Laurinda Pty Ltd v Ahern

[1988] HCATrans 221

~

~ ;;;-.~

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B30 of 1988

B e t w e e n -

LAURINDA PTY LTD

First Appellant

and

JOHN AHERN, ELIZABETH JOAN AHERN, JOHN NORMAN HOLDWAY and SUZAN~ JANN HOLDWAY

Second Appellants

and

CAPALABA PARK SHOPPING CENTRE

PTY LTD

Respondent

Laurinda(2)

MASON CJ~ BRENNAN J DEANE J

DAWSON J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON TUESDAY, 4 OCTOBER 1988, AT 10.16AM

Copyright in the High Court of Australia

C2Tl/l/AC 1 4/10/88

MR D.F. JACKSON, QC:. May it please the Court, I appear

with my learned friends, MR K.C. FLEMING and

MR N.J. THOMPSON, for the appellants.

(instructed by Philip D. Hishon & Co)

MR J. GALLAGHER, QC:  May it please the Court, I appear

with my learned friend, MR A.E. LYONS, for the

respondent. (instructed by Flower & Hart)

MASON CJ:	Yes, Mr Jackson.
MR JACKSON:	Your Honours, may I hand to the Court copies of our outline of submissions.
MASON CJ:	Yes. Thank you.
MR JACKSON:	As Your Honours will have seen the ultimate issu~ in our submission, is whether the first
appellant was entitled to terminate for breach
an agreement for lease entered into between it
as lessee and the respondent as lessor in
October 1985.  Your Honours, the agreement is
set out at page 126 - I will come to its terms
a little later if I may, but it has annexed to
it a number of documents including, significantly,
a document which is in the form of a registrable
lease which was to be the lease resulting from
the agreement.

Your Honours, the parties named as the second

appellants were guarantors of the obligations

of the first appellant.	The instrument of guarantee
appears at page 125.	Your Honours, I have referred

to the fact that the first appellant purported

to terminate the agreement for breach; the nature
of the breach was failure to procure the registration

of the lease or, to put it alternatively, failure

to deliver to us the lease in registrable form.

I put it in those alternative ways, Your Honours,

because the contract does not in terms say that

the respondent was to procure registration although

it suggests that it was. But, in any event,

it perhaps does not matter because we were asked
to and did pay the costs of registration on the

apparent understanding in the documents that

the registration would be effected on behalf

of the respondent. But, Your Honours, perhaps
it does not matter one way or the other but I
mention it in passing because the reasons for

judgment express the matter in terms of the

alternatives.

Your Honours, could I just say one or two

more things concerning the material facts before
turning to the issues upon which the appeal turns.

The agreement - at page 176 - was for the grant

C2Tl/2/AC	2	4/10/88
Laurinda(2)

of a lease to the first appellant of, what may

shortly be described as, shop 79 in a shopping

centre - Capalaba Shopping Centre in Brisbane -

for a term of six years. It was clear - indeed,

absolutely clear - that the lease was not to

rest merely in agreement but was to be a registered

lease conveying a legal and not merely an equitable

estate. That issue, Your Honours, is one on which

both the primary judge and the Full Court found
in favour of the appellants and in those circumstances
may I take Your Honours, as quickly as possible,

to the relevant references, first in the reasons

for judgment and secondly, the passages supporting

them.

One goes first to the reasons for judgment

of the Full Court at page 349 and Your Honours

will see in the passage commencing at the start

of the reasons for judgment- perhaps I should

say Mr Justice Matthews and Mr Justice Carter

delivered the only judgment; Mr Justice Dowsett

agreed - that does not quite appear, I think,

Your Honours, from the record.

(Continued on page 4)

C2Tl/3/AC ..	3	4/10/88
Laurinda(2)

:MR JACKSON ( continuing,) :  Your Honours will see en the first_ page, page 34 9,

that what is set out is the history of the entry into
the agreement and that is dealt with by Their Honours

throughout the whole of page 350 and going on to

page 351, about line 25.	Your Honours, I shall not
deal with that in detail.	May I indicate where

Their Honours conclusion is to be found and that is

at page 351, commencing in the third line on the page:

It was argued at the trial that the appellant

was not required by its contract with the

first respondent to do either of these things

and His Honour's rejection of this argument was

again the subject of appeal to this Court. The

terms of clause 15.7 of the deed were said to

justify a conclusion that there was no duty upon

the appellant to either register the lease or

have completed a lease a registrable form.

However, for the reasons given by His Honour, we

are satisfied that His Honour was quite correct

in his conclusion in this behalf.

And His Honour's conclusions appear in a number of

passages in his reasons for judgment -I am referring to

the primary judge - commencing at page 326, line 23.
Your Honours, I am afraid there are a number of passages
but may I indicate where they are and invite
Your Honours to look at them as I indicate the places.

The first is page 326, line 24 going through to page 327, ·

the third line on the page. The second is page 331,

commencing about line 15 and going through page 332

and to line 55 on page 333. And His Honour's conclusion

on.the point appears at page 334 between lines 25 and 35

where he expresses the view that it was the obligation

of the present respondent:

at the least to hand over a lease in registrable

form.

Your Honours, on this issue - - -

BRENNAN J:	What is the result for which you contend?
MR JACKSON:	The result for which we contend on this point,

Your Honour, is for the finding of the primary judge

and also of the Full Court.

BRENNAN J:  And that is at the :.least?

MR JACKSON:  I am sorry, Your Honour, I misunderstood what Your Honour was saying. We submit, Your Honour, that

there was an obligation to register the lease.

BRENNAN J:	To register it.
MR JACKSON:	And that obligation derives from one of two sources.

One source was the terms of the agreement. The other

source, if the former not be sufficient, was the fact

C2T2/. 1 /dVH 2) Laurin a( 4 MR JACKSON, QC 4/10/88

that we were asked to and did pay to the solicitors

for the respondent the costs of registering the lease.

DEANE J: Well, the second is a non sequitur, is it not? I mean -

or it does not get you very far.

MR JACKSON: Well, Your Honour -

DEANE J:  It may be a collateral agreement. A breach of that

collateral agreement would not entitle rescission of

the main agreement.

(Continued on page 6)

C2T2/2/VH	5	MR JACKSON, QC	4/10/88
Laurinda ( 2)

MR JACKSON:  Your Honour, that may be right, it does not

really matter very much in the end, with respect, because steps anterior to it were, in any event, not done so that one does not - the particular

in relation to which it may have some significance

is the question whether the conduct engaged in

was sufficient to demonstrate that the respondent

was only prepared to perform the contract on its

own terms. It may relate to that.

DEANE J:  I follow that, but if we get involved in agreements

to register, could you not only get any mileage
out of that if we also got involved in the problems

of the oral variation?

MR JACKSON: Well, Your Honour, it would be an additional term,

of course, made an additional term, part of the same

agreement.

DEANE J:	But that would involve a variation of the agreement?
MR JACKSON:	Yes, it would, Your Honour.
. DEANE J:	I v;ou~d have a number of problems from your point of

view.

MR JACKSON:	Well, Your Honour, if it were -if there were any question, for example, of the statute of frauds
that might be. There is none as we would understand
it.  What I mean by that, Your Honour, is that
the case was conducted as though the two
possibilities were open at all stages, but why
the courts below have not entered upon the point
is really that it does not seem to matter very
much in the end, with respect.
Now, Your Honours, could I go for just one moment to the terms of the agreements? Your Honours
will see at page 183 in clause 6.1 the obligation
that was undertaken by the respondent, and that
was to grant a lease of the demised premises,
in effect, in the form of the lease which was
annexure B,  to co1Imlence on one or other of
a number of specified dates.  Your Honours,
annexure Bis at page 196. The form of lease
is there the form of registered lease provided
for by the REAL PROPERTY ACT.  If I could return,
Your Honours, to page 183, Your Honours will see
in clause 6.2 that we were to execute the lease
andtwo counterparts and give them to the solicitors
for the lessor and we authorized them to complete
the lease by doing a number of things. One
of them, Your Honours, was that in clause 6.2(b), to insert a plan in a form acceptable to the
registrar of titles and if one looks also at
6.2(f), to sign the lease correct for the purposes
0£ registration on our behalf.

C2T3/l/MB	6	4/10/88
Laurinda(2)

Your Honours, the form of lease in clause 1.55

at page 209, required us to pay the costs of, amongst

other things, stamping and registration of the lease and, in fact, we paid those costs. That

appears in exhibit 9 at page 143. Your Honours,

will see there a letter to Mr Ahern, who is one

of the appellants, from the solicitors for the

respondent, referring to their bill of costs.

Your Honours, will see on the next page, at page 144,

that the costs included - this is in the third

line of the text of it:

to anticipated attendances required to

stamp the documents and register the

Lease and to all other matters usual or necessary to complete the transaction

on behalf of the Lessor.

Then the out-of-pocket sums: there are, in addition,stamp duty and registration fees there

set out. Your Honours, those sums were paid - and

the matter was not in issue on the pleadings - on

6 January 1986, many months before our purported,

if I might put it that way, repudiation.

(Continued on page 8)

C2T3/2/MB	7	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, the respondent took

no steps to complete the lease or have it registered

and the relevant steps which it might have taken were

to obtain the mortgagee's consent to annex a plan
of the leased premises, to stamp it, and to produce it

for registration at the least to us.

BRENNAN J:	No question arises about the rental?
MR JACKSON:	No, Your Honour.  Your Honours, because of that,

because of the steps which were not taken, the first

appellant had no legal interest in the land, other,

of course, than a tenancy from year to year, it did

not have what it contracted for. The first appellant's

interest in the land was not good against the world
because it was liable to be defeated by a purchaser

for value - Your Honours, the REAL PROPERTY ACT of 1877,

section 51 - and in endeavouring to sell its

interest the first appellant could not sell what one

might think a prudent purchaser would require, that

is a registered lease.

Your Honours, I will come to the evidence to

support the submission I am about to make in

just a moment if I may, but in our submission, the

approach taken by the respondent upon the findings

made by the primary judge in relation to its

obligation to convey a legal interest was cavalier

and demonstrated that it did not intend to perform

its contractual obligation in that regard, except

as and when it chose. Now, Your Honours, so

far as the evidence material to that point is concerned,
it is summarized in the judgment of the primary judge

in his findings at page 334, commencing at line 35.

DEANE J:  Mr Jackson, does it appear when the time referred

to in 6.2 on page 183 would have expired?

It is an authority to the solicitor operative either

on the date of commencement of the lease, or so soon

thereafter as is practicable.

MR JACKSON:  Your Honour, there was no evidence - I may be

corrected if I am wrong - which would identify

a particular date. What His Honour found was

that a reasonable time for doing all those things

had long expired.

DEANE J:  But the case seems to have proceeded on the basis

that the authority under 6.2 persisted.

MR JACKSON: 

Yes, Your Honour, I think it is right to say that.

DEANE J: 

But obviously it did not.

MR JACKSON: 

Well, Your Honour, the term "practicable" one

would think would be construed objectively and,
Your Honour, it would, one would have thought, have

C2T4/l/HS	8	4/10/88
Laurinda(2)

come to an end at some time well prior to August,

but it is right to say, Your Honour, that it was not

attempted to identify when that had happened.

DEANE J:  Once that time is expired the solicitors had no

authority to complete anything?

MR JACKSON:	No, Your Honour.
DEANE J:	The case seems to have proceeded on the basis that

they did, or have I misread something?

MR JACKSON:	Your Honour, it is, I suppose, right in a way to say that the case proceeded on that basis, but what
that really means, with respect, is this, that in the
transactions which took place between the parties,
and by that I mean the correspondence, essentially,
what our side was seeking to have was to have the lease
in registrable form, at least, given to it.

(Continued on page 10)

C2T4/2/HS	9	4/10/88
Laurinda(2)

MR JACKSON (continuing):  We were not aware of the fact that

these things had not been done.	And one might have
assumed that they were done.	We were asking for

the rather larger obligation in, for example, 6.1

to be performed and, of course, we did not have the

documents and I am going to come to the correspondence

in a moment, Your Honour, to show what the situation

was. But, Your Honour, I will just say one thing

about it if I may, and that is that the reference

to "practicable" does give some temporal quality

to the conduct required because what one would have

thought is the fact that the expression used is,

"upon the date of commencement of the lease or so

soon thereafter as is practicabli: would indicate

that the obligation was not one to be left .in lirrbo for as

long as might be chosen.

BRENNAN J:  But is it right to say that your client did not,

in the course of the trial or on the appeal to the

Full Court, seek to rely upon any breach of the

contract consisting in permitting the time provided

by clause 6.1 to expire without the functions to be

performed by the solicitor under that clause being

fulfilled?

MR JACKSON:	Your Honour, I will check the particular thing, but - p~rhaps I should do that before I answer. Your Honour, I am notsl00 per cent that I
have quite followed what Your Honour has put to me
but may I answer, as I understand to be the position,
in this way: that in the course of the trial it
became apparent that the activities required to be
performed by clause 6.2 had not been done and
the inserting of material in the form of lease had not occurred until well after all the events which
might or might not have constituted a repudiation
or acceptance of it but at __ the same time ·
arguments which were advanced were arguments based
upon the larger, if I might put it that way,
obligation, namely to grant a lease and that the
had not been performed, were something which went to events contemplated by clause 6.2, although they show that the larger obligation and the non-performance
of it entitled the giving of the notice to
repudiate the contract.  Your Honour, I do not know
that I can take any further than that, that seems
to be the way the matter ran.

Your Honours, where I was about to go was to

page 334, in particular to line 35 on that page.

What Your Honours will see there, commencing at

that passage - - -

DAWSON J: Sorry, Mr Jackson, what page was that?

MR JACKSON:  Page 334, Your Honour, commencing at line 35, it

is the new paragraph on the page.

C2T5/l/SR	10/11	4/10/88
Laurinda(2)

MR JACKSON (continuing): Your Honours, the first relevant

passage commences at line 35 and it goes through

to page 335, the next page, at line 45, and

Your Honours will see there that His Honour

concludes that there was no difficulty at all

in obtaining the consent of the mortgagee to the

leases but that - and tbis appears in particular

on page 335, between lines 34 and 45, that

the respondent simply decided not to comply

with that:

in order to avoid trouble and expense.

His Honour then goes on to say, again at page 335,

in the passage commencing at line 45, that it

seemed clear to him:

that a reasonable time had long since expired

by September 1986.

And he went on then to state the tests that he

considered were relevant. And then at page 336,

line 15, he returns to the events which occurred.

He refers first to the letter which is of

28 November 1985 - that Your Honours will find

at page 119. That was a letter from the respondent's

solicitors dated 28 November 1985 which referred

to previous correspondence and then said that

their client had advised that they had:

executed the Agreement for Lease and Lease

and will forward the same to us shortly.

That is the two documents had been executed and

would be forwarded shortly.

If I could return to His Honour's reasons for judgment at page 336, he goes on to say,

at line 22:

On 14th March, 1986 -

that letter, Your Honours, is page 120. Now,

that letter, Your Honours, was one by the accountants

for the appellants.	They ask that the lease
be forwarded at the earliest opportunity.	And
they said, reasonably enough:

that four months is a reasonable time for

you to have complied with their request

particularly as they were under pressure
by you to execute the lease without adequate

time to study the provisions of -

it.

C2T6/l/ND	12	4/10/88
Laurinda(2)

Your Honours, in relation to that letter

His Honour said, at page 336, line 35, that that

letter:

strongly suggests that the defendant's

solicitors' letter of 28th November, 1985

was in response to a request for the executed

lease. The defendant's solicitors replied

on 25th March -

and that letter is at page 121 and Your Honours

will see that that letter says that:

The lease documents were forwarded to

Melbourne for execution by the Lessor in

October last year.	They have not been
returned.	However, we have been advised

that they have been executed by the Lessor.

We expect that they will be returned in

the not too distant future. We will provide

your client with its stamped parts of the

documents as soon as we are able to.

(Continued on page 14)

C2T6/2/ND	13	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, "the not too distant

future" was in fact a little more distant, or perhaps

views of distance vary. But Your Honours will see

at the bottom of page 336 that His Honour said:

It would seem that at this time or shortly thereafter, the first plaintiff

was seeking a buyer for the business

for, on 21st April, 1986, the shopping

centre manager ..... wrote acknowledging

verbal advice to this effect -

and Your Honours, that letter appears at page 142, and

if I could just go to His Honour's reasons for

judgment at page 337 -

and warning that the approval of the

lessor was required before an

assignment could be made.

His Honour goes on to say at line 15 on page 337:

The significance of this letter, as

it seems to me, is that the defendant

should at this stage have been aware

that it had become a matter of moment

to the first plaintiff to have what it

was entitled to, namely, a registered

lease. The situation had gone beyond

one of dilatoriness on the part of

the lessor which could cause no real

prejudice to the first plaintiff.

Nonetheless four months elapsed without

the executed lease being either produced
to the first plaintiff or registered

and, on 21st August, 1986 -

and the letter is at page 122. It is also set out,

Your Honours,in the text of His Honour's reasons for

judgment -

the solicitors for the first plaintiff

wrote -

a letter. Now, Your Honours will see, that that

letter says, in the second paragraph, that their -

clients are concerned that searches

reveal that the above Lease has not been

registered in spite of the fact that

all documentation was completed over

ten months ago.

It is clearly of critical importance to

our clients that the Lease be registered

immediately to safeguard their rights

of tenure.

C2T7/l/SR	14	4/10/88
Laurinda(2)

To that end our clients nave already

paid to your firm on 6th January .....

sufficient funds to allow registration

of the Lease to be effected by your

client.

In such circumstances, and in view of the unexplained and lengthy delay, it

appears reasonable that our clients

require your client to complete

registration within fourteen days from

the date hereof.

If the registration is not completed

within that time then our clients
naturally reserve their rights in

respect of your client's default.

Now, Your Honours, as His Honour says at the bottom

of page 337:

there was no reply -

to that letter -

until 3rd September.

And that letter appears at page 123 and it was a

less than responsive kind. Then, Your Honours,

in response to that, there was the letter which

appears at page 124 which contained an election

to accept the repudiation.

What emerges from all that is that no reason

appeared to justify the failure of the respondent
to do the very thing which it had contracted to do,

namely, to grant the first appellant a lease,

meaning by that a registered lease of the premises or

registrable lease of the premises, and conversely,

what the evidence did demonstrate, in our submission,

and what was found as a fact by the primary judge

was that the respondent intended to perform that

obligation, if at all, not as required by the

agreement, but as and when it chose. His Honour's

reasons in that regard appear, Your Honours, at

page 340, line 25, going through to page 341, line 30.

(Continued on page 16)

C2T7/2/SR	15	4/10/88
Laurinda(2)

MR JACKSON (continuing). Now, Your Honours, that passage is

the passage in which His Honour says, if I could

summarize it, at about line 40:

There was not necessarily anything wilful or obdurate about its attitude -

but, as he says at line 35:

its commercial decision ..... was

unwarranted and was a clear breach of

its obligation.

Your Honours, His Honour expresses his conclusion

at page 341, line 23:

The defendant's position was that it simply

declined to do so until it suited it.

Your Honours, may I say two things about those

findings; the first is, in our submission, that they

were amply justified. The short fact was that the

respondent was only prepared to take the steps
necessary to produce a registrable lease when it chose

to do so. The second is that, in our submission, the

cases support the view that conduct of that kind gives

rise to an entitlement to rescind.

Your Honours, could I go first - there are four

decisions which I wish to mention. The first is

ASSOCIATED NEWSPAPERS LTD V BANKS, (1951) 83 CLR 322,

and in particular at page 339.	At the bottom of
page 339 Their Honours say:

The defendant had not to prove, as in the
case of a breach or breaches of non-essential

terms of a contract, that the conduct of

the plaintiff was such as to amount to a

refusal to be bound by the contract. But

when the circumstances are considered they

would appear to constitute such conduct.

The plaintiff made the original change

without consulting the defendant. It

maintained that it was entitled to do so

despite his protests -

and in particular, Your Honours, in the last few

lines -

Kennedy's promise to see what he could do

was vague, and it was accompanied by an

intermation that if anything was done it

would be done as a matter of grace and not

of right -

and it was said that satisfied the test laid down

py Lord Selborne, that test being set out, Your Honours,

at the bottom of page 338 and the top of page 339.

C2T8/l/HS	16	4/10/88
Laurinda(2)

Your Honours, I pass over that case relatively

briefly. The second case deals with the question a

little more fully, and that is CARR VJ.A. BERRIMAN

PTY LTD, (1953) 89 CLR 327, and in particular at

page 351. Your Honours, perhaps I should mention

first page 348 where, in the last half of the page,

is the well-known statement by Justice Fullagar

relating to the steps to be taken when time

is or is not of the essence, and then His Honours

goes on from there to page 349 to the paragraph
commencing a little further than half-way down the

page to say - the passage commencing "on the other

hand", and the passage which goes on to the top of the

next page and the reference to ASSOCIATED

NEWSPAPERS LTD V BANKS.

(Continued on page 18)

C2T8/2/HS	17	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Could I refer Your Honours

particularly in looking at that passage to that

part of it where His Honour refers to the fact

that the only legitimate inference might be drawn

that someone is saying: "Not only have I broken

my contract on the due day but I am not going	to do the thing at all" or 11 1 am not going to
do the thing at all unless and until I find it
convenient to do it". And, Your Honours, if one goes also to page 351 - it is in the paragraph commencing half-way down that page - and Your Honours, apart from the references to the
facts,if one goes to the last six or seven lines
of the paragraph:

A reasonable man could hardly draw any other

inference that that the building owner does

not intend to take the contract seriously,

that he is prepared to carry out his part

of the contract only if and when it suits

him. The intention must be judged from

acts .... The intention "evinced" here is

an intention not to be bound by the contract.

When such an intention is shown, the other

party is entitled to rescind the contract.

Your Honours, the issue was dealt with also,·

more recently, in SHEVILL V BUILDERS LICENSING BOARD,

(1982) 149 CLR 620. Could I refer Your Honours

to the reasons for judgment of Chief Justice Gibbs

at page 625, at the bottom of the page:

As Lord Wright pointed out in

HEYMAN V DARWINS LTD, repudiation is an

ambiguous word and is used in various senses.

We are of course concerned only with a case

in which it is admitted that there was a

valid and binding contract. Such a contract

may be repudiated if one party renounces

his liabilities under it - if he evinces

an intention no longer to be bound by the

contract (FREETH V BURR) or shows that he

intends to fulfil the contract only in a
manner substantially inconsistent with his
obligations and not in any other way.

DAWSON J: That seems to suggest that it does not matter

that you show an intention not to be bound by

some minor provision in a contract if you intend

to perform the rest of it.

MR JACKSON:  Your Honour, that may well be right. It is

a little difficult to answer that directly in

this sense, that if one had a number of minor

breaches then the total of them may amount to

evidence of an intention not to abide by the contract.

C2T9/l/AC .	18	4/10/88
Laurinda(2)

If one had a persistent refusal to abide by a

particular provision, albeit minor, it may be

that the same conclusion would be drawn but,

Your Honour, it may well be more difficult to show that that ultimate conclusion should be drawn if one is dealing with a provision, the

operation of which is, in the end, minor.

Your Honour, the point I am trying to make

is this, that whilst it may well be that in respect

of any contractual provision, major or minor, refusal to abide by it will, in the end, give

rise to a right to repudiate as well as a right

to damages. To demonstrate that such a right has accrued may be more difficult in the case of a breach of a minor provision. Although,

one would think that if a point comes where there

is an entirely unjustifiable refusal to abide

by a provision and a statement that it will not be abided by in any circumstance then the party

injured by it may be able to say at that point,

"Well, that is part of the contract and you have

indicated that you will take the part of the
contract that suits you but not the part that

does not". And that gives rise to the right

to repudiate, Your Honour, to accept that as

a repudiation.

(Continued on page 20)

C2T9/2/AC	19	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, the last case to which

I wish to refer on this point was the PROGRESSIVE

~:AILING HOUSE PTY LTD V TABALI PTY LTD,

(1985) 157 CLR 17. May I, Your Honours, refer

simply to two passages; one in the judgment of

Your Honour the Chief Justice at ~ap,e 33 after the

quotation:

This finding, though it comes close to a finding
of repudiation, stops short of it. What needs
to be established in order to constitute a

repudiation is that the party evinces an

intention no longer to be bound by the

contract or that he intends to fulfil the

contract only in a manner substantially

inconsistent with his obligations and not

in any other way.

And, Your Honours, at page 40, in the judgment of
Your Honour Justice Brennan, after referring to

SHEVILL's case - perhaps I should just say this

simply, Your Honour Your Honour appeared to

adopt what had been said in SHEVILL's case and
then went on to say:

In the present case, the lessee's breaches of covenant are said to show an intention to act,

and to act only, in a manner substantially
inconsistent with his obligations under the

lease.

Your Honour appears to have accepted the test.

Your Honours, our submission is, if one pauses

at that point, that what had been demonstrated by

the evidence before the primary judge, and what

he had accepted, was that the respondent intended

to perform its obligation as and when it suited it

and with no particular concern for the position of

the appellants. The Full Court adopted a different

view but, in our submission, may we say two things

about it. First, the reasons for adopting that

view are not, with respect to Their Honours, very

fully expressed and, secondly, the conclusion is,

we would submit, wrong.

Your Honours, the view taken by the Full Court

appears to have been that the circumstances before
the trial judge were circumstances showing delay

only. Your Honours, may I indicate two things:

first, where those views are to be found and,

secondly, why, in our submission, they are wrong.

In dealing with the first of those matters,

Your Honours, could I go first to page 354

commencing at line 8. Now, Your Honours will see

at about line 8 Their Honours set out the views

taken by the primary judge and then go on to say

C2Tl0/l/MB	20	4/10/88
Laurinda(2)

that he had obviously borne in mind CARR and PERRI V

COOLANGATTA INVESTMENTS, and they say:

In the earlier of those two cases Fullagar J

referred to -

and then set out - paraphrase what His Honour had said and I quote then a passage to which I have referred Your Honours and then say at page 355 about line 38:

But the question always arises whether

the facts warrant the particular conclusion

and the facts in CARR V BERRIMAN went beyond

delay only.

Their Honours then go on to say that in PERRI V

COOLANGATTA INVESTMENTS - and Your Honours, I do

not, with respect, think that the primary judge had referred to that case or that he thought it relevant and, in our submission, it really was

not relevant in the particular circumstances, but
the Full Court said that it was concerned with a
condition, in effect, precedent, rather than a

condition which was a promissory condition.

Their Honours then went on to say, at page 356

line 20:

(Continued on page 22)

C2Tl0/2/MB.	21	4/10/88
Laurinda(2)
MR JACKSON (continuing):

In the case under appeal it seems to us that

the term of the contract upon which the

decision depended was a pr.omissory condition

and that in the circumstances which existed

a party calling for performance would have been

obliged to give notice to the other. In this

case, of course, the first respondent had

purported to do that and had given an ineffectual

notice.

Your Honours, I will come back to the notice later,

of course:

We think that until an effectual notice was

given the delay continued but that alone was

insufficient to make evident any intention on

the part of the appellant that it would not be

bound by the contract. So far as the factual

position is concerned, the appellant, as

His Honour found, had no intention of refusing

to be bound and from an objective point of

view one could infer that it was anxious to

main such tenancies as it had of its shopping

units. It may have been dilatory ..... and

perhaps it should explained to the respondent

the reason for the delay, or it could have agreed

or suggested that the title of the first

respondent be secured by a caveat.

Then Their Honours went on to say, at line 55, that

it turned:

on the nature of such breach ..... The relevant

term ..... provided for the registration of the lease

or at least the giving to the first respondent of a registrable lease but the delay up to the

relevant time was itself no more than a breach

of a non-essential time stipulation.

Now, Their Honours then went on to quote some

observations of Your Honour the Chief Justice in

LOUINDER V LEIS.	Your Honours, I shall not read those
out, of course.	The first paragraph, on the assumption

made by Their Honours, was clearly relevant and it

would be the right test if the CARR V BERRIMAN approach

to the case was not apposite. The passage which

follows, with respect, does not seem to be germane
to the particular case because it seems to be dealing
with the question of whether there is an entitlement
to give a notice to complete the contract when the
breach in question is a breach of a term which is
not the obligation to complete or an obligation
antecedent to it, but leading to completion.

Of course, in the present case, Your Honours, the very thing that had been contracted tobe done was to give a lease or to put them in the position to obtain

the legal estate and that that essentially IlllSt have been

C2Tll/l/VH	22	4/10/88
Laurinda(2)

what was contemplated by completion. So, Your Honours,

the second-part of the quotation appears, with respect

to Their Honours, not to be germane.	But Their Honours
then go on to say:

We think that if one applies the principles to

which His Honour referred one concludes that
in the instant case a valid notice to comply

with the relevant term was required (and as

His Honour found such a notice was not given).

It follows that the asserted breach of contract .....

involving as it did no more than delay was no basis for the alleged acceptance by the first

respondent of the alleged repudiation of the

agreement.

Now, Your Honours, could I turn then to the reasons

why, in our submission, that approach was incorrect.

The first is that the view taken in the Full Court

appears to have been that the principle appearing

from cases such as CARR VJ.A. BERRI11AN could not
apply where all that was involved - or perhaps I

should say where what was involved - was delay in performance of a contractual obligation and delay

only. But, Your Honours, that, in our submission,

seems inconsistent with the manner in which the Court

in CARR VJ.A. BERRIMAN PTY LIMITED expressed its

views. Could I take Your Honours back to 89 CLR and

in particular at page 349.

Now, Your Honours, I do not mean to convey that

the passage. to which I am about to refer is decisive

on the point, but the Court - Justice Fullagar there -

does seem to be talking in terms which would indicate

that if there were delay then it would be sufficient

to indicate in an appropriate case that the party was

saying he or she would not be bound by the contract.

(Continued on page 24)

C2Tll/2/VH	23	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, could I refer to

the second new paragraph on page 349 and, in

particular, the second sentence. His Honour

there speaks of - he said:

If he did remedy it, the builder would be bound to accept the later performance, though entitled, of course, to sue for any damage

suffered by him through the delay.

That is introductory, Your Honours, but His Honour

is talking about delay.

The position thus remaining open, it 1s

correct, in my opinion, to say, as the breach might continue so long and in

such circumstances as to evince an intention

on the part of the building owner no longer
to be bound by the contract. In other words,

the only legitimate inference might be that

he is saying:  "Not only have I broken

my contract by not doing the thing on the

due daft, but I am not going to do the thing

at all', or "I am not going to do the thing

at all unless and until I find it convenient

to do it". In this way a right to rescind
might arise which is not based on breach

of the particular promise as such.

Your Honours, His Honour does seem to be contemplating

there that as would normally be the case what

gives rise to the ability to draw the inference

that the contract will not performed is a failure

to perform it timeously. So that, Your Honours,

our submission is - Your Honours, perhaps I should

add one other thing. At page 351, at the bottom

of the page, in the reference in the last lines

prior to ROBERT A MUNRO & CO, what is being

contemplated there is that an obligation may

not be performed on time, rather that it be carried

out only if and when it suits the particular

party.

Your Honours, the view taken by the Full Court,

and this is the second matter which we would

advance in relation to it, does not, in our submission,

take into account that the test is not just whether
the stipulation is or is not a stipulation as

to time but whether whatever the nature of the

stipulation may be, the party has shown that

he will only perform the contract as and when

he chooses.	Your Honours, I put that in a somewhat
convoluted way.	What I intend to convey is this,

that the view taken by the Full Court seems to

have been that if the stipulation in question

·is one which can be regarded as a time stipulation

C2Tl2/l/ND	24	4/10/88
Laurinda(2)

only, then the CARR V BERRIMAN approach, if I

could call it that, is not capable of applying

to it, one looks simply to the question whether

there has been unreasonable delay and a suitable

notice.

In our submission, that is not correct.

Whatever be the nature of the stipulation one

has to look to the circumstances and if the

circumstances demonstrate that the party has

shown that he will only perform the contract

as and when he chooses that is sufficient.

Your Honours, I shall not go over the evidence

on the point but the evidence did, in our submission,

demonstrate that that was the case and I have

referred Your Honours to His Honour's findings.

It was not simply, in any event, in the present

case a case of delay. It was not simply a case

of delay, Your Honours, because His Honour found

that they did not propose to perform it until

they were ready to do so in relation to their

affairs with their mortgagees.

BRENNAN J: Is there any distinction to be drawn between

the attitude of the party who says, "I will perform

only if and when it suits me.", and one who says,

"I will not perform unless it suits me."?

(Continued on page 26)

C2Tl2/2/ND.	25	L,/10/88
Laurinda(2)

MR JACKSON:  Your Honour, of course, the second case is

stronger.	But the two cases really amount, in our
submission, to the same thing.	Each is saying, I

will not perform my contractual obligation in

accordance with my contract. One is saying, I should

say, I will reserve to myself an option whether I

will perform my contract and if so when. The other

is saying, I shall reserve to myself an option as

to when I shall perform my contractual obligation.

Each of them, Your Honour, has the same vice and

the vice is that it gives to that party a right

to say, I am not bound by the contract but except

to the extent that I choose.

BRENNAN J:  The problem then arises, does it not, of a case

where a party might say, "I will perform only if

and when it suits me and in doing so I will not

be in breach of my contractual obligation as I

understand it"?

MR JACKSON:  Your Honour, that would be a problem, it would

be a problem of everyone really. But I am not

quite certain what the problem to which Your Honour

is adverting is in that regard. It may be a problem

of classification but - - -

BRENNAN J:	I am thinking of clause 5.7?
MR JACKSON:	Yes, Your Honour.  I am sorry, Your Honour,

I am afraid I am not sure of the point Your Honour

is making and wants me to deal with?

BRENNAN J: In the light of clause 15.7, is it possible to

say of the attitude of the lessor in this case,

that it corresponds with a test to which you have

drawn attention and amounts to a refusal to perform

the contract unless it suits him?

MR JACKSON:  Your Honour, our submission is that clause 15.7

does not lighten the load of the lessor.	What one
has to look at is clause 15.7 in the contract.	What
the contract says is that we are to get a lease

of the premises, which of course means, one assumes,

a legal lease. Clause 15.7 then says, our

obligations and their obligations:

are not conditional ..... upon the preparation

and execution of the Lease.

And, Your Honour, the lease has been executed by

us and our obligations under the lease continue.

Their obligations under the agreement continue

and we are bound to perform our obligations - so

are they. It really seems to be a provision which

says no more than that neither party is able to

say that they shall not enter on to the premises

or treat the case as if a lease were not already in

e~istence until the lease comes into existence.

C2Tl3/l/SR	26	MR JACKSON, QC	4/10/88
Laur in da ( 2 )

Your Honour, I am putting that badly. What I am

seeking to convey is this. That clause 15.7 seems

to be designed tc do no more than to say, although

we have noc yet got a lease, there has to be
possession given. It does not say that one can

wait forever to give you a lease.

(Continued on page 27)

C2Tl3/2/SR	27	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honour, it really does not

affect the position any more than that, in our

submission.

DAWSON J:  I think what His Honour was putting to you, if

another view is taken of that clause, the opposite

view to the view you have taken, that is consistent

with the refusal to be bound by the contract.

MR JACKSON:  Yes. Your Honour, clause 15.7 was dealt with

by the primary judge at page 341 and page 342,

and page 351 by the Full Court. The other point

I think Your Honour Justice Dawson was putting was that the last words of clause 15.7 seem to

say that, not withstanding the earlier parts

of 15.7, the obligation in 6.1 remains.	Now,
Your Honours, if one assumes -

MASON CJ: That last provision commences with the words:

but despite the non-completion of the Lease.

MR JACKSON:	Yes, Your Honour.
MASON CJ:	And the obligations remain:

from and after the date of commencement and

throughout the term of the lease -

notwithstanding non-completion.

MR JACKSON:  Your Honour, and the obligations which it

encompasses include - because it refers not just

to the lease but refers to the deed, but the

obligations encompass also those in the earlier

parts of the lease, such as clause 6.1. But,

Your Honour, what the clause is dealing with

really, in our submission, is to say that the

lease, or the parties, are to treat the situation

as if there were a lease from the date which
would otherwise be the commencement date of the

lease even though the lease has not, at that stage,

been prepared. But it does not,

Your Honours, leave open the fact that it may take

any time that the lessor may chose to bring about

the actual lease.

DAWSON J: 

Is it an objective or subjective test that should apply in deciding whether a person refuses to be

bound by the contract?

MR JACKSON: 

Well, Your Honour, it is objective, it seems to

be, objective in the sense that one - some guidance
is given to it in one of the cases. Perhaps I can

come back to that in a moment but one has to look at the circumstances which gave rise to the delay.

C2Tl4/l/MB	28	MR JACKSON, QC	4/10/88
Laurinda ( 2)

For example, one is entitled to look at what was

the reason for the delay, as in the present case,

one is entitled to look at the situation in relation

to the mortgage. I suppose, in that sense, it has

a subjective element but, Your Honour, one is

looking at it in an endeavour to decide what is

the reason for the non-performance and if the reason

is that stated in the test, then the test is

satisfied.

(Continued on page 30)

C2Tl4/2/MB	29	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honour, that perhaps does

involve a subjective element but one looks at it in the light of the objective events which

have occurred. So that in the end it involves

both, Your Honour, in that sense, but the test,

ultimately, is was the conduct such as to indicate

that there was the requisite intention.

Your Honours, if I could move on to the

second point. If one assumes that the Full Court

was correct in treating the question as being

one of mere delay in compliance with an obligation

where no time was fixed for performance then

the requirements which it was necessary for us

to satisfy were, first, that there had been

unreasonable delay; second, that we had given

a notice fixing a reasonable time and, thirdly,

that there had been non-compliance with that

notice. Your Honours, that is summarized in

LOUINDER V LEIS, 149 CLR 509 at page 527, in

the passage from the judgment of Your Honour the Chief Justice which in fact is quoted at page 357 in the record - the first paragraph.

Your Honours, the primary judge found that an unreasonable time had expired - that appears

at page 335 about line 45.

Your Honours, it also seems apparent that

the primary judge was of the view that the time

fixed by the notice was adequate. That appears,

Your Honours, at page 339, line 50, where
His Honour said:

I should say, however, that as to sufficiency of time I am far from persuaded that the contract could not have been stamped, endorsed with the mortgagee's consent and tendered

within the 14 days limited.

His Honour seems to put it in that way because

that apparently was the argument and the evidence

which he did not accept from the solicitor for the respondent; the argument being, in effect,

that there was not enough time and His Honour

did not accept that and the conclusion, Your Honours,

we would submit, appears to follow that he was

satisfied that it would have been a sufficient

time. But the point on which the case failed

was that the notice did not state that the appellants

would rescind for non-compliance if there were

non-compliance with it.

Your Honours will see the notice at page 122

and what it said was in the last paragraph:

C2Tl5/l/AC··	30	4/10/88
Laurinda(2)

If the registration is not completed within

that time then our clients naturally reserve
their rights in respect of your client's

default.

And, Your Honours, it did not say, specifically,

that one of the rights thus reserved was the right to terminate the contract by reason of that. Your Honours, the leading case on the

question is BALOG V CRESTANI, (1975) 132 CLR 289,

and the relevant passage commences in the judgment
of Justice Gibbs at page 296, half-way down the

page, immediately after the reference to

CARR VJ.A. BERRIMAN PTY. LTD.	There His Honour
said that the authorities:

strongly suggest, even if few of them actually

decide, that to be effective the notice
requiring performance must inform the party

to whom it is given that the party giving

it will treat the contract as at an end

if the notice is not complied with.

(Continued on page 32)

C2Tl5/2/Ac·	31	4/10/88
Laurinda(2)

MR JACKSON (continuing):  The principle is there stated,

or quoted from that work, and what it said it should

contain is that the party giving the notice shall

consider the contract at an end if it not be

completed within a reasonable time. His Honour

then refers to a number of cases in which observations

to that effect are made in passing, or in which

something is, typed notices are paraphrased, and

goes on to say at the bottom of the page:

Of course it is not necessary that the notice should use any particular form of

words; it is the substance of what it

conveys that matters -

and he gives a number of instances, and then says,

about a quarter of the way down the page: However, it must be regarded as doubtful

whether a notice would be effective if it

stated that upon non-compliance the party

giving it might treat the contract as at

an end, but might on the other hand seek

to have it specifically performed. Since

the object of the notice is to limit the

time for performance, and to indicate to
the party in default that he will be in

breach of an essential obligation if he

delays further, it is understandable that

it should be thought to be an objection

to the validity of a notice that it

suggests that, notwithstanding a failure

to complete within the specified time,
the party giving the notice might still

perform the contract.

His Honour referred then to two decisions which
were suggested, that he had suggested that an

ambiguous notice might be bad, and Your Honours will

see in respect of the first of those cases that there

were other circumstances which contributed to the

conclusion and that the same obtained, at the top

of the next page, in respect to the other case, and

then His Honour goes on to say at page 298:

On the other hand, in GOSTOWN PTY LTD V PRYOR

Helsham J held a notice to be effective

notwithstanding that it stated that upon

non-compliance the vendor would either

declare all moneys paid by the purchaser

forfeited and rescind the contract or

resell the property, or alternatively
apply to the Supreme Court for an order

directing specific performance of the

contract of sale. In reaching this

decision, Helsham J followed and applied

a dictum in O'BRIEN V DAWSON, where Jordon CJ

C2Tl6/l/HS	32	4/10/88
Laurinda(2)

(enlarging somewhat the traditional

statement of the rule) said:

"The time prescribed by such a notice

must be reasonable; and the notice must

state with reasonable explicitness what

it is that is being required to be done

and that if it be not done within the time

prescribed the party who has given the

notice will treat the contract as at an

end, or will treat himself as entitled to

put an end to it."

His Honour then went on to say - this is the passage

quoted in the reasons for judgment of

Mr Justice Connolly:

Today, when adherence to form is not

generally much esteemed, it may be thought

that it ought to be enough that a party

requires performance within a specified

reasonable time, and indicates that he

will rely on his rights if the other party

fails to comply with his requirement,

although a prudent solicitor may prefer to

use the accepted formula rather than face

the prospect of litigation. However, it is

unnecessary to resolve this question

since for reasons -

and His Honour went on to say that he was satisfied

the notice satisfied the test. Your Honours, in

our submission, the notion that a notice must state

in terms the possibility that the contract will be
rescinded represents, it is submitted, an unnecessary

complication, an unnecessary complication which should

not be retained. The purpose of the notice is to

convert a breach of an inessential term into a

fundamental, as it were, breach, by bringing to the

attention of the party in default what is expected

of that party and specifying a definite but reasonable

time within which to do it.

(Continued on page 34)

C2T16/2/HS	33	4/10/88
Laurinda(2)

MR JACKSON (continuing): And, Your Honours, that is adequately,

in our submission, satisfied by a notice which

simply says words to the effect, "If you are in breach

of the agreement or in breach of this term, or do not
comply within this time, the party giving the notice

reserves its rights by reason of that breach~

Your Honours, could I mention two cases since

BALOG V CRESTANI which deal with this point in the

Supreme Court in New South Wales. Your Honours,

I am afraid they are not on the list, and it was

impossible to get them photocopied, but could I just

give Your Honours the references? The first is

VANDYKE V VANDYKE, (1976) 12 ALR 621, and at page 633

in the judgment of Mr Justice Hutley in the Court

of Appeal His Honour used the words which I

used in the submission which I just made, and

at about line 20 His Honour said:

It is true that in many cases the courts have

suggested that an indication of what the giver

of the notice of the intends to do has to be

stated in the notice.	Why this is needed I have
found difficult to understand.	The purpose of

the notice is to convert a breach of an

inessential term into a fundamental breach by

bringing to the attention of the party in default

what is expected of him and specifying a definite

but reasonable time during which he has to do it.
In the time so specified the knowledge which the person giving the notice may have acquired may

dictate a change in his intentions.

The remedies for breach of contract are

given by law and I should have thought the

innocent party is not to be compelled in

advance to specify which of the various

remedies open to him he proposes to exercise

if the other party commits a fundamental breach.

And His Honour goes on then. I do not think I need go

any further on the point. But, Your Honours, our

expressed is one which is a correct statement of what	submission is that the view that His Honour there
purpose is to be served by the notice. The notice
is to say that the term which is inessential in
temporal terms is one which you have to perform by a
certain time and if you do not perform it by a certain
time then the party giving the notice is entitled to
utilize its remedies, whether the remedy be a remedy
by way of action on the contract in the sense of an action to enforce the contract or whether it be a
remedy meaning to bring the contract to an end by
reason of the breach.

Your Honours, the second decision to which I wish

refer is TAYLOR & RAGLAN DEVELOPMENTS PTY LIMITED,

(1981) 2 NSWLR 117. Mr Justice Powell,at page 133,

unabashed by the doubts expressed by Justice Gibbs

in BALOG V CRESTANI, said, and having quoted it,

C2Tl7/l/VH	34	4/10/88
Laurinda(2)

that he found himself:

unable to share the doubts expressed by

his Honour in the last sentence -

of that passage and he did not think the two authorities

supported those doubts -

for in neither case did the relevant notice

indicate that a possible consequence of

non-compliance was termination.

And His Honour went on to say that he thought the

function of a notice:

was to provide evidence of repudiation sufficient

to justify termination -

and -

it would follow ..... that even though a notice

to complete draws attention to other

possibilities, it is sufficient it draws to

the attention of the recipient the possibility

of termination for non-compliance,_

And he deals with that a little further.

(Continued on page 36)

C2Tl7/2/VH	35	MR JACKSON, QC	4/10/88
Laur in da ( 2)

MR JACKSON (continuing):  Your Honours, our submission

is that if a notice does do the things referred

to by Mr Justice Hutley then it is sufficient

and there is no reason why there should have

to be some kind of magic formula which has to

be used with the consequence that if the magic
formula is not used, although any intelligent
person might have understood the document - might
have understood the intention to be conveyed . . . '

yet the party g1v1ng the notice must lose because

of the failure to use the right password.

Your Honours, if I could turn from that

to the terms of the particular notice at

page 122. Your Honours will see that if that

requirement is not insisted upon then it is

entirely clear, in our submission, that the notice

did the things that it should be required to

do. Your Honours will see that it emphasized

in the third paragraph the importance of the

matter. It emphasized the fact that the money

had been paid. And in the second last paragraph

it said that there had been:

unexplained and lengthy delay -

and they required them -

to complete registration within fourteen

days -

If they did not do it then they reserved:

their rights in respect of -

the -

default.

And the rights reserved must have included, with

respect, the right to terminate the contract
by reason of breach.	Your Honours, one bears

in mind also the fact that a letter was addressed

to a solicitor who must, one would have thought, understood the nature of the rights contemplated as being reserved.

DEANE J: Is there any significance in the fact that the

notice does not require what has been asked before

but requires what the contract itself did not

entitle your client to?

MR JACKSON:  No, Your Honour, there is not and I make that

submission for these reasons: what we had been

told before - if I could go to page 121, what

we have been told before was that the documents
would be stamped in the not too distant future

and that we would be provided with our stamped

C2Tl8 /1 /ND	36	4/10/88
Laurinda(2)

parts of the documents as soon as they were able
to do it. It occurred, Your Honour, in

circumstances where, as between the parties,

we had been asked to and had provided the money

for the documents to be registered and for us
to say that we ask you to complete registration

is asking them, Your Honour, to do all the things

leading up to registration. And so, in our

submission, Your Honour, by asking them to do

what we asked them to do we were asking them
to indicate it clearly that they should perform

the terms of the contract. Perhaps, indeed,

Your Honour, perform the terms of the contracts.

Your Honours, in the last paragraph of our submissions, paragraph (e), I suspect that the

bow was drawn a little too long, Your Honours,

and I shall not advance that as a separate submission.

Your Honours, those are out submissions.

MASON CJ:  Thank you, Mr Jackson. Yes, Mr Gallagher.

MR GALLAGHER:	Your Honours, the result of this case will either put continued life into the Latin maxim
festina lente or procrastination will take over
a completely new meaning.

(Continued on page 38)

C2Tl8/2/ND ·	37	4/10/88
Laurinda(2)

MR GALLAGHER (continuing): What has happened today is that

in the last point raised by my learned friend he not only seeks to appeal against the judgment of

the Full Court that the notice was ineffective,

but he also seeks, in effect, to appeal against

the finding of the primary judge, that the notice

was ineffective. What he seeks to do is to have

it endorsed in the obiter of His Honour the

Chief Justice in BALOG V CRESTANI, that it really

does not matter what form one takes, or what

explicitness one takes, it is simply if you give

a letter saying ,''We will reserve our rights'~ is

sufficient. That in a nutshell is the essence

of the second point.

The first point raised by him goes to whether,

in the circumstances of the case,mere delay evinces

only the inference that there can be repudiation

on behalf of the landlord in this particular case -

only the inference. The Full Court expressly found

that there was mere delay, that there was no
trouble with the mortgagee consenting, that the

party simply procrastinated, or to use the term

of His Honour Mr Justice Connolly, was cavalier

but did not indicate as the only inference that

the way in which the contract would be performed

would be unless and until and only when the

landlord chose to do so.

This case is approached without dispute on

the basis that there was - I should hand up the

submissions, and a chronology, if the Court pleases.

MASON CJ:	Yes.
MR GALLAGHER:	This case has been approached by my learned friends on the basis that it is in the context of
an open contract in respect of which there was
no date prescribed for the performance of the applied conditions - and the authorities are too numerous to mention - that they therefore had a reasonable time in which to comply. T:hat is CANNING' s
case for one.  I will come to them inthe list
of authorities.  They are referred to by
Your Honour the Chief Justice in LOUINDER V LEIS
at pages 520 and 527, referring to the authority
of GREEN V SAVIN in the Chancery Division.

It was an open obligation in respect of

which time had to be reasonable and moreover it
has been assumed for the purposes of argument

today that it is a promissory obligation as distinct

from a condition precedent as was examined by this

Court in PERRI. In those circumstances the

relevant test then is that the time must be

unreasonable in order to give a notice calling

on the other party to perform. Then there are

C2Tl9/l/MB	38
Laurinda(2)

two requirements in respect of that notice. It

must state the effect of what the notice seeks to
achieve in terms of saying, "We are going to rescind
or we are going to seek specific performance or

we are going to seek damages", or whatever remedy

may be provided for in the particular contract,

and the period in respect of which that notice
is given must also be reasonable.

Now, in respect of the second aspect, the question of whether the notice was reasonable or

not, my learned friend would assume that from the

basis on which Mr Justice Connolly mentioned in

the record. But if one looks at his reasonings

one sees that he really found the notice ineffective
on terms of the BALOG V CRESTANI test, and having
found it ineffective it was not essentially necessary

to consider whether time was reasonable, although he was not convinced that in the circumstances of the case it may not be. That is as high, with

respect, that it goes. He found the notice to

be ineffective because it did not specify the

relief exactly claimed. He found the period in

which may or may not be reasonable, and what the

Full Court simply did is assumed his finding and said at the end - if I can take the Court to it - in volume 2, a very large passage of the judgment

at page 358:

(Continued on page 40)

C2Tl9/2/MB	39	4/10/88
Laurinda(2)

MR GALLAGHER (continuing):

We think that if one applies the

principles to which His Honour referred

one concludes that in the instant case

a valid notice to comply with the

relevant term was required (and as

His Honour such a notice was not given).

It follows that the asserted breach of

contract by the appellant involving as

it did no more than delay was no basis

for the alleged acceptance by the first

respondent of the alleged repudiation

of the agreement by the appellant.

Therefore it fails. They have adopted, in effect,

the GREEN V SEVIN requirement and then adopted the

trial judge that the notice was ineffective and

so found that until you did have an effective notice

that mere delay, in the circumstances of the case
to date, did not only evince an intention that

repudiation necessarily and only lay.	And therein
lies the case.	What the Full Court differed with

the trial judge on was in respect of whether the

circumstances of the case evinced only the

intention of repudiation. And can I say,irnmediately

when one comes to the circumstances of the case

and looks at the correspondence, it has been

looked at in some detail, there is absolutely no

suggestion of any urgency. There is absolutely

no suggestion that the property was about to be

sold in contradiction of the tenant's rights. There

was no absolutely no evidence that anyone was

about to take steps, in some way or other, to

circumvent the tenant's rights.

What the Full Court seemed to indicate in its

judgment as the reason or a possible reason for

the. rescission was none of those usual things that

if they had been real or threatened and apparent

could have been protected by caveat, what the

about line 44:	Full Court found at page 353 of the record at	Had the business of the first respondent
been profitable, it would, one might
think, have been looking to enforce its
rights rather than seeking to be
relieved of its obligations.

And therein, in our respectful submission, lies the

germane reason why such prompt action was taken in

August and termination occurred in September. The

letter in August merely sought registration.	The
letter in March merely sought to look at the

document because they said they had been forced to

execute it in a hurry. So the letter in August

C2T20/l/SR	40	MR GALLAGHER, QC 4/10/88
Laurinda ( 2)

was the first time that any threat had been made.

One can look at the whole of the circumstances,

but one must focus on that letter of August to

merely clarify it and classify it as a requirement

to register and no more where there were no

circumstances of urgency and no other facts or

threats which would be likely to endanger the

parties. And if one looks at it in that way as

the Full Court did, if one goes to page 353,

first I refer to the letter and they have referred

to the Full Court:

First, time was, so far as the obligation of the appellant was concerned, not

essential. The first respondent was

at all times from 3rd December, 1985

and up to the time of writing the letter

in possession of the premises of

shop 79 and was the equitable lessee.

(Continued on page 42)

C2T20/2/SR	41
Laurinda(2)

MR GALLAGHER (continuing): There is no suggestion of

unfairness, loss of profits, loss of business,

in that sense by being kept out of possession

as is the normal case when one is waiting to

go into these circumstances and there is an undue

delay, shop fitters, problems and the like.

There is none of that. They were carrying on

their business in all normal respects save for
the formal protection of the registration under

the REAL PROPERTY ACTS.

Its position as such and its tenure could

have been made secure by caveat. It did not

do so. And in any case, as His Honour found,

the appellant had no intention - this is an important

finding with respect both as to the primary judge

and to the Full Court - of denying a registered

lease to the first respondent and we would infer
no intention of interfering with the tenure of

the first respondent.

At that time, as His Honour also found,

the appellant was seeking lessees for shops in
the complex and this alone would suggest that

by August 1986 the lease of the first respondent

had not attracted any particular goodwill. Had

the business of the first respondent been profitable

it would, one might think, have been seeking

to enforce its rights rather than seeking to

be relieved of its obligation.

Another aspect of the letter of 21 August to which he referred is that it clearly was an

admission by the first respondent that there

was then a subsisting contract. Again, an indication

against the only inference one could draw was

he repudiating it in the sense that he said,

in a cavalier way, "Well, I don't care whether

there is a contract or not, I'm going to do the

matters as I feel fit." It reminds one of the

words of Lord Atkin in that famous case of

LIVERSIDGE V ANDERSON, (1942) AC, when he used

the Humpty Dumpty phrase:

Words are not what they mean but what they

are meant to mean -

1n terms of what Humpty Dumpty said to Alice.

It is referred to in that authority in the example.

And really, it is what the appellant seeks

to do here. Actions are not what they stand
out as but what the appellant seeks them to be
construed a~ as leading only to the inference
that repudiation could come about by, as the
Full Court said, mere delay. The respondent

C2T21/l/ND	42
Laurinda(2)

admitted there was a subsisting contract and

in determining whether the appellant had evinced an intention to perform its obligations pursuant to the contract only upon its own terms and so

be guilty of a fundamental breach of contract,

it seems that the time which elapsed between

the giving of the notice should be disregarded

and then they dealt with His Honour. And then,

the Full Court went on to CARR V BERRIMAN. If

I could take the Full Court to CARR V BERRIMAN

to re-emphasize some of the passages and I do
not wish to weary the Court because they had
been quoted at length but at page 349 of the

well quoted judgment of His Honour

Mr Justice Fullagar, I read from the passage

in the second paragraph leaving out the first

line because they have been read:

The position thus remaining open, it 1s

correct, in my opinion, to say, as

Mr Ferguson said, that a failure to remedy

the breach might continue so long and in

such circumstances -

and I emphasize those words because they keep

coming through in many cases, not the mere delay

but the circumstances in which the delay occurred -

as to evince an intention on the part of the

building owner no longer to be bound by

the contract. In other words, the only -

and I emphasize the word "only" -

legitimate inference might be that he is

saying:  "Not only have I broken my contract

by not doing the thing on the due day, but

I am not going to do the thing at all",

or "I am not going to do the thing at all

unless and until I find it convenient to	do it". In this way a right to rescind
might arise which is not based on breach
of the particular promise as such.

(Continued on page 44)

C2T21/2/ND	43	4/10/88
Laurinda(2)

MR GALLAGHER (continuing):  So it is a very circumscribed

right. In any event we debate whether it can

be exercised without any notice to complete in

an open contract in which the condition is

do anything until it suits me". Now,

promissor½ and I will come to that later, but going to
if there were circumstances in a promissory

contract when a person obviously said, "Well,

that circumstance may in the particular facts

give rise but they are a long way from the facts
in this case. All of the facts in this case

smack not of urgency, smacked of complete

politeness, although in a somewhat cavalier way,

by the solicitors and did not at any stage indicate,

"No, you wait until I am ready". All the letters

kept saying is, "Well, it has all been done,

we will have it there soon. We have sent it

to our principals in Melbourne and it will be

back soon." And there were only two events which

crystallized; there was the request for the lease,

there was one other I should refer to which showed

again a lack of urgency and that is after the

letter of March asking for a copy of the lease

there was a further letter in April at page 142

relating to the suggestion that the tenant may

wish to'sell off his premises. And that is a

letter from the principal, Hersfield Developments

Corporation, direct to the accountant for the

company and it sets out a verbal conversation

that they had been seeking a buyer and:

With regard to (a) and (b) should you

care to indicate a price we would gladly

pass the information on -

for the fittings and fixtures.

There- is a chance that we could find a retailer

to immediately take up possession.	However
the suitability of fittings etc, is questionable.

In conclusion, it is to your advantage

to keep us informed of any progress you

may make in selling as it is necessary that

the purchaser under the terms of the lease

provide for Lessors approval before an

assignment can be agreed to. Should you

vacate you are responsible for the payment

of rentals, outgoings etc, until such time

as the premises are re-leased, however we

trust that this situation will not arise.

Now, if it could be constructed from that

letter that from that point on they, for instance,

led evidence - and I might say immediately no

evidence at all was given by the tenant. They led

C2T22/l/AC	44
Laurinda(2)

evidence that as a result of that delay they lost

that tenant on an assignment basis, well that

would be a circumstance in which their rights

are eroded or continuing to be eroded if they sought to cease their business, profitable or

not, and go elsewhere. But that was a letter II h II • • h 1

f rom us, tot em~ to put 1t 1n t e vernacu ar;

there is no suggestion or comeback or evidence

after that fact that they, in fact, had a real

assignor, an assignee situation arising, there

is no suggestion that they had other persons

that they were unlikely to be able to pass on

a registered estate to. The whole matter certainly

smacked of delay but it did not smack.of an intention

on behalf of the landlord in some way to frustrate
by its delay any actions which would otherwise

be of benefit and/or of protection to the tenant.

And in those circumstances the lack of urgency

which was referred to in the case of

MICHAEL REALTY PTY LTD V CARR was a real

circumstance to be taken into account. It is

on our list of authorities, reported in

(1977) 1 NSWLR 553, ,and it was a case involving

the sale of land where there was gross and

unreasonable delay by a vendor not completing

a contract and the circumstances that were taken

in delay was the fact of whether there was not

urgency or not.

(Continued Ofr page 46)

C2T22/2/AC	45
Laurinda(2)
MR GALLAGHER (continuing):	One passage, for instance,

in which it appears quite clearly is the judgment of

His Honour Mr Justice Reynolds at page 561 at

paragraph F:

In the light of the principles I have

discussed I would seek to answer this

question by posing the question of whether

it was reasonable, in the light of all the

disclosed facts, to hold the purchaser to

a specifically enforceable contract for at

least a further three months. There must be

weighed against the inordinate delays and

other conduct of the vendor the fact that

the purchaser gave no evidence of special

urgency that would make it unreasonable

for him to remain so bound. He certainly

gave no communication to the vendor

indicative of special urgency. The fact

that the contract originally contemplated
the lapse of over a year and possibly of

fifteen months between contract and

completion is a relevant fact -

and over the page -

Although, in my view, in arriving at his ultimate conclusion his Honour dealt with

irrelevant matters when he took account

of the considerations which led the
purchaser's solicitor to select a period

of twenty-one days in the notice, I think

that one finding of his Honour, if it stands,

concludes the matter and that is (14):

" ... there was nothing in the evidence to

show that, if the notice had given the

vendor the three to six months more that

he needed, the postponement would have been

greater than justice to the purchaser would That is a circumstance that becomes most relevant require it to bear."

on the cases that when one looks at the delay

one also has to assess whether there has been

any injustice caused to the person that is the

recipient of the delay, and in this particular

case that can be far from stated or established,

particularly in circumstances where, as I have

said, the person is in possession and trading

normally. There were simply no circumstances

of injustice that were being perpetrated on him
as a result of the delay, so that even if the

vendor had been cavalier, it really took one

to no particular point of prejudice, other than

the formal registration of the agreement, and
as I say, clause 15.7 makes the registration of that

agreemen½ simply on the Court's findings, an implied

C2T23/l/HS	46
Laurinda(2)

term that did not seek to prevent an unconditional

contract coming into force at the time in respect of

which it was signed, and so making the person an

equitable lessee, at least in possession and trading,

but not able to transfer his property commercially,
it is said, because he did not have the benefit
of registration.

There are other aspects of reference to urgency of this case of MICHAEL REALTY V CARR and

they appear in the judgment of His Honour

Mr Justice Glass commencing at the passage where

he numbers the four, after (4), (5) and (6) he

mentions those, he says:

(6) All the circumstances of the case in light of which these questions are

to be decided include, but are not confined to, the delay of the vendor and the urgency of the purchaser's need to complete.

I am sorry, Your Honours, I have lost the page in

my photostat.

GUADRON J:	Page 566.
MR GALLAGHER:	Page 566, thank you, Your Honour, but it is

quite clear there, where they are succinctly set

out in principle form, that urgency is a circumstance

of the case which must be weighed and must be added

into as a factor to establish prejudice because

really what delay means and what it comes down to,

is it to such an extent that the tenant has been

prejudiced, and unless that can be established

really, the delay in itself means very little.

The delay has an equitable connotation in these

circumstances where one would lose rights for

specific performance and in the circumstances of

these letters and these conduct, we say quite

clearly, indeed assert, that there would have been

no deprivation to the vendor of the remedy for	specific performance in these circumstances so
as to prevent the vendor getting specific performance
and that, in effect, is a test to measure whether
delay was unreasonable in terms of showing an
inference to be no longer bound by the contract.

(Continued on page 48)

C2T23/2/HS	47	4/10/88
Laurinda(2)

MR GALLAGHER (continuing):  Moving, if I may, then, to the cases

which deal with the repudiation. I can be quite short

on them because I really do rely on the passages that
were quoted by my learned friend in SHEVILL by

His Honour Mr Justice Wilson at 149 CLR 633:

Repudiation of a contract is a serious matter

and is not to be lightly found or inferred .....

In considering it, one must look to all the

circumstances of the case to see whether the

conduct "amounts to a renunciation, to an

absolute refusal to perform the contract."

And I emphasize those words:

to an absolute refusal to perform the contract.

In the judgment of Your Honour the Chief Justice in

TABALI's case at 157 CLR 31:

It is often said that repudiation or fundamental
breach - in the sense of breach of a condition
or breach of another term or terms which is so
serious that it goes to the root of the contract,

and thus deprives the other party of substantially

the whole benefit of the contract -

and there again, that context of benefit or

loss of benefit and prejudice is a significant factor -

entitles the innocent party to rescind the

contract and sue for damages for loss of

the bargain.

No bargain has been lost here, I might add; certain rights of sale, but no bargain in terms of being

able to go in. I emphasize the words "substantially

being deprived of the whole benefit of the contract,"

Your Honour the Chief Justice in that same passage.

There is also the passage of His Honour Lord Justice
Buckley in DECRO-WALL INTERNATIONAL SA	V

PRACTITIONERS IN MARKETING LIMITED, (1971) 1 WLR 361 - it is on the list of cases - the passage at page 380:

To constitute repudiation, the threatened

breach must be such as to deprive the injured

party of a substantial part of the benefit

to which he is entitled under the contract.

Will the consequences of the breach be such that it

would be unfair to the injured party to· hold him to the

contract and to leave him to his remedy in damages?

He was not deprived of his rights for specific

performance and that was obviously if he had and

wished to stay, been the appropriate relief, indeed,

~s the Full Court observed.

C2T24/l/VH	48/49	MR GALLAGHER, QC	4/10/88
Launrinda ( 2)

MR GALLAGHER (continuing): There is also the reference

which I merely give to the Court of SPETTABILE

CONSORZIO V NORTHUMBERLAND SHIPBUILDING CO LTD,
(1919) 121 LT 628, the passage of Lord Justice Atkin

at page 634 to 635 where, when he was referring

to the various definitions of repudiation said:

They all come to the same thing and they all amount at any rate to this.

That it must be shown that the party

to the contract made quite plain -

"quite plain" are the words that I emphasize -

his own intention not to perform the

contract.

And in these circumstances the facts on which

we rely to rebut the suggestion of repudiation

is the fact that the agreement is in relation to

a lease. That contracts for the sale of land

creating as they do, equitable interest in the
land, do not easily go off except pursuant to an
express condition of the contract or to an

express repudiation or to an repudiation quite

clearly inferred. And for that proposition I rely

on the statement in NEETA (EPPING) PTY LTD V PHILLIPS,

(1974) 131 CLR 286, at page 296 of the Chief Justice

and Mr Justice Jacobs.

The second fact that I rely on is that the

lease had been part performed. They had entered into possession and had traded and had paid rent.

And, thirdly, there is absolutely no evidence of any express statement by the respondent that they

would decline to honour their obligations to the

appellant. The evidence at all times suggested only

one of honouring its obligations. although,as I say,

done tardily, but done tardily in circumstances

where there was no urgency shown. At best the

criticism that could be made of the respondents in

this case is that it was cavalier, that it was

guilty of delay, but mere delay as the Full Court

does not evince the intention to repudiate one's

obligations. Moreover, mere delay does not evince

the intention to do it simply in the way one wanted

to do it. In a subjective sense, there was evidence

to explain, in part, the cavalier delay and that

was negotiations with the mortgage, which His Honour

the trial judge found were not sufficient to justify

the delay. But nevertheless, it is a circumstance

as distinct from if absolutely nothing had occurred

and they had simply sat by and been tardy and

been completely unco-operative and had not replied

to any of the letters and had not answered any

of the letters, those circumstances may well in the

appropriate facts of the case go as far as my learned

C2T25/l/SR	so	MR GALLAGHER, QC 4/10/88
Laurinda ( 2)

friend seeks to advance, where one is discourteous,

and I am not saying that in a humbug sense, that

if you merely reply formally, you excuse yourself

from repudiation. But all of the circumstances

in this case really relate,as delay said in a
repudiation sense, really come down to when the

letter of August was sent as the Full Court said.

The earlier delay was a negotiation stage. And if

one wanted to rely on repudiation, it was really the

delay that has occurred since that letter of August

but I do not need to go, with respect, that far.

(Continued on page 52)

C2T25/l/SR	51
Laurinda(2)
DEANE J:	Mr Gallagher, if one goes to page 121, what

would you say the position was if instead of

that letter the solicitors for the lessor had

written, "Our client has executed the lease

but will only make it available to us, or for

registration, if and when it suits it."?

MR GALLAGHER:  That would be putting it too high to say

"insulting", but it would be very cavalier conduct

at least.

DEANE J:	But that still would not be enough?
MR GALLAGHER:	Not at that stage without more.
DEANE J:	I said not only when, I said if and when it suits

it?

MR GALLAGHER:  I may have misunderstood the first part,

Your Honour. Are you saying they simply refuse

to give them the copy of the lease or they simply

refuse to register the lease as and when it

suited them?

DEANE J:  I said what if the letter had said, "Our client

has executed the document but will only make it

available to us or for registration if and when

it suits it so to do."

MR GALLAGHER:  Your Honour, that would go very close to

CARR V BERRIMAN if a long period - say they

registered it the next day, there obviously could not be a repudiation, but say they did nothing at all and months and months went by, then that other

circumstance of the case, added to that letter,

would give much more force and effect to the

aggressive and unilateral conduct of the landlord

in that sense.

DEANE J:  Well, say March - it is a shame for the song sake

it is not September - but say March to August went

by?

MR GALLAGHER:  March to August, again, without urgency and

without detriment or prejudice to the tenant, would

again characterize the conduct as not befitting

gentlemen, but not necessarily only showing an

intention to repudiate. Your Honours, I know

that the Court has been taken through the letters

and correspondence to a degree which does not need

tedious repetition, but the letters and the

correspondence have to be looked at exactly for what they requested in terms of time. I simply

say that the letter of 14 March was a request

simply to see the lease, no more,no less. The

reason given for it was that they wanted to see

it because apparently they had executed it under

C2T26/l/MB	52
Laurinda(2)

pressure.	They had not got a copy of it and they
wanted to work out their obligations.	Now, that

request in itself does not cause one, in conveyancing

matters relating to title or relating to answering

requisitions, it was not a formal obligation, it was

a courtesy matter which one would have normally

expected, if they had executed a lease,they would

have kept a copy in any event even though that

copy may not have gone for stamping and registration,

that they would have had a copy of what they signed.

But apparently that was not the case, they simply

wanted to see it. Then on 25 March the reply

was that the documents had been sent to Melbourne

for execution and had not been returned but they

will be returned in the not too distant future

and:

We will provide your client with its stamped

parts ..... as soon aswe are able to.

There is no suggestion there, we will do it only when we want to or only if we chose even to decide

to give it to you.

(Continued on page 54)

C2T26/2/MB	53	4/10/88
Laurinda(2)

MR GALLALGHER (continuing): And then, the 21 April letter

at 142, simply putting it in the chronology

context, was an assurance to the tenant that the
tenant, if he found a person that he wished to
assign his lease to, that could be accommodated.

No suggestion there that the landlord was

intractibly wedded to this particular tenant.

He simply wanted to have tenants in his shopping

centre. A not unreasonable understanding of

the construction of the letter of 21 April.

Then, without any other circumstance, as

I say, normally attracted to these sorts of
situations of impending sale by the landlord,
of notice by the mortgagee that he would not
consent to the landlord's actions in terms of
the purchase of the property or to the registration

of leases, none of that, only the mere lapse

of time between 21 April and 21 August there

came the letter which simply said, in the end: our clients require your client to complete

registration within fourteen days from the

date hereof.

And I do not take any point that that was an

implied obligation to produce a registrable lease

and that in fact we undertook the factual burden

of procuring the actual registration; the implied

term only went so far as to produce a lease in

registrable form but because we had extracted

the money and had taken that, I might say, in

January, that that was referred to.

I should refer to that letter because the

context of it came as the last letter simply

before this particular letter was sent and it

is a letter at page 143 of the record by

Messrs Flower & Hart, addressed to John Ahern,

the accountant for the tenant, and at that stage

they enclosed copies of the bill of costs, and

the bill being paid and showed the outlays.

Now that letter being sent on 12 August is only

relevant to this extent, that it shows absolutely

no suggestion that the representative of the

landlord had been instructed in some way to abort

or attempt to advise the landlord as to some

method to get out of the lease. It is a letter

showing that "We've got your money, we've

acknowledged it and that we have acknowledged

our requirement to go ahead and register the

lease and here's an account of all of what's

happened" albeit rather sadly they they had

not, in fact, registered the lease.

. And it was only after that, in fact a number

of days after tha½ and one does not know whether

C2T27/l/ND	54	4/10/88
Laurinda(2)

that letter precipitated something in the mind of

the tenant or not but that is the last event

before the event of 21 August on which so much

reliance is being placed to have it be said that

up until that date, by some conduct other than

mere delay, there was evinced from the facts

a specific intention to repudiate the lease.

Your Honours, in our submissions, in the

context of a promissory condition in an open

contract the principles of LOUINDER V LEIS

necessitate that there was a requirement for

a notice calling on the landlords to complete

the contract within a reasonable time.

BRENNAN J:	Mr Gallagher, would you accept the proposition that the lessee was by August, at all events,
in a position to give notice to complete?
MR GALLAGHER:	On the open contract with a promissory

obligation test he was in a - His Honour

Mr Justice Connolly found that an unreasonable

time had elapsed. It is clear that we only had

a reasonable time and we do not seek to contradict

that finding.

(Continued on page 56)

C2T27/2/ND	55	MR GALLAGHER, QC 4/10/88
Laurinda(2)

MR GALLAGHER (continuing):  So that one then goes to

GREEN V SEVIN and that establishes a notice that

has proper warning and proper time. Now, that

is where His Honour Mr Justice Connolly went

to BALOG V CRESTANI and he found that that was

not sufficient but independently of that he then

went back to repudiation and said - - -

BRENNAN J:  I appreciate that but I would just like to draw

your attention to the problems about the letter

on page 122 - the purported notice to complete.

Leaving aside the BALOG V CRESTANI point, was

the time allowed by that letter reasonable or

unreasonable?

MR GALLAGHER:  The time allowed by the letter?

BRENNAN J:  Yes.

MR GALLAGHER:  We would say unreasonble - 14 days is unreasonable.

BRENNAN J:  To do what?

MR GALLAGHER:  To procure the consent of the mortgagee.

In	effect they had an executed lease - the findings
of	what had to be done are set out in the evidence
of	Mr Robert Lockhart and there were a series
of	steps which I can go through if Your Honour - - -

BRENNAN J:  Do you have to upset findings that have been

made below in order to get to that point?

MR GALLAGHER:  We do not seek to upset the findings below

that justified the letter of 21 August 1986,

in respect of the GREEN V SEVIN point.

BRENNAN J:	Of course.
MR GALLAGHER:	We seek to upset it in the point of repudiation.

There is a difference between an unreasonable

time elapsing to entitle you to give a GREEN V SEVIN

notice, as I call it, and an unreasonable time

elapsing so as to constitute repudiation as the

only inference.

BRENNAN J:	Well now, the time which was allowed bv the
letter was what -  14 days, was it?

MR GALLAGHER:  Yes.

BRENNAN J:  And was it not the view of Mr Justice Connolly

that that time was a reasonable time in which

to do what had to be done?

MR GALLAGHER:  No. Mr Justice Connolly, having found that

the formal notice was not good enough in

C2T28/l/AC	56
Laurinda(2)

BALOG V CRISTANI observed, and we say observed

if anything against my client, that - page 339,

Your Honour, at line 50:

I should say, however, that as to the

sufficiency of time I am far from persuaded

that the contract could not have been stamped,
endorsed with the mortgagee's consent and

tendered within the 14 days limited. It

must be remembered -

et cetera. But in the context - - -

BRENNAN J:  What is defective about that finding?

MR GALLAGHER: It is a passing finding. It is not an explicit

finding that it was reasonable or not because

if one goes back to page 338 the notice was first

examined on the BALOG V CRISTANI principle of

form and then the second test was, was the period

reasonable? And having dismissed it on the grounds

of form, as he said, but, "If I am wrong on the

BALOG V CRISTANI point' - because he rerers to

it as being at this level - that he was not prepared

to overrule what he construed to be the

BALOG V CRISTANI point and then he gave a

suggest ion, and no more than a suggest ion, that

he is saying:

I should say, however, that as to the

sufficiency of time I am far from persuaded - Now,· that is, with respect, not a positive finding

against us that the time was sufficient.

BRENNAN J:  Who bore the onus of proving it?

(Continued on page 58)

C2T28/2/AC	57
Laurinda(2)
MR GALLAGHER:	The onus of proof is borne by the tenant in this particular case. The 'tenant iid not
call any evidence, and the case showing that the onus of proof was on the tenant is a case of WENDT V BRUCE, 45 CLR 245. So that in those
circumstances the tenant cannot be assisted,with
respect, to get home on that finding, in effect,
he has to have done something better - - -
BRENNAN J:	Well, would you say that the tenant had not

established, as he was required to establish, that

the time allowed was reasonable?

MR GALLAGHER:  Was reasonable. And I say that for these

reasons, Your Honour: the only evidence called

was that of Mr Robert Lockhart, which appears in

the transcript, and he sets out the days. I

can give Your Honour the references: volume 1

at page 55 - and he goes through the various

steps:

Firstly, in your experience, how long does it tend to take to have a lease such as the subject lease stamped in the Stamps Office,

prior to lodgement ..... ?---It really depends least one to two weeks.

on the volume of work going through ..... but

But then if one goes on to the rest of his evidence

I can demonstrate, if the Court wishes me to, that

a period of much longer than two weeks was the

period which would have reasonably been anticipated.

As I say that was the only evidence called; no

evidence at all for the tenant on it by a solicitor

or experienced conveyancer and His Honour simply

said, "Well, I am not really convinced that it

was an unreasonable time."	No more than that and,
as I say, the context in which that is said is

he has first of all dismissed the validity of the
notice any way, so he did not make an express

finding. But it quite clear on the authorities,

particularly more lately in New South Wales, that

one has to give a notice which is valid in terms

of time and terms.

BRENNAN J: 

Mr Gallagher, the requirement that is in the

penultimate paragraph of that letter is to complete
registration. That, you say, is more than the
contract required?

MR GALLAGHER: 

That relies on the implied term of a contract,

which we do not dispute. To effect a demise we

have to effect a registration. But nowhere in

~he contract is registration said to be essential

as an obligation, it is simply assumed and we,

undoubtedly, assume the obligation to do it within

C2T29/l/MB	58
Laurinda(2)

a reasonable time, to effect registration and

to effect it within a reasonable time.

BRENNAN J:  One further question: that reliance, if

any, do you place on clause 15. 7?

MR GALLAGHER:  15.7 is the clause that we rely on to show

that this contract was unconditional. If it had

been argued, as we assumeditmay have been,that

PERRI's case had some application to this in terms

of being a contingent condition in respect of

which the mere expiry of time entitled one to

rescind, then the answer to that would have been

reliance on 15.7, but it is an unconditional

contract, the only term relating to title being

the obtaining of the mortgagee's consent and in

the course of Your Honour's judgment in PERRI,
those matters being matters of conveyance or

title can be included in an order for specific

performance so making the contract unconditional

in that sense, and because time is not specified,

it is a promissory condition in an open contract

in respect of which the GREEN V SEVIN rule

applies.

(Continued on page 60)

C2T29/l/MB	59	MR GALLAGHER, QC	4/10/88
Laurinda ( 2)

MR GALLAGHER (continuing):  So that is our reliance on

15. 7, Your Honour. Lastly, one comes to the question

of the validity of the notice and what it may state

and the cases on this really have been consistently

applied through the years starting at cases such as

LENNEBERG V McGIRR, (1919) SA(NSW) 83 - I merely

give the Court these references because they are

self-explanatory in terms of the propositions that

I advance - CHAPMAN V LARRESCY, (1978) 1 NSWLR 592;

O'BRIEN V DAWSON, (1941) SA(NSW) 294, particularly

the judgment of His Honour the Chief Justice Jordan

at 304, and the cases referred to by my learned
friend; VANDYKE and TAYLOR V RAGLAN DEVELOPMENTS,

particularly the judgment of His Honour Mr Justice Powell

between pages 131 to 134.

Although, as His Honour said, in BALOG V CRESTANI,

there is not much attention these days paid to

form, conveyancing and lease practice where there

are alternative forms of remedy, specific performance,
damages or repudiation leading to rescission, In the

context of an open contract in respect of which time

is not of the essence, it is essential, ·

in oor submission, to rra.ke a notice which is an evidentiary

notice showing that unless you clearly perform the

obligation which we call on you to do, namely, register

the lease, we are about to rescind. In other words, before one aborts the transaction to the extent that the tenant_ says they have lost all the benefit of the

transaction, they should specifically say what they

are about to do.

(Continued on page 61)

C2T30/l/VH	60	MR GALLAGHER, QC	4/10/88
Laurinda ( 2)

MR GALLAGHER (continuing):  It may be true, as His Honour

the Chief Justice said, in modern-day terms forms
are not important, but it would be sad indeed in

the field of conveyancing if forms retained that

unimportance.	They are our submissions, if the
Court pleases.

MASON CJ:  Mr Gallagher, can I ask you a question about

Mr Lockhart's evidence.

MR GALLAGHER:	Yes.
MASON CJ:	At pages 73 and 74 he was cross-examined with

reference to the reasonableness of time in the notice

and, as I understand his evidence, particularly at

page 74, he was saying from his knowledge of the

practices of the Commissioner of Stamp Duties and

the Registrar of Titles it would be unlikely to

expect that you can get a shopping centre lease

stamped and registered within 14 days, but he then

went on to agree that both the Registrar of Titles

and the Commissiner of Stamp Duties do treat matters

on an urgent basis. Was there any further

development of that answer?

MR GALLAGHER:  Yes. At transcript in the appeal book,

page 79, re-examination by Mr Muir:

What is required?--The Commissioner of

Stamp Duites usually requires a letter from

the party lodging the document, explaining

exactly why you require the documents to

be stamped urgently, thereby disrupting

his system.

Does he invariably accept any explanation

that is all that is offered?--No.	In fact,
on a number of occasions, I have had

requests to have things tamped urgently,

knocked back.

What about the Registrar of Titles; what

is his practice, if any, in relation to

expedition or registration?--Similar
practice to the Commissioner of Stamp
Duties.

There are other references to the time factor,

Your Honour, but to specifically answer the urgency

question, that is the reference.

MASON CJ:  That is what I asked you about.

DEANE J: Is there anything to indicate that the tenant would

have known the document was not stamped?

C2T31/1/HS	4/10/88
Laurinda(2)
MR GALLAGHER:	Nothing to indicate that.
DEANE J:	Under the Queensland Act, is stamping within a time from first execution or from execution by all
parties?
MR GALLAGHER:	Yes, there would have been, in practical

terms, a penalty accrue for non-lodgement within

30 days of lodging the document for stamping.

DEANE J: Within 30 days of first execution or of - - -

MR GALLAGHER: Of date of execution, whether that means

first execution, I assume it does.

DEANE J:	When you look at the letter, page 119, which says that on 28 November 1985 the document had been
executed by the other party. Assuming that the
documents are then out of Queensland, what would
have been the liability to duty?

MR GALLAGHER: If the document was out of Queensland - - -

DEANE J:	It had been executed by the tenant in Queensland,
sent to Melbourne and executed by the lessor?
MR GALLAGHER:	If I could ask Your Honour, first of all to turn

to page 121. In March the lease documents were

forwarded to me in Melbourne for execution. They

have not been returned but they have been executed.

So it is not quite clear on what exact date they were executed out of the State, but the reliability

for stamp duty penalty occurs at date of final

execution , that- is when the landlord had signed

it. And it would have occurred between November

and March.

DEANE J: Except the letter of 28 November said they had

been executed? Or am I misreading something?

(Continued on page 63)

C2T32/l/SR	62
Laurinda(2)
MR GALLAGHER:	That i·s so, Your Honour. The date of execution

appears at page 138 as to be 31 October, and then

there is that solicitor's letter of August indicating

when the money had been paid for the stamping of the

document. Yonr Honours, they are the submissions

of the respondent.

MASON CJ: Thank you, Mr Gallagher. Yes, Mr Jackson?

MR JACKSON:  Your Honours, our learned friend's argument dealt

with the view taken by the primary judge in relation to BALOG V CRESTANI. It is perfectly apparent, with

respect, that His Honour took the view rightly that

he was bound by the previous decisions and did not

attempt himself to create a new law on the point and

the Full Court did the same. Your Honours, if I could

observation, with respect, supported by no evidence,

turn to a matter relied upon by our learned friends:

at page 353 which perhaps covered the view of the

Full Court on the matter and that is the one between

lines 40 and 50:

Had the business of the first respondent

been profitable, it would, one might think,

have been looking to enforce its rights

rather than seeking to be relieved of its

obligations.

Your Honours, some evidence on that point, with respect,

might have assisted the court to arrive at that

conclusion; there was none; we were not behind with

the rent, or anything like that. And indeed, if the

Court were to take that view and the only possible

evidence that was in any way relevant to it was the

document at page 142 which suggested that we were

interested in selling the leased premises, if it

were a matter of relevance one would think that a

tenant who was not doing well would have at least as

much interest in having a registered lease which it

was doing very well. could then sell off to someone as would a party who (Continued on page 64)

C2T33/l/VH	63	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, in our submission,

(a) it was unsupported by evidence, (b) it was a

non sequitur, with respect.	The third point is this,
Your Honours;	it was suggested that we should have

caveated. We could caveat in two circumstances.

One was by consent, and the other was if we were

then prepared to start an action to support the

caveat, otherwise it would lapse. Why one should

be obliged to seek consent to a caveat when one

has had no success in obtaining a copy of a lease
which has to be signed by the same parties, in our

submission, does not very clearly appear. There is

no particular reason why we should attempt even

to get a second best.

Your Honours, prejudice, in our submission - I am

moving to another point - is not an essential element

of the right to rescind. If one looks at the way in

which the principles are stated in CARR V BERRIMAN

and the following cases that really does not appear,

nor does one have to establish that the obligation

is of the most dramatic importance. The matter was

put clearly by Your Honour the Chief Justice,

in our submission, in PROGRESSIVE MAILING HOUSE

V TABALI, 157 CLR 33, when, following the passages

referred to by our learned friends, in which

the importance or otherwise of the obligation had

been discussed, Your Honour said at page 33 -

gave a statement of principle in the second line

after the quotation:

What needs to be established in order
to constitute a repudiation is that the

party evinces an intention no longer to be

bound by the contract or that he intends to

fulfil the contract only in a manner

substantially inconsistent with his

obligations and not in any other way.

Your Honour, that is a statement of the test and

it mirrors the statements in earlier cases.

Your Honours, could I go from that to the question

of the length of time of the notice. The way in

which the case was conducted, in a sense, was

that Mr Lockhart's evidence as to the length of time

that it might take was advanced to show that the

time of 14 days was unreasonable.

(Continued on page 65)

C2T34/l/HS	64	4/10/88
Laurinda(2)

MR JACKSON (continuing): His evidence that matters would

take more than 14 days was really not accepted by

His Honour and Your Honours have seen how,

page 55, in his evidence in-chief - - -

MASON CJ:  By the way, it is 13 days rather than 14 days.

MR JACKSON:  Your Honour, I am sorry, yes. I accept that,

Your Honour.

MASON CJ: Because it is 14 days from the date of the notice

it was not delivered.

MR JACKSON:  It was received the next day, Your Honour, yes.

Your Honours, at page 55 he gave his evidence

in-chief about the time it would take to go through

the stamps office. He was then, of course,

cross-examined as Your Honours have seen at

page 74 and it appeared that urgent matters could be stamped urgently and then at page 79, all that

was said in re-examination was that hardly

surprisingly the Commissioner of Stamp Duties

did not always accede to every request, good or

bad, to stamp a document urgently and - - -

MASON CJ:  He might not think the circumstances are

urgent?

MR JACKSON:  But one might think that the party would be

able to persuade him that the instant case it was.

And, of course, it is, as the answer between

lines 25 and 30 demonstrates, really irrelevant

to look at any delay in the titles office because
the critical time is the time of the lodgement

the document. Once lodged and later registered

provision of the Act immediately to hand, but it

it takes effect from the date of lodgement.

is one of the provisions of the REAL PROPERTY ACT

registered takes effect from the date of lodgement	that says that, in effect, that the document once
with the registrar.

Your Honours, there is one final matter

with which I wish to deal and it is this. Our

learned friends referred to in passing the
observations of the Full Court to the effect that

time before the giving of the notice did not count.

Now, Your Honours, I did not refer to this in our

argument in-chief because it was not something

that ultimately went to the view taken by the court.

But may I take Your Honours to it for just a minute.

C2T35/l/SR	65	MR JACKSON, QC	4/10/88
Laurinda ( 2)

MR JACKSON (continuing):  Your Honours, the section to which

I had referred was section 43 of the

REAL PROPERTY ACT 1861. Could I return to the

point I was about to mention and it is this:

Your Honours will see at page 353, commencing

at line 50 in a passage which goes over to the
third line on the next page, that Their Honours
say that:

Another aspect of the letter ..... is that it clearly was an admission by the

first respondent that there was then a

subsisting contract.

Your Honours, of course it was, with respect.

Until one elects to terminate a contract it

continues. And Their Honours then go on to say

in determining whether the appellant had

evinced an intention to perform its
obligation pursuant to the contract only

upon its own terms and so to be guilty of

a fundamental breach of the contract, it seems that the time which elapsed before the giving of the notice should be

disregarded (see McMURRAYV SPICER).

Your Honours, that case is one which perhaps

I could hand to Your Honours. Your Honours,

that case does appear - I·will have to take

Your Honours to the passage in a moment - to

say that. No one before or after ever seems to

have said the same thing and Your Honours what

I mean by that is that if Your Honours look at

McMURRAY V SPICER you will see that at page 537

in the last paragraph on the page Vice Chancellor

Malins deals with what he calls the "next objection"

which is an objection to delay.

Now, Your Honours will see in that paragraph

that the point with which he is there dealing

is whether in determining whether a decree of specific performance should be refused in the exercise of the court's discretion on the ground

of delay in the institution of the proceedings,
the dealings between the parties in endeavouring
to arrive at some compromise or in discussions

should not be taken into account.

(Continued on page 67)

C2T36/l/AC	66	4/10/88
Laurinda(2)

MR JACKSON (continuing):  Your Honours, it might be right

or wrong but he follows the SOUTHCOMB	V THE
BISHOP OF EXETER.	But that is the point with

which he is there dealing.

Where one goes from there - and Your Honours

perhaps I might just say about it that in so far as it decides that one supposes that the case does no more than apply the general rule

in LINDSAY PETROLEUM COMPANY V HURD, namely that

one has to look at the nature of the acts involved

to determine whether they amount to delay. But

the passage which appears to found the observation
of the Full Court is the next passage at page 538 -

the second paragraph on page 538. His Lordship

there says:

It was argued that the notice could not be received as an admission -

that was the notice he speaks of of 12 December 1864

which was the notice purporting to rescind the

contract -

that there was, at that time, a subsisting

contract, but I read it most distinctly

as an admission by the purchaser that there

was a subsisting contract at that time.

As one would have to, one would think. And he

goes on to deal with that in the next two sentences

but concludes by saying -

and that, consequently, excludes all the

anterior time from the computation of delay.

Your Honours, that appears to pick out what must have been a very successful argument by counsel

at page 531, and it is the last paragraph on

page 531 where the argument appears to be put	in a manner which relates it to the SOUTHCOMB
V BISHOP OF EXETER point and, Your Honours, one
can understand that a notice to rescind carries with it the implication that there is something
to rescind, that is, a contract.

(Continued on page 68)

C2T37/l/ND	67
Laurinda(2)
MR JACKSON (continuing):	But why it should follow that

all delay up to the time of giving such a

purported notice to rescind should be excluded

for the purpose of determining whether delay in

instituting proceedings for specific performance -

I am sorry - why it should be excluded for that

purpose is, with respect, elusive, and there

really seems no reason why it should. It may

not be criticial, of course, but it would certainly

cast some colour upon the question. But why it

should possibly be relevant, with respect, to a

case such as the present is, Your Honours, even

more elusive.

DEANE J:  Mr Jackson, what do you say about the suggestion

that the reference to the lease on page 120 is,

in effect, to the documentation generally, because

your client did not have a copy, which would

mean that it really has nothing to do with

completion of a separate document or registration?

MR JACKSON: 

Well, Your Honour, it is at least that, it is

at least the request to forward us a copy of the
lease but, Your Honour, at the time what was being

done was that there had been an agreement entered

into which required there to be a lease, at least
in a registrable form - I am not trying to avoid

what Your Honour said, I am just seeking to put
it in the context - but what it means is - - -

DEANE J:  I follow all that. I am just wondering about

the separate reliance that one can place on the

letter of 14 March. One approach - I think this was implicit in what was said on the other side -

is that the reference to lease there is really to

the documentation and not to a separate memorandum

of lease.

(Continued on page 69)

C2T38/l/MB	68	4/10/88
Laurinda(2)

MR JACKSON:  Your Honour, the term "lease" used in the

letter is not referring to, in effect, a conveyancing

draft, it is referring to a document which conveys -

deals with rights and interests and it deals with

rights and interests by reason of its own quality.

When it says, ''We want to see a copy of it, we want

to have our copy of the lease",it is asking for our copy of the document in compliance with the

agreement.

DEANE J:  Well, that is what I was asking you. As I

understand what is suggested against you is that

the reference to '11.ease"with the small "l" there

is simply a reference to the documents which'we

executed and we want a copy of them."

MR JACKSON:  Your Honour, it is, with respect. - really one ,;.;ould be

parsing and analysing it too. finely to arrive

at that result, in our submission, because we had

entered into an agreement one of the terms of which

was that we would get a lease.	We say, "Where is
our lease?"	That is the thing we complain about

throughout, we want a copy of our lease and that

lease is one which, of its nature, is one to be

registered.

DEANE J:  So I can be clear, you dispute that that letter

is, in effect, saying, "We have not got a copy of the documentation, please supply us with a copy."

MR JACKSON:	Yes, we do dispute that,Your Honour, meaning by that that we do not suggest that the letter
merely conveys that for good order we should have
a copy of it so that we can look at it whenever
we choose. What we are saying is they have asked us, "We have been instructed to ask you to forward
a copy of the document to us", the document being
the lease which conveys interests, we say to
comply with their request, that is, the request
to have the lease.

(Continued on page 70)

C2T39/l/:MB	69	MR JACKSON, QC	4/10/88
Laurinda ( 2)

MR JACKSON (continuing): It means more than just asking

for the piece of paper, Your Honour.

MASON CJ:  Mr Jackson, I thought that there was modern

authority to support the proposition that, in

determining whether the time fixed by the notice

was reasonable, you did have regard to the period

of time that ensued prior to the giving of the

notice.

MR JACKSON:  Yes. Your Honour, I am sorry, I should have

said that. That is, in fact, I think, referred

to in what Your Honour said in LOUINDER V LEIS.

MASON CJ: Yes, that was my impression and, I think there

is other authority for it apart from that.

MR JACKSON:  Yes and, Your Honour, it would seem, one would

think, a really curious thing if one did not because
the time that one would fix in the notice must have

some relevance to what has happened beforehand.

MASON CJ: Yes.

MR JACKSON:  Yes, Your Honour, I am sorry, I should have

referred to that but it iR implicit, Your Honour

and, perhaps, explicit in what Your Honour said in that

case. Your Honour, those are our submissions.

MASON CJ:  Thank you. Mr Gallagher, do you want to say

anything in response to the question I asked

Mr Jackson?

MR GALLAGHER:  Your Honour, STICKNEY V KEEBLE in the House

of Lords clearly proposed the proposition that the

time up until the date of the giving of notice must

be taken into account but, with respect, what the

Full Court was talking about there was not disputing

that proposition but it was talking about McMURRAY V

SPICER in the context of whether there had been

repud:iation ~nd while negotiations are going on to

a certain point, McMURRAY V SPICER found there was

no repudiation as evinced in that time frame and

you did not take it into account in that context. It

was not trying to overrule the statement of common

sense that in determining the 14 day period, for

example, in this case, you should not also take into

account the earlier period. They were completely

separately arguments, completely separate points and
if one reads the pages before McMURRAY V SPICER in
the Full Court, it becomes apparent that what the

Full Court was talking about was the repudiation

argument, as distinct from whether the time was

reasonable or not in terms of the 14 days.

MASON CJ: ·Thank you. The Court will consider its decision

in this matter and adjourn until 10.15 am tomorrow.

AT 12.48 PM THE MATTER WAS ADJOURNED SINE DIE

C2T40/l/SH	70	4/10/88
Laurinda(2)