the moneys referred to and it does this by giving

the purchaser an additional and statutory

opportunity to remedy the default. So, all it

really does is prevent a notice of rescission

forthwith from having the effect which the contract

and the common law would give it. The contract

says, clause 11, that you can terminate the

contract forthwith.

So, all the vendor is ever doing is exercising

his contractual right.	He is not repudiating the
contract.	He is, in fact, acting in accordance

with its terms. The contract, in our respectful submission, in consequence of the application of

the section, remains on foot. It is not repudiated

and it is not rescinded. It remains on foot. The

vendor remains entitled to rely on the breach by

giving another notice under section 72.

BRENNAN J:	Now, was this argued in the courts below?
MR DAVIES:	No, Your Honour, it was not argued in the court

below. Your Honour will recall that was a matter

which was raised in a special leave application.

BRENNAN J: Yes.

MR DAVIES:  It was, in fact, raised in the notice of appeal

to the Full Court but it was never argued before	the Full Court and I really have no recollection	about what was said in the Full Court about it,
Your Honour, if anything. I suspect there were -
it is not in our outline of argument and I suspect
it was not argued at all but there was a - and I
cannot say this was the reason why it was not argued but there was a difficulty in fact before the Full Court which does not exist before this
Court and that is that although in this Court in
Wacal the only question before the Court was
whether it was an instalment contract, the consequence of restoring the judgment below, which the judgment of this Court did in Wacal, was not only to declare that the contract was an instalment
contract but also to entitle the purchaser to a

Braidotti(2) 20 14/11/90

return of his deposit and the purchaser in that

case had rescinded on the basis of a repudiation on

the vendor's - this case, the same as this case.

So that the consequence of restoration of the

judgment was, I suppose, an acceptance in the end, although it was never argued before this Court, of

the correctness of the proposition we are

questioning today but, as I say, I cannot say that

was the reason we did not argue; I cannot say we

did not argue it although I have no recollection of

arguing it and it was not in our outline.

'•

BRENNAN J: Did it go further, and was the contrary assumed

by consent?

MR DAVIES:  No. Certainly there was no concession made

either and we have really endeavoured to ascertain

what happened below before Justice McPherson;

there was no concession made before

Mr Justice McPherson and no concession made in the

Full Court.

DEANE J: But if the contract remained on foot by virtue of

section 72, why was not the notice that your

clients rescinded the contract a repudiation of the

contract that remained on foot?	I do not quite
follow.	I mean the notice of rescission is the
contract is at an end;	we are not going to abide
by its terms;	we are not going to bother about it
any more.

MR DAVIES:  Yes, ~ell, contractually, if one looks at the

terms of the contract, that would be effective,

assuming our notice to complete was correct.	The
effect of the statute, in our respectful
submission, is to do no more than to say that
notice is ineffective in its consequences.

DEANE J:  No, it is not, it is to say that the contract

remains on foot.

MR DAVIES: But that is the consequence of saying - I mean,

one really has to get to a point of saying that in

order to have repudiation, that our conduct in

giving that notice, evidenced an intention on our

part not to be bound by the contract. Now, that is

not correct in the sense that we, at all times,

were acting in accordance with our contractual

rights.

DEANE J: But you have said that you are not going to

observe the contract any longer and the contract is

on foot for another month.

Braidotti(2)	21	14/11/90
MR DAVIES:	Yes.	We are saying, in accordance with our

contractual right, this is what we are doing; we

intend to terminate the contract. Yes. The

consequence of the statutory provision, we say, is

and is no more than that notice has no effect.

That is it is as if that notice was not given.

DEANE J: But what about the other party? Does he think, "They are going to abide by the contract for the next month.", or does he think,"They have told me

that they do not recognize the contract."?

MR DAVIES: 

The other party no doubt thinks that we say we

do not recognize the contract. There is no doubt
about that, Your Honour, but the question of the

application of this Act really did not ever come

until the matter was pleaded in court. In fact

what they did was purport to accept our repudiation
and put an end to the contract, but we submit that

we have not acted in breach of contract; we have

not indicated intention not to be bound by the

contract;  we have really acted pursuant to our

contractual rights and, in our respectful

submission, it really does no more than relieve the
purchaser in the consequence of the breach of what

was really a fundamental obligation.

Perhaps we should say one other thing about

that, is that it would be a curious consequence, in

our respectful submission, if the purchaser, in

breach of a substantial term and fundamental breach

of the contract, could, in these circumstances,
say, "I am entitled to rescind."

GAUDRON J: What you are really saying is 72 itself directs that its only point is to assert that the contract

is alive?

MR DAVIES:  Yes, quite, and for that limited purpose, to

allow the purchaser to have a right of redemption.

Your Honours, they are really our submissions.

The only orders which I think we would seek, if we

are successful, would be that the appeal be allowed

and that the motion, which was the respondent's

motion, be dismissed with costs.

MASON CJ: Thank you, Mr Davies. Yes, Mr Jackson.

MR JACKSON:  Your Honours' tipstaves, I think, have copies of our outline of submissions. Your Honours, could

I give one reference that should be contained in there but is not, in fact. It is at the bottom of

page 3, in paragraph 13, and Your Honours will see

the sentence, "The appellants as well applied for a

declaration that the contract had been terminated."

Your Honours, the reference to that, it is a fact

Braidotti(2) 22 14/11/90

admitted in the pleadings, the statement of claim

paragraph 36, at page 16, and it is admitted by

paragraph 1 of the defence.

Your Honours, that sentence also goes on to

say "and sought removal of a caveat." That is a

reference back, Your Honours, to the document

referred to in paragraph 12, page 70A.

Your Honours, we wish to make submissions as

is apparent from our of outline submissions on two

questions. One is the appeal itself and secondly,

whether the grant of special leave should be

rescinded. That was a matter the possibility of

which was contemplated by the Court at the time

when the application was heard. May I deal with

that issue at the end of our submissions.

Your Honours, the case turns on a number of

questions of construction of the contract and also
of the operation upon the facts and upon that

contract of the instalment contract provisions and

may I turn, immediately, to the question which lies

at the heart of the potential application of

section 71 and 72 and that is, what is the

functions to be performed by special condition 42

in the contract and, Your Honours, the first

question is essentially whether that condition is

in some way separate or severable from the contract

itself.

Your Honours, we would submit it is clear that that special condition, 42, which is at page 36 is,

in every relevant sense, a part of the contract of sale of-the purchase and a part of the contract of sale of the purchase to which a provision such as

general condition 11, if I might call it that,

which is at the bottom of page 31, would apply;

and, Your Honours, general condition 11 is the

provision - and I will return to it in a little

more detail later - which empowers the vendor to

bring the contract to an end if any sum payable

under it is not paid. That would include the

payments of $80 a week.

Now, Your Honours, we would submit it is clear

both as a matter of form and as a matter of

substance, special condition 42 is part of the

contract. As a matter of form, Your Honours will

see that it forms one of the special conditions

which are annexure A at pages 34, 35 and 36, and

page 33 under the heading "Special Conditions" says:

As Per Annexure 'A'.

Braidotti(2) 23 14/11/90

The numbering of the clause immediately follows

those preceding it and, Your Honours, if one looks

at the text of the clause it treats itself, if I

can use that expression, as being part of the

contract because it uses the expression in the last

line of it -

from the date of execution hereof -

and then it goes on to say -

until this contract is at an end.

Your Honours, as a matter of substance there

are also several features which militate against
the notion that the terms of that condition are in

some way extraneous to the remainder of the

contract. Your Honours, at the time when the

contract was entered into it was one which might go

off, as it were, without the fault of either party

and if it did, the appellants would get back in the

fullest sense of the term, their land and may wish

to farm it again; and special condition 42

recognizes that the vendors may incur costs in that
regard.

Now, Your Honours, the amounts to be payable under special condition 42 are amounts which, in

our submission, fall naturally within the terms of
conditions such as general condition 9 and general

condition 11 which Your Honours will see at

page 31. There would seem to be, if one speaks of

clause 9 first of all, no reason at all why special
condition 42, or the moneys payable under it, if

not paid·timeously, would not attract interest in

accordance with clause 9. Nor, and more

importantly, is there any reason why, if one looks

at clause 11, they would not be sums of money to

which it would apply in this sense, that -

If the purchaser fails to pay the deposit or

any balance of purchase price or otherwise

fails to comply with any of the terms of this

contract then the vendor -

is given various specified rights.	They include
the right in paragraph (c) to -

terminate the contract.

Now, Your Honours that, in our submission, is

something which goes to the heart of our learned

friend's first submission because general

condition 11 is a provision which has the result

that if the moneys payable week by week under

clause 42 are not paid, then the vendor is entitled

Braidotti(2) 24 14/11/90

to say that there shall not be completion by reason

of that non-payment.

Your Honours, the terms of the special

condition, in our submission, give the vendors
substantial rights under the main parts of the

contract and special condition 42 should not be

treated as some kind of side or collateral

agreement. We would submit, in summary, that the

reason for it is the existence of the contract of

sale. Its subject-matter is a payment for the

potential loss caused by the fact that the contract

of sale is conditional and that the operation of

the clause is the period during which the contract

is unperformed and in those - - -

BRENNAN J:  Mr Jackson, does that argument really meet

Mr Davies' proposition which, as I understand it,

is it is a question of whether or not these

payments entitle the purchaser to a purchaser's

lien and whether or not it goes to the right of

conveyance. Let us assume that although there was

default in the payment of the clause 42 amounts,
the vendor elected to affirm the contract but yet

the purchaser did not pay but paid all other sums

due and payable under the contract.	What then
would be the right to a conveyance?

MR JACKSON:  Your Honour, the answer would probably then be

that pursuant to clause 2, the purchaser would be

entitled to a conveyance and would have to pay the

money. Your Honour, speaking a little more

loosely, perhaps, in saying that, the vendor had
the right not to give a conveyance but what

Your Honour puts to me would equally be true, with

respect, of the purchase money itself in a sense if

the purchaser were. to say to the vendor, "I cannot
pay the purchase money on the due date but will you

yet give me a conveyance?", then the vendor might

elect to adopt that course and take his own

chances.	Your Honour, both those matters are
matters which lie at the election of the vendor.

BRENNAN J:  I was putting to you, perhaps, not quite that

proposition. Let us assume that the purchaser

produces the $1,500,000 but declares that none of

that is the amount which is due and payable under

clause 42, demands a conveyance and says that for
some reason or other, valid or otherwise, "I don't

propose to pay the amount on the clause 42"?

MR JACKSON:	Your Honour, in those circumstances the vendor has to choose whether to exercise the right under
clause 11.

BRENNAN J: If he elects to affirm?

Braidotti(2) 25 14/11/90

MR JACKSON:  If he elects to affirm, then he must give a

conveyance but, on the other hand, he is entitled

to recover the money after conveyance.

DAWSON J:  What if he does nothing and the purchaser then

sues for specific performance?

MR JACKSON:  Your Honour, in those circumstances it would be

a question whether he - - -

DAWSON J:  Or he accepts the money but does not give any

conveyance, the $1,500,000.

MR JACKSON:	Your Honour, the acceptance of the money in those circumstances, one would think, would be
likely to be treated as being an election not to
exercise the right to - - -

DAWSON J: All right, then refuses to accept even that

money.

MR JACKSON:  Your Honour, in those circumstances, we would

submit that the probability would be that he is

then exercising a right under clause 11 and his

conduct would seem to be consistent only with

bringing the contract to an end in that regard.

DAWSON J:  I do not understand that. Why do you not embrace

the proposition that a party in default cannot

enforce the contract?

MR JACKSON:  Your Honour, it must depend to a degree, we

would submit, on the particular obligations

involved and the degree to which one might regard

one as being, or not being, entirely separate from

another.

DAWSON J:  You say this is a term of the contract, an

integral part of the contract, if he does not pay

he is in default, how then can he enforce the

contract?

MR JACKSON: Well, Your Honour, what I am saying that the

particular case, I think, but what I am saying is,

if one has a situation where the vendor takes the

money, in effect, then by doing so what the vendor

has done is to exercise the election not to

terminate given -

DAWSON J: If you put that on one side, where he just

refuses to accept the money.	He says, "That is not
all that is owing to me".

MR JACKSON: Well, Your Honour, in the particular case that

is what he is doing, he seems to be exercising a

right under - - -

Braidotti(2) 26 14/11/90

DAWSON J: All right, then why is it not a situation where

the party who is in default cannot enforce the

contract ..... remedies the default?

MR JACKSON:  Your Honour, I accept that proposition, I

simply was not really going to accept it. Every

case, with respect - - -

DAWSON J:	Why is it not a universal proposition?
MR JACKSON:	Your Honour, it really, we would submit, must depend upon the particular terms of the contract
and it would work great harshness, one would think,
in some cases, if there were minor breaches of
contract which had the result that no part of the contract could be enforced.

DAWSON J: Why is that a hardship? If they are minor, they

are easy to remedy.

MR JACKSON:  Your Honour, that might be right, with respect,

if one were looking at it purely from the point of

view of enforcing contracts by legal proceedings on

both sides but if one took, for example, a

construction contract where there was an
entitlement to have a large sum of money paid by
way of a progress payment if all the conditions

precedent to obtaining the payment were met and, on

the other hand, there were a minor breach such as

not having the trucks which were doing some of the

work fitted with appropriate silencing equipment

and this was a contract being carried out in the

bush. Now, Your Honour, if it were said that the

Once one is signed up the deposit is to be paid,

but the terms of the contract in the three
references to deposit, make particular reference to

the fact that the deposit is to be paid in two sums

Braidotti(2) 44 14/11/90

if there is a rezoning: one on signing, a

relatively nominal sum, but then when the rezoning

comes through, a larger sum is to be paid and, of

course, that is to be paid at a time which is
likely to be relatively shortly before completion.

So it is not a deposit in the usual commercial sense, although undoubtedly it is the deposit in the legal sense, Your Honour.

DEANE J:  Now, finally, are there any cases that you are

aware of that say a clause such as 11, by using the

word "forfeit", confines the forfeiture to so much

of the deposit as has actually been paid, as

distinct from the amount that was payable as

deposit, regardless of whether it has in fact been

paid?

MR JACKSON:	No, Your Honour, and in the ordinary course of events, if one were to see a deposit which, say,
was a sum of $15,000 payable as to $1000 on
execution and $14,000 within 7 days, with the
contract to be completed at some time in the
future, one would think that if there were an election to terminate the contract under clause 11
for some other reason, that the amount that would
be the subject of forfeiture would be the $15,000, although the amount that the vendor would have in
its hand would be the $1000 and would then have to
sue to enforce the forfeiture of the remaining $14,000.

BRENNAN J: That is if the event had occurred and which made

the $14,000 payable?

MR JACKSON:  Yes, Your Honour. I was speaking, Your Honour,

of a - what I was contemplating in answering that
question was a circumstance where the deposit was

payable, there was no condition which might make
the deposit not payable, but before it had actually been paid, or before the time for payment of it had

arrived, some event had occurred of default on the

part of the purchaser which gave the vendor the

entitlement under clause 11.

Your Honour, in relation to Sibbles v

Highfern, I have referred to the circumstances of

it without taking Your Honour to the passage in it.

It is 164 CLR. The particular passage is at

page 227 where the Court refers in the second line

and following to the nature of the repudiation
involved and Their Honours said:

But the repudiation found by the trial judge went beyond default in the making of payments.

He found that the "continuing failure of the

Sibbles to complete the contract, and their

persistence in wrongfully contending that they

Briadotti(2) 45 14/11/90

had rescinded the contract ..... 'amounted to an

intimation of their intention to have no more

to do with the purchase'".

Your Honours, before turning to the last

matter with which I said I wish to deal - that was

the question about special leave - could I add one
thing in relation to the sections of Division 4 and

the application they would have if a situation were

to arise where section 72, for example, did not

apply in cases where the last payment was the only

one which had to be made.

Your Honours, if one looks at section 72, it

simply says:

any instalment or sum of money ..... due and

payable under the -

instalment contract. There seems no particular

reason to read that down. Your Honours, if one

were to read down section 72(1) in the way

suggested by our learned friends, one would wonder

why the Act would give the protection contemplated

by the other provisions of the Act to a purchaser

whose only then right was to get the conveyance in

exchange for the purchase money and it is clear

that sections 73, 74 and so on, do apply in

circumstances where all that is to happen is that

the purchase money is to be paid.

In that regard, if Your Honours look for

example at section 73, section 73 appears to
operate during the whole period that an instalment

contract .remains such; that is, up to completion

and Your Honours will see a particular reference to

"completion" in section 7 3 ( 2) (a) . If one goes to

section 74, the right to caveat, Your Honours will

see a particular reference to the discharge of the

contract by performance in section 74(2)(b) and

that seems to assume that the contract will be an instalment contract until completion, and I would

also give a reference to the right to have a

deposit of the title deeds in section 76(l)(b).

The last thing I wish to mention before moving on to the other question is this: the present

contract, of course, is one which in every respect

continued to be an instalment contract until the
date for completion because clause 42 operated to
require a payment "of $80 a week from the date of

execution hereof until this Contract is at an end".

So, it was something that was - which payments were

required to be made right through.

Your Honours, could I turn then to the question of special leave. The Court in granting

Braidotti(2) 46 14/11/90

special leave recognized the possibility that it

might emerge in the end that the case was one where

it was not appropriate for the grant of special

leave. I do not know if Your Honours have copies

of the transcript of the hearing of the special

leave application?

MASON CJ:  We have all read it, I would think, Mr Jackson.

MR JACKSON:  Could I just say this: we would submit that

the grant of special leave should be rescinded for

the reasons which are set out in our outline of

submissions. I would refer particularly,

Your Honours, to the fact that the case in the end,

we would submit, so far as condition 42 is

concerned, is no more than a particular application

of Wacal Developments. I will not go to the other

matters I have set out there specifically except to

say that if one goes to the last paragraph of our

submission, Your Honours will see that we have

given a number of references to the fact that the

issue was one, in fact, as we would submit, agreed

upon as being the issue by the parties.

Could I take Your Honours to page 76, line 19,

in the passage which goes from there to the top of

the next page and refer particularly to the fact

that His Honour said at line 29:

Other matters apart, it was accepted that the answer to the first question depended upon whether the contract was an "instalment

contract" -

and, it goes on to the top of the next page. Then,

at page 81, line 26, His Honour said:

The questions that I have determined here

were raised as issues in the pleadings

delivered in this action ..... The parties or

their representatives, however, thought it

convenient to have these questions decided as

points of law in advance of a trial, and both

expressly consented to my doing so.

That goes over to the top of the next page and

then, Your Honours, the reference is to the same
matters in the decision in the Full Court and I

think Your Honours will see the two handwritten

references there contained.	Your Honours, those
are our submissions.

MASON CJ: Thank you, Mr Jackson. Yes, Mr Davies.

MR DAVIES:  Your Honours, can I say in answer to the point

which Your Honour Justice Dawson raised both with

me and with my learned friend, Mr Jackson, that we

Braidotti(2) 47 14/11/90

would really join with our learned friend,

Mr Jackson, in saying that really whether failure

to make a payment under a contract entitles the

vendor, in this case, to refuse to complete depends

in the end on the terms of the contract. On the

terms of this contract it did not because clause 2

did not entitle the vendor to refuse to complete

because of a payment of that kind.

Your Honours, our learned friends in dealing with both Chan v Dainford and Sibbles v Highfern,

with great respect, in our submission, really

misdescribed the nature of the transaction. Our

learned friend said that in Chan v Dainford that

the moneys were payable under a loan transaction

but the way in which the transaction was

characterized and as one transaction by the

Full Court of Queensland, and that being accepted

by this Court, was as being one total transaction.

Can I give Your Honours the reference to the

judgment of the Full Court. It seems to be also

reported only in the Queensland Conveyancing Law

and Practice and the reference, Your Honours, is

(1985) Queensland Conveyancing Reports 54-169 and

in a passage which appears in the second column on

page 57-137 one of Their Honours and the others

agreed said:

In my view the correct conclusion is, as

Mr Jackson, QC, for the respondent submitted,

that in the circumstances there was but one

agreement which was carried into effect by two

instruments.

That view, which was adopted below seems to have been accepted in all respects by this Court at

page 537 of the judgment.

Your Honours, it is also not correct to say as

our learned friend said of Sibbles v Highfern, that
the relevant payment there was rent by another

name. There is not the slightest suggestion in the	judgment that at any stage the payment of interest,
notwithstanding the fact that the purchaser was allowed in possession, was properly characterized
as rent.

The majority dealt with it in a joint judgment

at page 217, described it as interest and said it

was payable on the outstanding balance at the rate

of $1653 a month. That is at page 217 of the joint

judgment. There is no suggestion anywhere that any

attempt was made by anyone to characterize the

payment as other than a payment of interest.

Braidotti(2) 48 14/11/90

Your Honours, I should have said when I was

addressing you at the outset that we did not rely

on ground 5 of the notice of appeal. Our learned

friends directed Your Honours' attention to that.

I should also have said that we did not rely on

ground 6(b) because our learned friend has really

addressed on ground 6(b) and we did not, and we do

not rely on it. Indeed, it seems to us that the

bundle of cases which our learned friends handed to

Your Honours were really directed to ground 6(b),

not ground 6(a).

We do not say that merely because the payment happens to be the last payment that the contract

cannot come within the Act, or cannot come within

section 72. What we say is that a notice to

complete properly given and not complied with has a

character and consequences which this Court stated

in Ciavarella. Failure to comply with that notice

to complete is, in our respectful submission,

repudiation. In this case we would add, and rely

upon the remarks which Your Honour Justice Deane

made during the course of my learned friend's
submission that, in any event, if we correctly

characterized the deposit there was a failure to

pay deposit as well as balance of purchase price.

Your Honours, as to our learned friend's

submission that acts subsequent to our purported

rescission were repudiatory if rescission was not,

in our respectful submission, they can be no more

repudiatory than the purported rescission. They

were, as the rescission was, in exercise of our

contractual rights, and our construction of

section 72 is that all it does is give relief

against the consequence of the exercise of what are
contractual rights, and all the rights that we

exercised up until the first time that section 72

was relied on which was, in fact, in the statement

of claim, were, in fact, in pursuance of what

clearly was a contractual right.

I am reminded that the corollary of that is,

of course, that we say that at all stages they had

the right to rely on section 72.

Your Honours, I do not think I need to say

anything more about our learned friend's

application for rescission of special leave, except

to remark upon his statement that there were

questions of fact involved. Clearly this

application could never have been made with respect

to questions of fact. It is only an application

which could have been made by raising points of law

prior to the hearing of evidence or by raising

questions of law because of admissions on

pleadings. They are our submissions.

Braidotti(2)	49	14/11/90
MASON CJ:	Thank you, Mr Davies.	The Court will consider

its decision in this matter and will adjourn until

10.15 am tomorrow.

AT 12.53 PM THE MATTER WAS ADJOURNED SINE DIE

Braidotti(2) 50 14/11/90