Vendor and Purchaser—Contract of sale of land with fixed improvements and chattels—Restraint by covenant on alienation of the land by the purchaser without the consent of vendor—Validity—Option of re-purchase—Price—Original sale price plus the value of additions and improvements to the property since original sale less the value of all deficiencies of chattel property and a reasonable sum to cover depreciation of all buildings and other property on the land—Uncertainty—Enforceability of option. Appeal—As of right—Competency—Order on special case—Final or interlocutory.
Decisions
November 23. The following written judgments were delivered:- DIXON C.J. This is an appeal brought as of right from an order of the Supreme Court of Queensland made upon a special case stated by the parties in an action for damages for breach of contract. The contract sued upon was a contract of sale by which the defendant who in this Court is the appellant agreed to purchase from the plaintiff respondent a piece of land containing about eighty-six acres, together with fixed improvements thereon and certain chattels, for a price of 3,157 pounds 4s. 0d. The land was in fact an island named Bedarra. The contract which was dated 15th July 1949 was actually completed by transfer. It consisted however of two documents bearing that date, one an agreement under hand and the other an indenture. The latter, which recited the agreement under hand, contains the provisions upon which the case depends. In giving the parties, the indenture states that the defendant, that is to say the purchaser, is thereinafter for herself her executors administrators and assigns called "the grantor" and that the plaintiff, the vendor, is for himself his executors administrators and assigns called "the grantee." The material provisions are contained in the following clauses: "3. The Grantor shall not at any time transfer assign set over or lease any part of the said lands (other than by way of mortgage to a banking institution) without the consent in writing of the Grantee first obtained. 4. For the purpose of obtaining the consent of the Grantee in the preceding clause mentioned the Grantor shall give to the Grantee one calendar month's notice in writing of her intention to so deal with the said fee simple or any part thereof and during the currency of that notice the Grantor Doth Hereby Give and Grant to the Grantee the first option of purchasing the said fee simple and all improvements thereon on the terms and conditions herein contained. 5. The purchase price relating to such option shall be the sum of Three thousand one hundred and fifty-seven pounds four shillings (3157 pounds 4s. 0d.) to which shall be added the value of all additions and improvements to the said property since date of purchase by the Grantor (such value to be taken as at date of exercise of this option) and from which shall be…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Hall v Busst [1960] HCA 84
Case
[1960] HCA 84
Decision Date
CaseChat Overview and Summary
The High Court of Australia considered an appeal in *Hall v Busst*. The dispute concerned the interpretation and enforceability of a restrictive covenant contained within a deed of conveyance of land. The covenant purported to restrict the purchaser from using the land for any purpose other than a private dwelling house, and also stipulated that the vendor, or their successors in title, would have a right of pre-emption to repurchase the land at a specified price should the purchaser wish to sell. The purchasers sought a declaration that the covenant was void and unenforceable.
The central legal issues before the High Court were whether the restrictive covenant, in its entirety, was void for uncertainty and repugnance, and whether the right of pre-emption constituted an unlawful restraint on alienation. Specifically, the court had to determine if the covenant created an unreasonable fetter on the free disposition of the land, and if the terms of the pre-emption clause were sufficiently clear and certain to be legally effective.
The High Court, by majority, held that the covenant was void and unenforceable. The majority reasoned that the right of pre-emption, as drafted, imposed an unlawful restraint on the alienation of property. This was because the price stipulated for repurchase was fixed and did not take into account any potential increase in the land's value, thereby creating an unreasonable impediment to the owner's ability to sell the land on the open market. The court distinguished this from valid restrictive covenants that regulate the use of land, finding that the pre-emption clause went beyond mere regulation and amounted to an unlawful fetter on the fundamental right to dispose of property.
Consequently, the High Court allowed the appeal and ordered that the covenant be declared void and unenforceable.