Houghton & Anor v Arms

In *Houghton & Anor v Arms*, the High Court of Australia considered a dispute concerning the enforceability of a contract for the sale of land. The purchasers, Mr Houghton and Mr. and Mrs. Smith, sought to enforce the contract against the vendor, Mr. Arms, who had sought to resile from the agreement.

The central legal issue before the High Court was whether the purchasers had validly exercised their contractual right to extend the settlement date. This turned on the interpretation of a clause in the contract which stipulated that the purchasers could extend the settlement date by giving notice in writing, provided that such notice was given "at least 7 days before the settlement date". The vendor argued that the notice of extension was not validly given as it was not received by him at least 7 days prior to the original settlement date.

The High Court, by majority, held that the purchasers had validly exercised their right to extend the settlement date. The Court reasoned that the phrase "at least 7 days before the settlement date" referred to the date on which the notice was given, not the date on which it was received. The majority adopted a literal interpretation of the clause, finding that the notice was given on a date that was seven days or more prior to the settlement date. The Court affirmed the principle that contractual terms should be given their ordinary and natural meaning unless there is a clear indication to the contrary.

The High Court dismissed the appeal, upholding the decision of the primary judge and the Court of Appeal.