deposit of 15 per cent. of the purchase money was to be paid at once, 15 per cent. eighteen months after the date of the contract and the balance by six equal half-yearly instalments. The contract also provided that time should be of the essence of the contract. The appellant paid the deposit but failed to pay the first instalment on the due date.

Held, that the respondents were thereupon entitled to determine the contract.

28 CLR 259

The respondents having subsequently to the failure to pay the first instal- ment resold the land, the appellant brought an action against them to recover damages for breach of the contract, and a verdict was given in his favour by the jury.

Held, that the question as to whether prior to the resale the respondents had elected either to determine the contract or to treat it as still subsisting not having been submitted to the jury, as upon the evidence should have been done, there should be a new trial.

Decision of the Full Court: Hoad v. Swan, 20 S.R. (N.S.W.), 131, reversed.

APPEAL from the Supreme Court of New South Wales.

By three contracts dated 22nd January 1913 Arthur Donovan Swan, William Vanstone and Frederick James Kelly sold certain land of a total area of about 633 acres to John William Hoad. The contracts provided that upon execution of the contract the purchaser should pay a cash deposit equal to 15 per cent. of the purchase money, that eighteen months after the day of sale he should pay a portion of the purchase money equal to 15 per cent. of the total purchase money, and that he should pay the balance of the purchase money in six equal instalments payable at equal consecutive periods spread over six and a half years from the expiry of the period of eighteen months, interest being charged on the balance owing from time to time after payment of the deposit at 5 per cent. per annum, payable half-yearly. The contract also provided (clause 17) that if (inter alia) the purchaser should make default in payment of the purchase money or any part of it, or interest, he should forthwith redeliver up to the vendors possession of the land, and that if he should refuse or neglect to give up posses- sion the vendors might proceed to eject him as if he were a tenant holding over after the determination of his tenancy, and for this purpose the purchaser became tenant at will of the land to the vendors. The contract further provided (clause 21) that time should be of the essence of the contract. The purchaser paid the deposit and went into possession of…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Hoad v Swan

Details

AGLC: Hoad v Swan [1920] HCA 50
Case: [1920] HCA 50
Decision Date: 26 August 1920

CaseChat Overview and Summary

The case of Hoad v Swan involved an appeal to the High Court of Australia from the Supreme Court of New South Wales. The dispute arose from a contract for the sale of land where the purchaser, Hoad, failed to pay an instalment of the purchase money on the due date. The vendors, Swan and others, subsequently resold the land and the purchaser then sued for damages for breach of contract.

The legal issues before the High Court were whether the vendors were entitled to determine the contract due to the purchaser's failure to pay the instalment, and if so, whether they had elected to do so prior to reselling the land. The contract explicitly stated that time was of the essence. The purchaser argued that his failure to pay was not a breach going to the root of the contract and that the vendors had not elected to terminate the contract before reselling.

The High Court held that, due to the express clause making time of the essence, the purchaser's failure to pay the instalment on the due date entitled the vendors to terminate the contract. However, the Court found that the question of whether the vendors had, in fact, elected to terminate the contract or to treat it as still subsisting prior to the resale had not been properly put to the jury. The evidence regarding the parties' conduct and negotiations after the default was not sufficiently decisive to allow the court to determine this issue as a matter of law.

Consequently, the High Court allowed the appeal, reversed the judgment of the Supreme Court, and ordered a new trial. The costs in all courts were to abide the result of the new trial.

Orders