H and T Trawling Co Pty Ltd v Daikyo (North Queensland) Pty Ltd

[1994] QCA 465

IN THE COURT OF APPEAL	[1994] QCA 465
SUPREME COURT OF QUEENSLAND

Appeal No. 256 of 1993

Brisbane
[H & T Trawling v Daikyo]

BETWEEN:

H. & T. TRAWLING CO. PTY. LTD.
(Plaintiff)

Appellant

AND:

DAIKYO (NORTH QUEENSLAND) PTY. LTD.
(Defendant)

Respondent

Macrossan CJ McPherson JA Demack J

Judgment delivered 03/11/1994

The Chief Justice and Demack J. delivering joint reasons.
McPherson J.A. delivering separate concurring reasons.

Appeal allowed. Judgment entered for the appellant declaring it entitled to the orders sought in paragraphs 1 and 2 of the amended statement of claim, together with an order for costs of the appeal and of the hearing below, including reserved costs, if any, to be taxed. Each party is to have liberty to lodge further written submissions on the issue of damages calculated upon a liquidated basis in accordance with the second measure stated in clause 20 of the contract between the parties and the details of the assessment made on that basis and handed down with these reasons. Those submissions are to be lodged within fourteen days from the date of publication of the Court's reasons.

Judgment on the quantum of the damages award is reserved.
The respondent is to have an indemnity certificate in
respect of the appeal pursuant to s.15 of the Appeal Costs
Fund Act 1973. The appeal record is to be altered to show
the appellant's correct name as H. & T. Trawling Co. Pty.

calculating damages - quantum of damages.

Counsel:	Mr D.B. Fraser Q.C. for the Appellant Mr L. Harrison Q.C. for the Respondent
Solicitors:	Gilshenan & Luton for the Appellant Phillips Fox for the Respondent
Hearing Date:	03/06/94

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No.256 of 1993

Brisbane

Before	Macrossan CJ McPherson JA Demack J
BETWEEN:

H. & T. TRAWLING CO. PTY. LTD.
(Plaintiff)

Appellant

AND:

DAIKYO (NORTH QUEENSLAND) PTY. LTD.
(Defendant)

Respondent

REASONS FOR JUDGMENT - THE CHIEF JUSTICE and DEMACK J.

Judgment delivered 03/11/94

This appeal is against a decision dismissing the appellant's claim for a declaration that it had validly terminated an agreement in writing and dismissing also its claim for associated relief.

The agreement in question was dated 8 October 1991 and it was for the sale of the appellant's leasehold interest in a lease "T" held from the Cairns Port Authority. In association with its principal claim the appellant sought a declaration that the deposit paid by the respondent to a stakeholder pursuant to the contract was forfeited to the appellant, damages for breach of contract and interest pursuant to the Common Law Practice Act 1867.

The date originally provided for completion of the contract was, by consent, extended eventually to 24 April 1992, but time remained of the essence. On the date fixed for completion those representing the respondent took the attitude that the appellant was not in a position to complete in accordance with the contract and on that account purported to rescind the contract.

Certain dealings between the parties on 24 April 1992 became somewhat protracted. In the early afternoon, a tender of the balance of the purchase moneys was made on the respondent's behalf but at that time an injunction obtained ex parte by certain boat owners who had been using the leasehold premises, restrained the appellant from completing the contract. Later in the afternoon, the injunction was dissolved and the appellant made a tender of performance but this was refused by the respondent on the basis of the appellant's alleged inability to deliver vacant possession due to the claims of the boat owners and the absence of consent on their part and also it was claimed that the form of assignment tendered by the appellant under the contract was not capable of immediate registration. The grounds for refusal to complete taken by the respondent, more precisely appear in a letter dated 24 April 1992 delivered to the appellant's solicitor. The appellant responded on 28 April 1992 by terminating the agreement because of the respondent's alleged default in performance purportedly acting under clause 20 of the contract.

Clause 6 of the contract declared that vacant possession should be delivered on completion, and clause 7 required the vendor to deliver to the purchaser in exchange for payment of the balance of the purchase price, "a duly executed transfer capable of immediate registration".

Clause 12 provided that the purchaser should "be entitled to make requisitions and objections (if any) on or to the vendor's title except such matters precluded by this agreement" and that the purchaser should "be deemed to have waived any requisition, objection or claim in respect of the vendor's title which (had) not been made and delivered to the vendor within fourteen (14) days from the formation of (the) agreement".

The respondent did not succeed before the trial judge on the matters relied on by it on 24 April 1992 to justify its refusal to settle. However, the judge decided that the appellant was in breach of its obligations on the settlement date because it had not obtained Ministerial approval to the assignment of the lease such as was contemplated by special condition 1.1 of the contract. In view of the wording of condition 1.1 and because of the provisions of s.64(7)(a)(ii) of the Harbours Act 1955, the judge considered that Ministerial approval was an essential matter. Special condition 1.1 is in these terms:

"This agreement is conditional upon the Vendor within forty five (45) days from the date hereof obtaining the approval in writing of the Minister and the Lessor for the transfer and assignment of the Leasehold estate forming part of the property, such approval being on terms and conditions which are satisfactory to the purchaser."

Some time after the contract had been entered into, special condition 1.1 was, by agreement between the parties, deleted from the contract, but the judge ruled that this had occurred on the basis of representations made by the appellant's solicitor to the effect that Ministerial approval had in fact been obtained. He decided that the respondent should not be held to its agreement to delete the special condition. Presumably, although it was not explicitly stated, the judge decided in this fashion on the basis that there had occurred an innocent representation as to the existence of an approval (no fraud was alleged), with the consequence that the respondent was entitled to rescind either the subsequent agreement to amend the original contract by omitting the condition or else to rescind the amended contract which resulted from the agreement to delete the condition, in either case leaving the unamended contract in place. This was not a basis which had been relied upon by the respondent on 24 February 1992 but its argument was that, having subsequently become aware of what it claimed was an absence of consent to the assignment, it was entitled to rely upon it to justify its refusal to complete in accordance with the principle appearing in Shepherd v. Felt and Textiles (1931) 45 C.L.R. 359.

Some further details should now be set out.
A letter dated 4 June 1991 was sent from the Director

(Marine and Ports) to the Cairns Port Authority advising that pursuant to s.64(7A)(a) of the Harbours Act, general Ministerial approval had been given on 24 May, 1991 to any future assignment or subletting of leases referred to in a schedule provided that certain conditions were met. The relevant lease to the appellant, described as being for dry marina purposes, appeared amongst those in the schedule.

One of the conditions of that Ministerial approval which it is material to mention here was that the lease area and conditions should not be altered in any way. The letter of advice of 4 June 1991 continued that it would, accordingly, not be necessary for the Minister to endorse his approval on any subsequent assignment or subletting documents in relation to the scheduled leases. At that date the Minister had not given his approval to the variations in respect of the rental and area of the subject lease agreed upon between the appellant and the Authority.

Section 64(3) of the Act had the effect that the Authority was not to lease harbour lands unless the Minister's approval in writing of the lease and its terms, conditions and duration, was first obtained and it was further provided that if any harbour board (which would include the Authority) should purport to lease such land without complying with the section, the lease would be void.

Section 64(7) dealing with assignment of leases was in a somewhat different form. It provided that a lessee under a relevant lease (which would include the present one) should not assign his rights except, by subs. (a)(i) with the approval of the (Authority) and of every other person having an interest in the land to which the lease related first had and obtained and, by subs. (a)(ii), in the case of a lease of harbour lands, such as the present, with the approval of the Minister first had and obtained.

Subsection 64 (7A)(a) had been referred to in the letter to the Authority dated 4 June 1991 and it provided that the relevant Ministerial approval could be granted either generally or specifically and subject to such conditions as might be specified at the time when the approval was granted. Unlike the position under section 64(3) there was no express provision that assignments of lessees' interests without the prior approval of the Minister should be void. Such an express provision being absent it would appear that the situation is governed by subs.(10) under which, in certain cases including where the lessee has contravened or failed to comply with a provision of s.64, the Harbour Board that granted the lease can, by notice in writing to the lessee, terminate the lease either forthwith or from a date to be fixed.

On 11 February 1992 the Authority sought Ministerial approval to variations of the lease to the appellant to amend the rent, to increase the area and to change the purpose of the lease from one of "dry marina". The relevant letter set out a number of particulars covering the proposed changes which it said were to be effected by the issue of two deeds of variation to the then existing lease. The first page of the letter contained a recommendation in these terms:

"It is recommended that your prior approval, pursuant to s.64(3) of the Harbours Act, be given to the two deeds of variation."

The same page also contained the statement: "further details and explanatory notes regarding the lease are attached hereto". A place was indicated on the first page for the Minister to express his approval should this be his decision and the Minister's signature with a date 12 February 1992, appears there. It was accepted by the appellant in its submissions that the lease variations in the present case technically resulted in there being a fresh demise, and that under s.64(3) there would thus be no new or varied lease until the Minister gave his written approval.

The second page of the letter to the Minister of 11 February, 1992, obviously carrying forward the intimation on the first page that further details and explanations regarding the lease were attached, set out some details and then proceeded:

"Comment:

The Authority has advised verbally that the second deed of variation document will also contain an assignment of the lease. However, your general approval to any future assignment or subletting of this lease was granted on 25 May 1991 and accordingly, your approval to the proposed assignment is not necessary.

The Division of Marine and Ports raises no
objection to the proposal".

The contention of the respondent on the hearing of the action, although not raised by way of objection or adverted to when the respondent refused to settle in April 1992, was that the Minister, having been told on 11 and 12 February that his approval to the proposed assignment was not necessary since he had already given his general approval, had not, within the meaning of s.64(7), approved the assignment. For the appellant, the argument was that the effect of what the Minister had done on 12 February 1992 when he indicated his approval by appending his signature on the first page, was that he had in fact approved the assignment. The first page of the communication of 11 February can be regarded as incorporating by reference the second page where the Minister was clearly informed that one of the deeds of variation would also contain an assignment of the lease and reminded that his general approval to future assignments had been granted in May of the previous year. The opinion there offered, that because of the Minister's prior general approval, his approval to the proposed assignment was not necessary, cannot be regarded as correct. This is because his general approval was subject to the requirement that there should be no variation to the terms and conditions of the lease and that was exactly what was here being proposed. However, the statutory requirement for Ministerial approval of assignments did not call for it to be in any particular form or even to be in writing, and the actions of the Minister in respect of the two page document placed before him on 11 or 12 February, were not irrelevant to the question whether he was approving the assignment.

The question whether or not consent has been given to a transaction is one of fact. Consent can be given in express terms or there can, in certain circumstances, be an inference of consent: Booton v. Clayton (1948) 48 S.R. (NSW) 336 and Lord Elphinstone v. Monkland Iron and Coal Co. (1886) 11 A.C. 332. In the present case the Minister, had been told that an assignment of the lease as varied was to be contained in one of the deeds of variation, and accordingly his signature indicating approval should be taken as sufficient acceptance by him of the assignment. It was not to be expected that the Minister would find it necessary to go into the circumstances of the matter before him in great depth. He had already expressed a general approval provided that the terms of the lease were not altered; in fact he had no objection to the proposed variations; he was informed that the deeds prepared to incorporate the variations would also contain an assignment and finally there was no statutory requirement that he should approve the variation in any particular fashion.

With all respect to the contrary view formed by the trial judge, it should be concluded that the Minister is shown to have sufficiently given an approval to the assignment on 12 February 1992.

This conclusion, if correct, would mean that it is not strictly necessary to consider a number of other points raised by the respondent, but it is, in the circumstances, desirable to express a view upon them.

If, within the meaning of s.64(7) of the Act there was no approval of the Minister obtained, then the consequence which might follow could depend upon whether special condition 1.1 should be regarded as remaining in the contract or as capable of being reinstated notwithstanding that agreement was reached for its deletion. The respondent sought to have the action considered on the basis that the special condition continued to bind the parties because of the misrepresentation which it alleged. If there is substance in this claim and if the Minister had not in fact given his approval to the assignment, then, even though the respondent did not purport to rely upon this ground in declining to complete on 24 April 1992, it may, under the doctrine of Shepherd v. Felt and Textiles (supra), not be too late for it to rely upon it now. This requires the alleged misrepresentation to be examined.

The respondent's pleading setting up the alleged misrepresentation relied upon a letter dated 20 December 1991 from the appellant's solicitors to the respondent's solicitors, but in argument it sought to extend the basis of its claim by relying upon a number of further documents which it said should be considered to give the letter of 20 December 1991 its full and true effect. It is convenient to summarise these now in order of date.

The appellant's solicitors wrote to the respondent's solicitors on 14 October 1991 and their letter stated in part:

"We confirm that the application referred to in special condition 1.2 has been made to the Cairns Port Authority. The Cairns Port Authority advise that a separate application to the Minister is not required."

On 29 October the appellant's solicitors wrote again to the respondent's solicitors in part stating:

"We enclose a copy of a letter dated 23 October 1991 received from the Cairns Port Authority setting out the Authority's approval to the transfer of the lease and the conditions of such approval. We have written to MacDonnells, the solicitors acting for the Authority, offering them the opportunity of preparing the `Deed of Assignment'. An officer of the Authority has advised that the Minister has given his prior approval to the transfer of the lease and we are presently seeking written confirmation of this."

The appellant's solicitors wrote again to the respondent's solicitors on 1 November stating as follows:

"Further to our letter of 29 October 1991 we now enclose a copy of a facsimile transmission dated 29 October 1991 from the Cairns Port Authority confirming the approval of the Minister.

We look forward to receiving your advices that the approvals of the Cairns Port Authority and the Minister are on `terms and conditions which are satisfactory to' your client.

As regards the termination notices to be given to the occupants of the `dry marina', we seek your urgent advices as to whether or not your client will waive its requirement regarding vacant possession of the `dry marina'."

The copy facsimile referred to as being enclosed, was one dated 29 October 1991 to the appellant's solicitors from an officer of the Cairns Port Authority and it stated:

"I refer to your letter dated 25 October 1991 and advise that the prior approval of the Minister to assign the abovementioned lease is not required.

The Minister, on 25 May 1991 gave his approval of any future assignment or sub-letting to this lease area."

While this letter is not accurate in that the Minister's prior general approval was, as has already been noted, one given on conditions, the statement of the officer of the Authority, on its face, consists of a clear unqualified assertion.

It can be accepted that the communications on this
topic passing between the solicitors for the respective
parties should be read together for their overall effect.
So regarded it should have been apparent to the respondent's
solicitors that the appellant's solicitors were merely
acting as a conduit in respect of the information being
conveyed to them, that they were not purporting to speak
with any greater authority than the information coming to
them justified, and that their letter of 20 December 1991
was not purporting to do any more than summarise the effect
of the earlier communications, as that effect appeared to
them. The respondent in alleging a relevant
misrepresentation relied both upon the claimed effect of a
misrepresentation under the general law and upon ss 52 and
87 of the Trade Practices Act. It was said that the
communications from the appellant's solicitors were, within
the meaning of s.52(1) of that Act either misleading or
deceptive or were likely to mislead or deceive. Yorke v.
Lucas Pty Ltd (1985) 158 C.L.R. 661, especially at 666 was
referred to.

Notwithstanding that the solicitors for the appellant in their final letter on this topic did not add any express disclaimer, it is clear and would have been clear to the respondent's representatives that they were limiting their role to passing on information received for what it was worth, adding their own view of what it was worth on a basis which could be clearly perceived and was not likely to deceive. These communications would have left the respondent's solicitors free to make their own confirming enquiries had they wished.

The solicitors for the respondent, since this point is now raised, had the burden of showing that they were induced by something amounting, on general principles, to a misrepresentation or, under the Act, that the appellant's solicitors had engaged in conduct that was misleading or likely to mislead. From neither point of view did the case they led at trial establish this. The relevant witness for the respondent at trial was Ms Frangos and she gave evidence that was ambiguous in her reference to the communications which, on this topic, had significance for her. On one view her evidence might be thought to refer to the letter from the Cairns Port Authority which stated that the Minister had given his approval, that is the facsimile of 29 October 1991, or perhaps her evidence might have been intended to refer to the letter from the appellant's solicitors of 29 October 1991 conveying simply what an officer of the Authority had advised. If the respondent is to succeed in making its point on this issue it would be necessary for it to have led evidence which was sufficiently unambiguous and which demonstrated not only a reliance by it but also a misrepresentation attributable to the appellant. It should not be accepted that the respondent has discharged this onus. It would follow that if the conclusion which has already been stated, namely that the Minister should be taken as having approved the assignment is not correct, the respondent is nevertheless not entitled to have its rights determined upon the basis that special condition 1.1 should be regarded as remaining in the contract.

If there is error in the conclusion that the Minister should be taken as having approved the assignment but special condition 1.1 was, by agreement, deleted from the contract, what would follow? There would then be no breach of condition on which the respondent could rely and, at best, it would be left to make a case as best it could upon the effect of the Harbours Act in the circumstances. The difference between a failure to comply with s.64(3) where there is a lease without Ministerial approval and the lease is then declared void and a failure to comply with s.64(7) where there is an assignment of a lease without Ministerial approval and the subsection makes no express statement upon the effect of that circumstance, is a matter to which, in the overall construction of the section, an effect should be given. The difference in wording should be regarded as significant especially when subs.(10)(c) specifically provides for a consequence to attach to a failure to comply with subs.(7) and other provisions of s.64. The consequence under subs.(10)(c)(i), is that the Harbour Board that granted the lease may, by notice in writing to the lessee, terminate it. In the present case the Harbour Board in question, which was the Authority, would not be entitled to terminate the lease. It made clear representations to the appellant that Ministerial approval had been obtained so that it would be estopped from claiming to the contrary and also, because with knowledge of the circumstances it continued to deal with the appellant in respect of its lease and the assignment proposed by it, it could be said that it had waived any right to rely upon a failure to comply with subs.(7) consisting of the absence of a Ministerial approval. Therefore, there would on this ground be no defect in title affecting the assignment which the appellant was able to offer on 24 April 1992. Additionally, if it could be said that there was, in fact, a defect in title in the circumstances just discussed, it would not be a matter upon which the respondent was entitled to rely as a basis for a refusal to complete its contract. Clause 12 of that document provided that the purchaser could make requisitions and objections to title but should be taken as having waived any such which it had not made within fourteen days of the date of the contract. It is an additional fact of consequence that if an objection based upon the alleged absence of Ministerial consent to the assignment had been made in good time, then there is every indication that the appellant would have been able to meet the objection by obtaining more explicit Ministerial approval. Also, the effect of s.57A of the Property Law Act probably is that the appellant had until the date fixed for settlement, namely 24 April 1992, to comply with the condition for obtaining Ministerial consent, that is, if it should be regarded as not having been granted on 12 February 1992, a conclusion which has already been rejected.

The result is that the respondent should be regarded as having failed on its main point of contention and on the further points which it raised associated with that matter.

The trial judge's conclusion that the appellant was able to give vacant possession at settlement should be accepted as correct and also it should be concluded that the respondent was not, in any event, entitled to rely on this point to avoid settlement. It appears to be a proper conclusion that the boat owners whose claims were outstanding at settlement, had licences only and that those rights were sufficiently clearly terminated by proper notice prior to settlement. This is so even though some of them were disposed to continue with the litigation they initiated notwithstanding that the preliminary injunctions had been dissolved. Certainly a purchaser will not be compelled to accept a title offered by a vendor when sufficient doubts attach to it (see the discussion on this point at Cawood v. Infraworth Pty Ltd (1990) 2 Qd.R. 114 at 120, for example), but here the purchaser, if it wished to object, was obliged to have taken steps earlier. There are indications in the evidence that the purchaser itself caused delays in dealing with the boat owners for purposes of its own and was responsible for the state of the relationship with those parties which persisted up to the settlement date, thereby depriving the vendor of an earlier opportunity to reach accommodation with them. Accordingly the respondent should be regarded as estopped from raising this particular objection which was one it should clearly have raised earlier under clause 12 of the contract. It could have insisted on resolution of the doubts concerning the position of the boat owners resulting in their removal at an earlier date.

A number of other points were raised in the respondent's submissions but they lacked substance and can be dealt with briefly.

It was said that under clause 7 of the contract the vendor was obliged to deliver to the purchaser "a duly executed draft ... capable of immediate registration" and it was suggested that this required that the leased land should be brought under the provisions of the Real Property Acts so that a title available for registration under those Acts could be offered. The phrase quoted, however, should be given its meaning according to the context in which it is found and with due regard for the nature of the interest being dealt with by the assignment. It was sufficiently established that leases and assignments of harbour lands are dealt with quite informally and, in effect, that their existence would customarily merely be noted in departmental records. The title offered by the appellant at settlement should be taken in these circumstances to be in conformity with the phrase quoted from clause 7 of the contract.

Further, under clause 27 of the contract the obligation fell on the respondent as purchaser to prepare the necessary transfer documents and deliver them to the vendor at least fourteen days prior to completion. This point, for what it is worth, (and it does not appear to have substance) is not one now available to the respondent.

A further objection of the respondent is that no covenant for title was offered by the appellant at settlement but the short answer to this is that even if the appellant had been obliged to offer such a covenant had it been sought, none was asked for. Clause 12 can again be referred to. It provided that there should be a deemed waiver in respect of objections to title which were not raised in accordance with the clause, and no relevant objection was raised at the time.

It was then said that some difference had been introduced under the lease in respect of the rent calculation with the rent, rather than being calculated on the value of the land, becoming a rent to be increased accordingly to CPI variations. Once again, no objection was made on behalf of the respondent to the modified basis for rental calculation. Indeed the evidence at the hearing does not provide any indication that this matter was material to the purchaser. The trial judge has held that the respondent was offered at settlement, the lease "T" which it had contracted for and no sufficient reason appears to depart from this conclusion, or to ignore the absence of objection by the respondent at relevant times.

The conclusions which have been expressed mean that the appeal must succeed with the consequence that in addition to declarations sought, the appellant should be adjudged entitled to damages for breach of contract together with interest. In this respect, the trial judge has found that amounts stated in paragraph 14 of the amended statement of claim should be modified. He has accepted the evidence given by the valuer, Mr Duffield. Although the respondent, in its submissions, contended that Mr Duffield's evidence should not be accepted, no sufficient reason was demonstrated for departing from the judge's conclusion.

This may be accepted, notwithstanding that Duffield's valuation which attributed $270,000 as the market value of the property at the date of the respondent's breach in April 1992 had to allow for the different levels of market value which might be thought to be indicated by the two sales at higher figures in October 1992 and February 1993. A separate submission of the respondent is that in the events that happened, the appellant was entitled, under clause 20 of the contract, only to the deficiency in price upon resale with incidental expenses, but not to a sum calculated under an alternative measure of damages for breach.

There was a resale of the property to a different purchaser under a contract dated 11 February 1993 and it was completed on 27 April 1993 at a price of $455,000. If the correct measure of damages is to be calculated by regarding the resale price rather than by considering damages for breach under the common measure, then the evidence of Mr Duffield loses importance. Although the respondent contended that the appellant was entitled under clause 20 only to the deficiency on resale and related expenses, the appellant urged that the contract gave it a free right to elect as between the two measures unrestricted by the events which happened. The trial judge has not gone on to assess damages although he made the limited findings already mentioned. On the hearing of the appeal, an opportunity was afforded to the parties to make supplementary submissions dealing, amongst other issues, with the question of damages.

The submissions of the parties, especially those of the respondent, on the issue of damages, were not particularly extensive. It would be possible now to invite further written submissions from the parties or to direct a further hearing on the issue of damages before the trial judge.

However, in view of the fullness of the opportunity already given to the parties to make submissions, the best course seems to be for this Court to make an assessment on the material before it without formally pronouncing judgment for a particular sum and reserving liberty to apply in respect of the details of the calculation. Something further should now be said on the applicable measure of damages.

The nature of the election given under clause 20 may, in this case, have been affected by the events which have happened. The relevant portion of clause 20 is as follows:

"DEFAULT

If the Purchaser defaults in the observance or performance of any obligation imposed on the Purchaser hereunder or by virtue hereof, the Vendor shall be entitled to either affirm or terminate this agreement.

If the Vendor affirms this agreement, the Vendor shall be entitled to sue the Purchaser either for damages for breach or for specific performance and damages in addition to or in lieu thereof. If the Vendor terminates this agreement, the deposit paid by the Purchaser (except so much of it as exceeds ten percent [10%] of the purchase price) shall be forfeited to the Vendor and the Vendor shall be entitled to elect to either sue the Purchaser for breach or to resell the Property as owner and, if the resale is completed within two years from termination of this agreement recover from the Purchaser as liquidated damages any deficiency arising from such resale and all expenses of and incidental to such resale, any prior attempted resale and the Purchaser's default. ... The rights and powers conferred on the vendor by this clause are in addition and without prejudice to any other right or power which may be conferred on the vendor at law or in equity."

The appellant did not sue for breach and obtain judgment on that basis before re-selling, but, on the contrary, has chosen to re-sell and complete the resale within the two years period running from the breach. This might have the effect, on a proper construction of the clause, of restricting the appellant to liquidated damages consisting of "any deficiency arising from such resale and all expenses of and incidental to such resale, ... and the purchaser's default". Although the appellant contended that the right of election in respect of the measure of damages under the clause remained open and the respondent contended that it had been lost neither counsel cited any authority bearing upon the effect of the clause. The issue was simply left with the court as a matter to be decided by construing the words which appear in the clause.

Although the wording of the statement of claim might be thought to allow room for argument whether the appellant was placing any reliance on the concluding words of clause 20, the appellant's argument before this Court made it sufficiently clear that it was relying only on the two alternatives expressed first within the clause and not upon any further right (if it should differ from the first alternative) of having its damages assessed under any general principles of law or equity.

It seems that the proper conclusion to adopt is that the choice originally open to the appellant has been confined by the fact of the resale which it has chosen to complete within the two year period. This followed its nomination of the rights under clause 20 as the basis upon which it was terminating the contract (see its solicitor's letter dated 28/4/92). The appellant's damages should thus be assessed upon the liquidated basis in accordance with the second measure stated in clause 20. Some observations relevant to that calculation should now be made.

The adjusted contract price under the original contract which was due for completion on 24 April 1992 is shown by the settlement statement dated 24/4/92 as $548,441.68 (the appellant's supplementary written submission seems to state this figure incorrectly at $543,265). The difference between $548,441.68 and the resale contract price of $455,000 becomes an important component of the liquidated damages total. The expenses listed in paragraphs (a), (d), (e), (f) of paragraph 14 of the amended statement of claim can, under clause 20, be regarded as expenses to be added if the award is made on a liquidated damages basis. The outgoings mentioned in (a) may be considered to be expenses incidental to the purchaser's default and those in (d) similarly, while those in (e) and (f) appear to be expenses of and incidental to the re-sale. The appellant pressed for these items to be included and the respondent made no submission relating to them. The trial judge has corrected the amount which appeared in (f). The amounts referred to in paragraphs (b) and (c) of paragraph 14 were not claimed by the appellant in its calculation of damages on a liquidated basis and so need not be further considered.

The appellant pressed for "interest" under (g) of paragraph 14 of the statement of claim. Described as interest, there would appear to be difficulties in claiming the amount in question. Amounts will not be claimable unless they are embraced by the formula which is specified in clause 20 for calculating liquidated damages. See Rossco Developments Pty Ltd v. O'Halloran (1980) 42, F.L.R. 236 and Hoskins v. Rule (1952) G.L.R (NZ) 565. Portion of clause 23 was relied on in support of the claim. This clause reads in part as follows:

"Interest on late payments.
If any money (including the deposit) payable by the
Purchaser under or by virtue of this agreement is not
paid when payable, such moneys shall bear interest at
the Default Interest Rate from the due date for payment
to the date of payment. Any judgment in respect of any
such money shall bear interest at the same rate from
the date of judgment until payment ... "

Clause 20, under which the damages on a liquidated basis must be claimed, includes a reference to:

"Any deficiency arising from such resale and all expenses of and incidental to ... the Purchaser's default."

Clause 23 may be regarded as a mechanism to continuously adjust the settlement figure during any period when the purchaser's default continues. By affecting the sale price, it will control the amount of the calculated deficiency which will finally be established at the date of resale. An alternative view may be that this addition to the outstanding purchase price can be regarded as a deficiency or an expense of and incidental to the purchaser's default. On either basis, and especially perhaps the former, the amounts claimed for interest in (g) and (h) of the particulars in paragraph 14 referred to in the assessment of damages, can be regarded as falling within the formula in clause 20 and so allowable. Counsel for the respondent presented no argument against the allowance of these items.

A general claim for interest on part of the judgment
sum was also made. The principal sum on which the claim was
made was $128,029.12 but even if the claim should be
conceded, this sum seems to have been wrongly calculated.
The correct figure to which reference should have been made
seems rather to be $133,205.80 made up by the contract
deficiency of $93,441.68 and the figure of $39,764.12 (made
up by the addition of the amounts assessed under
subparagraphs (a), (d), (e) and (f), of the particulars of
claim but not including those appearing in (g) and (h)). In
his written submissions, the appellant's Counsel sought
interest pursuant to clause 23 at the contractual default
rate on this amount for the period from trial to judgment.
However, there appears to be no proper basis for making this
allowance if damages are to be assessed on a liquidated
basis under clause 20 because there is no reference to it in
the clause. Attached to these reasons are details of the
assessment of damages made on a liquidated basis.

Although the conclusion has been reached that damages should be assessed upon a liquidated basis, in case it should be decided elsewhere that this view is incorrect an assessment on the basis of unliquidated damages for breach has also been made and for the value it may have, details of that assessment are also attached. The appellant, in its supplementary written submissions, did not seek interest at the default rate from trial to judgment on any assessment made on this basis.

The statement of claim asks for damages under the Common Law Practice Act. When the assessment is made on a liquidated damages basis, there is no justification for adding interest under s.72 of the Common Law Practice Act since an allowance under clauses 20 and 23 in respect of the purchase price component of the damages is already made in the calculation. If damages were to be assessed on a general basis for breach of contract under the alternative heading in clause 20, it would be appropriate to add interest at 10% to the amount of the award.

The appeal should be allowed and judgment entered for the appellant declaring it entitled to the orders sought in paragraphs 1 and 2 of the amended statement of claim, together with an order for costs of the appeal and of the hearing below, including reserved costs, if any, to be taxed. Each party is to have liberty to lodge further written submissions on the issue of damages calculated upon a liquidated basis in accordance with the second measure stated in clause 20 of the contract between the parties and the details of the assessment made on that basis and handed down with these reasons. Those submissions are to be lodged within fourteen days from the date of publication of this Court's reasons. Judgment on the quantum of the damages award is reserved. The respondent is to have an indemnity certificate in respect of the appeal pursuant to s.15 of the Appeal Costs Fund Act 1973. The appeal record is to be altered to show the appellant's correct name as H. & T. Trawling Co. Pty. Ltd.

ASSESSMENT ON THE BASIS OF LIQUIDATED DAMAGES

Contract price October 1991 $500,000.00

Additions as per settlement statement dated 24 April 1992$48,441.68

$548,441.68

Subtract resale price under contract completed April 1993 $455.000

Provisional deficiency in purchase price on resale	$93,441.68
Add amounts specified in (a), (d), (e), and (f) of
paragraph 14 of the particulars of the
Statement of Claim ((d) corrected by the
trial judge)	$37,764.12

Subtotal:  $133,205.80

Add interest claimed pursuant to Clause 23 of the
contract at scheduled default interest rate of 17%
on adjusted original contract price $548,441.68 less
$50,000 deposit, held until date of resale,

i.e. on $498,441.68	$85,431.50
Add also interest pursuant to Clause 23 of the contract
at 17% on $43,441.68 (being the amount of the
original contract price adjusted figure
for settlement and allowance of the deposit
in hand less contract price on re-sale).	$3,945.45 Under Clause (h)

TOTAL $222,582.75

Less Deduction accepted by Counsel for the

appellant as value of "rents and profits" $1,360.00

AWARD TOTAL $221,222.75

ASSESSMENT ON ALTERNATIVE BASIS OF DAMAGES FOR BREACH

Adjusted original contract price	$548,441.68
Less market value at date of breach (as per Duffield)	$270,000.00

Assessment of damages	TOTAL	$278,441.68
Add interest at 10% from date of breach to date of judgment
IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND

Appeal No. 256 of 1993

Brisbane

Before Macrossan C.J. McPherson J.A. Demack J.

[H & T Trawling v. Daikyo Pty. Ltd]

BETWEEN

H. & T. TRAWLING CO. PTY. LTD

(Plaintiff) Appellant

AND

DAIKYO (NORTH QUEENSLAND) PTY. LTD

(Defendant) Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered the 3rd day of November 1994

I have had the advantage of reading what is said by the Chief Justice and Demack J. in their judgment in this matter. For the reasons they have given, I agree that the appeal should be allowed. I wish only to add some further considerations in support of that conclusion.

The right of the respondent to refuse to complete the contract rests ultimately on the proposition that at the date fixed for completion, which was 24 April 1992, the appellant was not in a position to assign the lease from the Cairns Port Authority that was the subject matter of the contract. The reason, so it was said, was that the necessary approvals for a valid assignment of the lease had not then been obtained in conformity with the provisions of s.64(7)(a) of the Harbours Act 1955.

Section 64(7)(a) inhibits the assignment of a lease granted under that section by a Harbours Board except with the approval (i) of the Board, and (ii) of the Minister.

However, in giving approval on 12 February 1992 under s.64(3) to the two deeds of variation of the lease referred to in the letter dated 11 February from the Port Authority, the Minister must, in the circumstances, be taken also to have approved the assignment to which it was assumed he had on 25 May 1991 previously given an effective general approval under s.64(7A)(a) of the Act. The assumption was, as it happened, mistaken because the variations in question were such as in law to bring about a new demise. The Minister was nevertheless fully informed of what the transaction in fact involved and it was to it that his approval was directed. It could make no difference that the precise legal implications and effect of the transaction were not spelled out to him.

Although s.64(7) proscribes an assignment without approvals, it does not specify what consequence is to follow if the requisite approvals are not obtained. By s.64(3), a lease granted without the approval of the Minister is expressly declared to be void : cf. Queensland Television Ltd. v. F.C.T. (1969) 119 C.L.R. 167. There is no comparable provision in the case of an assignment without approval. Section 64(10)(c)(i) goes only so far as to provide that, if a lessee fails to comply with a provision of s.64, the Harbour Board may by notice in writing terminate the lease.

Decisions under similar legislation show a strong disposition to approach leases granted by the Crown or public instrumentalities under statutory powers like s.64 of the Act as being subject to the rules of the general law except to the extent that those rules are excluded by express provision or necessary implication. In American Dairy Queen (Qld.) Pty. Ltd v. Blue Rio Pty. Ltd (1981) 147 C.L.R. 677, this state of affairs was ascribed to the principle that statutes are construed in conformity with the common law, which it was suggested might possess "added force in relation to common law principles respecting property rights". In that instance, a statutory prohibition against assignment of a lease was held not to prevent assignment or sublease by a sublessee, "whose right to assign and otherwise deal with his interest is a right of the tenant at common law". Likewise, in Davenport v. The Queen (1877) 3 App. Cas. 115, the Privy Council held that principles of the general law relating to waiver of forfeiture were not excluded by Queensland Crown lands legislation to which the leases were subject. See also State of Queensland v. Ling [1993] 1 Qd.R. 343, 349-350.

Under the general law an assignment without consent of the lessor does not of its own force determine the lease even if it takes place in contravention of a condition that is expressed to avoid the lease. See Owendale Pty. Ltd v. Anthony (1961) 117 C.L.R. 539, 589. There is, as was pointed out in Davenport v. The Queen (1877) 3 App. Cas. 115, 128-129, a long line of compelling authorities to that effect. In such a case the consequence is at most to confer on the lessor a right to elect whether or not to terminate the lease, which will be lost by waiver or affirmation.

"Anything which a landlord does or says which is an
unequivocal recognition of the continued existence of the
lease when he is aware of facts which would have given him a
right of re-entry will amount to a waiving of that right".
Owendale Pty. Ltd v. Anthony (1967) 117 C.L.R. 539, 556-557.

Davenport v. The Queen stands as authority that the general doctrine of waiver is capable of applying to a lease granted under statutory provisions of this general character. Far from displacing that doctrine, the provisions of s.64(10)(c)(i) tend to confirm that an assignment of a harbour lease in contravention of s.64(7) will give rise not to an automatic determination of the lease but at most to a power to terminate it. There has never been anything here to suggest that as lessor the Cairns Port Authority had it in mind to terminate the lease; on the contrary, it is clear that its conduct has been such as to constitute a waiver of any right it might have to give a notice in writing terminating the lease pursuant to s.64(10)(c)(i).

In these circumstances, the appellant was on 24 April 1992 in a position to transfer to the respondent a title to the subject lease which as purchaser it was not justified in refusing to accept, and which by the operation of cl.12 of the contract it had probably earlier lost the right to reject. There is a presumption that the subject matter of a sale is the whole of the vendor's interest in the land, which in this case is the appellant's leasehold interest under the Harbours Act. When, as was the case here, that fact was known to both parties, it would require considerably more than the reference in cl.7 of the contract to "a draft ... capable of immediate registration" to justify the conclusion that what was contracted for was a title registrable under the Real Property Acts.

The issue of damages raises other questions that have been made more difficult by the limited scope of the submissions received from the parties on appeal. Conditions similar in form to cl.20 are not uncommon in contracts of this kind, and have been the subject of judicial consideration or comment on a number of occasions in the past. See for example, Holland v. Wiltshire (1954) 90 C.L.R. 409; Cooper v. Ungar (1958) 100 C.L.R. 510; and Coates v. Sarich [1964] W.A.R. 2. From these authorities and from the terms of the clause itself, it sufficiently emerges that a condition in this form confers an option exercisable at the election of the vendor; but that it is one which, once exercised, may not ordinarily be departed from. Here it is, I agree, clear from the solicitors' letter of 28 April 1992 that the appellant was electing to exercise the second of the two options in cl.20, which was to terminate the contract, resell, and recover any deficiency as liquidated damages on completion of the resale within two years. In Cooper v. Ungar (1958) 100 C.L.R. 510, 514, it was said that in such a case the cause of action is "for the balance of money the title to which is reserved under the contract". This has the consequence, as cl.20 itself contemplates, that the deposit paid by the purchaser must be brought into account : see Pitt v. Curotta (1932) 49 W.N. (N.S.W.) 107, which is a result that accords with the general rule in assessing damages apart from such a clause in the contract : Cowan v. Stanhill Estates Pty. Ltd (No. 2) [1967] V.R. 641, 648-649. One would be inclined to expect that, if the appellant is entitled under cl.20 to claim outgoings such as rates on the property, it would also be bound to account for any income received from that source during the period pending the resale : cf. Pitt v. Curotta (1931) 31 S.R. (N.S.W.) 477.

Some of these matters were not the subject of specific submissions by the parties to the appeal, and like the Chief Justice and Demack J. I would prefer to receive more detailed submissions before reaching a final conclusion on them.

I agree with the orders proposed by the Chief Justice

and Demack J.