Vendor and Purchaser—Sale of land—Contract—Breach—Rescission—Time of essence—Intimation by vendors before date for completion of inability to complete—Notice of rescission by purchasers—Purchasers' readiness and willingness to complete—Estoppel—Whether vendors estopped from asserting purchasers' inability to complete.
Decisions
MASON C.J. This appeal raises an important question of principle. It concerns the entitlement of purchasers under a contract for the sale of land to terminate the contract and recover their deposit following a statement by the vendors shortly prior to completion that they would be unable to complete on the date fixed for completion, completion on that date being an essential term of the contract, in circumstances in which the purchasers did not treat that repudiation as an anticipatory breach but terminated the contract after the time fixed for completion in consequence of the vendors' failure to complete on the appointed day.
2. The facts may be shortly stated. By a contract dated 24 December 1982 the vendors agreed to sell and the purchasers agreed to buy a parcel of land at Ebenezer for $75,000. The contract provided for payment of a deposit in the sum of $7,500 on execution of the contract. This sum was paid, leaving a balance of $67,500 to be paid on completion. The contract fixed 22 June 1983 as the date for completion, time being of the essence in this respect.
3. The contract contained a number of special conditions, one of which was in these terms:
"The Purchaser shall not make any
requisition, objection or claim for compensation in respect of Right of Way 3 metres wide shown on the draft Plan attached hereto and marked with the letter 'A' and draft 88B Instrument attached herewith and marked with the letter 'B'. The Purchaser acknowledges that he is aware that the attached draft Plan and draft 88B Instrument have not been registered and the Vendor warrants that he will attend to the registration of the said Plan together with 88B Instrument prior to completion."
4. On 20 June 1983, two days before the date fixed for completion, the solicitor for the purchasers telephoned the solicitor for the vendors. The primary judge (Needham J.) accepted the evidence given by the purchasers' solicitor of the terms of the conversation and his Honour's findings on this matter were accepted by the New South Wales Court of Appeal.
5. The terms of the conversation are recorded in the judgment of Street C.J. in this way:
"The purchasers' solicitor said that he
had just received word that finance had been arranged for Wednesday, 22 June 1983 and asked, 'What time can we settle on that day?'. The vendors' solicitors replied, 'We have a problem here. We won't be able to settle on Wednesday 22 June because the Right of Way which we are required to give under one of the Special Conditions in the…
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.
Continue reading Foran v Wight
Sign in free to access the full text
Details
AGLC
Foran v Wight [1989] HCA 51
Case
[1989] HCA 51
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal concerning a contract for the sale of land. The purchasers, Mr. and Mrs. Wight, sought to rescind the contract after the vendors, Mr. and Mrs. Foran, indicated they would be unable to complete the sale by the stipulated date, which was of the essence. The central dispute revolved around whether the purchasers were entitled to rescind the contract, given the vendors' prior intimation of their inability to complete and the purchasers' subsequent readiness and willingness to complete.
The High Court was required to determine whether the vendors were estopped from asserting the purchasers' failure to complete on the due date as a ground for rescission. This involved considering the effect of the vendors' conduct in indicating their inability to complete, and whether this conduct led the purchasers to believe that strict adherence to the completion date would not be insisted upon. The court also had to assess whether the purchasers' subsequent readiness and willingness to complete, albeit after the original date, was sufficient to entitle them to relief.
The High Court held that the vendors' conduct, by intimating their inability to complete, had the effect of waiving the time stipulation in the contract. This waiver created an estoppel, preventing the vendors from relying on the purchasers' failure to complete on the original date as a ground for rescission. The court reasoned that the vendors' conduct had led the purchasers to believe that the time for completion was no longer of the essence, and that they would be granted a reasonable time to complete. Consequently, the purchasers were entitled to complete the contract, and the vendors' purported rescission was invalid.
The appeal was allowed with costs. The orders of the Court of Appeal of New South Wales were set aside, and in lieu thereof, the appeal to the High Court was dismissed with costs.
Orders
Orders of the court
Appeal allowed with costs.
Set aside the orders of the Court of Appeal of New South Wales dated 24 December 1987 and in lieu thereof order that the appeal to the Court be dismissed with costs.