Laurinda Pty Ltd v Ahern

[1988] HCATrans 141

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Brisbane No B26 of 1988

B e t w e e n -

LAURINDA PTY LIMITED

First-named Applicant

and

JOHN AHERN, ELIZABETH JOAN AHERN,
JOHN NORMAN HOLDWAY and

SUZANNE JANN HOLDWAY

Second-named Applicants

and

CAPALABA PARK SHOPPING CENTRE

PTY LIMITED

Respondent

Application for special leave to

appeal

Laurinda

MASON CJ
WILSON J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON FRIDAY, 1 JULY 1988, AT 12.22 PM

Copyright in the High Court of Australia

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MR R. HANSON QC:  If the Court pleases, I appear with my learned

friends, MR K. FLEMING and MR N.J. THOMPSON for the

applicants. (instructed by Ph1l1p D. H1shon & Co)

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

my learned friend, MR A. LYONS, for the respondent.

(instructed by Flower & Hart)

MR HANSON:  Your Honours, in this case the Full Court has reversed

the learned trial judge on grounds submitted to be

erroneous in law and upon a £actual ground when, in our

submission, the circumstances which justify an appellate

court in interfering were not present.

MASON CJ: Well now, Mr Hanson, could I ask you to explain to

us at the outset why there is a question of general
importance here? May it not be said that the real
issue concerns the drawing of an inference from the

facts?

MR HANSON:  Your Honour, the Full Court, in our submission, has

made two statements of matters of law which we wish to

submit are wrong.

MASON CJ:  Now, can you identify them for us?

MR HANSON:  Yes, I can. If Your Honours would go to the bottom

of page 27 at about point 9:

Another aspect of the letter of 21st August,

1986 to which we referred is that it clearly was
an admission by the first respondent that there

was then a subsisting contract and 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

fundament~l breach of the contract, it seems that

the time which elapsed before the giving of the

notice should be disregarded (see McMURRAY V SPICER).

With respect, we submit that involves a misreading of

McMURRAY V SPICER, and may we hand up copies of the

judgment in that case.

MASON CJ: Now, before you go to that, because the Court will

have to adjourn in a minute, could you identify the

second error of principle on the part of the Full Court?

MR HANSON:  Yes, Your Honour. If Your Honour would go to

the foot of page 30:

The matter turns, in our opinion, on the

nature of such breach as is alleged against
the appellant. The relevant term of the
contract 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.

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There follows a reference to Your Honour the Chief Justice's

judgment in LOUINDER V LEIS. The submission is that

involves a misreading of what Your Honour is saying or taking of what Your Honour is saying out of context in

applying those comments to a situation that they were

never designed to meet, in particular, presumably, the
court relied upon the last sentence of the first paragraph

of that quote, "Because the initial period of delay".

MASON CJ: The Court will adjourn now and we will resume at 2.30.

AT 12.26 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.40 PM:

MASON CJ: Yes, Mr Hanson?

MR HANSON:  Your Honours, in our submission, the Full Court adopted

an approach to the question of repudiatory conduct which

could be read as rolling together two of the categories

of repudiatory conduct that the Court spelled out in

SHEVILL V BUILDERS LICENSING BOARD. Your Honours may

recall that in that case His Honour Mr Justice Gibbs spelled out three categories of repudiatory conduct;

the first being a refusal to be bound by the contract;

the second being conduct evincing an intention to

perform but only upon terms that suited that party

and inconsistent with his obligations; and the third

being.a breach of an essential or fundamental term.

At trial, Mr Justice Connolly found against the

applicant in the third category because he found that
the notice requiring performance was invalid and
therefore there was no proof of breach of a fundamental
or essential term. But he dealt quite separately with

evincing an intention to perform as that party saw fit. the other category and found as a fact that conduct In the Full Court it seems to us, with respect,

that Their Honours have rolled the two tests together

and perhaps have found them to be mutually exclusive

or perhaps they have approached it this way: they have

said that where the repudiatory conduct relied upon

consists of mere delay when time is not of the essence,

well then, it is only the third category that is

available to the innocent party. They have said, on a

reading of the judgment, that the innocent party had to

give a valid notice and do not seem to have given any

consideration as the trial judge did to the quite

separate avenue for establishing a repudiation, namely,

simply conduct evincing an intention to perform as he

saw fit, so that a notice just became completely irrelevant.

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Now, in our submissions that is a fair interpretation

of a reading of the judgment at pages 30 through to

page 32 and that, in our submission, is a special leave

point. At the middle of page 30 ·Your Honours will see a

cormnent that the innocent party was:

obliged to give notice -

and about the middle of the page:

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.

They go on then, at the foot of this page, to speak

about what is the breach alleged against the appellant.

At the top of the next page is the passage I asked

Your Honours to look at before lunch, and the quote

from LOUINDER and SEVIN. And then on page 32 it is

all brought together in these terms:

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 by

the appellant involving as it did no more than

delay was no basis for the alleged acceptance -

of the repudiation.

Your Honours, that is our first submission. The

Full Court.seems to have rolled together these two

separate avenues that. an innocent party can resort to,

whereas, the trial judge treated them separately and

found in our favour by travelling one path.

Could we pose then the first speciaL leave point

in these terms: where the innocent party relies merely

upon delay in completing in a case where no time to

complete is fixed, can the innocent party make out a

case of repudiation under the second category in SHEVILL,

that is, an intention to perform as and when it suits
the other party, or must the innocent party give notice

to complete, making time of the essence and thus proceed under the third category? They could be put another way:

are the categories of repudiatory conduct spelled out

in SHEVILL's case mutually exclusive where mere delay is

relied upon, in a case where time is not.essential?

In our submission, that is a special leave point open

in this case and this Court ought to correct the

suggestion of the Full Court, if it is to be read that

way, that mere delay entitles the innocent party to

proceed along one limb only.

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WILSON J: There is a logical connection between the two, is

there not, Mr Hanson? I mean, one can understand
that repudiation might be shown by a whole range of

things but if, in fact, the only basis for repudiation

is a dilatoriness on the part of a lessor that

is not shown otherwise than to want to and intend to

complete, is it not consistent with the principle to

require that that dilatoriness be brought to an end by a

notice?

MR HANSON:  Your Honour, our submission is that if the dilatoriness

has been so extended - to take, for example, this

six-year lease and they have been sitting there for

two years waiting for their registered lease, it is

our submission that the lessee a£ that case could

make a case of repudiation after two years simply

based upon dilatoriness.

WILSON J: Even if the lessor were shown to have"·had some

reason for holding it and in the absence of any

formal notification from the lessee to complete?

MR HANSON:  When Your Honour says "formal notification", you

mean an adequate notice?

WILSON J: Yes, an adequate notice.

MR HANSON:  Yes, in the absence of an adequate notice, if the

lessee has been requesting what he contracted for,

a registered lease, and not getting it and if the

lessor was delaying for his own cormnercial purposes

or whatever, our submission - - -

WILSON J:  So, you would be relying on the expressions of impatience

by the intending lessee in this case as going to show

repudiation, quite apart from whether or not that

notification constituted a. valid notice to complete?

MR HANSON:	Yes, Your Honour, the dilatoriness in the light of the lessee's requests and the lessee's expression of
vital concern.

WILSON J:  So the other element - it is not mere delay. It is

mere delay in the context of a known anxiety on the

part of the other party to get its title?

MR HANSON:  Perhaps, Your Honour, if the lessee did not object

he would probably be accused of having waived_ the

delay. So, I suppose, it would be solved that way.

It probably, in fact, would be difficult to rely on

mere delay with nothing else whatever.	It would probably
be taken to be a waiver, I suppose.

Your Honours, we have a further proposition that

is a special leave point, in our submission. When the

Full Court states that mere delay was insufficient, if

that is a statement of a proposition of law, well then,

we would submit that was wrong in law for the reasons I

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gave Your Honours before lunch. It is based upon a

misreading of LOUINDER V LEIS. Alternatively, if the
statement of the Full Court is merely a finding of

fact, well then, we have two special leave points and

they are these: that that finding of fact is based upon

the error of law, that is, the misreading of

McMURRAY V SPICER that I have referred Your Honours to before lunch. I do not know whether Your Honours had an opportunity to look at that point over lunch. You

will recall that that point comes from the passage

at the foot of page 27 and the top- of page 28.

We have here copies of that case, Your Honours,

McMURRAY V SPICER.

Your Honours will see from the foot of page 27

and the top of page 28 the judgment of the Full Court

suggests:

that the time which elapsed before the giving

of the notice should be disregarded.

And in reliance upon that statement, the Full Court

then disregarded, apparently, the delay that occurred

between December 1985 and August 1986, being the period

before the notice was given. Now, in our submission,

McMURRAY V SPICER does not support that proposition

at all. It was a vendor's bill for specific performance

and the purchaser's answer appears from the opening

paragraphs of the judgment at page 535:

The resistance to this contract is upon

three grounds: First, that the property, by
the terms of the contract, is so indefinitely

described ..... secondly, that there has been

such delay that the Plaintiff has lost his right

to~· decree for specific performance; and

thirdly, that an effectual notice to rescind -

if Your Honours would go then to the midale of page 537:

The next objection is as to the delay.

And that paragraph sets out the history of the matter

between the parties and shows that the contract was:

entered into in 1861, the bill was not filed

till August, 1865 -

but up until December 1864 they had been corresponding

and negotiating. And then at the top of page 538

His Honour excludes:

for the purpose of considering delay, all the

time down to the 12th of December -

which was when the notice was given. Then the next

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passage is in a similar vein, finishing off with:

Consequently, excludes all the anterior

time from the computation of delay.

All the time before the notice. What His Honour is

talking about, of course, is the delay in the

context of laches that had been pleaded against the

vendor plaintiff and that was the only question there,

whether the period up until the giving of the notice

should be brought to account in determining laches

or not. That is all the case decides. If that is
an error or law on the part of the Full Court, well
then, it follows that they have erroneously left

out of _ computation eight months of delay.and

taken into account only one month. Notice was given

in August and the tenant rescinded in September.

That is the first proposition we have,if the

Full Court has said, as a matter of fact, that the

delay was inadequate.	The second proposition we
have is a WARREN V COOMBES argument.	The learned trial

judge's finding that delay was adequate to found a

repudiation is at page 18 at about point 4 of the page.

The final question is whether the defendant has evinced an intention to perform its obligation only upon its own terms. There was obviously no intention on the

part of the defendant of denying registered leases

to its lessees. His Honour then goes on - I do not

need to read the rest of that page except to pick out

a few words here and there. It was a "cavalier"

approach.

The crux of the finding is on the next page, 19,

about four lines from the top of 19:

One cannot resist the conclusion that the decision of the defendant was to prefer

the course which it had adopted in its own

commercial interest and to ignore its

contractual obligation. It was, in my

judgment, unquestionably an essential term

of the contract that a lease in registrable

form be executed. The defendant's position

was that it simply declined to do so until

it suited it. In judgment therefore the

plaintiff was entitled to regard the conduct

of the defendant as repudiatory in a

relevant sense.

Your Honours, the Full Court have found, as a fact

otherwise.

MASON CJ:  Mr Hanson, I think we may interrupt you, at this

stage, to say that we would profit, now, from hearing

from Mr Callinan.

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MR CALLINAN:  Your Honours, could I start with the proposition

that my learned friend really conceded to

Your Honour Mr Justice Wilson that unless there were a valid notice or a sufficient notice, then

there would, in effect, have been a waiver.	Now,
both in the Court - - -

WILSON J: 

But as I understood him, Mr Callinan, he put that

in the position where there was no expression of a
wish to proceed on the part of the other party in

the meantime; if there was complete silence. ·

MR CALLINAN: 

Yes, I see.

WILSON J: 

And if there was a move, as in this case, an attempt

to hurry the thing along, then that would not be

a situation that allowed for waiver.

MR CALLINAN:  Yes. Well, could I approach it on that basis,

then, Your Honour?

WILSON J: 

Yes.

MR CALLINAN: 

Your Honour, with respect to that, we would point

out, however, and it is still relevant, that it was
found by His Honour Mr Justice Connolly and. affirmed,

in effect, by the Full Court, that the notice of

August was not a sufficient notice, so that the

circumstances were then that there had not been

anything done which required in a sufficient way the

lessor to perform its obligation, the obligation that

was found to obtain registration.  Now, that being so,

we would submit, that is really the end of the case,

Your Honours, and that that is the ratio, or really, that

the ratio of the Full Court is to be found at about

30 point 5 of the application book.  Could I take

Your Honours to it? The Full Court there said:

In the case,under appeal it seems to us that the term of the contract upon which the decision depended was a promissory condition

party calling for performance would have been	and that in the circumstances which existed a
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. We think that until an

effectual notice was given the delay continued - so the Court took into account the question of delay -

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 the Full Court did have due regard, we would submit, to the question of delay both before and after the

document relied upon as a notice.	The Court went on
to say:

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So far as the factual position is concerned,

the appellant, as His Honour found -

and this was a finding at first instance -

had no intention of refusing to be bound and
from an objective point of view one could

infer that it was anxious to maintain such

tenancies as it had of its shopping units.

It may have been dilatory, as His Honour

found, and perhaps it should have explained

to the first 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.

The matter turns, in our opinion, on

the nature of such breach as is alleged ag~inst

the appellant.

And so on. But, Your Honours, it is not correct to

say or to make any submission which depends upon the

proposition that the Full Court overlooked or did

not have regard to the question of delay before the

notice. It did, and correctly held, in our submission,

that that taken alone was not sufficient. So that

we would submit to Your Honours that the decision in

the Full Court was plainly correct. Could we also

make these submissions on the question of special

leave generally?

Your Honours, the case depends very much on its

own facts and on the construction of its own documents.

It raises no new principle of law; it raises no matter

which remains to be settled. The questions of

essentiality of time terms and the way in which one

construes open contracts, those matters were all

settled by this Court in LOUINDER V LEIS and, to

some extent, in PERRY, the other decision referred

to in the reasons for judgment. Your Honours, we
would submit that, in summary,	the decision is
correct.	No new principles are raised for consideration.
The principles have all been well settled.	The case

depends upon its own facts and circumstances and is

not an appropriate case for a grant of special leave.

Your Honours, on the question of WARREN V COOMBES,

one is talking about, of course, inferences from

documents and from the facts.- I.t is not a case in

which the Full Court found it necessary to disturb

any finding of fact. His Honour Mr Justice Connolly's

characterization of the conduct as "cavalier" is no

more than a characterization of conduct. It is not a finding of primary fact. Your Honour$, those are

our submissions.

MASON CJ:	Thank you, Mr Callinan.	Mr Hanson.
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MR HANSON:  Your Honour, may we raise a further point? We

had a further special leave point, Your Honour.

MA.SON CJ:	Yes.
MR HANSON:	At page 16 point 5, His Honour noticed that in

BALOG V CRESTANI the Court had left open the question of what a notice has to contain.

MASON CJ:	Mr Hanson, we need not trouble you any further on
this point.  The Court will grant special leave to

appeal in this matter.

AT 3.02 PM THE. MATTER WAS ADJOURNED SINE DIE

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