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Carr v JA Berriman Pty Ltd

Carr v JA Berriman Pty Ltd

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Case Copied 5 June 1953 51 min read

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89 CLR 327

at pp.348,349, CONS'D 149eLR510 CARR

Appl 85 ALR 183 J. A. BERRIMAN PTY. LTD.

RESPONDENT. PLAINTIFF,

Appl. 166 cnr 623 CARR J. A. BERRIMAN PTY. LTD.

RESPONDENT. DEFENDANT,

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES Building contract-Rescission-Repudiation-Powers of architect - Direction to

omit work-Time of the essence-Conduct consistent with continuance of contract -Election not to rescind--Notice requiring performanceContinuing breach- Failure to remedy breach-Intention not to be bound-Further breach- Damages.

A clause in conditions annexed to a building contract provided: The April 10,13; Architect may in his absolute discretion and from time to time issue

of any work. The Builder shall forthwith comply with all Architect's Held, that the clause would authorize the architect, doubtless within certain limits, to direct that particular items of work included in the plans and specifications should not be carried out; but it would not authorize him to say that particular items SO included should be carried out, not by the builder with whom the contract was made, but by some other builder or contractor. Such a power could be conferred only by very clear words.

Where a contract contains a promise to do a particular thing on or before a specified day, time may or may not be of the essence of the promise. If time is of the essence, and the promise is not performed on the day, the promi- see is entitled to rescind the contract, but he may elect not to exercise that

89 CLR 328

right, and an election will be inferred from any conduct which is consistent only with the continued existence of the contract. If time is not of the r

essence of the promise, the promisee is not entitled to rescind for non-per- formance on the day. If time is not originally of the essence, or, time being originally of the essence, the right to rescind for non-performance on the day is lost by election, the promisee can, generally speaking, rescind only after he has given a notice requiring performance within a specified reasonable time, and after non-compliance with that notice.

The effect of a builder's election not to rescind the contract upon a breach thereof by the building owner is to leave it open to the building owner to remedy his breach, and the builder will be bound to accept the late perfor- mance, though entitled to sue for any damage suffered by him through the delay, but a failure to remedy the breach might continue SO long and in such circumstances as to evince an intention on the part of the building owner no longer to be bound by the contract.

Decision of the Supreme Court of New South Wales (Full Court): Carr V. J. A. Berriman Pty. Ltd. (1952) 70 W.N. (N.S.W.) 23, affirmed.

APPEALS from the Supreme Court of New South Wales.

A contract was entered into on 3rd May 1950 between T. Carr &Co., therein called the proprietor", and J. A. Berriman Pty. Ltd., therein called '…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1953] HCA 31
Decision Date: 5 June 1953

CaseChat Overview and Summary

This case involved an appeal to the High Court of Australia concerning a building contract between T. Carr & Co. (the proprietor) and J. A. Berriman Pty. Ltd. (the builder). The dispute arose from the proprietor's failure to provide the building site to the builder by the agreed date, and the proprietor's subsequent arrangement for the structural steelwork to be supplied and fabricated by another company. The builder sought to rescind the contract and claim damages, while the proprietor contended that the builder's actions constituted a repudiation of the contract.

The legal issues before the court included whether the proprietor's failure to give possession of the site by the specified date constituted a fundamental breach of the contract, whether time was of the essence for the provision of the site, and whether the proprietor's actions, including arranging for the steelwork, evinced an intention not to be bound by the contract. The court also had to consider the effect of the builder's election not to rescind immediately upon the initial breach and the requirements for making time of the essence after an initial breach.

The court reasoned that a clause allowing the architect to direct the omission of work did not extend to authorising the proprietor to have work carried out by another contractor. It was held that where a contract specifies a date for performance, time may or may not be of the essence. If time is of the essence and the promise is not performed, the promisee can rescind, but may elect to affirm the contract, which can be inferred from conduct consistent with its continuance. If time is not of the essence, or the right to rescind is lost by election, rescission generally requires a notice requiring performance within a reasonable time. The court also considered that a failure to remedy a breach could, if prolonged, evince an intention not to be bound by the contract. The High Court affirmed the decision of the Supreme Court of New South Wales, finding that the proprietor's conduct, particularly the failure to provide the site and the arrangement for the steelwork, amounted to a repudiation of the contract, entitling the builder to damages.

Orders