Hoad v Swan

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.