King v Poggioli

Case [1923] HCA 11


32 CLR 222

ON APPEAL FROM THE SUPREME COURT OF

NEW SOUTH WALES, Vendor and Purchaser-Day named for delivery of possession-Refusal to give posses-

sion on day named-Suit for specific performanceJurisdiction of Court of Equity to award damages arising out of refusal to give possession-Readiness and SYDNEY,

willingness--Abatement of purchase-money-Diminution or deterioration in value Sept. 15, 18,

of property - Breach of contract - Measure of damages - Equity Act 1901 (N.S. II'.) (No. 24 of 1901), sec. 9. * April 26,

By an agreement in writing the appellant agreed to sell to the respondent a certain pastoral property, and it was thereby provided that delivery of * Sec. 9 of the Equity Act 1901

tract, covenant, or agreement the (N.S.W.) provides that 'In all cases

Court may award damages to the party in which the Court has jurisdiction to

injured either in addition to or in sub entertain an application the specific performance of any con-

32 CLR 223

possession should be given and taken on a named day, 31st March 1920, on which the balance of purchase-money should be paid and transfers executed. The respondent brought a suit against the appellant in the Supreme Court of New South Wales in its equitable jurisdiction, claiming specific performance, and damages by way of compensation for the delay of the appellant beyond the named day in delivering possession of the bulk of the land and for his retention and use thereof, and that the damages might be deducted from the balance of purchase-money upon completion of the contract. By reason of the refusal of the appellant to deliver possession of the property on the named day and of the respondent's inability to obtain sufficient pasturage elsewhere, the respon- dent lost a number of cattle through starvation.

Held, by Higgins and Starke JJ. (Knox C.J. dissenting), on the evidence, affirming the finding of Street C.J. in Eq., that the appellant had refused to give to the respondent possession of the property on the named day.

Held, also, by Knox C.J. and Starke J. (Higgins J. dissenting), (1) that, although an abatement of purchase-money is permitted in cases where there is some diminution or deterioration in the value of the property contracted to be sold so that the purchaser will not get the whole of what he contracted to buy, the damages for breach of contract in not delivering possession of the whole property on the day named were not in the nature of compensation, but were unliquidated damages arising out of failure to deliver possession in accordance with the con- tract, and therefore could not be the subject of abatement of the purchase- money; (2) that the plaintiff was not entitled to specific performance, because he had failed to prove his readiness and willingness to perform his part of the contract inasmuch as he had refused to pay the balance of the purchase- money except subject to an abatement for damages which he was not entitled to claim and (3) that, although…

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King v Poggioli [1923] HCA 11
Case
[1923] HCA 11
Decision Date

CaseChat Overview and Summary

The appellant, King, agreed to sell a pastoral property to the respondent, Poggioli, with possession to be delivered on 31 March 1920. Poggioli sued King in the Supreme Court of New South Wales in its equitable jurisdiction, seeking specific performance of the contract and damages for King's alleged refusal to deliver possession of a significant portion of the land on the agreed date, and for King's subsequent retention and use of that portion. Poggioli sought to deduct these damages from the balance of the purchase money.

The High Court of Australia was required to determine whether possession of the entire property was delivered on 31 March 1920. It also needed to consider whether Poggioli had sufficiently demonstrated his readiness and willingness to perform his obligations under the contract, particularly in light of his insistence on deducting damages from the purchase price. Finally, the Court had to ascertain if Poggioli was entitled to compensation or damages, and if so, what measure should be applied.

Knox C.J. found that possession of the whole property was delivered on 31 March 1920, as Poggioli accepted delivery and permitted King's cattle to remain on the land for a short period by licence. He further held that Poggioli was not ready and willing to complete the contract as he insisted on a deduction for damages to which he was not entitled in equity, but rather had a remedy at law. Consequently, Knox C.J. concluded that Poggioli was not entitled to the relief sought. Higgins and Starke JJ., dissenting on the first point, found that King had refused to give possession of the property on the named day. However, Knox C.J. and Starke J. agreed that damages for breach of contract in not delivering possession were unliquidated and not recoverable by way of abatement of purchase money in equity. They also held that Poggioli was not entitled to specific performance due to his failure to prove readiness and willingness to perform the contract without the unauthorised deduction, and that damages were not recoverable in equity under s 9 of the Equity Act 1901 (NSW) in a suit where specific performance was not granted. Higgins J. dissented, arguing for specific performance with compensation for the delay.

The High Court, by majority (Knox C.J. and Starke J.), reversed the decision of the Supreme Court. The appeal was allowed, and the decree of the Supreme Court was set aside.

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Background

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Evidence

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