Foran v Wight

[1989] HCA 51

HIGH COURT OF AUSTRALIA

Mason C.J., Brennan, Deane, Dawson and Gaudron JJ.

FORAN AND ANOTHER v. WIGHT AND ANOTHER

(1989) 168 CLR 385

15 November 1989

Vendor and Purchaser

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 Contract is not registered as yet'. The purchasers' solicitor said, 'What went wrong(?) You had six months or more in which to register the Right of Way' and the vendors' solicitor replied, 'We have had problems with the neighbours of Mr Wight and his Solicitor has mucked us around'. The purchasers' solicitor asked, "What stage has the registration of the Right of Way reached?' and the vendors' solicitor replied, 'I don't know. I'll have to check that. What is your attitude to settling this matter some time after Wednesday when the Right of Way will be registered? We can't settle without the Right of Way'. The purchasers' solicitor responded, 'You realise that time is of the essence in the contract. I cannot say anything in relation to that and will have to seek instructions. I can't enter into any further discussions in relation to settlement'."

6. Nothing was done by the vendors or the purchasers until two days after the date fixed for completion. Then, on Friday, 24 June, the purchasers executed and served a notice of rescission addressed to the vendors in these terms:

"With reference to the Contract for Sale

by you to us dated 24th December 1982 in relation to the Property described as Lot 8 Deposited Plan 227211 in Tizzana Road Ebenezer Certificate of Title Volume 10340 Folio 84 and in consequence of your default under the said contract in registering a Plan Of Right Of Way together with 88B Instrument in providing a good selling title to the said property and in completing the sale in accordance with the requirements thereof, We hereby give you Notice that the said purchase is hereby rescinded and we require repayment to us of the amount of the deposit paid without deduction and without prejudice to our rights to claim damages costs or expenses in respect of the default."

7. The right of way referred to in the earlier conversation and in the notice, which was required to be registered prior to completion, was not in fact registered until 22 July 1983. The vendors were thus unable to complete the contract on the date fixed for completion.

8. There was further correspondence between the solicitors in 1983 and 1984. In that correspondence the vendors sought to enforce completion and the purchasers maintained that they had validly terminated the contract. This correspondence culminated on 28 September 1984 when the vendors entered into a contract selling the property to other purchasers for the price of $68,000.

9. Meantime, on 30 November 1983, the purchasers issued out of the Supreme Court of New South Wales a summons, which was later amended. The amended summons sought a declaration that the purchasers had validly terminated the contract, another declaration that they were entitled to the return of the deposit and an order that the vendors return the deposit to the purchasers, and a further declaration that they were entitled to relief against forfeiture of the deposit under s.55(2A) of the Conveyancing Act 1919 (NSW). In an amended cross-summons filed on the day of the hearing before Needham J. the vendors sought declarations that the purchasers were not able to complete the agreement, that by reason thereof the purchasers were not entitled to rely on the essential time condition fixing the date for completion, that the purported notice of rescission dated 24 June 1983 was invalid and that in the events that had happened the vendors had validly terminated the contract and were entitled to forfeit the deposit. The amended cross-summons also claimed damages.

10. One major issue of fact at trial concerned the ability of the purchasers to complete the contract on 22 June 1983. The purchasers' case was that as at 20 June they had in place funding arrangements and resources which would have enabled them to pay the outstanding balance of $67,500. Needham J. held that he was not satisfied that those arrangements and resources would in fact have funded the required amount. His Honour said:

"I accept that they had arranged for finance from Nat. West. in the sum of $56000 and that that sum, assuming that the plaintiffs and their solicitor acted expeditiously, would have been available on Wednesday, 22 June. Mrs Foran, the female plaintiff, in an affidavit, claimed that she had a sum in excess of $15000 available to her in the ANZ Bank at Guildford. However, in cross- examination, it appeared that only the sum of $1783.42 or so of that was her own money, and she gave no evidence to indicate that she had any right to make use of any of the other accounts with that bank. The male plaintiff gave some evidence in the witness-box that he would have been able to obtain some $7000 from his mother, but that came at the heel of the hunt, and I find it difficult to accept without some further evidence that that amount of money was available. The male plaintiff's evidence, in my opinion, is somewhat suspect, from the suggestion he had made to the defendant as to the amount of purchase price in the contract. A further source of finance was said to have been the potentiality of the plaintiffs to obtain further moneys under an overdraft granted by the bank to their company, which carried on business as plumbers. The evidence established that the limit of the overdraft was $20000, but Mr Foran said that frequently he overdrew that figure up to the extent of $36000 or $37000, that is, that the overdraft went to the sum $36000 or $37000. It appears from the balance-sheets of that company that, as at 30 June, the company was in overdraft to the bank in the sum of between $36000 and $37000, and the suggestion from the plaintiff that he could have drawn a cheque to meet a balance of some $10000 required under the contract was not, to me, convincing, in the absence of any evidence from the bank manager that such a cheque would have been honoured."

In the result, his Honour was not satisfied that the purchasers had discharged the onus of establishing that they were able to complete on the date fixed for completion.

11. However, his Honour held that this finding was not relevant to the purchasers' claim for relief. His Honour concluded that the vendors' indication that they could not settle on 22 June entitled the purchasers to treat that statement as a repudiation and to terminate the contract on that account. His Honour concluded that the purchasers acted with adequate promptitude and regarded the occurrence of the time for completion in the meantime as irrelevant to the purchasers' exercise of the right to terminate for repudiation.

12. On appeal, the Court of Appeal (Street C.J. and McHugh J.A.; Kirby P. dissenting) came to a different conclusion. The Court of Appeal was of the opinion that the purchasers terminated the contract, not for anticipatory repudiation, but for failure to complete on the essential date. The majority held that a party to a contract, in order to be entitled to terminate for non-completion on an essential date, must show that it was ready and willing to complete on that date. For this reason the purchasers were not entitled to relief and the contract continued on foot. The Court of Appeal set aside the orders made by the trial judge and ordered that the amended summons be dismissed and declared that the vendors had validly terminated the contract and were entitled to forfeit the deposit. The Court of Appeal declared that the purchasers were liable for damages for breach of contract and the matter was referred to the Master for assessment of damages.

13. The purchasers' case in support of their appeal in this Court was that they terminated for actual breach, that breach being the natural consequence of the antecedent anticipatory breach, and that the only relief which they sought was a declaration that the contract had been terminated and an order for the return of their deposit. The purchasers contended that the vendors' fundamental anticipatory breach on 20 June relieved the purchasers from their obligation to tender the balance of the purchase money on 22 June and entitled them to terminate for actual breach, once that occurred on 22 June, without the necessity of proving a tender of performance or even that they were ready and willing to perform on that date. The purchasers further submitted that the finding of the primary judge fell short of a finding that they were unable to complete and that in any event the evidence fell short of establishing that this was the case.

14. The vendors filed a notice of contention challenging, amongst other things, the finding that the words uttered by the vendors' solicitor on 20 June gave rise to a repudiation by them entitling the purchasers to terminate the contract. However, they did not appear on the hearing of the appeal and, although they filed an outline of argument prepared by counsel, it did not deal with all the points made in support of the appeal.

15. It is convenient to begin with the challenge to the primary judge's finding that the purchasers had not discharged the onus of establishing that the arrangements that they had made before 20 June would have enabled them to complete the contract on 22 June. Once the purchasers' ability to complete on 22 June was put in issue, the onus was on them as the plaintiffs to establish that they would have been ready and willing to perform the contract on 22 June had it not been for the vendors' repudiation: AN.AC v. Robinson (1977) VR 87; see also Bahr v. Nicolay (No. 2) (1988) 164 CLR 604, at pp 620-621.

16. Even if, as will appear, the vendors' repudiation absolved the purchasers from any obligation to continue their efforts to procure finance, it may become necessary to determine whether they would have been able on the date for completion to provide the outstanding balance of the purchase price, $67,500. Needham J. accepted that $56,000 would have been available on 22 June. Having considered the financial arrangements made by the purchasers, the financial position of the purchasers and those associated with them, in particular the likelihood of funds becoming available by 22 June, his Honour concluded that the purchasers had failed to satisfy the onus of proof. True it is, as Kirby P. pointed out, that experience instructs us that last-minute arrangements might be made and the purchasers discontinued efforts to procure finance after the vendors' repudiation on 20 June. However, it was for the purchasers to prove what arrangements might have been made and whether they might have come to fruition. Needham J. found that the evidence did not establish that finance was likely to be forthcoming and I am not persuaded that his decision on this issue was incorrect. I therefore approach the case on the footing that the purchasers were not and would not have been ready and willing to complete the contract on 22 June. The trial judge did not attribute a single cause to that failure of the purchasers, but was clearly of the view that they would not have been ready and willing to complete, regardless of the vendors' repudiation.

17. In the circumstances of this case, for reasons which I shall state later in this judgment, the relevant question for determination by the primary judge was whether there was a substantial incapacity on the part of the purchasers to complete on the due date. However, at no stage in the proceedings in the courts below, or for that matter in this Court, was the issue for decision formulated by the purchasers in this way. On the particular facts of this case I am inclined to think that the primary judge's finding amounted to one of substantial incapacity. But, in any event, I do not consider that, having regard to the way in which the case was conducted, the issues should be reformulated and decided afresh by this Court.

18. The starting point of our consideration of the principal question agitated by the vendors lies in the concurrent findings of fact made by the courts below. The inevitable consequence of Needham J.'s finding that the vendors' solicitor stated on 20 June that they would not settle on 22 June was that the vendors thereby committed an anticipatory breach of an essential term of the contract. The breach was then anticipatory because it amounted to a refusal by the vendors to perform an essential term of the contract before the time for performance had arrived. The breach was a repudiation which entitled the purchasers at their election to treat the contract as at an end, subject to the court's power to grant relief in respect of any termination which happens to be unconscionable or inequitable (see Legione v. Hateley (1983) 152 CLR 406, at pp 429, 447-449; Stern v. McArthur (1988) 165 CLR 489; Laurinda Pty. Ltd. v. Capalaba Park Shopping Centre Pty. Ltd. (1989) 63 ALJR 372; 85 ALR 183), or to keep it on foot (see Peter Turnbull &Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. (1954) 90 CLR 235, at pp 250-251).

19. It was not necessary for the purchasers to show that the breach of the essential term was also a fundamental breach in the sense in which that expression was explained by Lord Diplock in Afovos Shipping Co. v. Pagnan &Flli (1983) 1 WLR 195, at p 203; (1983) 1 All ER 449, at p 455, before they acquired a right to terminate the contract. However, if it were necessary to consider the question, I would regard the anticipatory breach as fundamental. The law has traditionally treated completion on the date fixed for completion, where time is of the essence, as being a matter of vital importance to the parties. And the vendors' solicitor gave no indication that the delay in registration of the right of way would be negligible.

20. But the purchasers did not terminate for anticipatory breach. The notice of rescission made no mention of the statement made by the vendors' solicitor on 20 June that the vendors would be unable to complete on the due date. Instead the notice referred to the failure to register the right of way and to provide a good selling title and to complete in accordance with the requirements of the contract. More importantly, if the purchasers wished to terminate for anticipatory breach they should have done so "while the period specified by the contract for performance is unexpired", to use the words of Kitto J. in Peter Turnbull, at pp 250-251. It follows that the purchasers terminated for actual breach, that is, for the vendors' failure to complete on the day fixed for completion. It matters not that the actual breach occurred shortly after the anticipatory breach and that the notice was given only four days after 20 June. The fact is that the purchasers allowed the time for performance to pass without electing to terminate and of necessity they relied on the actual breach, that breach being the natural consequence of the antecedent anticipatory breach.

21. A failure by the innocent party to treat an anticipatory breach of an essential term as a repudiation and to terminate the contract has the effect of leaving the contract on foot, in which event it remains in force for the benefit of both parties, just as it would if the anticipatory breach had never occurred, subject to a qualification to which I shall refer in a moment. The parties then remain bound by the contract and the repudiating party may rely on any supervening circumstance which justifies his non-performance of the contract when the time for performance arrives: Bowes v. Chaleyer (1923) 32 CLR 159, at pp 169, 197-198; Peter Turnbull, at pp 250, 261. The qualification is that, if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party of his obligation, and does not retract that intimation in time to give the innocent party an opportunity to perform his obligation, that party may be excused from actual performance of the condition precedent. The repudiating party then waives complete performance of the condition precedent and his conditional promise becomes unconditional. The term "waiver" is generally used where one party by words or conduct relieves the other party from timely fulfilment of a condition or performance of a promise, time being of the essence of the contract: Peter Turnbull, at pp 247, 251. The precise nature and extent of this qualification is critical to the outcome of the present case.

22. In a contract for the sale of land, the vendor's obligation to deliver a good title and the purchaser's obligation to pay the purchase money are concurrent and mutually dependent obligations in the sense that they are "simultaneous acts to be performed interchangeably": Palmer v. Lark (1945) Ch 182, at pp 184-185; Michael Realty Pty. Ltd. v. Carr (1977) 1 NSWLR 553, at p 571; Frankcombe v. Foster Investments Pty. Ltd. (1978) 2 NSWLR 41, at p 48. Generally speaking, a party in breach of such an obligation cannot terminate for the other party's breach. But a party may be excused or absolved from performance of his concurrent obligation by conduct on the part of the other party amounting to a waiver or dispensation with performance. A repudiation by that party of his concurrent obligation may constitute such a waiver or dispensation. In that event the party excused or absolved from performance may terminate the contract and sue for damages.

23. In the context of concurrent and mutually dependent obligations it was recognized as early as the eighteenth century that a party who was ready and offered to perform his part of the contract could maintain an action against the party who refused or neglected to perform his part. In Kingston v. Preston (1773), as noted in 2 Dougl. 689 (99 ER 437), Lord Mansfield said (at p 691 (p 438 of ER)):

"... if one party was ready, and offered, to perform his part, and the other neglected, or refused, to perform his, he who was ready, and offered, has fulfilled his engagement, and may maintain an action for the default of the other".

The principle thus established was that the plaintiff, being unable to prove actual performance, had to prove that the defendant had refused to perform (thereby dispensing with performance by the plaintiff) and that he (the plaintiff) was ready and willing to perform and would have performed but for the dispensation. In this context readiness and willingness imports ability, as well as disposition, to perform: De Medina v. Norman (1842) 9 M &W 820, at p 827 (152 ER 347, at p 350); Peter Turnbull, at p 253. Repudiation by one party amounting to a waiver of performance by the other party does not entitle that party to enforce the contract on the notional footing that he has actually performed his part of the contract; it merely entitles him to recover such damages as he may have sustained by losing the benefit of the contract: Laird v. Pim (1841) 7 M &W 474 (151 ER 852); Peter Turnbull, at pp 252-253.

24. The principle enunciated in Kingston v. Preston was applied in Jones v. Barkley (1781) 2 Dougl. 684 (99 ER 434) to a case in which an agreement provided that the plaintiffs would execute and deliver a release and an assignment of an equity of redemption, upon which the defendant was to make payment of 611. The plaintiffs averred readiness and willingness to complete. They had tendered to the defendant a draft assignment and release which they offered to execute, the defendant then absolving them from execution. The defendant pleaded that the averment failed because execution was a condition precedent to payment. It was held that the plaintiffs need only show that they were ready and willing. In the words of Lord Mansfield (at p 694 (p 440 of ER)):

"... the question is, whether there was a sufficient performance. Take it on the reason of the thing. The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act."

All that was excused in Jones v. Barkley was the delivery of executed documents; in all other respects the plaintiffs were required to have been ready and willing to deliver the documents contracted for. See also Goodisson v. Nunn (1792) 4 TR 761 (100 ER 1288); Morton v. Lamb (1797) 7 TR 125 (101 ER 890). All these cases involved actual rather than anticipatory breach, but that consideration does not affect the statements of principle they contain relating to dispensation.

25. A waiver of a condition precedent arising from the defendant's repudiation did not entirely relieve the plaintiff from showing that he was ready and willing; the plaintiff was dispensed from the need to do that which the defendant had indicated would be pointless. He was not excused from showing that at the time of repudiation he was ready and willing to complete the contract had it not been repudiated by the defendant: see Dawson, "Waiver of Conditions Precedent on a Repudiation", (1980) 96 Law Quarterly Review 239, at pp 244-245. So, in Ripley v. M'Clure (1849) 4 Ex 345 (154 ER 1245) a buyer repudiated before the time for performance a contract to purchase tea. The plaintiff pleaded that he was ready to deliver in accordance with the contract and would have performed but for the repudiation. It was held that the refusal to perform, unretracted down to the time for performance, was a waiver of the seller's need actually to deliver the goods. Parke B. observed (at pp 359-360 (p 1251 of ER)):

"By an express refusal to comply with the

conditions of the contract of purchase, the defendant must be understood to have said to the plaintiff, 'You need not take the trouble to deliver the cargo to me, when it arrives at Belfast, as purchaser, for I never will become such;' and this would be a waiver, at that time, of the delivery, and, if unretracted, would dispense with the actual delivery after arrival."

His Lordship went on to say (at p 361 (p 1251 of ER)):

"(A)fter the time that the delivery was excused, and the defendant refused to receive ... readiness and willingness ... is wholly immaterial".

The jury expressly found that the plaintiff was willing to deliver according to the contract down to the time of the defendant's refusal: at p 353 (p 1248 of ER).

26. The defendant appealed: M'Clure v. Ripley (1850) 5 Ex 140 (155 ER 60). In dismissing that appeal, Patteson J. expressed a different view in these terms (at p 146 (p 63 of ER)):

"The declaration would be good enough without any averment of readiness and willingness, supposing there were only an averment of discharge, and that averment were traversed and found for the plaintiff. The assessment of damages would be on the nonperformance of the contract, and not upon the question, whether the plaintiff was ready and willing or not."

This approach to the question seems not to have been followed in the later cases until it was revived in Taylor v. Oakes, Roncoroni and Co. (1922) 127 LT 267, especially by Atkin LJ., at p 272.

27. The same question arose for decision in Cort v. The Ambergate, Etc., Railway Company (1851) 17 QB 127 (117 ER 1229). There the defendant buyer informed the plaintiffs that it would accept no more iron chairs under a contract for the manufacture of such chairs. The plaintiffs treated themselves as discharged and commenced proceedings against the defendant for wrongfully refusing to accept the chairs. The plaintiffs pleaded that, from the making of the contract until the defendant's refusal, they were ready and willing to perform but that they had been discharged from further performance by the defendant's repudiation. The defendant denied that its renunciation before the time for performance excused the plaintiffs from the need to show that they were ready and willing to perform at the time for performance. It was held that the plaintiffs' averment was sufficient. Lord Campbell C.J. said (at p 144 (p 1236 of ER)):

"In common sense the meaning of such an averment of readiness and willingness must be that the noncompletion of the contract was not the fault of the plaintiffs, and that they were disposed and able to complete it if it had not been renounced by the defendants."

28. These comments reflect not only the observations of Parke B. (in preference to those of Patteson J.) but also the earlier remarks of Tindal C.J. in Pontifex v. Wilkinson (1845) 1 CB 75 (135 ER 464) where the plaintiffs agreed to manufacture and fit certain fittings for a fixed price. It was argued that the defendant refused to permit the plaintiffs to complete the manufacture and "absolutely discharged them from proceeding". Tindal C.J., delivering the judgment of the Court, held (at pp 90-91 (p 470 of ER)) that the two issues (a) readiness and willingness and (b) whether the defendant discharged the plaintiffs from completing the contract, were no more than one issue, namely,

"whether the non-completion of the contract proceeded from the wrongful act and conduct of the plaintiffs in refusing to finish, or of the defendant in not permitting them to finish the goods according to the terms of the contract".

The inference is that the defendant's conduct did not absolve the plaintiffs from any failure to be ready and willing of which that conduct was not the sole cause. Accordingly, the issue was whether the plaintiffs refrained from performing their promise in reliance on the defendant's conduct or for an independent cause.

29. Two other cases indicate that proof of readiness and willingness went to the existence of the cause of action; its materiality was not confined to the recovery of substantial damages. In Smith v. Wilson (1807) 8 East 437 (103 ER 410) the plaintiff's action failed because he was unable to establish that he was ready and willing to perform. In Griffith v. Selby (1854) 9 Ex 393 (156 ER 167) the defendant, having entered into an agreement to buy wrought iron goods solely from the plaintiff, later decided to buy the goods from another source. The plaintiff sued for damages, averring that he had always been ready and willing to supply the goods. The defendant contended that, if the plaintiff supplied the goods, the goods would not have been fit and proper for the purpose contemplated by the contract. It was held that this would be a defence, if established, so that it was for the jury to decide whether the plaintiff was able to perform.

30. The doctrine of anticipatory breach was first recognized in Hochster v. De la Tour (1853) 2 El &Bl 678 (118 ER 922). This explains why in the earlier cases there was no attempt to distinguish between actions for actual breach and actions for anticipatory breach. The principles expounded in the cases were considered to apply to instances of actual breach. However, as Dixon C.J. noted in Peter Turnbull (at p 247), Ripley v. M'Clure "might at a later date have been decided as a case of anticipatory breach".

31. In the context of actions to recover damages the principles stated in such cases as Jones v. Barkley and Cort v. The Ambergate, Etc., Railway Company have been enunciated and applied by Australian courts. So, in Hensley v. Reschke (1914) 18 CLR 452, Barton J. referred (at pp 462, 463) to the purchaser's readiness and willingness to complete as a "condition precedent" to his right to recover damages in the sense of special damages. Likewise, Isaacs and Rich JJ. stated (at pp 467-468) that the purchaser would have no right to claim damages unless he was ready and willing to pay the purchase money at the relevant time. In the course of discussing this point, their Honours said (at p 467):

"If Gunson (the purchaser) were suing Mrs. Reschke (the vendor) for damages an averment of his readiness and willingness to pay his purchase money would under Order XX, rule 13, be implied ... But that would be so because the condition would go to the cause of action." (my emphasis)

Subsequently, in Cohen &Co. v. Ockerby &Co. Ltd. (1917) 24 CLR 288, where buyers brought an action against the sellers for damages for non-delivery of goods, Isaacs J. discussed the buyers' right to sue on the footing that they had been absolved from performing their obligation, concurrent with the sellers' obligation to deliver, to establish a local credit with a bank to enable the sellers to obtain payment. His Honour said (at p 298):

"In my opinion Byrne v. Van Tienhoven ((1880) 5 CPD 344) goes to show that a party so absolved, though he may defend an action against him, by merely showing he was so absolved, yet, if he sues the other party whose refusal he relies on, he must show he was ready and willing to perform his part, had he not been absolved from actual performance. 'Readiness and willingness' is in that case a condition precedent."

Later, in Bowes v. Chaleyer this Court held that judgment must be given for the defendant (the buyer) in an action for damages for breach of contract for the sale of goods brought by the seller where the plaintiff had affirmed the contract, after repudiation by the buyer before the time for performance, on the ground that the plaintiff was not ready and willing to perform the contract according to its terms - he had not arranged for shipment of the goods as promised - and he was not absolved from performance by the repudiation: see at p 198. And in Henry Dean &Sons (Sydney) Ltd. v. P. O'Day Pty. Ltd. (1927) 39 CLR 330 Knox C.J. said (at p 336):

"The meaning of the averment of readiness and willingness is that the non-completion of the contract was not the fault of the plaintiff and that he was disposed and able to complete it if it had not been renounced by the

defendant (Cort v. Ambergate &. Railway

Co.)."

Henry Dean &Sons was not followed by the House of Lords on another point: see Gill &Duffus S.A. v. Berger &Co. Inc. (1984) AC 382, at p 392.

32. Properly understood, the English and Australian cases to which I have referred and the statements which they contain (other than those of Patteson J. in M'Clure v. Ripley) support the view that the readiness and willingness requirement goes to the existence of the plaintiff's cause of action. Failure by the plaintiff to prove that element in his cause of action resulted in a verdict and judgment for the defendant: see Smith v. Wilson; Bowes v. Chaleyer. Such a failure did not result in an award of nominal damages. Absent proof of readiness and willingness, the plaintiff had no cause of action.

33. The prevailing rules and forms of common law pleading in the eighteenth and nineteenth centuries, which necessarily reflected the principles of substantive law as applied by the courts, demonstrated that the courts treated readiness and willingness as being material to the existence of the plaintiff's cause of action. The plaintiff was required to aver in his declaration the material elements in his cause of action. These elements included satisfaction or performance of all conditions precedent. Thus the plaintiff was required to aver performance of any condition precedent to, or concurrent with, performance of the defendant's promise. Just as the plaintiff was required to plead and prove readiness and willingness in a suit for specific performance, so at common law he had to plead and prove that he was ready and willing in an action for damages for breach of contract. It followed that proof that the plaintiff was ready and willing to perform his obligation on which performance of the defendant's promise was expressed to be conditioned was regarded as being essential to the plaintiff's cause of action. See also Jefferson v. Paskell (1916) 1 KB 57, at p 74; Lloyd, "Ready and Willing to Perform: The Problem of Prospective Inability in the Law of Contract", (1974) 37 Modern Law Review 121.

34. When it became necessary to frame a declaration where the defendant had dispensed with performance by the plaintiff of a mutually dependent and concurrent obligation, it was natural and logical for the pleader to mould the usual form of declaration to the new situation by averring his excuse for non-performance in lieu of performance. But he was still required, in conformity with the authorities already mentioned, to allege (and prove) that he was ready and willing to perform that obligation; see Bullen and Leake, Precedents of Pleadings, 3rd ed. (1868), p 61; Chitty's Treatise on Pleading, 7th ed. (1844), vol.1, p 335.

35. It is perhaps not surprising that with the passing of the strict rules of pleading the courts came to make occasional statements suggesting that readiness and willingness was relevant not so much to the establishment of a cause of action as to the assessment of damages. That is especially so when one considers that the majority of cases involve claims for damages. But the fact that the principles governing assessment of damages necessarily raise questions as to whether the plaintiff would have been able to perform the contract in any event should not lead us to lose sight of the more fundamental importance of the readiness and willingness requirement. The relevance of the requirement in a damages context is discussed in Y.P. Barley Producers Ltd. v. E.C. Robertson Pty. Ltd. (1927) VLR 194, at pp 212-214. Notwithstanding such considerations, when the defendant has dispensed with performance by the plaintiff of a mutually dependent and concurrent obligation, it remains for the plaintiff to show, not that he was ready and willing to perform, but that he would have been ready and willing to perform had the defendant not dispensed with performance.

36. Mahoney v. Lindsay (1980) 55 ALJR 118; 33 ALR 601, though it was a purchasers' action for specific performance and not an action for damages, illustrates the point. The purchasers succeeded, although they did not seek out the vendor and tender the purchase money. The primary judge found that the vendor's solicitor had indicated that it would be useless for the purchasers to attend with the purchase money since the vendor did not intend to perform his part of the contract. The purchasers were ready and willing to complete and would have completed but for the vendor's dispensation.

37. Peter Turnbull was a more complicated case. There the buyer recovered damages for non-performance by the seller of a contract for the sale of oats, notwithstanding non-fulfilment by the buyer of a condition requiring the nomination of a ship in February for delivery f.o.b. and the giving of fourteen days notice of the ship and shipping date. It was held that in the circumstances, including a repudiation of the contract by the buyer before the time for performance had arrived, the seller had dispensed the buyer from performance of these conditions. The action was for damages for actual, not anticipatory, breach of the contract, the buyer having elected to keep the contract on foot. Dixon C.J. observed (at p 246) that it was always the law that, if a contracting party prevented the other party from fulfilling a condition precedent, it was equal to performance. His Honour went on to say (at pp 246-247):

"(A) plaintiff may be dispensed from performing a condition by the defendant ... intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention."

His Honour referred to Lord Mansfield's comments in Jones v. Barkley and recited Lord Campbell C.J.'s account in Cort v. The Ambergate, Etc., Railway Company of Ripley v. M'Clure.

38. Dixon C.J. did not address the question whether readiness and willingness goes to the existence of the cause of action or only to damages. As his Honour pointed out (at pp 245-246), the case was not confined to a simple anticipatory refusal to perform followed by an election by the seller not to treat the contract as discharged for breach. Because the buyer's conduct involved more than that, it brought other principles of law into play. The buyer insisted that it could perform the contract only in one way, by substituting a shipment in Melbourne for the contracted shipment in Sydney. By seeking the seller's co-operation in securing this substitution and maintaining that it could not perform the contract according to its terms, the buyer clearly intimated to the seller that it need not pursue the conditions applicable to shipment in Sydney. The seller left the contract on foot subject to a continued intimation that only by a substituted performance could the buyer carry it out. Dixon C.J.'s stated reason for disagreeing with the Supreme Court's view that the seller must fail because it was not ready and willing to complete was that the buyer intimated that it would be useless to take steps to comply with the contract and excused the seller from doing so "at and from a time when the (seller) could still have fulfilled it": see at p 248.

39. Kitto J. adopted a similar approach. His Honour also made the point (at p 254) earlier made by Tindal C.J. in Pontifex v. Wilkinson (at pp 90-91 (p 470 of ER)) and Lord Campbell C.J. in Cort v. The Ambergate, Etc., Railway Company (at p 144 (p 1236 of ER)) that the question of readiness and willingness was an aspect of the larger question whether non-completion of the contract proceeded from the wrongful act or conduct of the defendant or of the plaintiff.

40. But it is the judgment of Dixon C.J. in Rawson v. Hobbs (1961) 107 CLR 466 that demonstrates the true significance of the plaintiff's readiness and willingness in an action for damages for breach of contract arising out of the plaintiff's acceptance of an anticipatory repudiation. The Chief Justice (at pp 480-481) evidently approved, subject to a slight qualification, the discussion of readiness in Lord Sumner's speech in British and Beningtons Ltd. v. N.W. Cachar Tea Co. and Others (1923) AC 48, at pp 70-72. In that case Lord Sumner (with whom Lord Buckmaster and, it seems, Lord Wrenbury and Lord Carson agreed) had been concerned to reject the notion, apparently favoured by Lord Atkinson (at pp 62-66) and supported by the Court of Appeal decision in Braithwaite v. Foreign Hardwood Company (1905) 2 KB 543 (see also Taylor v. Oakes, Roncoroni and Co. and Continental Contractors Ltd. v. Medway Oil &Storage Co. Ltd. (1925) 23 Ll L Rep 124, at p 133), that a repudiation by a buyer under a contract for the sale of goods excused the seller from the performance of all conditions precedent, including readiness and willingness. His Lordship denied (at p 71) that Braithwaite decided:

"that a buyer, who has repudiated a contract for a given reason which fails him, has, therefore, no other opportunity of defence either as to the whole or as to part, but must fail utterly".

His Lordship continued (at pp 71-72):

"If he had repudiated, giving no reason at all, I suppose all reasons and all defences in the action, partial or complete, would be open to him. ... (B)ut I do not see how the fact, that the buyers have wrongly said 'we treat this contract as being at an end, owing to your unreasonable delay in the performance of it' obliges them, when that reason fails, to pay in full, if, at the very time of this repudiation, the sellers had become wholly and finally disabled from performing essential terms of the contract altogether."

41. In Rawson v. Hobbs, Dixon C.J. pointed out (at p 481) that when a party seeks to justify termination before the time for performance on the ground of anticipatory breach or renunciation, the question is whether up to the time when he elects to treat himself as no longer bound he is "ready and willing to proceed with the contract and, as and when the time comes to do his part, so far as it is of the essence, to perform the contract on his side". The Chief Justice went on to point out that this was not the case when the party was acting under "a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires". Moreover, with reference to the position of the non-repudiating party, his Honour said:

"On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete."

His Honour had earlier referred (at p 481) to the plaintiff posited by Lord Sumner, who "had become wholly and finally disabled from performing essential terms of the contract altogether", observing that a party in that situation "cannot recover from the opposite party to the contract if the latter at that point renounces the contract on his side".

42. Implicit in this view of the concept of readiness and willingness in the context of an action for damages for anticipatory renunciation is the proposition that the action will be dismissed if the plaintiff was not, immediately before acceptance of the renunciation, in a position to complete on the day appointed for completion. It is a view that is consistent with the proposition that a party who refuses to perform a contract can justify his action by pointing to grounds that justify his refusal even if at the time of refusal he was unaware of the existence of those grounds: Shepherd v. Felt and Textiles of Australia Ltd. (1931) 45 CLR 359, at pp 377-378; Rawson v. Hobbs, at pp 480, 491; D.TR Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. (1978) 138 CLR 423, at pp 431-433; Sunbird Plaza Pty. Ltd. v. Maloney (1988) 62 ALJR 195, at pp 200, 207-208; 77 ALR 205, at pp 213, 225-226; Universal Cargo Carriers Corporation v. Citati (1957) 2 QB 401, at pp 443-446. And, as Rawson v. Hobbs itself demonstrates, the incapacity of one party to complete the contract is a lawful ground of termination by the other party before the time for performance.

43. In my opinion it is not possible to read the judgment of Dixon C.J. in Rawson v. Hobbs as stating that readiness and willingness is material only to the assessment of damages. The propositions stated by his Honour are of a more fundamental character, deriving, as they do, from the traditional concept of readiness and willingness as a material element in the existence of the plaintiff's cause of action. Nor do I think that it is possible to regard his Honour's remarks as having no application to the entitlement of a party to terminate a contract for breach. A party who is disabled from suing for damages because he is not ready and willing to perform in the sense discussed above cannot exercise a right to treat himself as discharged from the contract on the ground that the other party is in breach of an essential term or is otherwise in fundamental breach of the contract. As Stephen, Mason and Jacobs JJ. observed in D.T.R. Nominees (at p 433):

"A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation. Otherwise he is not an innocent party, the common description of a party entitled to rescind for anticipatory breach".

44. The approach taken by Dixon C.J. and by Lord Sumner in British and Beningtons is to be preferred to that pursued in Braithwaite, Taylor v. Oakes, Roncoroni and Co., Continental Contractors and by Lord Atkinson in British and Beningtons. The former approach conforms to that adopted in the eighteenth and nineteenth century cases, subject to the qualification, which is appropriate to cases of election to terminate for anticipatory breach, that readiness and willingness after termination of the contract is immaterial. As anticipatory breach was not foreseen before Hochster v. De la Tour, it is logical and proper to confine the requirement of readiness and willingness to the period down to the moment before the party elects to accept the anticipatory renunciation. In this way the established principle is given an application which fits the new situation to which it is directed. The contrary approach is inconsistent with the strong stream of earlier authority and generates unsatisfactory results, including those suggested by Lord Sumner. In passing, I should mention that in the United States it has been held that the plaintiff must show readiness and willingness as a material element in his cause of action for anticipatory breach: Yale Development Co. v. Aurora Pizza Hut, Inc. (1981) 420 NE 2d 823.

45. Braithwaite has very recently sustained a mortal wound at the hands of the House of Lords: see Fercometal v. Mediterranean Shipping Co. (1988) 3 WLR 200, at p 212; (1988) 2 All ER 742, at p 751, where Lord Ackner treated it as an instance of acceptance of an anticipatory breach before the time for performance, or alternatively, if it was a case of actual breach, as being wrongly decided. From what I have already said, there are other reasons for declining to regard it as a persuasive decision. Indeed, even on the issue of quantification of damages, it now seems to be at odds with Gill &Duffus S.A. v. Berger &Co. Inc.

46. On this aspect of the case it remains for me only to mention the alternative approach advocated in such cases as Pontifex v. Wilkinson and adopted by Lord Campbell C.J. and Kitto J., namely, to ask the question whether the contract went off through the wrongful default and conduct of the plaintiff or the defendant. If the issue is to be looked at in this way the result would be no different, as indeed the discussion in the judgments makes clear. Insistence on the plaintiff being ready and willing is a means of ensuring that a plaintiff will not succeed in an action for breach of contract if the contract has gone off through his wrongful default or conduct. The burden this places on a plaintiff will vary from case to case. But it will generally be true to say that a plaintiff relying on anticipatory breach or claiming the benefit of some dispensation with complete performance will be faced with a burden capable of being displaced without undue expense or inconvenience. Moreover, it would be arbitrary and unjust if a plaintiff who could not show that he did not cause the contract to go off were able to succeed in an action against a defendant who has been open and forthcoming about the difficulties he is facing in his own performance. There are therefore good reasons in policy for the position revealed by the authorities.

47. Accordingly, in relation to termination for actual breach, the principle is that established by the earlier decisions - the plaintiff is required to show that he was ready and willing to perform the contract if it had not been repudiated by the plaintiff. In other words, the requirement is that the plaintiff be ready and willing to perform except to the extent that the defendant dispensed with his performance. In the case of an anticipatory renunciation accepted by the plaintiff, the requirement of readiness and willingness extends only up to the time of acceptance because then the earlier repudiation results in an early termination of the contract. Accordingly, in the case of actual breach the requirement of readiness and willingness is more stringent; it continues through to the time for performance. That is because the termination of the contract does not antedate the time for performance. Subject to this difference and to the possibility of a difference in the onus of proof, the principle to be applied in the case of actual breach is consistent with that to be applied in the case of termination for anticipatory breach. The difference in the onus of proof arises because in the case of termination for anticipatory breach the plaintiff will generally be able to show at the time of termination that he would have been able to perform at the time for performance by demonstrating that he was not then disabled or incapacitated from such performance. As Dixon C.J. noted in Rawson v. Hobbs, at p 481, one "must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness".

48. However, in the present case, the anticipatory breach of the vendors was not accepted. The case is one of termination for actual breach. The time for determining whether or not the purchasers would have been ready and willing to perform the contract had it not been for the dispensing conduct of the vendors is therefore the time for performance. The purchasers have not discharged the onus of showing that at that time they would have been so ready and willing. It follows that the purchasers are unable to justify their termination by reference to the ordinary principles of contract law. It is necessary now to turn to the doctrine of estoppel in order to ascertain whether the application of that doctrine enables the purchasers to succeed.

49. In Fercometal, Lord Ackner, speaking for the House of Lords, recognized that the defendant might be estopped from relying on the plaintiff's non-performance of a condition precedent or concurrent condition. Fercometal is authority for the proposition stated by Lord Ackner (at p 212; pp 751-752 of All ER) in these terms:

"When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind, the right to take advantage of any supervening circumstance which would justify him in declining to complete."

With respect to the possible operation of the doctrine of estoppel, Lord Ackner said (at p 212; p 752 of All ER):

"(I)t is always open to A, who has refused to accept B's repudiation of the contract, and thereby kept the contract alive, to contend that in relation to a particular right or obligation under the contract, B is estopped from contending that he, B, is entitled to exercise that right or that he, A, has remained bound by that obligation. If B represents to A that he no longer intends to exercise that right or requires that obligation to be fulfilled by A and A acts on that representation, then clearly B cannot be heard thereafter to say that he is entitled to exercise that right or that A is in breach of contract by not fulfilling that obligation."

His Lordship went on to point out (at p 212; p 752 of All ER) that there was no finding of any relevant representation by the repudiating charterers in that case and that the non-readiness of the owners to load on the material date was in no way induced by the charterers' conduct, but was the result of the owners' decision to load other cargo first.

50. So far as the present case is concerned, on the primary judge's findings, the vendors through their solicitor represented to the purchasers through their solicitor that they could not and would not complete the contract on the date fixed for completion. The representation was not retracted and continued until the time stipulated for completion. The representation fell into two parts: first, a representation as to a future fact - that they would not complete; secondly, a representation as to an existing fact - that they could not complete, due to non-registration of the right of way. By expressing the representations in this way, I run some risk of expressing inadequately the vendors' attitude as it was stated by their solicitor in the critical conversation. From the terms of that conversation, it seems that the vendors wished to proceed with the contract, but with a later date for completion substituted for 22 June. However, what is important, and perhaps critical, judged from the perspective of applying the doctrine of estoppel is that the vendors impliedly intimated that it would be pointless or futile for the purchasers to tender performance of the contract. It is that intimation upon which an application of the doctrine of estoppel stands or falls. Whether that intimation amounts to a representation of future fact or existing fact is a fine question, but as will appear, it is not a question which I need to determine.

51. Not every anticipatory repudiation of a contract amounts to a representation to the other party that it would be pointless for him to complete the contract. So much plainly appears from Dixon C.J.'s discussion of the buyer's repudiation and conduct in Peter Turnbull (at pp 245-246). His Honour was at pains to emphasize that the buyer's conduct involved more than a simple repudiation, in particular its endeavours to secure the seller's co-operation in a substituted shipment in another port. Although his Honour did not speak explicitly of estoppel, his insistence on looking for clear evidence of waiver is characteristic of the traditional insistence on a clear and unambiguous representation as a necessary foundation for an estoppel: see Legione v. Hateley, at pp 435-437, and the cases there cited. Granted that a representation relied upon as an estoppel must be clear and unambiguous, the representation in the present case satisfies that requirement, despite the fact that it arises from the repudiation itself in the setting in which it was communicated by the vendors' solicitor to the purchasers' solicitor and, unlike in the case of Peter Turnbull, the representation did not take the form of a request.

52. There is a long line of authority to support the proposition that, in order to ground a case of common law estoppel by representation, the representation must be as to an existing fact, a promise or representation as to future conduct being insufficient: Legione v. Hateley, at p 432; Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387, at p 398. In Waltons Stores Wilson J. and I pointed out (at p 399) that if there was a basis for holding that common law estoppel arises where there is a mistaken assumption as to future events, it was to be found in reversing Jorden v. Money (1854) 5 HLC 185 (10 ER 868) and in accepting the powerful dissent of Lord St. Leonards in that case. In the absence of argument we declined to embark on that course and instead decided the case by reference to promissory estoppel which extends to representations or promises as to future conduct: see Legione v. Hateley, at p 432; Waltons Stores, at pp 399, 451-452, 459. On further reflection it seems to me that we should now recognize that a common law estoppel as well as an equitable estoppel may arise out of a representation or mistaken assumption as to future conduct. To do so would give greater unity and consistency to the general doctrine of estoppel. Moreover, the clear acceptance by the Court in Waltons Stores of the doctrine of promissory estoppel makes this course inevitable. After all, it was the apprehension that representations as to future conduct, unsupported by consideration, would invade the territory of promises for valuable consideration that led to the confinement of common law estoppel to representations of existing fact. Given the recognition of promissory estoppel and the fact that the doctrine may preclude the enforcement of rights at least between parties in a pre-existing contractual relationship, the dam wall has fractured at its most critical point with the result that we should accept that a representation or a mistaken assumption as to future conduct will in appropriate circumstances create a common law estoppel as well as an equitable estoppel.

53. In Waltons Stores Wilson J. and I (at p 404) referred to and applied the underlying principle that the courts will grant relief to "a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has 'played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it'": Grundt v. Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641, at p 675; see also Thompson v. Palmer (1933) 49 CLR 507, at p 547. The same principle may be applied to the purchasers in this case if they acted to their detriment on the faith of the representation by not tendering performance on 22 June. The estoppel would operate to protect the purchasers from a claim by the vendors that the purchasers' failure to tender performance constituted a breach of contract and, as well, to enable the purchasers to maintain their termination of the contract on the footing that the vendors, not the purchasers, were in breach of the contract.

54. This brings me to the question whether the purchasers acted to their detriment in reliance upon the vendors' representation. The purchasers acted in reliance upon the representation by not continuing their efforts to procure finance and by not tendering performance on 22 June. Whether they did so to their detriment is the critical issue. If, in any event, quite apart from the making of the representation, the purchasers would have been unable to tender performance on that date, due to the inadequacy of their financial resources, there can be no basis for concluding that they were induced by the representation to act to their detriment. As Dixon J. observed in Grundt, at pp 674-675:

"(The) purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. This means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumption were deserted that led to it. So long as the assumption is adhered to, the party who altered his situation upon the faith of it cannot complain. His complaint is that when afterwards the other party makes a different state of affairs the basis of an assertion of right against him then, if it is allowed, his own original change of position will operate as a detriment. His action or inaction must be such that, if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence would be to make his original act or failure to act a source of prejudice."

Even if it were accepted, as Lord Denning stated in W.J. Alan &Co. v. El Nasr Export (1972) 2 QB 189, at pp 213-214, and Brikom Investments v. Carr (1979) QB 467, at p 482, that detriment need not be proved as a separate element, over and above reliance, in order to found an estoppel, at least in the case of promissory estoppel if that were to continue to be regarded as being in a special category, it is clear in the present case that the reliance which Lord Denning required in those cases is not present.

55. My conclusion adverse to the purchasers on the issue of readiness and willingness denies that the purchasers sustained a relevant detriment in consequence of their reliance upon the representation. Although it might be true to say that, as a result of the vendors' intimation, the purchasers lost the chance of tendering the purchase price and therefore were subjected to the requirement that they demonstrate that they would have been ready and willing to perform but for that intimation, the evidence reveals that that chance would have come to nothing. The purchasers cannot by invoking the doctrine of estoppel avoid the need to show that the vendors' conduct caused them not to perform the contract.

56. The contract went off for two reasons: first, because the purchasers lacked the financial resources to complete on the appointed day; secondly, because the vendors were unable to complete on the appointed day as the right of way could not be registered in time. Accordingly, the failure of the contract was as much due to the purchasers' incapacity as that of the vendors. But in order to terminate the contract the purchasers needed to show that the vendors were at fault. The consequence is that the purchasers did not validly terminate the contract. In this situation it might at first seem just and fair that the purchasers should recover their deposit but it is conceded that, if the purchasers did not validly terminate, the vendors' later termination of the contract was valid and it was not contested, in this event, that the purchasers' claim to recover the deposit should fail. In any case, so long as the contract continued on foot, it governed the relations between the parties and there is no basis in these circumstances for an appeal to the law of quasi-contract.

57. In the result I would dismiss the appeal.

BRENNAN J. Contracts for the purchase and sale of a parcel of land known as Lot 8, Tizzana Road, Ebenezer, were exchanged on 24 December 1982. The appellants were the purchasers, the respondents the vendors. It was a term of the contract that settlement should take place "on or before June 22, 1983 and in this respect time shall be of the essence." A deposit of $7,500 was paid. The contract contained a clause relating to an easement burdening the subject land shown on an unregistered plan and referred to in an instrument executed for the purposes of s.88B of the Conveyancing Act 1919 (NSW). The clause provided, inter alia, that "the Vendor warrants that he will attend to the registration of the said Plan together with 88B Instrument prior to completion."

2. On 20 June 1983 the solicitor for the purchasers rang the solicitor for the vendors, told him that finance had been arranged for Wednesday 22 June and asked: "What time can we settle on that day?" The vendors' solicitor said:
"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 contract is not registered as yet." He offered an excuse for the vendors' inability to complete on the due date in strict accordance with the terms of the contract. When the purchasers' solicitor asked: "What stage has the registration of the right of way reached?" the vendors' solicitor replied: "I don't know. I'll have to check that. What is your attitude to settling this matter some time after Wednesday when the right of way will be registered? We can't settle without the right of way." The purchasers' solicitor said: "You realise that time is of the essence in the contract. I cannot say anything in relation to that and will have to seek instructions. I can't enter into any further discussions in relation to settlement."

3. After this conversation, there was no further communication between the parties or their solicitors until 24 June. At no time prior to 22 June 1983, the stipulated day for completion, did the purchasers purport to rescind the contract. On 22 June neither the purchasers nor the vendors tendered performance. On 24 June the purchasers executed a notice of rescission which was duly served, apparently on the same day. The notice of rescission was based not on an anticipatory breach by the vendors on 20 June, but on the vendors' actual breach in failing to complete the contract on 22 June 1983. The vendors refused to recognize the validity of the notice of rescission.

4. Thereafter the purchasers issued a summons out of the Supreme Court of New South Wales seeking declarations, inter alia, that they had validly rescinded the contract and that they were entitled to the return of the deposit. The vendors cross-claimed, seeking declarations that the purchasers were not themselves able to complete the agreement for sale and on that account were not entitled to rely upon the essential time condition in the contract. While the proceedings were pending, the vendors gave the purchasers a notice to complete and, after the time limited by that notice had expired, they purported to rescind the contract. By an amended cross-claim, the vendors sought declarations that they had validly terminated the agreement, that they were entitled to forfeit the deposit and that the purchasers were liable to the vendors for damages for breach of contract. Needham J. found:
"that on 20 June 1983 the (vendors) indicated
that they could not settle on the 22nd. The (purchasers) in my opinion were then entitled to treat that statement as a repudiation and to rescind, even though the time for completion had not arrived." On this finding, his Honour held that the purchasers were entitled to accept the vendors' repudiation on 20 June, although the day for completion had passed. His Honour made the declarations sought by the purchasers and dismissed the vendors' cross-claim. However, his Honour also made an observation about readiness to complete by the purchasers who had been searching for finance. He said:

"It is my view that if the plaintiffs bore the onus of proving (readiness to complete), and ... it does seem that the onus would be on the plaintiffs to prove that fact, I would not have been satisfied that the plaintiffs had discharged that onus."

5. The judgment for the purchasers was set aside by the Court of Appeal. Street C.J. concluded that, as the purchasers had not rescinded the contract before the day fixed for completion, the contract had remained on foot and, as both parties had failed to perform their respective obligations, both were in default and neither could treat the other's failure to complete on the day fixed for completion as a breach founding rescission. Therefore, his Honour reasoned, the time stipulation lost its essential character, the purchasers' notice of rescission was ineffective and the contract remained on foot until it was rescinded by the vendors. McHugh J.A. was of the same opinion. Referring to earlier decisions of the Supreme Court of New South Wales, his Honour said: "The principle of those cases is that a party
who cannot perform his own contractual obligation on the date fixed for settlement cannot rescind because of the breach of the obligation of the other party irrespective of which obligation arose first. This is because the contract imposes concurrent obligations on each party, and one who is unable to perform his concurrent obligation cannot take advantage of the other party's inability to perform." Kirby P. in dissent said that the vendors' argument contained an "essential flaw" for it ignored that the vendors' intimation on 20 June relieved the purchasers "of the obligation to continue the search for finance." By majority, the Court of Appeal held that the purchasers had not validly rescinded the contract, the vendors had validly terminated it and the vendors were entitled to retain the deposit and recover damages for the purchasers' refusal to perform.

6. When the appeal was argued in this Court, the vendors were not represented but written submissions on their behalf were received. The first question for determination is whether the contract was subsisting on 22 June despite the intimation by the vendors' solicitor on 20 June that the vendors could not complete on 22 June. It is clear that the vendors' solicitor did not wish the sale to go off; he sought no more than a postponement of the day for completion in order that he could procure the registration of the easement over the land before conveyance. The vendors did not offer to complete on 22 June; the vendors' solicitor had intimated that they were unready to complete on the day fixed for completion. As the parties had made completion on the day fixed an essential term of the contract, the intimation that the vendors were not ready to complete on 22 June was capable of amounting to a repudiation which would confer on the purchasers a right to rescind. When a promise is an essential term of a contract, an announcement by the promisor before the time for performance arrives that he will not perform the promise is an anticipatory breach amounting to a repudiation of the contract conferring on the promisee a right to rescind the contract: see Laurinda Pty Ltd v. Capalaba Park Shopping Centre Pty Ltd (1989) 63 ALJR 372, at pp 380,389-390; 85 ALR 183, at pp 195-196,212. It is unnecessary, in my opinion, that an anticipatory breach be classified as "fundamental" in any other respect in order to amount to a repudiation: but cf. per Lord Diplock in Afovos Shipping Co. v. Pagnan &Flli (1983) 1 WLR 195, at p 203; (1983) 1 All ER 449, at p 455.

7. However, a repudiation by anticipatory breach does not affect the subsistence of a contract unless the promisee elects to rescind: Frost v. Knight (1872) LR 7 Exch 111, at p 112; Heyman v. Darwins, Ld. (1942) AC 356, at p 361. Absent an election by the promisee to rescind, both parties remain bound by the contract, and the promisor may take advantage of any supervening circumstance which justifies him in refusing to perform when the time for performance arrives: Bowes v. Chaleyer (1923) 32 CLR 159, at pp 169,192,197-198; Peter Turnbull &Co. Pty.Ltd. v. Mundus Trading Co. (Australasia) Pty.Ltd. (1954) 90 CLR 235, at pp 250,261; and see, for example, Avery v. Bowden (1856) 6 El &Bl 953 (119 ER 1119); Arcos, Ld. v. E.A.Ronaasen &Son (1933) AC 470. The purchasers did not elect to rescind for repudiation by anticipatory breach and the contract was subsisting on 22 June, the day fixed for completion. The purchasers elected to rescind for an actual breach by the vendors in failing to complete on 22 June. The question is whether the failure by the vendors to complete on that day was a breach of contract.
The effect of an intimation of non-performance on mutually dependent obligations under a subsisting contract.

8. The obligation of a vendor to deliver a conveyance and the obligation of a purchaser to pay the price on completion are mutually dependent and concurrent obligations in the absence of any contrary stipulation; each obligation is to be performed in exchange for the other: Palmer v. Lark (1945) Ch 182, at pp 184-185. Where the respective obligations of parties to a contract are mutually dependent and concurrent, the primary rule is that neither party who fails to perform his obligation when the time for performance arrives can rescind for the other party's failure at that time to perform his obligation. Each party's obligation is conditional on performance by the other; neither can complain of non-performance by the other when the condition governing the other's obligation goes unfulfilled. But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed from a nugatory tender of performance. Lord Mansfield said in Jones v. Barkley (1781) 2 Dougl 684, at p 694 (99 ER 434, at p 440):
"The defendant pleads, that the plaintiff did
not actually execute an assignment and release; and the question is, whether there was a sufficient performance. Take it on the reason of the thing. The party must shew he was ready; but, if the other stops him on the ground of an intention not to perform his part, it is not necessary for the first to go farther, and do a nugatory act." This passage was cited with approval by Dixon C.J. in Peter Turnbull, at p 247. In that case, Dixon C.J. pointed out that acting upon an intimation that tender of performance will be nugatory is equivalent to being prevented from performing one's obligation. He said (at pp 246-247):

" Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co. ((1787) 1 TR 638 (99 ER 1295)). But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention."

9. In Laird v. Pim (1841) 7 M &W 474 (151 ER 852) purchasers, who had been let into possession before completion, refused to pay the purchase price. The vendor, suing in assumpsit for the price, pleaded that he was ready, willing and able to complete had not the purchasers discharged him from so doing in that the purchasers "did not regard their ... promise": at p 484 (p 856). It was held on demurrer that the vendor was entitled to succeed. Parke B. said (at p 485 (p 857)):

"Upon the facts alleged in this declaration, the plaintiff is substantially in the same situation, for the purpose of recovering the money, as if all had been done on his part which he engaged to do. It does not follow that he shall recover the whole purchase- money, but he is in the same situation for the purpose of recovering damages for the non-payment of the price, as if all had been done by him."

In Cort v. The Ambergate, etc., Railway Company (1851) 17 QB 127 (117 ER 1229), Lord Campbell C.J., explaining Ripley v. M'Clure (1849) 4 Exch 345 (154 ER 1245), said (at pp 147-148 (p 1237)):

"There being an executory contract, whereby the plaintiff agreed to sell and the defendant to buy, on arrival, certain goods, to be delivered at Belfast at a certain price, payable on delivery, it was held that a refusal by the defendant before the arrival of the cargo to perform the contract was not of itself necessarily a breach of it, but that such refusal, unretracted down to and inclusive of the time when the defendant was bound to receive the cargo, was evidence of a continuing refusal and a waiver of the condition precedent of delivery, so as to render the defendant liable for the breach of contract."

This passage, cited with approval by Dixon C.J. (at p 247) and by Kitto J. (at p 250) in Peter Turnbull, illustrates the governing principle which Kitto J. stated thus:

"The principle, which applies whenever the promise of one party, A, is subject to a condition to be fulfilled by the other party, B, may, I think, be stated as follows. If, although B is ready and willing to perform the contract in all respects on his part, A absolutely refuses to carry out the contract, and persists in the refusal until a time arrives at which performance of his promise would have been due if the condition had been fulfilled by B, A is liable to B in damages for breach of his promise although the condition remains unfulfilled."

A's refusal to perform is an intimation to B that a tender of performance by B will be nugatory. (I shall hereafter follow the terminology of "A" and "B" - "A" to refer to a party who has declared that he will not perform his obligation under a contract containing mutually dependent and concurrent conditions; "B" to refer to the party to whom the intimation is given and who in reliance thereon omits to tender performance of his obligation.) Where A refuses to complete and thereby intimates to B that he need not trouble to fulfil a concurrent condition on which A's obligation to complete is dependent, B may be entitled to sue for A's actual breach though B elected not to terminate the contract before the time for completion arrived. Kitto J. said in Peter Turnbull (at p 251):

"What does it matter for the purposes of that action that the refusal was not treated as ending the contract and as founding an action for anticipatory breach? The damages claimed are not for loss of the contract by premature termination, but for loss of the benefit which performance of the contract in accordance with its terms by both parties would by now have produced to B but for the fault of A. It is a cause of action which the facts I have assumed make out, unless the non-fulfilment of the condition is an answer to it; and as to that the inescapable fact is that A's refusal was a continuing intimation that the condition need not be observed, and it did not become any the less an intimation to that effect because B chose not to determine the contract before its time. The intimation having continued until the time came when A would certainly have been in default if the condition had been fulfilled, the law, as I understand it, treats A's obligation as absolute, and holds B entitled to damages for not having got what A promised he should have in the event of the condition being fulfilled." (Emphasis added.)

Following Peter Turnbull, this Court held in Mahoney v. Lindsay (1980) 55 ALJR 118; 33 ALR 601 that a purchaser is not in breach of his obligation to complete on the day fixed for completion if he abstains from tendering the price on that day because of an intimation by a vendor that it is useless to do so since the vendor does not intend then to perform his part of the contract.

10. The reference by Dixon C.J. in Peter Turnbull to one party's "requesting" of the other party not to perform a condition suggests that the dispensing of the other party from his obligation is effected by acceptance of the request. A consensual variation of the contract may be the inference to be drawn in some cases but, more frequently, the facts will show no more than that the party to whom the intimation is given abstains from tendering performance in reliance on the intimation that he need not trouble to perform and that it will be useless for him to do so. It would be inequitable for A, having induced B to abstain from tendering performance, to assert that B's failure to tender performance when the time for completion arrives is a breach of contract by B or constitutes a failure to fulfil a condition on which A's obligation depends. The basis on which a party is dispensed from tendering performance is that an equity is raised against the party giving the intimation which is satisfied by treating him as though he had prevented the innocent party from tendering performance: see Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387. Such an equity enures for the benefit of the party who has acted on the intimation, but it does not impair the contractual obligation of the party giving the intimation.

11. A purchaser who is thus dispensed from his obligation to pay the price at the time stipulated for completion is not thereby discharged from his obligation to pay the price at some later time. A stipulation for completion on a fixed day creates both a substantive and a temporal obligation; an obligation to complete and an obligation to do so on the fixed day. A purchaser who acts on an intimation from the vendor that the vendor will complete but not on the fixed day is dispensed from his temporal obligation, so that his omission to tender the price on that day is no breach; but, unless the contract is terminated, his obligation to pay the price remains after the day fixed for completion is past. When a promisor's intimation of non-performance relates only to the temporal aspect of the promise and the promisee either cannot rescind or elects not to rescind on account of that intimation, the promisee is not forever released from the substantive obligation; he is dispensed from performance only until the promisor gives him reasonable notice that the promisor has performed or is ready, willing and able to perform his obligation. (If it were otherwise, it would be pointless for a party who has once been in default in the timeous performance of his obligation under a contract which continues to bind both parties to give to the other a notice to complete.) When no time is fixed for performance of mutually dependent and concurrent obligations and B abstains from tendering performance in reliance on A's intimation that he will not perform the contract, B must give A a notice to perform before A will commit an actual breach - as distinct from an anticipatory breach - of the contract: Carr v. J.A. Berriman Pty.Ltd. (1953) 89 CLR 327, at pp 348-349. (I leave aside cases of delay so gross as to amount to repudiation: see Laurinda Pty Ltd v. Capalaba Park Shopping Centre Pty Ltd, at pp 380-381,387; pp 196-197,208.) But it is otherwise when the time for performance is fixed by the contract. In such a case, A's temporal obligation is breached by non-performance at the stipulated time.

"Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof ... But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention."

In the course of his concurring judgment, Kitto J. referred to the case of Laird v. Pim (1841) 7 M &W 474 (151 ER 852) where the vendor of land sued for damages for non-payment of the purchase price. The defendants had been let into possession by the plaintiff vendor but had refused to pay the purchase money or complete. The plaintiff pleaded that he was ready and willing to make a good title and would have tendered a proper conveyance had the defendants not discharged him from doing so. A plea in response by the defendants that no conveyance had ever been made or executed to the defendants was held to be bad. At p 485 (p 857 of ER), Parke B. said that "the plaintiff is substantially in the same situation, for the purpose of recovering the money, as if all had been done on his part which he engaged to do. It does not follow that he shall recover the whole purchase-money, but he is in the same situation for the purpose of recovering damages for the non-payment of the price, as if all had been done by him."

15. It is necessary to deal with the decision in Braithwaite v. Foreign Hardwood Company (1905) 2 KB 543, more for the difficulty which it has caused than for the light which it shed upon the relevant principles. In that case, the plaintiff, who lived in British Honduras, contracted to sell a quantity of Honduras rosewood to the defendants by instalments. Payment was to be by cash against bill of lading. While the first consignment was on the sea, the defendants repudiated the contract and refused to accept any rosewood upon the ground that the seller had committed a breach of a collateral oral agreement not to supply rosewood to any other person in the trade. Ultimately the trial judge found that there was no such collateral agreement. After the defendants' repudiation of the contract, the plaintiff's agent informed the defendants that he had received the bill of lading for the first instalment, but the defendants again wrote refusing to take the bill of lading on the basis of their previous repudiation. When the first consignment of rosewood arrived, the plaintiff sold it as against the defendants and sought to recover the difference in price from them by way of damages. The trial judge, Kennedy J., found that the repudiation of the contract by the defendants was wrongful and that it was accepted by the plaintiff, presumably when the first consignment was sold. But he also found that a portion of the first consignment was not in accordance with the contract and that the defect would have entitled the defendants to repudiate the contract with respect to that consignment had they not previously wrongfully repudiated it. He awarded damages to the plaintiff, making allowance for the defective wood. No question arose with respect to a second consignment which was, in the absence of any collateral agreement, wrongly rejected by the defendants.

16. On appeal, Collins M.R., somewhat inexplicably in view of the finding of Kennedy J. to the contrary, treated the defendants' repudiation of the contract as not having been accepted by the plaintiff. Upon that basis he expressed the view that the act of the defendants in refusing to take the bill of lading absolved the plaintiff from the obligation of delivering rosewood in accordance with the specifications of the contract. Cozens-Hardy L.J. agreed with Collins M.R.

17. Mathew L.J., who purported to be of the same opinion, dealt with the matter (as appears from the report in (1905) 74 LJ KB 688, at pp 693-694) upon the basis that the plaintiff accepted the defendants' repudiation of the contract. He then described as "astonishing" the suggestion made by the defendants that, having discovered that their repudiation was wrongful, "they are entitled to fall back upon and to re-open the matter of the first consignment, and to say that, as they have since discovered that the plaintiff would have been in a difficulty as to the delivery of that consignment, he was not in a position to perform the conditions precedent with respect to that consignment, and therefore cannot claim any damages with respect of it."

18. There have been various explanations of the decision in Braithwaite: see, e.g., Taylor v. Oakes, Roncoroni and Co. (1922) 127 LT 267; British and Beningtons Ltd. v. N.W. Cachar Tea Co. and Others (1923) AC 48; Bowes v. Chaleyer (1923) 32 CLR 159. Whatever explanation is the correct one, the reasons of the majority in Braithwaite may be interpreted as offering support for the proposition that where a contract is repudiated by a party to it, the other party, if he does not accept the repudiation and affirms the contract, is thereby absolved from tendering further performance under the contract, at all events unless and until the repudiation is withdrawn. Put in that way, that proposition has now been found unacceptable by the House of Lords in Fercometal v. Mediterranean Shipping Co. (1988) 3 WLR 200; (1988) 2 All ER 742. In that case, Lord Ackner, whose reasons were those of the House, favoured an interpretation of Braithwaite whereby after the first general repudiation by the defendants, there was an offer by the plaintiff to tender the bill of lading in relation to the first consignment, which was refused. Upon this view that refusal constituted a second repudiation by the defendants "which was accepted by sale in the market, thereby making it irrelevant to consider any question of waiver of conditions precedent" (at p 210; p 750 of All ER). Upon that basis, Braithwaite does not support the above proposition for which it appears to be authority. On the other hand, if that explanation is incorrect and Braithwaite does support that proposition, then, in the opinion of Lord Ackner, it is wrong. In his view, which he expresses at p 212 (pp 751-752 of All ER), the correct exposition of the law is as follows:

"When A wrongfully repudiates his contractual obligations in anticipation of the time for their performance, he presents the innocent party B with two choices. He may either affirm the contract by treating it as still in force or he may treat it as finally and conclusively discharged. There is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until A gives reasonable notice that he is once again able and willing to perform. Such a choice would negate the contract being kept alive for the benefit of both parties and would deny the party who unsuccessfully sought to rescind, the right to take advantage of any supervening circumstance which would justify him in declining to complete."

19. This statement of the law, by itself, does not accommodate the earlier cases beginning with Jones v. Barkley to which Lord Ackner had earlier made reference. These cases, he said at p 205 (p 745 of All ER), "were concerned to absolve the 'innocent party' from the need to render useless performance, which the repudiating buyer had indicated he no longer wanted". The principle established by these cases may or may not be thought to provide a via media, but it is not possible to ignore them. Nor did Lord Ackner do so. However, in recognizing them, he categorized them as cases of estoppel. Thus at p 212 (p 752 of All ER), he says:

"Of course, it is always open to A, who has refused to accept B's repudiation of the contract, and thereby kept the contract alive, to contend that in relation to a particular right or obligation under the contract, B is estopped from contending that he, B, is entitled to exercise that right or that he, A, has remained bound by that obligation. If B represents to A that he no longer intends to exercise that right or requires that obligation to be fulfilled by A and A acts upon that representation, then clearly B cannot be heard thereafter to say that he is entitled to exercise that right or that A is in breach of contract by not fulfilling that obligation."

20. Turning to Fercometal itself, it is not difficult to see why Lord Ackner chose to deal first with the doctrine of anticipatory breach as a separate issue and then to introduce a qualification by way of estoppel. Indeed, it may be inaccurate to speak of estoppel as a qualification for it rests upon its own principles, irrespective of whether those principles have previously been given express recognition in the context of anticipatory breach. In Fercometal, charterers entered into a charterparty with the owners of a vessel for the carriage of a cargo of steel from Durban to Bilbao. There was no time stipulated for the loading of the vessel, but the charterers were given the option of cancelling the charterparty should the vessel not be ready to load on or before 9 July 1982. Upon forming the view that the vessel would not be available for loading by 9 July, the charterers on 2 July purported to cancel the contract. That cancellation was premature and constituted a repudiation of the charterparty by way of anticipatory breach. The owners continued to assert the availability of the vessel. On 8 July, despite the owners' assertion that the vessel was available for loading, it was clear that it was not and on 12 July the charterers sent a further cancellation notice. The owners advanced a claim for dead freight against the charterers, based upon a contention that the repudiation constituted by the first and wrongful cancellation, although not accepted, absolved the owners from any responsibility of having their vessel ready by the cancelling date, thus disentitling the charterers from cancelling on or after that date and enabling the owners to pursue their claim.

21. Clearly in that situation, there was, to use the words of Dixon C.J. in Peter Turnbull, no "additional element" which, the contract having been kept alive, could have relieved the owners of their obligations under it. Thus, speaking in the language of estoppel, Lord Ackner concluded that there was no finding of any representation by the charterers that they no longer required the owners' vessel to arrive on time let alone that the owners were induced thereby not to make the vessel ready to load by 9 July.

22. There is, in truth, no difference between the "additional element" of which Dixon C.J. spoke and the requirements of the law of estoppel, even taking the strictest view of those requirements. It is, perhaps, curious that this has not been spelt out before in the cases, but promissory estoppel is involved and the influence of the decision in Jorden v. Money (1854) 5 HLC 185 (10 ER 868) has been strong. The preservation of the doctrine of consideration was thought to depend upon the maintenance of a distinction between a representation of existing fact and a representation as to future conduct (or promise), allowing estoppel based upon the first and denying it based upon the second. But even if the notion of promissory estoppel was thought to undermine the doctrine of consideration, it never entirely disappeared. The principle which survived was expressed by Lord Cairns in Hughes v. Metropolitan Railway Co. (1877) 2 App Cas 439, at p 448, in a familiar passage as follows:

"... it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties."

The same principle was expressed by Bowen L.J. in Birmingham and District Land Company v. London and North Western Railway Co. (1888) 40 Ch D 268, at p 286, as follows:

"... if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before."

23. Certainly so much as is contained in those passages has been accepted in Legione v. Hateley (1983) 152 CLR 406 and, even within those limits, the doctrine of promissory estoppel requires no adaptation to describe the situation of a party to a contract who has been led, by an intimation of the other party who has committed an anticipatory breach, to believe that it is useless to perform his obligations under the contract and has accordingly refrained from doing so. Of course, this Court has gone further in Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387 in discerning a broader foundation for promissory estoppel and in giving it an application beyond the context of pre-existing contractual rights. For present purposes it is unnecessary to rely upon that case. It is enough to say that the principles of promissory estoppel as they were accepted in Legione v. Hateley are indistinguishable from the principles expounded in the line of cases beginning with Jones v. Barkley. There would seem to be little point in maintaining a distinction any longer.

24. I should add that although the purchasers were the plaintiffs in the action, this does not offend against the traditional view that estoppel cannot found an action - can be used only as a shield and not as a sword. Even upon that view, a plaintiff may rely upon an estoppel if he has an independent cause of action and the estoppel upon which he relies is in answer to a defence raised by the defendant rather than part of the cause of action itself: see Waltons Stores (Interstate) Ltd. v. Maher, at p 400.

25. Under the contract, the obligation of the purchasers to pay the purchase price or the balance of the purchase price was simultaneous with the obligation of the vendors to deliver a conveyance. That is to say, they were mutual or concurrent obligations, the performance of each being conditional upon the performance of the other: Palmer v. Lark (1945) Ch 182, at pp 184-185; Dainford Ltd. v. Smith (1985) 155 CLR 342, at p 365; Sunbird Plaza Pty. Ltd. v. Maloney (1988) 62 ALJR 195, at p 206; 77 ALR 205, at p 223. Not only were there concurrent obligations to settle but, an essential time having been fixed for settlement, there was an obligation on each side to settle within that time. The vendors intimated, however, that they could not settle within that time and impliedly intimated that it would be useless for the purchasers to attempt to do so. Unless there was some reason preventing them from doing so, the purchasers were entitled to rely upon the representation of the vendors as absolving them from tendering the purchase price within the stipulated time. In Mahoney v. Lindsay (1980) 55 ALJR 118, at p 119; 33 ALR 601, at p 603, Gibbs J., relying upon Peter Turnbull, expressed the situation as follows:

"The main argument submitted on behalf of the appellant was that in the circumstances it was not proved that the respondents had been absolved from their obligation to seek out the vendor and tender the purchase money. However, if one party to a contract prevents the other from fulfilling a condition of the contract, that is equivalent to performance by the latter."

26. The reason why it is said that the purchasers were not entitled to rely upon the vendors' representation is that they, the purchasers, were not ready and willing to perform their obligations because they did not then have the finance to enable them to do so. Of course, the date for settlement had not arrived at the time the vendors repudiated the contract and, as will appear, it is necessary to consider the purchasers' obligation at that time with that fact in mind. But I shall return to that aspect of the matter shortly. First it is necessary to settle the question whether the purchasers were under any obligation to prove, as plaintiffs, that, notwithstanding the vendors' repudiation, they were ready and willing to perform their obligations under the contract. Of course, readiness and willingness implies not only disposition, but also capacity: De Medina v. Norman (1842) 9 M &W 820, at p 827 (152 ER 347, at p 350).

27. In any action for breach of contract, the readiness and willingness of the plaintiff to perform those mutual obligations remaining to be performed on his part under the contract is a condition precedent to his right to recover: see Hensley v. Reschke (1914) 18 CLR 452. Under the old rules a plaintiff was required to plead that he was ready and willing but under the present rules that fact is implied with the effect that he is not required to prove it unless the defendant puts it in issue. In that event, the burden of proving readiness and willingness rests upon the plaintiff. See Supreme Court Rules 1970 (NSW) Pt 15, r.11.

28. But what if the breach is anticipatory rather than actual? The authorities have given conflicting answers to this question, but it is now clear that in cases of repudiation as well as actual breach, readiness and willingness on the part of the plaintiff is part of his cause of action. The position was clearly stated in D.TR Nominees Pty. Ltd. v. Mona Homes Pty. Ltd., at p 433:

"A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation. Otherwise he is not an innocent party, the common description of a party entitled to rescind for anticipatory breach ..."

29. Nevertheless there are those who have held a contrary view. In Bowes v. Chaleyer (at p 198), Starke J. said: "No doubt, if a party repudiates a contract and the repudiation is accepted and acted upon by the other party, then the latter is relieved from proving readiness and willingness on his part to perform the contract." See also per Higgins J. at p 192. A similar view was expressed in Taylor v. Oakes, Roncoroni and Co. (1922) 127 LT 27, and by Lord Atkinson in British and Beningtons Ltd. v. N.W. Cachar Tea Co. and Others (1923) AC 48, at p 66. And support for the proposition is to be found in the judgment of Collins M.R. in Braithwaite v. Foreign Hardwood Company, at pp 551-552, and in Y.P. Barley Producers Ltd. v. E.C. Robertson Pty. Ltd. (1927) VLR 194, at p 209.

30. The error in these cases lay, I think, in attempting to carry too far the principle that the repudiation by one party of a contract may absolve the other party from the obligation of tendering useless performance. No doubt that principle, when it applies, may reduce the extent, or alter the nature, of the readiness and willingness which a plaintiff is required to show, but there is no reason why it should eliminate the requirement entirely. A party should not be able to sue for breach if he is unable or unwilling to carry out his part of the bargain; where, in other words, he is not the innocent party. Even where a party has been absolved by the repudiating party from performing his future obligations under the contract he must show that at the time of the repudiation he was ready and willing to complete the contract had it not been repudiated. But in proving his readiness and willingness where he has been absolved from tendering performance he may not have to prove a great deal. For example, in Cort v. The Ambergate, Etc., Railway Company the plaintiffs could and did prove that they were ready and willing to manufacture railway chairs in accordance with their contract at the time it was repudiated by the defendants. But they were not required to prove that they had taken steps to manufacture the chairs in order to be able to tender them.

31. Dixon J. recognized the limited scope of the readiness and willingness required of a plaintiff in the case of anticipatory breach of a contract. In Psaltis v. Schultz (1948) 76 CLR 547, at p 560, he expressed it in this way:

"To be ready and willing to perform a contract a party must not only be disposed to do the act promised but also have the capacity to do it. But the tenor of the promise will show when and how the act is to be performed and it is to that time and mode of performance that the capacity and disposition to fulfil the promise are to be directed. It is enough that he is not presently incapacitated from future performance and is not indisposed to do, when the time comes, what the contract requires."

And in Rawson v. Hobbs Dixon C.J. returned to the question. At pp 480-481 he said:

"It is hardly necessary to say that once there has been a renunciation of a contract or of future performance of an essential obligation thereof by one contracting party, the other if he elects to treat that as an anticipatory breach discharging the contract is relieved from all further obligation to perform on his side and in consequence need not thereafter be ready and willing to do what would otherwise be his part. But that is not the question. What is the question is whether up to that point he must not be ready and willing to proceed with the contract and, as and when the time comes to do his part, so far as it is of the essence, to perform the contract on his side. ... One must be very careful to see that nothing but a substantial incapacity or definitive resolve or decision against doing in the future what the contract requires is counted as an absence of readiness and willingness. On the other hand it is absurd to treat one party as tied to the performance of an executory contract although the other has neither the means nor intention of performing his part when his turn comes, simply because his incapacity to do so is not necessarily final or logically complete."

32. In this case, the purchasers did not accept the vendors' repudiation of the contract but terminated the contract for actual breach. But the vendors' implied intimation to the purchasers that there was no point in their attempting to tender the purchase price on the due date was sufficient to alter the nature of the readiness and willingness which the purchasers were required to prove, that being put in issue by the vendors. They were not required to show that upon the day stipulated for settlement they were ready and willing to tender the purchase price. They were absolved from the obligation of placing themselves in a position to be able to tender the purchase price upon that day by reason of the representation of the vendors two days earlier. All that the purchasers were required to show was that at the time of the repudiation, that is, at the time they were absolved from future performance, there was not a "substantial incapacity" on their part or a "definitive resolve or decision" against the performance of their obligations.

33. The question whether the purchasers satisfied this onus is not without some difficulty because the trial judge directed his attention to the situation on the date stipulated for settlement rather than the situation two days before. However, the purchasers did not have to prove that they could have raised the amount needed to complete the financing of their purchase by the time stipulated for settlement. They merely had to prove that, at the time of the defendants' repudiation, two days before the settlement date, they were not incapacitated from raising that amount and had not resolved or decided against doing so. That was a relatively light burden to discharge and, upon the evidence, I think that the plaintiffs did discharge it. There is nothing in the trial judge's findings which requires a contrary conclusion.

34. Treating the situation as one giving rise to an estoppel, it can be seen that the vendors, by indicating their inability to settle and their intention of not doing so, represented to the purchasers that they did not require them to tender the purchase price and would not hold them in breach of contract for not doing so. The purchasers in reliance upon that representation did not tender the balance of the purchase price and would, upon the date fixed for settlement, have been in breach of contract if the vendors had not been estopped from denying the truth of their representation. Thus, in relying upon the vendors' representation the purchasers placed themselves at risk of non-performance - in a position of detriment - unless the vendors were kept to their word. The vendors were estopped.

35. Had the purchasers pursued their claim for damages, the question may have arisen whether, notwithstanding that at the time of the vendors' repudiation they were ready and willing to proceed with the contract and to perform their future obligations as they fell due, the purchasers were nevertheless unable to prove their loss. Subsequent events may have established that the balance of the purchase price was unavailable to them by the time settlement was due: cf. The Mihalis Angelos (1971) 1 QB 164. Had the purchasers claimed damages and been unable to prove their loss for this reason, they would have been entitled only to nominal damages.

36. But the purchasers seek only to recover the deposit paid by them. That is not a claim for damages: Christie v. Robinson (1907) 4 CLR 1338, at p 1361. It is a claim for money had and received and is based upon an imputed promise to repay, the money having been paid for a consideration that has wholly failed: Blackburn v. Smith (1848) 2 Ex 783 (154 ER 707); Sinclair v. Brougham (1914) AC 398, at pp 454-455; Christie v. Robinson, at p 1349. The purchasers are entitled to the return of the deposit.

37. I would allow the appeal.

GAUDRON J. The facts are comprehensively set out in the judgment of Brennan J. Those facts reveal that the vendors under a contract for sale of land were unable, and thus failed, to convey title on the stipulated day made essential for settlement by the contract. The purchasers, who had previously been informed of the vendors' inability, did not tender performance on the stipulated day but thereafter purported to rescind the contract. The purchasers were not themselves ready and able to settle on the stipulated day.

2. On behalf of the purchasers (the appellants in this Court) it was contended that, by failing to settle on the stipulated day, the vendors committed a breach of an essential term of the contract and that that breach entitled the purchasers to bring the obligations under the contract to an end and to recover the deposit paid.

3. Settlement of a contract for sale of land ordinarily involves, as was contemplated by the contract in the present case, the contemporaneous performance by vendor and purchaser of their obligations under the contract. Those obligations are concurrent and dependent. Thus, there is no actual breach by one party of an obligation to settle unless the other party tenders performance of his or her obligation to settle. See Dainford Ltd. v. Smith (1985) 155 CLR 342, at p 365; Sunbird Plaza Pty. Ltd. v. Maloney (1988) 62 ALJR 195, at p 206; 77 ALR 205, at p 223. In point of principle that must be so, whether or not the time of settlement has been made essential. Accordingly, the vendors could only be regarded as in breach of their obligation if their intimation to the purchasers that they would be unable to complete on the stipulated date relieved the purchasers of their obligation to tender settlement and had legal operation as if such tender had been made.

4. When one party to a contract intimates to the other that the latter's performance of a contractual obligation will be futile the latter is not required to tender performance of that obligation. See Peter Turnbull &Co. Pty. Ltd. v. Mundus Trading Co. (Australasia) Pty. Ltd. (1954) 90 CLR 235. Thus, following an intimation by one party that a tender of settlement of a contract for sale of land will be futile, the failure of the other party to tender settlement at the time made essential will neither defeat a claim by the latter party for specific performance (Mahoney v. Lindsay (1980) 55 ALJR 118; 33 ALR 601), nor put that latter party in breach of his or her obligation (Sunbird Plaza, at p 206; p 223 of ALR).

5. In Peter Turnbull Dixon C.J. stated (at pp 246-247):

"Now long before the doctrine of anticipatory breach of contract was developed it was always the law that, if a contracting party prevented the fulfilment by the opposite party to the contract of a condition precedent therein expressed or implied, it was equal to performance thereof: Hotham v. East India Co. ((1787) 1 TR 638 (99 ER 1295)). But a plaintiff may be dispensed from performing a condition by the defendant expressly or impliedly intimating that it is useless for him to perform it and requesting him not to do so. If the plaintiff acts upon the intimation it is just as effectual as actual prevention."

It is, I think, clear from that passage that his Honour contemplated that the particular result there identified was effected by operation of an estoppel. It seems likely that the operation of that estoppel precluded an assertion of non-fulfilment of the condition precedent - "it was equal to performance" although the same effect would have been achieved by waiver. See also per Kitto J. at p 252.

6. It may be appropriate in some, if not all, cases of condition precedent to treat an intimation that performance will be futile as conduct capable of creating an estoppel which operates to preclude an assertion of non-performance. However, it is otherwise in the case of an intimation that it will be futile to tender performance of a concurrent obligation to settle a contract for sale of land. If an intimation that it is futile to tender performance were to operate to preclude an assertion that performance had not been tendered, it would operate to enable a person who had not in fact tendered performance to recover damages on the basis that he or she had done so. Such a result is contrary to long-standing authority: Hensley v. Reschke (1914) 18 CLR 452, at pp 467-468. See also Henry Dean &Sons (Sydney) Ltd. v. P. O'Day Pty. Ltd. (1927) 39 CLR 330, especially at p 358; Forrestt and Son Limited v. Aramayo (1900) 83 LT 335, especially per Lord Halsbury at p 338.

7. In Mahoney v. Lindsay, Gibbs J. (with whom the other members of the Court agreed) cited with approval (at p 119; p 603 of ALR) the passage from the judgment of Dixon C.J. in Peter Turnbull set out above. However, the decision in Mahoney v. Lindsay is based on the impermissibility of drawing an inference of unreadiness or inability from the failure to tender performance and not on the operation of an estoppel. Similarly, in so far as Sunbird Plaza was concerned with the effect of an intimation that tender of performance would be futile, the issue was whether there had been an actual breach of contract rather than whether an estoppel operated to preclude the assertion of such a breach.

8. In Waltons Stores (Interstate) Ltd. v. Maher (1988) 164 CLR 387, I expressed the view (at p 458) that an estoppel may operate by reference to an assumption as to legal rights as well as by reference to an assumption as to a matter of fact. See also per Brennan J. at p 432 and per Deane J. at p 452. It may be that an intimation that it is futile to tender performance on the day made essential for settlement could ground an assumption that a right of election as between rescission and affirmation of the contract will come into existence as if performance had been tendered. If so, it would remain necessary to ascertain whether that assumption was adopted as the basis of the failure to tender performance. Questions of readiness, willingness and ability to settle would not be irrelevant to that issue. However, in my view, a consideration of estoppel is unnecessary in the present case.

9. If a party entitled to insist on the essentiality of a stipulated time in a contract for sale of land leads the other to assume that that essentiality is not being maintained time thereupon ceases to be essential: Mehmet v. Benson (1965) 113 CLR 295, per Barwick C.J. at p 303. In such a case, it is said that there has been a waiver of the benefit of the essentiality of the provision. See Green v. Sommerville (1979) 141 CLR 594, especially per Wilson J. at p 612. Thus, if both parties to a contract for sale of land in which time of completion is made essential allow the date fixed for completion to pass without tendering performance, they may, and ordinarily will, be taken to have each waived the essentiality of the requirement as to time of performance. That waiver is ordinarily inferred from the failure of one to tender performance on the stipulated day and the failure of the other to insist upon performance on the date fixed for completion or a combination of both. In such a case it is said that the contract continues on foot. But it continues on foot in what is, in effect, varied form. It is transformed from one requiring performance at a specified time to one requiring performance within a reasonable time. That transformation follows from the waiver by each party of the essentiality of the requirement as to time of performance.

10. In the present case the vendors, by their intimation that they were unable to settle on the day made essential by the contract, waived any benefit accruing to them from that essentiality and freed the purchasers from the obligation to tender settlement on that day. Being freed of the obligation, no inference of the purchasers' waiver of the benefit of that essentiality can be drawn from their failure to tender performance. The purchasers' notice of rescission, forwarded to and received by the vendors two days after the day stipulated for settlement, precludes any inference of waiver which might have been drawn if there had been mere silence on the part of the purchasers. Unless an inference of waiver is to be drawn from the purchasers' failure to accept the vendors' repudiation, evidenced by the communication of their inability to settle on the day stipulated for settlement, the situation which arose once the stipulated settlement date had passed was one in which the contract could no longer be performed according to its essential term and there existed no consensual basis for a variation of that term.

11. A party to a contract which has been repudiated may either terminate the obligations under the contract or affirm the contract. See Bowes v. Chaleyer (1923) 32 CLR 159, per Knox C.J. at p 169, per Higgins J. at p 190; Carr v. J.A. Berriman Pty. Ltd. (1953) 89 CLR 327, at p 348; Peter Turnbull, per Kitto J. at p 250; Tropical Traders Ltd. v. Goonan (1964) 111 CLR 41, per Kitto J. at p 55. A party is taken to have affirmed the contract if he or she does an act which is consistent only with its continued existence: Sargent v. A.S.L. Developments Ltd. (1974) 131 CLR 634, per Stephen J. at p 646 and per Mason J. at p 656. However, there may be situations in which delay by the party having the right to repudiate will give rise to an assumption on the part of the other party that the contract has been affirmed and in which departure from that assumption will cause detriment so that, by operation of estoppel, the former is treated as having affirmed the contract. See Sargent, per Mason J. at p 656, although his Honour dealt with the matter on the basis of prejudicial delay rather than in terms of an estoppel.

12. It was said by Lord Ackner in Fercometal v. Mediterranean Shipping Co. (1988) 3 WLR 200, at p 212; (1988) 2 All ER 742, at pp 751-752, that "(t)here is no third choice, as a sort of via media, to affirm the contract and yet to be absolved from tendering further performance unless and until (the other party) gives reasonable notice that he is once again able and willing to perform". Subject to the operation of an estoppel or waiver (as was seemingly recognized by his Lordship (at pp 212-213; p 752 of All ER) and as operated in Peter Turnbull), that is an accurate statement of the law. Thus, in the present case it was possible for the purchasers to affirm the contract and yet to be freed from tendering performance on the essential day by the vendors' waiver of the benefit of that essentiality. However, it should be emphasized that affirmation is no more than an acknowledgement of the continued existence of the contract.

13. In the present case the purchasers did not rescind upon receipt of the communication that the vendors were unable to settle on the stipulated day made essential for settlement by the contract. Even if it be accepted that this amounted to an election to affirm the contract, the obligations affirmed were the obligations brought into existence by the contract, namely, to settle on the day made essential by the contract. Nothing that the purchasers did following receipt of the communication amounted to a waiver of that essentiality. The consequence was that, once the day made essential had passed, the contract could no longer be performed according to its essential term and there was no consensus, as in the case of mutual waiver, to support a variation of that term. The conclusion to be drawn from that situation is that the contractual obligations had come to an end, and the notice of rescission operated to put the matter beyond dispute such as might arise in the event that no action were taken and it were to be asserted that that inaction amounted to waiver of essentiality. That being so, I agree with Brennan J. that the deposit was recoverable as money paid for a consideration that wholly failed.

14. The appeal should be allowed, the orders of the Court of Appeal of the Supreme Court of New South Wales should be set aside and in lieu thereof it should be ordered that the appeal to that court be dismissed with costs.

Orders

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.