Braidotti & Anor v Queensland City Properties Limited
[1990] HCATrans 153
•
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Brisbane No B22 of 1990 B e t w e e n -
AUGUSTO BRAIDOTTI and MARY
VILMA BRAIDOTTI
Applicants
and
QUEENSLAND CITY PROPERTIES
LIMITED
Respondent
Application for special leave
to appeal
BRENNAN ACJ
DAWSON JGAUDRON J
Braidotti TRANSCRIPT OF PROCEEDINGS
AT BRISBANE ON FRIDAY, 29 JUNE 1990, AT 12.02 PM
Copyright in the High Court of Australia
BlT 11/1/RB 1 29/6/90 MR G.L. DAVIES, QC, Solicitor-General for the State of Queensland:
May it please the Court, I appear with my learned
by Bain Gasteen Smith) friend, MR B.J. CLARKE, for the applicant. (instructed
MR D.F. JACKSON, ~C: May it please the Court, I appear with my learne friend, MR T.W. QUIN, for the respondent.
(in.structed by Henderson Trout)
BRENNAN ACJ: Yes, Mr Solicitor. MR DAVIES: Your Honours, we seek leave to read an affidavit which is really further to an affidavit which, on our
learned friend's side was, I think filed yesterday,
at least served on us yesterday. Could I hand up
copies of that affidavit. It is an affidavit by
John Sydney Power O'Keefe and it is sworn today.
MRJACKSCN: Perhaps I should inquire if Your Honours have the affidavit from our side to which my learned friend
has referred, one by Mr Morrow.
BRENNAN ACJ: It was filed yesterday, was it?
MR JACKSON: Yes, it was, Your Honour, in multiple copies. BRENNAN ACJ: It appears that none of the Justices has that.
MR JACKSON: I am sorry, Your Honour. I will endeavour to - may I hand to Your Honours one copy of it innnediately and - I can give Your Honours three copies altogether.
BRENNAN ACJ: Perhaps you should give us some time to read these
affidavits. There is no objection on either side to
the reception of either affidavit?
MR JACKSON: No, Your Honour. BRENNAN ACJ: Being thus informed, Mr Solicitor, you may proceed. MR DAVIES: Thank Your Honour.
Your Honours would be aware that the Full Court
declared that the contract between the parties was
rescinded by the respondent on 10 August 1989. There
were, in our respectful submission, two steps in
Their Honours' reasoning to that conclusion: the
first was that the contract was an instalment
contract within the meaning of section 71 of the
PROPERTY LAW ACT and they reached that conclusion
because they said that clause 42 of the contract,
which provided that the purchaser agreed to pay to the
vendor the sum of $80 per week in order to maintainthe property for farming purposes until the contract
came to an end, provided for payments within the meaning
of that section.
BlTll/2/RB 2 29/6/90 Braidotti The second step in their reasoning was that
the vendor/applicant had repudiated the contract by
purporting to rescind without first giving notice
of intention to do so within the meaning of
section 72 of the Act and that that entitled thepurchaser then to rescind.
- -The consequence was that the respondent is,
if the Full Court's decision stands, entitled to
damages against the applicant which still have to
be assessed, which are likely to be quite substantial.
Your Honours, in our respectful submission, that
reasoning gives rise to five questions of law which
I will outline in a moment. Before doing so, can I
take Your Honours to what, in our respectful
submission, are the relevant parts of the contract
which appears at page 32 and following of the appeal
book.
First, Your Honours, it may be of some
significance, thought not a great deal, but some little
significance that the contract - at least the printedpart of the contract - is a standard form contract
as Your Honours will see from the top, adopted by the
Real Estate Institute of Queensland and the Queensland
Law Society. Then, on the same page, at letter N
the purchase price is provided and letter O states
the deposit. Clause 1 of the printed contract, on thefollowing page, Your Honours, at the top provides
if Your Honours go down to the fourth line that:
Whether or not the Vendor terminates this
contract the Vendor shall be entitled to
recover as a liquidated debt from the Purchaser
so much of the deposit as has not been paid by
the Purchaser.
So that provides a right to recovery of the deposit
whether in fact the vendor terminates or not.
Clause 11 is of marginal importance. That deals with
forfeiture of the deposit. On the following page clause 21 is a non-merger provision that provides
that the obligations do not merge in conveyance.
Then if one goes to the typed additions, the additional
conditions on page 36 clause 30 provides for:
The deposit of $150,000 -
to which you have been referred -
shall be paid as follows:- $1,000 ..... on
the signing hereof and the balance namely
$149,000 ..... on gazettal of the rezoning
of the land to Residential A.
BlTll/3/RB 3 29/6/90 Braidotti
BRENNAN ACJ: How do you read that in conjunction with clause l? MR DAVIES: In the end, Your Honour, we would read that the whole of the $150,000 could be recovered by the
vendor.
BRENNAN ACJ:
How do you achieve that,by reading out the provisions of clause 30?
MR DAVIES: No, Your Honour, by reading them together, that is that it can be recovered but could only be recovered
after fulfilment of that condition.
BRENNAN ACJ: After gazettal?
MR DAVIES: Yes, or, we would say, waiver, because we have an argument,with respect, to say that waiver is equivalent
to fulfilment of that- - -
BRENNAN ACJ: Yes. MR DAVIES: Your Honours, then clause 32, which in (a) and (b) are the conditions which had to be fulfilled,
Your Honours will have seen those, and then (d), an acknowledgement that (a) and (b) have been inserted
for the benefit of the purchaser and may be waived.
On page 38, clauses 41 and in particular 42.
Your Honours, the relevant facts which are in very short compass, apart from the fact that $1000
deposit was paid and no more, are that in May the
respondent wrote waiving the benefit of clause 32(a)
but when read as a whole it appears - and it was
eventually common ground - that the intention was to
waive 32(a) and (b) because it called for settlement
on 23 June. Then on 11 July the applicant/vendor gave
notice to complete on 26 July. On 26 July the purchaser failed to complete and on the 27th the
vendors purported to rescind.
Arising out of those facts the first question which,
in our respectful submission, arises is as to the
construction of the definition of "instalment contract" in section 71. Do Your Honours have a copy of those provisions? Could I hand up some photocopies of the
relevant sections which are sections 71 and 72, but
for the moment I am directing Your Honours' attention
to the definition of "instalment contract" in
section 71(2)(b) and the question really is as to the
construction of that provision and, in particular, asto the construction of the words:"
a payment or payments ..... without becoming
entitled to receive a conveyance in exchange
therefore;
BlTll/4/RB 4 29/6/90 Braidotti As Your Honours will recall, in WAQ\L
DEVELOPMENTS V REALTY DEVELOPMENTS, 140 CLR 503, this Court decided that interest on the balance of
purchase moneys was a payment or payments within
that definition and we take no issue with that
conclusion. Do Your Honours have copies of WACAL. It was certainly on our list?
BRENNAN ACJ: No, we do not seem to have copies of anything,
Mr Solicitor.
MR DAVIES: I think we were told that if they were in the
Cormnonwealth Law Reports we did not need to provide
copies, Your Honours.
BRENNAN ACJ: There seems to have been some misunderstanding.
MR DAVIES: Your Honours, I can hand up only one copy at the
moment. My learned junior will get further copies down from the library.
MR JACKSON: I can give Your Honours mine in the interim. MR DAVIES: Your Honours, the actual decision in the case, as I said, with which we do not take isaue, is that interest on the balance of purchase moneys was a payment within the meaning of that section. In doing
so, the Court rejected an argument that the payments
referred to should be limited to instalments of the
purchase price. Now, again we take no issue with that conclusion. We do not urge here that payment or payments should be limited to instalments of the
purchase price.
It was not necessary for the Court in that case
to determine precisely what the limitation was on
those words "payment or payments" but they did say
that it was limited to payment or payments requiredto be made to the vendor or the vendor's agent and
it did not include payment or payments required to be
made to a third party. They did that bJ relying on
section 72 - when I say "they", some of them did, Your Honours; not all of them dealt with this point- but those who did reached that conclusion because of section 72(2).
Section 72 is the relief section. It really is
a statutory analogy, I suppose, to the equitable rule
which this Court considered in LEGIONE V HATELEY, and what it says in subsection (2) is that the relief can
be obtained by making the payments to the vendor or
the vendor's agent and, in our respectful submission,
that really is not an appropriate limitation but it
may not be necessary, for the purposes of special leave
or even arguing this appeal, to question the correctness
of that. Whether it is or not we are not completelysure.
BlTll/5/RB 5 29/6/90 Braidotti But, in our respectful submission, the
appropriate limitation upon the words "payment or
payments" in the definition of "instalment contract"
really comes from section 71(2)(b) itself., The context
there indicates they must be payments by a purchaser,
that they must be payments under an executory contract
for the sale of land and that they must not be
sufficient to entitle the purchaser to receive a
conveyance in exchange therefor. What we say that envisages is that the payment must be a payment which
goes towards gaining for the purchaser a right to a
conveyance. In other words, a payment failure to pay
which would disentitle the purchaser to a conveyance.
GAUDRON J: Mr Solicitor, I am having some difficulty. Does this problem arise because it is accepted that if it
were an instalment contract the contract was purportedly
determined by reason of default on the part of thepurchaser in payment of any instalment or sum of
money. I just do not see how section 72 has any
bearing on this case and therefore I do not see why
you are worried about section 71. Has that been
| Tll | common ground, has it? |
MR DAVIES: That section 72 has some bearing on the case?
GAUDRON J: Yes.
MR DAVIES: It seemed to be essential to the Full Court's decision, in our respectful submission, in this
respect - - -
GAUDRON J: And it has not been challenged at any stage by you
that - - -
MR DAVIES: Oh yes, indeed, as to whether in fact there was an
entitlement to rescind in any event.
GAUDRON J: No, as to whether or not section 72 says anything
about a purported termination for failure to comply
with a notice to complete.
MR DAVIES: Yes, Your Honour, that is one of our points. One of our points is that all that sectim 72 does is render
what we did ineffectual; that it does not constitute
what we did a repudiation.
GAUDRON J: I do not see why it bears on what you did at all.
MR DAVIES: Well, I am not sure that I understand Your Honour's
point.
GAUDRON J: On what basis was it determined? It was determined on the basis of failure to comply with a notice to
complete. That is to say on the basis of accepting
a repudiation or treating the failure as a repudiation.
BlT12/l/RB 6 29/6/90 Braidotti
MR DAVIES: Yes, indeed. GAUDRON J: And that was not by reason of default in the payment of any instalment or sum of money due and payable
under the contract.
MR DAVIES: That certainly was a point we argued below but the
argument against us there was that when one comes
to the failure to complete, it is the failure to pay
the last payments, whatever it might be under the
contract, the final - that seems to be the argument.
But that was a point that was argued below, Your Honour.
BRENNAN ACJ: But how does 72 work in a situation where there is
a notice to complete given by a vendor?
MR DAVIES: If it is relevant, Your Honour, it would work, in our respectful submission, by when there is a failure
to complete on the due date, doing no more than if
there was then a rescission irmnediately by the vendor,
rendering that notice of rescission nugatory. It
would not go any further. I mean, it cannot have the
further effect of rendering that notice of rescission
itself a repudiation.
BRENNAN ACJ: How does a vendor rescind for non performance in a contract to which 72(1) applies after giving a
notice to complete?
MR DAVIES: If section 72 applies, then having given notice to
complete and there being failure to complete on the
due date, it would then have to give another 30 days
to the purchaser to allow that purchaser to complete,
assuming that section 72 gives statutory relief in
that situation also.
BRENNAN ACJ: And then defer the rescission until after the expiration of that 30 days.
MR DAVIES: Yes. Can I return then to the definition in section 71(2)(b) of llinstalment contract". What we
say is that the payment or payments which are referred
to therein are those which go towards gaining a right to conveyance; that they must be a payment,failure
to pay which would disentitle the purchaser to a
conveyance and that that is not the character of
the payments which were payable under clause 42 because the payments which are made pursuant to clause 42 are, if not paid, would not disentitle
the purchaser to a conveyance. They would simply give
rise to a money claim by the - a claim in debt by the
vendors against the purchaser. It would not affect
the purchaser's right to a conveyance. And that is
the very purpose, in our respectful submission, ofthe definition of "instalment contract" in section 71(2)(b)
BlT12/2/RB 7 29/6/90 Braidotti Your Honours, the affidavit our learned friend
put in really went to say that a clause in terms
of clause 42(b) is not a very cotl'llllon clause, or it
is an uncotl'llllon clause, they had not seen it before,
but in our respectful submission, what we say is
that this submission applies equally to a clause
where - and it is quite common, according to Mr 0 1 Keefe - where a purchaser is let into possession on the basis that he pays rent, pending possession. Because if the Full Court's decision is correct, then that would become an instalment contract if, under
the contract of sale, there was a specific butseparable clause which said, "The purchaser shall be entitled to go into possession pending completion and paying so much per week". So that is the first question, in our respectful
submission. The second concerns the construction of
section 72 itself and that was the point I was really
making a little earlier: does it render the noticeof rescission which we gave merely ineffecutal or does
it go further, as the Full Court really held, and give
the notice of rescission the status of a breach of
contract amounting to a repudiation? In our
respectful submission, what section 72 does - and it
is really very likely a statutory version of the
equitable rule - what it does, and does no more than
is give relief to a purchaser in the circumstances
mentioned. And it does this by providing, in
subsection (1) that:
An instalment contract shall not be
determinable or determined by reason
of default on the part of the purchaser in
payment of any instalment ..... until .....
thirty days after service
of notice, and then in subsection (3) by providing
that:
Upon payment or tender: .... any right or
power of the vendor to determine ..... shall cease -
It does not, either expressly or by implication go
further and provide that that constitutes a
repudiation, nor does it imply a term into the contract
between the parties.
BRENNAN ACJ: Why does the question whether or not the document
which was served on 27 July amotmts to a repudiation
turn on any question of section 72?If it is an
intimation of an intention not to be bound by the
contract, why is that not a repudiation if there are,
as a matter of law, no grotmds for that?
MR DAVIES: Section 72 apart, Your Honour, we would have been
entitled to repudiate the contract.
B1Tl2/3/RB 8 29/6/90 Braidotti
BRENNAN ACJ: That may well be so, but that simply goes to the question of whether or not your refusal to be bound
bound as from 27 July, the question whether you have was justified. Why is it that if you refuse to be repudiated or not turns not upon section 72 except so far as that establishes the justification for
the-refusal to be bound.
MR DAVIES: It is true in the sense that that indicates an intention, Your Honour, but as to whether in fact
that constitutes a breach of contract by us, in our
respectful submission, depends upon the proper
construction of section 72. In our respectful
submission, if the only purpose of section 72 is not
to render what we have done a breach of contract but
to confer relief upon the purchaser in that
circusmtance, then in our respectful submission it
does not constitute a breach.
BRENNAN ACJ: But repudiation in the sense which is relevant here is not a breach of contract; it is an
anticipatory breach in the sense that it is an
intimation of an intention no longer to be bound.
MR DAVIES: Yes, but - - - BRENNAN ACJ: Is it any the less that, whatever the operation
of section 72 may be?
MR DAVIES: Can I perhaps put it another way, Your Honour, which may be a better way of putting it. The position of
the purchaser is that the purchaser is in fundamental
breach of contract at that time, having failed to
complete on the due date; that whatever we have done
by our conduct,section 72 or nothing, really,
entitles the purchaser to rely upon what we have
done because the purchaser itself is in fundamental
breach of that contract and section 72 does not take
that away.
DAWSON J: What you really say is that you showed an intention
not to be bound by the statute, not an intention not to be bound by the contract.
MR DAVIES: Yes. GAUDRON J: And perhaps another way of putting it is that if the
purchaser says, that is ineffective, then the purchaser
cannot in the same breath say, that is a repudiation.
MR DAVIES: Yes, that is it, quite. That is the point we make.
Your Honours, I do not think I can really state that
point or advance it any further. Can I then go to really quite a different question then, which is the definition of II.deposit" in section 71(2)(a) and the
words in parenthesis in section 72. We really assume for the purpose of this argument, as the Full Court held,
BlT12/4/RB 9 29/6/90 Braidotti that thebalance of deposit moneys became payable on
completion and the question is whether, nevertheless,
there was on the date fixed for completion a failure
to pay part of the deposit within the meaning of
the words in parenthesis in section 72(1) of the Act.
If there was, then the notice of rescission was
effective. Now, what the Full Court seemed to say is that where part of the deposit is payable only as part
of the purchase price, it has lost its character as
deposit and perhaps I should take Your Honours to where
they say that, rather than paraphrasing it. It appears
at page 60, lines about 15 to 30.
(Continued on page 11)
BlT12/5/RB 10 29/6/90 Braidotti
MR DAVIES (continuing): And, Your Honours, what we submit is that that view is really inconsistent with the
definition of "deposit" in section 71(2)(a)
because it really puts a gloss on it and it is
really also inconsistent with the standard form of real estate institute contract; "deposit:' is defined in the contract as $150,000 and clause 1,
Your Honours will recall, says that the whole
of the $150,000, in effect, subject to clause 30,
is recoverable. So that notwithstanding that it might not be payable until completion, it would
have been, at any later stage, recoverable.
BRENNAN ACJ:
But the -definition of "deposit" in 71(2)(a) contains as one of its elements in paragraph (iii) as:
liable to be forfeited and retained by the
vendor in the event of a breach of contract
by the purchaser.
MR DAVIES: Yes, clause 11 deals with that in the standard form contract, Your Honour, about forfeiture.
BRENNAN ACJ: Yes, well now in the present case, however, if there had been no gazettal but there had been a
waiver and the time for completion had arrived,
would the element in paragraph (iii) be satisfied in
respect of $149,000?
MR DAVIES:
Yes, Your Honour, for two, really, alternative reasons: one we really have not come to and that
is, in our respectful submission, waiver is equivalent to fulfilment of the condition so that the
deposit was payable then but quite apart from that,assuming that to be wrong, assuming against us the deposit was not payable until the end, in our respectful submission, the contract still made it liable to forfeiture if it was paid and recovery if it was not because clause 11 clearly makes it liable to forfeiture, but what it says is, once it has
been paid it is liable to fo~feiture, if it has not
been paid it is recoverable. BRENNAN ACJ: Yes. MR DAVIES: Perhaps I should mention that another aspect of our learned friend's affidavit said that it is
uncommon to have a contract which requires payment
of the balance deposit - our learned friend's
affidavit said that it was uncommon to have a
contract where the balance of the deposit was not
recoverable until the balance of the purchase money
was payable but the same argument we are advancing
would apply where, for example, part deposit was also
part of an instalment, exactly the same argument that
we have advanced would apply in that situation.
B1Tl3/l/JH 29/6/90 Braidotti 11 Your Honours, the fifth question which arises is
the effect of wavier which I have foreshadowed a
little earlier in conditions such as clause 32(a)
and 32(b) and, in our respectful submission, there
can be really two competing views of the effect
of waiver in a situation such as that: one is that _the contract should thereafter be construed
as {f those conditions had never existed in the
contract, in other words they should be excised;
and the other is that the contract should be
viewed as if those conditions had been fulfilled.
In our respectful submission, that is also a general
question simply because there are many contracts
which are conditional, many contracts which do not
provide for the consequences of waiver and many
contracts which do not even specifically provide for
waiver but where there would be a right in
the purchaser example to waiver conditions.
Your Honours would be aware from the many cases
about whether clauses in contracts are inserted for
the benefit of one party or not.
The Full Court clearly enough took the former
of those views, that is, that the contract should
be treated as if that clause had been excised.In our respectful submission, the correct view is the latter of those and, in our respectful
submission, that is because parties really have in
their contemplation that where waiver is to be
substituted for fulfilment of the condition, that
the same consequences would flow from waiver as
would flow from fulfilment of conditions. Now, if that is so, then the money was payable when those
conditions were waived and, in our respectfulsubmission, we were entitled to rescind for the
non payment of the deposit at that time.
GAUDRON J: Well, we have to go a bit further to make good
that proposition, is that not so? I mean, even if you are correct on all those matters there is a
question of sufficiency of time.
:MR DAVIES: That was something which, really, was left to one side, Your Honour.
GAUDRON J: So, if you were right on everything you have said to date, it would still have to go back for
determination as to sufficiency of time?
:MR DAVIES: Yes, of course, we accept that. The question really is, judgment for the other side or going
back to the court. Yes, we accept that. Your Honours, they are our submissions.
BRENNAN ACJ: Yes, thank you, Mr Davies. Mr Jackson? B1Tl3/2/JH 12 29/6/90 Braidotti
MR JACKSON:
Your Honours, may I hand to the Court copies of summary of our submissions setting out the
reasons why we would submit special leave should
not be granted. Your Honour, attached to the documents are copies of three cases to which I wish to refer briefly. -Your Honours, could I say before Your Honours
see them or while they are being handed to
Your Honours, they do not deal with one point and
the reason why they do not deal with one point is
because the point seems to have been accepted in
both courts below, the particular point being
whether the notice to complete was a document which
if it did not comply with section 72 in terms of
time would have entitled us to bring the contract
to an end, in effect. Could I give Your Honours the references to that now? The first is at page 54 in the judgment in the Full Court at about
point 4 and Your Honours will see at line 15 thatHis Honour says:
It is not in dispute between the parties
that if the notice to complete
of 11th July was not a good one, the vendors'
purported rescission was a repudiation which
the purchaser was entitled to accept, as itdid, and thus determine the contract itself.
Your Honours, an interesting point treated as
academic before the Full Court and it was also
treated in the same way before the primary judge as
is apparent when one goes to page 38 and
Your Honours will see at line 19 His Honour says:
The first question for determination turns upon whether the vendors were entitled to
rescind the contract on that date. If they
were not, it would follow that the
purchaser was entitled to treat their
notice of rescission as an unjustified
repudiation of the contract.
Now, Your Honour, I would ask Your Honours to read
the next sentence then, at about line 29:
Other matters apart -
and that seems to refer to different questiomabout
the sufficiency of the time given by the notice to
complete -
it was accepted that the answer to the first
question -
the first question being the question in the
preceding paragraph -
B1Tl3/3/JH 13 29/6/90 Braidotti depended upon whether the contract was
an "instalment contract" within the
terms of the definition of that
expression in section 71 ..... If it was,
then the vendors were not entitled to
determine the contract by reason of the
-purchaser's failure to settle until the
expiration of 30 days.
Now, Your Honours, that issue was one that was
treated as not being a matter in issue before either
of the courts below and Your Honours should not,
in our submission, allow that point to be the basisfor a grant of special leave.
Could I turn then, Your Honours, to the
outline of submissions which we have?
Your Honours, I wonder if I can turn first to
paragraph 2 and in paragraph 2 we set out the broad
submissions which we make, first of all these~
that the decisions in the courts below simply
applied WACAL DEVELOPMENTS V REALTY DEVELOPMENTS to the facts of a particular case and, Your Honours,
in saying that, I want to go to the case in just
a moment but what Your Honours will see from it, is
that it did not decide, for example, just that
the definition applied to a case where there was arequirement to pay interest on an unpaid purchase price.-
The case was decided on a broader basis, namely tha~ any sum of money which had to be paid under a contract which was not a deposit which was payable
to the vendor or his agent and in respect of the
payment of which there was not a conve¥ance in return
was something which gave rise to the contract being
an instalment contract and, Your Honours, may I come
to that in just a moment.
The second aspect of it is that the decision of the Full Court and of the primary judge is one
which really does no more than to construe a contract
in quite unusual terms and, we would submit, that there is no issue of general principle and the
decisions are not sufficiently attended with doubt.
Your Honours, could I come then to the points raised
by our learned friends: the first is in relation to clause 42 itself. At the start of our learned
friend's argument it was said that clause 42 is
really something which deals with a quite separate
matter but if one goes to clause 42 which
Your Honours will see at page 33, what Your Honours
will see is that it is a clause whereby:·
The purchasers acknowledge that a portion
of the vendors land is used for farming
purposes and is required to be maintained
14
B1Tl3/4/JH 29/6/90 Braidotti in a condition ready to plant. In
consideration thereof the purchasersagree to pay to the vendor for this
purpose a sum of Eighty dollars ($80.00)
per week payable from the date ofexecution hereof until this contract is
at an end.
Now, Your Honours, the contract was one which might have come to an end without any default on the
part of either party and it contemplated, as
Your Honours will see from clauses 31 and 32, that
there were rights to terminate the contract in
the event of certain matters occurring or notoccurring and what was recognized by the contract
was that the vendors might wish to resume farming
on the land and in the event the contract went off.So, Your Honours, it cannot be regarded as
substantially severable from the terms of the
contract nor was it severable in form becaase,
as Your Honours will see, it speaks itself of
"this contract" and it is referred to as being
one of the special conditions of the contract.
Your Honours, having said that, one then goes to
WACAL DEVELOPMENTS and, Your Honours, the issue whicharose in that case was not limited to a particular class of payment but was a rather larger question.
What the Court held was that the words should be
given their natural meaning and that an instalment
contract included any contract for the sale of land in terms of which the purchaser was obliged to make
a payment of the nature described in the definition.
Could I take Your Honours to the case and the
relevant passages? The first is at page 506
and Your Honours will see at about point 8, the
connnencement of the judgment of Justice Gibbs
and, Your Honours, his discussion of it connnences
there and it goes through the whole of the next page
and to the top of page 508. His Honour proceeded
to deal with a number of submissions which were made
to support a contention that the definition should be
in some way limited, all of which His Honour rejected and, in particular - Your Honours do not really need, I think, to look at the passage
connnencing on page 508 in the first new paragraph
through to the end of the first continuing paragraph
on page 509 because that dealt with a particular
narrow submission.
At page 509, in the first new paragraph,
Your Honours will see a submission that was advanced and rejected and Your Honours might we observe in
passing that there was very little difference between
a payment by the purchaser to a vendor to reimburse
him for the cost of obtaining a planning approval on
the one hand and, on the other hand, a payment by the
BlT13/5/JH 15 29/6/90 Braidotti vendor to ensure the vendor does not suffer loss
if a planning approval is not obtained. It is
clear, if one looks at that, that payments of
the general nature presently in question were
ones which were to the mind of the Court when it
decided that case. Your Honours, could I go to the judgment of Justice Stephen at page 513, about
point 8 and His Honour, after discussing the various
submissions that were made, said in the paragraph
commencing about point 8:
In my view effect must, therefore, as the
legislation now stands, be given to the
definition of "instalment contract" in a
sense not confined to contracts which
involve payment of the balance of
purchase price by instalments. No doctrine of interpretation justifies, in the present circumstances, any departure
from what I regard as the orindary meaning
of the legislature's words.
Your Honours, Justice Mason at page 518, if one
goes to after the quotation up to about paint 6,
paraphrased the definition then set out the
submissions which were made to indicate why the
respondent contended that it should be read down
and then went on to deal with and dismiss all thosearguments.
Your Honours, Justice Murphy at page 522,
about point 6, dealt with the case quite summarily
and Justice Aickin reached his conclusion at
page 531, point 8 down to the bottom of the page.
Now, Your Honours,what is entirely apparent,
in our submission, is that the reasoning of the
Court in that case was that the words of the
definition should be given their natureal meaning.
Once a contract fell within it, then one had a
contract to which section 72 applied.
BRENNAN ACJ: Mr Jackson, would this be a convenient time? MR JACKSON: Yes, Your Honour. BRENNAN ACJ:
Could you give us any indication as to the length of time your argument will take?
MR JACKSON: I expect to take 15 minutes, Your Honour. BRENNAN ACJ: The Court will adjourn until 2.15 pm. AT 12.50 PM LUNCHEON ADJOURNMENT
B1Tl3/6/JH 16 29/6/90 Braidotti UPON RESUMING AT 2.25 PM:
BRENNAN ACJ: Yes, Mr Jackson? MR JACKSON: Your Honours, I was dealing with paragraph 6 of the submissions which we have given
Your Honours and the particular point with which
I was dealing was in relation to WACAL DEVELOPMENTS
where I was seeking to demonstrate that the
decision was one which was based upon a wider
proposition than just the proposition that it
applied to instalments of interest or payments
of interest. I had given Your Honours a reference to page 509 at about point 3 in the reasons for
judgment of Justice Gibbs. Could I refer also,
Your Honours, to page 514 commencing at about
point 9 and going on to about the end of
His Honour's reasons for judgment on the next page.
At that point, His Honour Justice Stephen recognized
that there were payments which were not payments
which were in any way in diminution of the purchase
price or otherwise payments such as instalmentsof interest which might be required to be made by
a purchaser under a contract and that the ambit of
the definition he reduced but only by saying that
it didrot apply to payments which had to be made to
a person other than the vendor and, Your Honours,
that appears in the passage to which I have referred.
Those observations were agreed in by
Justice Aickin and, Your Honours, at page 519 in
the present Chief Justice's judgment, His Honour
said at about point 5:
It was suggested that the giving of a literal
interpretation to the statutory definition
would entail -
et cetera and could I ask Your Honours to read the
whole of that paragraph which makes it clear that it
was present to the minds of the Court that the decision of the Court was one which would have the
effect that any payment which was required to be made
under a contract to the vendor prior to completion,
in effect, and which was not the deposit was something
which would have the result that the contract became
an instalment contract.
Your Honours, I submitted in my submissions
before lunch that the payments of the kind contemplated
by clause 42 were not very significantly different
from payments of the kind contemplated byJustice Gibbs at page 509. Could I give Your Honours
BlT14/l/JH 17 29/6/90 Braidotti a couple of other references in that regard?
One is to the Court's decision in
SIBBLES V HIGHFERN PTY LTD, (1987) 164 CLR 214 at 217 -
that is one of the cases I gave to Your Honours
earlier. Now, Your Honours, that was case where at page 217, four members of the Court were of the
view that:
The contract was, therefore, an instalment contract within the meaning of that Act -
that appears half-way down the page, page 217,
but if Your Honours look at the earlier part of that
paragraph, what is apparent is that the purchasers
were allowed to go into possession of the unit
prior to completion. For the privilege of being
able to do so they had to pay a sum which was
described as interest on the purchase money but,
of course, the purchase money was not yet due and
it was really rent by another name. Now, Your Honours, that is that case and a case where
the rent was described by the name of "rent" and
it was treated as being a case to which the Actapplied - I give Your Honours this by way of
example - is the unreported decision of
Mr Justice McPherson in McERLEAN and AUSTIN which
was decided on 21 December last year and it is one
of the cases I gave Your Honours. Your Honours will see in that case at the bottom of the first
page of the reasons for judgment, which is the
third page of what Your Honours have, I think, it
is said:
In return the purchaser agreed to pay to the vendors by way of rent for the land
from 1 September to the extended
completion date the sum of $6,300.00 as well
as Cotmcil rates -
in an amount specified. Your Honours, it is apparent
from the way the sentence is· constructed that
His Honour had in mind that the amount for rates was an amount payable to the vendor as distinct from
payable to the local authority.
Then~ Your Honours, at the bottom of the
page, which is the next page, number 2 at the top,
His Honour says:
The contract was not completed by the
purchaser within the time limited by the
notice or at all. The application asks whether the contract is within the meaning
of the Act an "instalment contract".
Because of the provision for payments to
B1Tl4/2/JH 18 29/6/90 Braidotti be made to the vendors on account of
rent and rates, I am of the view that
it is (WACAL DEVELOPMENTS ..... -
and, Your Honours, also I should, perhaps, give
Your Honours the last reference and that is to
CHAN V DAINFORD LIMITED, (1985) 155 CLR 533 and
in that case, Your Honours, without going to the
detail of it, the obligation to make a payment
which made the agreement an instalment contract
was not part of the purchase price; it was a loan
by the purchaser to the vendor and the loan, in
due course, was a sum of money which might be
applied in diminution of the amount which had to
be paid by the purchaser at completion but its
characterization was as a loan.
Your Honours, I do not want to labour the point
unduly but what is apparent, Your Honours, from
that, we would submit, is two things: the first
is, that if one goes to WACAL DEVELOPMENTS itself,
it is apparent, we would submit, it is based on a
wide principle; secondly, since WACAL DEVELOPMENTS
there has been nothing to suggest that the principle
which it stands for :is one which should be in any way
diminished and it has been applied to circumstances
not in any way relevantly dissimilar from the
present and the present simply stands as a case
where WACAL DEVELOPMENTS was applied to particular
facts.
Your Honours, I should also say, we would
refer Your Honours particularly to page 57 of the
reasons for judgment in the present case, page 57
of the application book, and if Your Honours look
at the whole, in effect, of page 57 Your Honours
will see what, in our submission, is a correct
analysis of the nature of the payments .contemplated
by clause 42 and, in particular, from about
point 4 to point 7 and there seems no particular reason, in our submission, why a payment of that
kind should be treated as remote from the types of payment that one might ordinarily see being made pursuant to contracts of sale prior to completion. Your Honours, might I turn then to the
submissions which we make in paragraph 7 and that
is that there is not any particular reason why the
Court should reconsider or trim or put a gloss on
WACAL DEVELOPMENTS. Your Honours, in that case, as
appears from page 520, the history of the provision
is set out and what had happened, Your Honours, was
that there had been a report of the Law Reform
Commission and the drafting of the - Your Honours, I think in paragraph 7 we refer to sections 71; in fact, the provision which was changed was 72
B1Tl4/3/JH 19 29/6/90 Braidotti but ~f Your Honours look at page 520, about point 5,
Justice Mason refers to the passages in the text of
the Law Reform Commission report and goes on then
to say in the line which is four lines below the
quotation:
What is more important is that the
Commission's draft of clause 71 (which is
the counterpart of section 72) was
significantly altered by Parliament. The commission's draft referred to "default
on the part of the purchaser in
payment of any instalment or instalments
due and payable under the contract". In
section 72 the language is changed to
" ... any instalment or sum of money (other
than a deposit or any part thereof)". As
Parliament decided to depart from the
Commission's draft in a vital respect it
cannot be inferred that Parliament
implicitly accepted the Commission's
recommendation -
et cetera. I would refer Your Honours also to similar observations by Justice Murphy at page 523.
Your Honours, what that demonstates is that the
legislature, we would submit, intended section 71
and section 72 to have a wide reach. Now, the PROPERTY LAW ACT has been amended on quite a number
of occasions since WACAL DEVELOPMENTS. Many of the
amendments which have been made to it are ones
consequential upon amendments to other Acts; they
do not matter for present purposes.but it has been
amended in substantive ways on two occasions, namely,
by the PROPERTY LAW ACT AMENDMENT ACTS 1981 and 1985
and there has been no attempt by the legislature
to alter in any way the ambit of section 71 or
section 72. Your Honours, one would have thought that to the extent those matters are relevant, they
constitute an acceptance by the legislature of, as
one might expect, the Court's decision in WACAL DEVELOPMENTS. So, in summary, we would say
the question whether clause 42 did, in fact, make
the contract "instalment contract" was simply an
application of WAJAb DEVELOPMENTS and not something
which merited. special leave.Could I come then, Your Honours, to the next point which is the one with which we deal at
paragraph 9 and that is whether there was a breach
by failing to pay the $149,000 on waiver of the
benefit of clause 32(a). Your Honours, that is, in our submission, something which does depend
entirely on the relationship between the various
provisions to which we refer. I wonder if I could take Your Honours to those very briefly? Your Honours
B1Tl4/4/JH 20 29/6/90 Braidotti will see that page 27 sets out beside item 0,
the deposit - the provision for a deposit - clause 1 provides that the deposit is to be
payable "in accordance with clause 30".
Clause 30 says the deposit is to be oaid in a manner which is specifies, that is, as to:
the balance namely $149,000 (One Hundred
and Forty-nine Thousand Dollars) on
gazettal of the rezoning of the land
to Residential A.
Clauses 31 and 32 are provisions which give rights
to the purchaser and, in particular, clause 32(d)
contains an acknowledgement by the vendor
that clauses 32(a) and 32Cb) may be waived by the
purchaser but the agreement goes on to sayspecifically what is to happen in the event of
waiver. Now, Your Honours, that appears from clause 41 at page 33 and it says specifically that
if there is waiver then, in effect, the time for
completion of the contract is accelerated
and the vendor gets its money more quickly and,
Your Honours, we did waive _·the,'provision and as
we waived it we said, "Completion is due in 30 daysfrom now" and, as it turned out, the venrlor was not
able to complete because of problems -which it had
with title.
So, the position simply is, in our submission,
that if one looks at those provisions, they are
provisions which are framed in a particular way and,
Your Honours, the contentions which the applicant
makes in relation to the construction of those
provisions have had a chilled response, as it were,
in the courts below.
Could I refer Your Honours to page 40, the
judgment of Mr Justice McPherson and, Your Honours,
in particular, commencing at. about point 2 on the
page and, Your Honours, His Honour sets out the submission in the first new paragraph on the page
and then, Your Honours, between about lines 25 to 30,
makes it apparent that in his view, which we wouldsubmit was correct, the question was one of
construction of the particular contract and
His Honour's reasoning goes on to the next page and,
in particular, about line 11 and following.
Your Honours, there has not really been, in
our submission - and, Your Honours, to the same
effect, one sees the observations of Mr Justice Conno.lly
in the Full Court commencing at page 59 about point 9.
Your Honours, His Honour's reasons go over to the top
of page 61 - I should, perhaps, mention there seems to
BlT14/5/JH 21 29/6/90 Braidotti be an error on page 60 in, perhaps, the typing
or the original writing of it because if
Your Honours look at the sentence commencing six
lines from the bottom of the page, it says:
It is impossible therefore to regard
failure to pay the $149,000.00 on thedate specified in the notice as justifying
rescission if, by virtue of Part 4
of the PROPERTY LAW ACT -
Your Honours, I think, the words should be "failure
to pay" -
the rest of the balance purchase price
did not.
Your Honours, we would also submit that the case does
not give rise to any general question whether the
waiver of the benefit of a condition subsequ.ent isto be treated as equivalent to performance of the
condition. Sometimes it will but, Your Honour, what one has in the present case is a situation where the consequences of waiver were dealt with specifically by clause 41, that is - - -
BRENNAN ACJ: Why do you say "condition subsequent"? MR JACKSON: Your Honour, perhaps I was using it loosely. What I was meaning to indicate was that it was
a condition that the - condition subsequent is the wrong
expression; what I was trying to convey was a
shorthand expression for a provision which entitled
a purchaser to elect not to proceed with the agreementif certain events occurred or did not occur.
BRENNAN ACJ: Is that even the correct analysis of section 32 which appears on its face not to give a
right of election - though I see the courts below
treated it as that - but itself to work a discharge
of the contract?
MR JACKSON: Yes, Your Honour, it could, I suppose. There would be a question whether the expression
"ipso facto determine" despite the emphatic nature
in which it is expressed might yet have the
consequence that there was not an automatic
determination but there had to be an election to
determine by a party.
BRENNAN ACJ: Is there a question here whether when there is a clause of this kind and a party does that which
is described in the contract as a waiver, the
consequence of that is that the clause should be taken to have been fulfilled rather than to have been eliminated?
BlT14/6/JH 22 29/6/90 Braidotti
MR JACKSON: Your Honour, in our submission, there is not a real question - I mean, no doubt, one can say
there is a question but the question, Your Honour,
really is not one that, in our submission, arises
because if one looks at the terms of the
provisions, all that one has is a situation whereclause 32(a) refers to a situation where the
locar authority does not consent to rezoning and
then 32(h) refers to Situation where the local
authority consents but the rezoning has not been
gazetted within a particular time. Now, in those circumstances, all that happens is that the
purchaser is given a right to elect to say, despitethe non-compliance with those provisions - I am
sorry, Your Honours, I will start again. What happens with those provisions is that the purchaser
is given a right to say, "I elect to bring the
contract to an end because those provisions have
not been complied with".
(Continued on page 24)
B1Tl4/7/JH 23 29/6/90 Braidotti
MR JACKSON (continuing): Now, if the purchaser exercises the right given by clause 32(d), then what the
purchaser is saying is, "I shall not exercise
the right given by clause 32(d)". Now, Your Honours, there is not a very clear reason
why one then treats an election which in terms
was an election not to rely upon clause 32(a)
as saying that the rezoning has been gazetted or
should be treated as having been gazetted for the
purposes of clause 30. Your Honour, why there is
not a very good reason for doing so is twofold:
the first is, that it is quite a jump to say that the fact that one has a right to elect to waive a benefit of a particular clause means that the
events which have not occurred but might have
occurred if the clause had been performed are to
be treated as having been performed in every case.
But also, there is a second difficulty in the
present case and that is caused by the fact that the
contract itself makes a particular provision for
what is to happen in the event of waiver and that
is the provision made by clause 41 which says that
the completion date then becomes 30 days after you
have given notice of your election to waive and
because the events which otherwise would haveprovided the base for commencement of the time
after which settlement was to take place have not
ex hypothesi happened, that is, the events
contemplated by 32(a) and (b), what it means is,
that there has been an acceleration of the time
for payment of the whole of the balance purchase
price.
Your Honour, that is why we would say that
really there is not a question which arises in the
particular case. If there is a question which
arises in the particular case, it is not one of
general importance sufficient to merit special leave.Your Honour, I do not want to labour the point but it is not sufficient, in our submission, just
to have a poin~whether it is one that is attractive or not, which does not result in something of
general application unless, of course, the case is
one of significant injustice.
Your Honours, could I come then to the next
point and that is the one dealt with in paragraph 11
of our submissions and, Your Honours, our learned
friend referred to the definition of "instalment
contract" and placed particular emphasis on the
expression:
without becoming entitled to receive a
conveyance in exchange therefor -
in section 71(2)(b) and then in some way sought to
translate that to the operation of section 72.
BlTlS/1/JH 24 29/6/90 Braidotti But, Your Honours, the provisions perform
different functions. The function of section 71(2)(b) is to identify and define the classes of contract
which are "instalment contracts". Now, once that has been done and it is seen that a contract is a
contract which satisfies the terms of the
definition, then section 72 and the succeeding
provisions of that part of the division of the Act
come into play and if one goes to section 72(1),
what it says is that:
An instalment contract -
that is, something which falls within the definition
in section 71(2)(b) -
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 ..... due and payable under the
contract until the expiration of -
et cetera. Now, Your Honours, if one has a clause which has the result that the contract becomes an
"instalment contract", that really is something
which is a threshold question. Once that is satisfied, section 72 comes into play in relation
to the whole of the contract.
Your Honours, I wonder if I might move on then
to paragraphs 12 and 13 and they deal with the
contention that the obligation to pay the $149,000
as part of the balance purchase price on completion
was an obligation to pay something which was a
deposit and that because there was the obligation
to pay a deposit and that deposit had not been paid,
therefore, there was some other default. Now, Your Honours, the first thing we would submit about it
is that it is clear that in this respect, at least,
the contract is of an unusual kind and if one goes
to the terms of the contract-, which Your Honours will
see relevantly at page 28, Your Honours will see that
the terms of the deposit provision are ones which have been altered to bring into play clause 30 but
before going to clause 30 what they say is that:
The deposit shall be paid by the
Purchaser to the Stakeholder in accordance
with clause 30 -
so one must look to identify the occurrence, as it
were, of the obligation to pay, one must go to
clause 30 and then before going to that, clause 1 says:
If the deposit or any part of it is paid
by cheque ..... the Purchaser shall immediately
thereupon be in substantial breach of this
BlTlS/2/JH 25 29/6/90 Braidotti contract and the Vendor may terminate .....
Whether or not the Vendor terminates
this contract the Vendor shall be entitled
to recover as a liquidated debt from the
Purchaser so much of the deposit as has not been paid by the Purchaser -
and-that, Your Honours, must mean paid in accordance
with the contract. Then, Your Honours, in the last
two sentences of it:
If the Vendor has not terminated this
contract at the time of recovery of that
amount then he shall pay the amount
recovered to the Stakeholder under this
contract -
and one wonders why he would be doing that at a time
when completion has occurred:
The deposit shall be retained by the
Stakeholder until completion -
all of which seems fairly ridiculous in its
application to a deposit which is payable as part
of the balance purchase price -
when it shall be accounted for to the
Vendor.
Now, Your Honours, if one goes to clause 11 at the
bottom of the same page, it says:
If the Purchaser fails to pay the deposit -
that must mean fail to pay timeously or in
accordance with the contract. Your Honours, if one goes then to clause 30, Your Honours will see
that i:time is provided for for payment of the
deposit by it - that is at page 31 and then, of course, the provision in clause 41 for acceleration
of the time for completion if there is the waiver.
I have said those things, Your Honours, simply
to demonstrate two things: the first is, that this
a point which, Your Honours with respect, on any
view of the case must turn on a combination of
particular provisions; the second thing is,Your Honours, that it is not right, in our submission - I am sorry, I will start that again.
Your Honours, what I have submitted indicates, we
would say, that the issue is one which is not
sufficiently arguable in favour of the other side
but the third thing is that if one looks, for
example, at Mr Justice McPherson's judgment at
B1Tl5/3/JH 26 29/6/90 Braidotti page 41 point 9 - Your Honours, it is paragraph 12,
I have given the wrong reference; I have given the
original page numbers; it should be pages 41 point 9
to page 42 point 7 and if one looks at the bottom
of page 41 where His Honour speaks of:
a deposit is by its very nature a
- prepayment of a portion of the total
purchases moneys. It is paid as an
earnest to bind the bargain -
and one goes on through that paragraph until its
end, about point 7 on page 42, that, we would
submit, seems prima facie correct in relation to
the particular case. Your Honours, our learned friend's argument on the point did not really
condescend to particulars about why those views
were wrong or arguably so.
Your Honours, in summary the case is one where
it may take a few moments to see the true nature of
the case but when one does it is apparent, we would
submit, that if one is looking at it from the point
of view of its appropriateness for the grant of
special leave, it is a case where, really, when one
looks closely, the emperor has not got too many
clothes on and, Your Honours, we would submit it is
not a case where the Court should grant special leave.
BRENNAN ACJ: Mr Jackson, do you wish to say anything about the point that was upon the submission that you
have made not argued below, that is, the passages
that appear at page 38 and page 54; do you wish
to say anything further about that point?
MR JACKSON: May I just say one thing about it, Your Honour,
and it may well be the case that the issue was - our
point was not argued further because it was
apparent, in our submission, that in any event there
had been on the part of the vendor a determination
to bring the contract to an end and if I could take
Your Honours to page 15, Your Honours will see that at the bottom of that page, paragraph 35 of our statement of claim, Your Honours will see that we allege - and this paragraph was admitted - that the: defendants demanded removal of a caveat
lodged by the plaintiff to protect its
interest.:.
and also in paragraph 36 which also was admitted
that they had:
sought, inter alia, a declaration that the
contract had been rescinded and thereafter
served such application on the plaintiff
as respondent.
BlT15/4/JH 27 29/6/90 Braidotti Npw, in those circumsrances one can understand the situation where the attitude which is taken
is that to which I have referred at page 38 and
page 54 and the point, ultimately, is not put in
issue. So, Your Honour, that is all I want to say about it. - Your Honours, could I also just say one
further thing and it is this: if the Court were
minded to grant special leave, we would ask there be
reserved to us the possibility of applying to rescind
the grant of special leave because in the end
we would suspect that the case which would be
mounted would be one which seeks to overrul~ in one
way or another, WACAL DEVELOPMENTS and we wouldwant to be heard on that question, Your Honour.
BRENNAN ACJ: Yes. Mr Solicitor?
MR DAVIES: Your Honours, can I deal with that last point about the passage on page 54 of the judgment of
the Full Court? His Honour Mr Justice Connolly
did not state accurately, in our rspectful
submission, what the real position was. The real
position was, Your Honour, that that question had
been raised by way of notice of appeal to the
Full Court. Can I hand up to Your Honours some copies of the - Your Honours will see it is in
ground 8 of the notice of appeal to the Full Court.
Your Honours, it is correct that before the Full Court the point which was made this morning
was not made before them but it would have been
difficult, in our respectful submission, to have made
that point without arguing that the decision in
WACAL DEVELOPMENTS was given per incuriam because
the actual decision in WACAL DEVELOPMENTS was very
like the actual decision which was given in the
Full Court in this case. Can I just take Your Honours to that case for a moment to show
Your Honours the relevant fa~ts? They appear in the judgment of Mr Justice Stephen at page 512, the
first paragraph on that page, His Honour said:
In the present case a payment of interest fell due, there was a default in payment by the purchaser and the vendor gave to the purchaser a fourteen day notice as contemplated by the contract. When the
default was not remedied a notice of
rescission followed. Simultaneously the
purchaser itself gave notice of rescission,
alleging repudiation by reason of the
vendor's non-observance of the requirements
of section 72 of Division 4 of the Act.Hence the question whether or not the
contract was an "instalment contract" -
BlTlS/5/JH 28 29/6/90 Braidotti and so on. But then His Honour said:
The purchaser succeeded at first instance.
Now, what the purchaser succeeded at first instance
in obtaining was not just a declaration but an
actual return of the deposit paid. That appears
from xhe judgment of Mr Justice Aickin in the
first paragraph on page 523 and what the decision
of the High Court did was to restore that judgment
so it really follows that, in effect, what that
decision does is hold that in the circumstances
the purchaser was entitled to rescind. So, in our respectful submission, it was really not appropriate for us to argue that question before
the Full Court whereas, of course, it is a matterwhich can be properly argued before this Court.
BRENNAN ACJ: I am sorry, I am not following, I am afraid, Mr Solicitor.
MR DAVIES:
Your Honour, it is simply this, that before the Full Court of Queensland in WACAL, in this case we
would have beeri bound by the decision in WACAL. The decision in WACAL said, in effect, that the purchaser was entitled to rescind and to obtain
return of his deposit.
BRENNAN ACJ: Yes. Now, that being so, was the point taken and preserved?
MR DAVIES: I can only say this, Your Honour, that no, it was not specifically said to the Full Court, "We
take that point and reserve it". but the notice ofappeal, that ground on the notice of appeal was, on
the other hand, never abandoned.
BRENNAN ACJ: What happened to it, was there any reference made:to it?
MR DAVIES: Your Honour, I have to say I cannot recall.
BRENNAN ACJ: Yes.
GAUDRON J: And, at first instance? MR DAVIES: And again, I have no idea of what happened at first instance, Your Honour, I am sorry.
BRENNAN ACJ: Well, one must face up to the proposition that it was not raised at first instance because of what
was said at page 38, must one not?
MR DAVIES: Yes, that is possibly so but, again, it may not have been raised for precisely that reason, Your Honour.
BlTlS/6/JH 29 29/6/90 Braidotti
BRENNAN ACJ: Yes, whatever the reason may be, no consideration has been given to the argument in
the courts below and that ultimately for thereason that they were not asked to consider it.
MR DAVIES: That is true. I mean, of course, one can make
excuses. I mean, it was a chamber day before a chamb-er judge and, perhaps, the point was not for
a number of reasons argued but however that may be,Your Honour, it is a question of law, it emerges
on undisputed fact. It is not a question, in our
respectful submission, which on any view would
require any further or different facts.
BRENNAN ACJ: Yes. It may be material, none the less, to the exercise of discretion for a gr nt of special leave.
MR DAVIES: I appreciate that, Your Honour. BRENNAN ACJ: Mr Solicitor, whilst you are speaking about WACAL, if special leave were granted have you any dear
desire to challenge WACAL DEVELOPMENTS?
MR DAVIES:
Your Honour, as we said earlier, we do not challenge the decision in WACAL.
We do not challenge
that the payment of interest on purchase moneys
is a payment within the definition of "instalment
contract".
(Continued on page 31)
BlT15/7/JH 30 29/6/90 Braidotti BRENNAN ACJ: Well, that is a fairly limited proposition.
MR DAVIES: What we contend is the reason why that is so is because it is a payment, failure to pay which would
disentitle the purchaser to a conveyance and, in
our respectful submission, the same is true, if one
goes to WACAL, of the example which Justice Mason
gav_e· in the passage to which our learned friends
referred you on 519. He gave the example of rates
and taxes and the same argument would be true of
that. We would say, yes, that rate adjustments and tax adjustments are adjustments that have to be made
on settlement and without that adjustment being
made, the purchaser could not call for and be
entitled to a conveyance.
We say this, on the other hand, is a payment of
a quite different kind. This is a payment for work
done. On any view of the matter, that is the proper characterization of the payment and it is exactly
the same in character as a payment for, for example,
rental, in the example we gave to Your Honours this
morning.
BRENNAN ACJ: So the proposition is that WACAL DEVELOPMENTS stands for the proposition that whatever moneys would
be due and payable on settlement are covered by
section 72, but those which are not required to be
paid on settlement are not.
MR DAVIES: Yes. BRENNAN ACJ: And to that extent you do not seek to challenge WACAL?
MR DAVIES: No, we do not. BRENNAN ACJ: But if WACAL stands as authority for wider propositions, you do, is that the correct- - -
MR DAVIES: Yes, Your Honour, that is stated correctly. And may I say this, Your Honour, that SIBBLES V HIGHFERN,
was dealt with on the basis that the payment there in which WACAL was really dealt with very briefly, it was a payment of interest and in DAINFORD V CHAN, the other case to which our learned friends referred, there was in effect a 30 per cent deposit and it was because the deposit exceeded 10 per cent in that case,
the definition of deposit in the Act being limited
to 10 per cent, that .the extra payment became an
instalment payment.So again, we would not question the decision in that case either. Your Honours, the only other
point which perhaps I should make in reply is because of remarks which Your Honour the presiding Judge and Justice Gaudron made to me this morning, and that is
BlT16/l/RB 31 29/6/90 Braidotti that the points which I think Your Honour Justice Gaudrcn
raised with me, and I said it was raised below, it was
dealt with in the judgment of the Full Court at
page 59 of the appeal book. There are two points
really argued there, the first is dealt with in the
first paragraph on 59 and the second is dealt with
in ~he second paragraph on page 59.
GAUDRON J: Thank you. MR DAVIES: They are our submissions in reply, may it please
the Court.
MR JACKSON: May I say one thing in relation to the course of procedure in the Full Court? It is correct to say
that the notice of appeal contained the ground to which
my learned friend refers. The outline of submissions handed to the court on behalf of the applicant on
that occasion contained no reference to the point and
it was accurate, in our submission, for
Mr Justice Connolly to say, as he said at page 54
point 5, "It is not in dispute between the parties"
et cetera.
BRENNAN ACJ: The Court is of the opinion that there should be a grant of special leave in this case but having
regard to the course of discussion in this
application, it is manifest that there may well be
consideration given in the course of the hearing ofthe appeal to the rescission of the grant of
special leave, either generally or with respect to
any particular aspect of the present application.
Subject to those observations, the order of the
Court is that special leave be granted.
The Court will now adjourn.to a date to be fixed.
AT 3.10 PM THE MATIER WAS ADJOURNED SINE DIE
B1Tl6/2/RB 32 29/6/90 Braidotti
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