Legione v Hateley

[1983] HCA 11

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Murphy, Brennan and Deane JJ.

LEGIONE v. HATELEY

(1983) 152 CLR 406

14 April 1983

Vendor and Purchaser

Vendor and Purchaser—Contract of sale of land—Instalment contract—Time of essence—Failure to pay balance of price on due date—Notice requiring defaults to be remedied by stipulated date—Contract to be rescinded if defaults not remedied—Erroneous inclusion of matter not a default—Validity of notice—Equitable estoppel—Extension of time—Conversation between solicitors—Relief against forfeiture—Whether available when time of essence.

Decisions

1983, April 14.
The following written judgments were delivered: -
GIBBS C.J. AND MURPHY J. The appellants were the vendors under a contract of sale executed on 14 July 1978. The purchasers were the respondent Mrs. Hateley and her husband, who died after the present proceedings were commenced. The contract was for the sale of certain land in Victoria for a price of $35,000. A deposit of $6,000 was paid and the contract provided for payment of the residue "on the 1st day of July, 1979 or such earlier date as shall be agreed between the parties". The purchasers agreed to pay interest on the residue at the rate of 8 per cent per annum calculated from 1 July 1978, adjusted and payable quarterly. Clause 3 of the copyright conditions of sale, as amended by cl.5 of the special conditions, provided that if the purchasers made default in the payment of purchase money or interest, they should pay interest at the rate of 14 per cent on the amount in default. Clause 5 of the copyright conditions of sale, so far as its provisions are material, was in the following terms:

"(1) Time shall be of the essence of this contract in all respects but the liberty of either party to enforce any right or remedies hereunder or at common law (other than any given to the vendor by conditions 3 and 4 or his right to sue for any moneys already fallen due) arising out of the default of the other in performing or observing any of the terms and conditions of this contract shall be restricted as follows: - Neither shall be entitled to enforce any of the said rights and remedies other than those excepted above unless he gives to the other a written notice specifying the default and stating his intention to enforce his rights and remedies unless the default is made good and the proper legal costs occasioned by it to the party giving the notice are paid, both within a period of not less than fourteen days from the date of giving of the notice and the other fails within that period to remedy the default and pay those costs. (2) If the notice also states that unless the default is so remedied and the costs paid the contract will be rescinded pursuant to this sub-clause, then if the default is not remedied and the costs paid within the said period - (a) the contract shall become rescinded upon the expiry of the period (b) . . . (c) If the notice was given by the vendor he may - (i) forfeit the deposit money paid and (ii) proceed to take or recover possession of the land sold and within a reasonable time thereafter

(iii) exercise the option which is hereby given to him either: to retain the land sold and sue the purchaser for damages for breach of contract and pending the determination of the amount of those damages to retain all instalments of purchase money and interest paid or: to resell the said land by public auction or private contract in which event any deficiency between the price payable hereunder and that contracted to be paid by the purchaser upon that resale plus the vendor's costs and expenses of the resale and those occasioned by the default specified in the notice shall upon demand be paid to him by the present purchaser as liquidated damages. . . . " (at p414)

2. The facts, so far as they are relevant to the matters which now fall for decision, are as follows. In reciting them it will be convenient to refer to the appellants as the vendors and to Mr. and Mrs. Hateley as the purchasers. The contract entitled the purchasers to vacant possession of the land upon acceptance of title and payment of the deposit. After the purchasers had taken possession of the land, they erected a dwelling house on it, but there is no evidence that the vendors knew that they had done so. They had expected to raise the purchase money by the sale of another property, but that sale fell through. On or about 14 June 1979 the solicitors for the purchasers received a letter from the solicitors for the vendors, pointing out that the contract fell due for completion on 1 July, asking them to send a transfer of land for perusal, and concluding with the words, "Please arrange to settle on the due date." In reply to that letter the solicitors for the purchasers wrote on 29 June, informing the solicitors for the vendors that the sale of the purchasers' property had fallen through and requesting an extension of three months in order that the purchasers might arrange to find other purchasers for their property. On 12 July, the solicitors for the vendors wrote in reply saying that their clients would not extend the due date for completion, and suggesting that the purchasers obtain bridging finance. In the meantime, of course, the time fixed by the contract for completion had expired and the price had not been paid. (at p415)

3. On 26 July the solicitors for the vendors sent to the solicitors for the purchasers a notice which had been signed by the vendors and which, omitting formal parts, read as follows:
"We, SALVATORE LEGIONE (Farmer) and NUNZIA LEGIONE (Married Woman) both formerly of Gembrook Road Nar Nar Goon but now both of 106 Mallawa Drive Palm Beach in the State of Queensland (hereinafter called "the Vendors") HEREBY GIVE YOU NOTICE that you have made default under a Contract of Sale dated July 14, 1978 in respect of ALL THAT piece of land comprising 10 acres 3 roods and 19 perches or thereabouts and being part of Crown Allotment 81A2 Parish of Nar Nar Goon and being the whole of the land more particularly described in Certificate of Title Volume 8930 Folio 710 being property situate in Gembrook Road Nar Nar Goon.
Your default consists of your failure to pay the residue of purchase money being the sum of TWENTY NINE THOUSAND DOLLARS ($29,000-00) which was due to be paid on July 1, 1979 in accordance with the terms of the said Contract of Sale. Your default further consists of your failure to pay interest for the quarter ended July 1, 1979 which interest is now payable at the rate of fourteen per cent (14%) per annum. IT is the intention of the Vendors to exercise their rights and remedies arising out of such defaults unless those defaults are remedied and the proper legal costs of the Vendors' Solicitors Messieurs Macpherson &Kelley of 229 Thomas Street Dandenong occasioned by your default and in connection with this Notice are paid within a period of fifteen days from the date of giving of this Notice.

UNLESS the defaults are so remedied and the costs paid the said Contract of Sale will be rescinded pursuant to Condition 5(2)(a) of the said Contract of Sale. THE Vendors' Solicitors' costs of SEVENTY FIVE DOLLARS ($75- 00) are the proper legal costs occasioned to them by the reason of the said defaults up to the time of service of this Notice upon you. THE Vendors require interest at the rate of fourteen per cent (14%) in accordance with Special Condition 5 of the Contract of Sale."

It is common ground that the time fixed by this notice expired at midnight on 10 August. (at p415)

4. On 7 August the solicitors for the purchasers wrote to the solicitors for the vendors enclosing a transfer of land signed by the purchasers for signature by the vendors. On 9 August, Mr. Gardiner, a member of the firm of solicitors acting for the purchasers, telephoned the solicitors for the vendors. The conversation which he then had is so important that it is necessary to set out in full the evidence which he gave with respect to it. That was as follows:
"Tell the Court what you recall of the conversations in respect to proposed settlement on or about 9 August 1979 - Well the only conversation that relates to that, that I remember was one on 9 August 1979 when I telephoned Macpherson and Kelley, asked to speak to the persons dealing with the matter and was put on to a Miss Williams of that firm. I told Miss Williams that my clients had arranged bridging finance from the A.N.Z. Bank at Pakenham. I told her that the bank required approximately a week in which to carry out their usual title searches, but they would be ready to settle on the following Friday - which was 17 August. Miss Williams said to me 'I think that'll be all right but I'll have to get instructions', and that's the substance of that conversation as far as I recollect it."
No evidence was called on behalf of the vendors, and there is no other evidence with regard to this conversation. The evidence does not reveal what position Miss Williams occupied, but in a letter from the solicitors for the vendors, dated 22 August 1979, it was stated that she was the secretary of a Mr. Overell who was a partner in that firm. (at p416)

5. On 9 August, the day on which this conversation took place, the solicitors for the purchasers wrote to the solicitors for the vendors a letter in the following terms:

"We refer to our telephone conversation of today's date and confirm that the A.N.Z. Bank Limited at Pakenham is providing the balance of settlement moneys in this matter and we confirm that the bank should be in a position to settle on the 17th August 1979. We advise that you will be receiving the sum of $30,188.24 which is made up as follows: Balance required to finalise terms contract of sale $29,000.00 Plus one quarter's interest due 1st July 1979 $ 580.00 Plus interest on one quarter's interest until the 17th August 1979 $ 10.45 Plus interest on balance of principal from 1/7/79 to 17/8/79 on $29,000 $ 522.79 Plus costs on rescission notice $ 75.00 ---------- $30,188.24 ----------

Kindly confirm that the above is in order."

On 13 August the solicitors for the vendors wrote to the solicitors for the purchasers, acknowledged their letters of 7 and 9 August, and stated that the transfer of land had been sent to their clients in Queensland for signing, but went on to say that they did not agree with the purchasers' calculation of interest which was not in accordance with special condition 5 and copyright condition 3. However, before that letter was received by the solicitors for the purchasers, the solicitors for the vendors wrote, on 14 August 1979, and caused to be delivered by hand, a letter, which commenced as follows:

"We refer to our letter of August 13 and advise that we have now received instructions from our clients. They decline to sign the Transfer of Land as the Contract of Sale has been rescinded. Default Notices were served on your clients on July 27, the Contract therefore became rescinded on August 11."

The letter went on to demand immediate possession of the land. On the same day the solicitors for the purchasers replied denying that the contract had been validly rescinded for the following reasons:

"1. The Rescission Notice does not correctly set out the amounts payable to remedy our clients' default. The Notice claims interest at the rate of 14% for the quarter ending 1st July, 1979. This is not in accordance with the conditions of the Contract. 2. When we spoke to your office on the 9th August and advised you that our clients had arranged bridging finance from their bank and would be able to settle within one week, you did not advise us that this was not acceptable and that the Contract would be cancelled if settlement was not completed by the 11th August. You in fact told us that you thought that if the matter was settled by the 17th this would probably be acceptable to your clients and you would have to get instructions. Had it been made clear that no extension would be granted we would have been able to arrange for the bank to settle on the 10th August."

The letter concluded by saying that the solicitors proposed to attend at the office of the solicitors for the vendors on the following day and to tender a bank cheque for the amount owing. In fact they did tender a bank cheque for $30,188.24 on 15 August but the tender was rejected. Mrs. Hateley gave evidence that bridging finance had been obtained from the bank, and that funds were available to enable settlement to be effected on 9 August 1979. (at p417)

6. The purchasers commenced an action in the Supreme Court of Victoria claiming specific performance of the contract of sale, and the vendors counterclaimed for a declaration that the contract had been validly rescinded. After Mr. Hateley's death, an order was made to enable the action to be continued by the respondent on her own behalf and as executrix of her late husband. The action was tried by Murray J., who held that the notice of rescission was valid and effective and that the contract was rescinded when the time specified in the notice expired. He rejected the arguments that the vendors had waived their rights, and that the statement of Miss Williams gave rise to a promissory estoppel. He accordingly dismissed the purchasers' claim for specific performance and made a declaration that the contract had been validly rescinded and made certain other orders in favour of the vendors. On appeal the Full Court, by a majority, held that the vendors were estopped from asserting that the contract of sale had been rescinded before 15 August 1979, when the tender was made. If that was the case, no reason existed for refusing specific performance. The Court accordingly allowed the appeal. (at p418)

7. Before we turn to the main question in the case, viz. whether the vendors were, in the circumstances, precluded from asserting that the contract was rescinded when the period specified in the notice of rescission expired, it is convenient to mention that in argument before us counsel for the purchasers sought to submit that the judgment of the Full Court should be upheld on two other grounds. First, it was submitted that the notice of rescission erroneously claimed too much and was therefore ineffective. This argument had been rejected both by the learned trial judge and in the Full Court. It appears that the notice was in error in stating that the purchasers' default included their failure to pay interest at the rate of 14 per cent for the quarter which ended on 1 July 1979. Under the provisions of the contract to which reference has been made, that interest was payable at the rate of 8 per cent only, and interest at the rate of 14 per cent would have become payable only in respect of a period subsequent to 1 July 1979 if the interest for the last quarter had not been paid within seven days of that date and the vendor had made a demand under cl. 3 of the copyright conditions as amended by cl. 5 of the special conditions. The notice therefore specified a non-existent default as well as a real default. However, in Green v. Sommerville (1979) 141 CLR 594 , Mason J., with whom Murphy and Aickin JJ. agreed, held that a notice which required the party to whom it was given, under threat of rescission, to rectify two alleged defaults when under the contract only one of those defaults provided a foundation for rescission, was not invalidated by the presence of the additional unauthorized requirement (1979) 141 CLR, at pp 607, 612 . Barwick C.J. and Wilson J. took a different view (1979) 141 CLR, at pp 600, 613 . The decision in that case accords with that of Gowans J. in Gair v. Smith (1964) VR 814 . We did not consider it appropriate to allow this question, so recently decided in this Court, to be reopened. This submission therefore fails. A second argument advanced on behalf of the purchasers was that the notice of rescission effected a forfeiture against which the purchasers were entitled to be relieved. Relief of that kind was not sought in the pleadings or in argument in the Supreme Court. We reserved for later decision, if necessary, the question whether in the circumstances the purchasers should be permitted to raise the matter for the first time in this Court. Although, for the reasons which we are about to give, we would hold that the purchasers must in any case succeed, it will nevertheless be necessary to consider that question. (at p419)

8. We return then to the first question on the appeal. All three of the learned judges of the Full Court appear to have agreed as to the nature of the principle which governed the case, but they differed as to its application to the facts. Mr. Black, who argued the case very clearly for the vendors, did not suggest that the majority of the Full Court had erred in holding that the doctrine of promissory estoppel is part of the law of Victoria; his submission was that certain of the essential elements, which must exist before such an estoppel can arise, were absent in the present case. (at p419)

9. The principle which the majority of the Full Court applied was stated by Lord Cairns in Hughes v. Metropolitan Railway Co. (1877) 2 App Cas 439, at p 448 , as follows:
". . . it is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties."
In Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch D 268, at p 286 , Bowen L.J. said that the principle amounts to this:

". . . if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before."

The doctrine has undergone a considerable development in recent times, particularly since Central London Property Trust Ltd. v. High Trees House Ltd. (1947) KB 130 . It was affirmed by the House of Lords in Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. (1955) 1 WLR 761; (1955) 2 All ER 657 . In Ajayi v. R. T. Briscoe (Nigeria) Ltd. (1964) 1 WLR 1326, at p 1330; (1964) 3 All ER 556, at p 559 the Judicial Committee said that the principle "is that when one party to a contract in the absence of fresh consideration agrees not to enforce his rights an equity will be raised in favour of the other party". Their Lordships continued:

"This equity is, however, subject to the qualifications (1) that the other party has altered his position, (2) that the promisor can resile from his promise on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position, (3) the promise only becomes final and irrevocable if the promisee cannot resume his position."

Neither the House of Lords nor the Privy Council has however had occasion to review the whole sequence of cases and reduce them to a coherent body of doctrine: see Woodhouse Ltd. v. Nigerian Produce Ltd. (1972) AC 741, at p 758 . Nor has this Court had occasion to do so. At a time before the principle had undergone its present development, it was said in this Court, in Barns v. Queensland National Bank Ltd. (1906) 3 CLR 925, at p 938 , that the principle laid down in Hughes v. Metropolitan Railway Co. (1877) 2 App Cas 439 requires that "there must be something in the nature of what is called a consideration". However the Court went on to say (1906) 3 CLR, at p 939 :

"The suggested consideration is that Nott at the request of the mortgagees refrained from taking steps which might, and upon the evidence probably would, have resulted in his saving the property for his beneficiaries. We have some difficulty in saying that this is not a sufficient consideration to bring this case within the rule laid down in Hughes v. Metropolitan Railway Co."

This seems to us very close to the present doctrine, which more frankly recognizes that it is not necessary to put the label of consideration on the action or inaction of the party who has altered his position in the belief induced by the other party. (at p421)

10. Having regard to the course which the argument took, this is not an appropriate case in which to consider fully the limits of the principle. However, there will be an estoppel in the present case if the following facts are established - (1) that Miss Williams, by saying that she would get instructions, induced the solicitors for the purchasers to believe that the vendors' right to rescind the contract would be kept in abeyance until the instructions were obtained and communicated, and intended that those solicitors should act on that belief; (2) that the vendors are bound by the conduct of Miss Williams; (3) that the solicitors for the purchasers, acting on the faith of that inducement, desisted from paying the balance of the purchase price within the time specified in the notice of rescission, although they would otherwise have made payment within that time; (4) that it would be inequitable to allow the vendors to rescind the contract without first informing the purchasers that no extension of time would be granted and then giving the purchasers a reasonable opportunity to make the payment. (at p421)

11. It is of course clear that neither the solicitors, nor Miss Williams, had any actual authority from the vendors to make any representation to the purchasers that the vendors' rights would be kept in abeyance. But the vendors had authorized the solicitors to act for them in completing the sale. Within reasonable limits, the solicitors, having been entrusted by the vendors with the conduct of the negotiations, must be treated as having the authority which, within the course of the negotiations, they purported to exercise: cf. Crabb v. Arun District Council (1976) Ch 179, at p 193 . "The solicitor is to be regarded as the alter ego of the client and the rights of the other party to the contract cannot be made to depend upon the diligence or lack of diligence exhibited by the solicitor in his dealings with his client": Sargent v. A.S.L. Developments Ltd. (1974) 131 CLR 634, at p 659 ; see also at p. 649. It was of course the conduct of the vendors that gave the solicitors ostensible authority to act on their behalf. The authority extended to actions carried out in the ordinary course of business by such members or employees of the firm as ordinarily acted for it. When the solicitors selected or permitted Miss Williams to speak on their behalf, in their capacity as solicitors for the vendors, her words bound the vendors. It was no doubt to be expected that if Miss Williams was employed as a secretary, she would promptly communicate the conversation to a member of the firm, who, if he wished to resile from what she had said, could have informed the purchasers' solicitors accordingly. Similarly one would have expected the solicitors to communicate promptly with the vendors - the fact that the vendors were in Queensland does not mean that they were incommunicado - and, again, to inform the purchasers' solicitors of any change of attitude. If there was any lack of diligence on the part of the vendors' solicitors - and we do not suggest that there was - that cannot affect the position of the purchasers. (at p422)

12. The statement by Miss Williams was in our opinion both intended and likely to induce a belief in the mind of the purchasers' solicitors that the vendors would not enforce their strict legal rights until they indicated their intention to do so. In one sense, the statement made by Miss Williams may have seemed only tentative and provisional. However, it was made in the context of a conversation between parties who knew that the time fixed by the notice of rescission was about to expire, and that if the purchasers did not settle within that time the contract would be at an end. There would have been no point in Miss Williams obtaining instructions, if, by the time they had been obtained, the rescission of the contract had taken effect. The position would have been quite different if Miss Williams had said: "I have no instructions - the only safe thing for you to do is to settle within the time specified in the notice." But when Miss Williams said that she thought it would be all right, and that she would have to get instructions, she must have meant, and the purchasers' solicitors were entitled to believe, that the position was being left in abeyance until the instructions were received. If that were not so, the conversation would have been a futility. We should add that we consider that Miss Williams acted quite reasonably in doing what she did. (at p422)

13. It was submitted that there was no evidence that the purchasers' solicitors believed that the matter was left in abeyance and that the vendors' rights would not be enforced until some further communication was made and the purchasers were given an opportunity to make payment. However, it seems to us that the facts lead to the inference that the solicitors had such a belief and acted on it. Funds were available on 9 August, and it is impossible to suppose that the purchasers' solicitors would not have made payment on that or on the following day, if they had thought that the vendors intended to insist on their legal right to treat the contract as rescinded if payment had not been made within the time specified in the notice. The terms of the letter sent by the purchasers' solicitors on 9 August support this view. The inaction of the purchasers, which altered their position, was because they believed, on the faith of the conversation, that the matter was in abeyance. It would be inequitable to allow the vendors to treat the contract as rescinded without first informing the purchasers that they must complete forthwith and giving them a reasonable opportunity to do so. (at p423)

14. The vendors had the legal right to treat the contract as rescinded if payment was not made by midnight on 10 August. But for the reasons which we have given, the conduct of their agents made it inequitable to allow them to enforce that right without first giving reasonable notice to the purchasers of their intention to do so if payment was not made. They gave no notice but claimed to treat the contract as rescinded. The purchasers forthwith made a tender of payment. The vendors were estopped from treating the contract as rescinded when the tender was made. (at p423)

15. For these reasons we consider that the purchasers were entitled to specific performance and that the appeal should be dismissed. (at p423)

16. However, it appears that the other members of the Court would hold that the vendors were not estopped from treating the contract as rescinded. It therefore becomes necessary for us to consider the further question whether the purchasers should be relieved against the forfeiture of their interest in the land that will occur if the vendors are successful in the present proceedings. (at p423)

17. It is first necessary for us to decide whether the purchasers should be allowed to raise this question, since they did not take the point in the Supreme Court. Although, as will appear, we consider that the evidence as it stands makes out a strong case for relief, we are unable to say that we have before us all relevant facts which could possibly have been given in evidence if the question had been raised in the Court below. Nevertheless, the case is an exceptional one for a number of reasons. First, as we have already said, in our opinion the purchasers should for other reasons succeed in their appeal. Secondly, a claim for relief against forfeiture could not have succeeded in the Supreme Court, which would have felt itself bound by two decisions of the Privy Council, which we shall later discuss, to refuse relief. Thirdly, the existing evidence shows that the purchasers should be granted relief and the possibility that further evidence will place a different complexion on the matter seems remote. In these circumstances we agree in thinking that the successful purchasers should be allowed to endeavour to maintain their success, although on a new ground, and although, since new evidence could possibly affect the matter, it will be necessary to remit the case to the Supreme Court. (at p423)

18. There is no doubt that when the purchasers executed the contract and paid the deposit the beneficial ownership of the land passed to them subject to the payment of the purchase money. The effect of cl. 15 of the copyright conditions of sale was to deprive the purchasers of their interest in the land once a notice had been given under that clause and the default in payment to which the notice referred had not been remedied within the time limited in the notice. In saying that we of course assume, contrary to our own opinion, that no estoppel had occurred. In these circumstances it is manifest that the condition brought about a forfeiture of the purchasers' interest in the land. (at p424)

19. In Shiloh Spinners Ltd. v. Harding (1973) AC 691, at p 722 Lord Wilberforce said:

"There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copyholds, or where the forfeiture was in the nature of a penalty. Although the principle is well established, there has undoubtedly been some fluctuation of authority as to the self-limitation to be imposed or accepted on this power. There has not been much difficulty as regards two heads of jurisdiction. First, where it is possible to state that the object of the transaction and of the insertion of the right to forfeit is essentially to secure the payment of money, equity has been willing to relieve on terms that the payment is made with interest, if appropriate, and also costs (Peachy v. Duke of Somerset (1721) 1 Stra 447 (93 ER 626) and cases there cited). . . . Secondly, there were the heads of fraud, accident, mistake or surprise, always a ground for equity's intervention, the inclusion of which entailed the exclusion of mere inadvertence and a fortiori of wilful defaults."

Later, after discussing some of the authorities, his Lordship went on (1973) AC, at p 723 :

"But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result."

The judgment of Lord Wilberforce was concurred in by all members of the House in that case except Lord Simon of Glaisdale who took a wider view, holding that "equity has an unlimited and unfettered jurisdiction to relieve against contractual forfeitures and penalties" (1973) AC, at p 726 . It was held in that case that there was power to relieve against the exercise by the covenantee (the assignor of a leasehold interest) of a right of entry on failure by the covenantor to perform certain stipulations as to fencing and support of buildings. (at p425)

20. In the light of those statements of principle it is difficult to see any reason why the power of courts of equity to relieve against forfeiture should not be available in a case such as the present. On behalf of the vendors three reasons were advanced in support of the view that the Court cannot grant relief. It was said, first, that equity will not relieve against the forfeiture of a purchaser's interest in land under a contract of sale where that interest is lost consequent upon a discharge of the contract, secondly, that the power to grant relief against forfeiture is not exercised except to grant relief against a penal provision in a contract and, thirdly, that equity does not intervene to grant specific performance (whether to effect relief against forfeiture or otherwise) where the parties have stipulated in their bargain that time shall be of the essence and the party seeking specific performance is in default. (at p425)

21. It is convenient to deal first with the second of these submissions. It is true that in some cases concerning relief against forfeiture the courts have spoken of relief against penalty. That may have been because "penalty" and "forfeiture" were regarded as synonymous or because a forfeiture for breach of a covenant or condition may be regarded as a penalty for the breach. But except in the sense that a provision for forfeiture can be described as a penalty it is unnecessary that the condition which provides for forfeiture should be a penal one before the jurisdiction of equity can be invoked. From early times the courts of equity granted relief against forfeiture of a lease where the breach was by non-payment of rent. No additional penal element was required. It is a short step to hold that relief may be granted against forfeiture of a puchaser who has defaulted in payment of the purchase money, and that step has been taken in a number of cases to which reference will shortly be made. However, if it is necessary to describe the condition as penal, cl. 5 answers that description, in that the purchaser who fails to comply with the notice is punished by forfeiture. (at p425)

22. The first and third of the vendors' submissions may be considered together. Before 1916 there was consistent authority in favour of the view that equity would relieve a defaulting purchaser against forfeiture of his interest in the land, even when he had failed to comply with a condition of which time was of the essence. In Vernon v. Stephens (1722) 2 P Wms 66 (24 ER 642) , the plaintiff had agreed to purchase a manor, and after he had made default in payment had entered into orders by consent by which it was agreed that if he did not pay the money by a certain day he would give up the contract and lose whatever he had already paid. He again made default, but, having brought an appeal for specific performance, was granted relief on payment of principal, interest and costs. In re Dagenham (Thames) Dock Co.; Ex parte Hulse (1873) LR 8 Ch App 1022 was a similar case. Under an agreement for sale it was provided that on failure to pay the balance of the purchase money by a certain day, in respect of which time was to be of the essence of the contract, the vendors could repossess the land without any obligation to repay any part of the purchase money. It was held that the provision was a "penalty" from which the court would relieve, and the vendors were refused an order giving them liberty to issue execution in an action for ejectment. That decision was followed and applied by the Judicial Committee in Kilmer v. British Columbia Orchard Lands Ltd. (1913) AC 319 . There an agreement for sale provided that instalments of purchase money were to be paid on specified dates and declared time to be of the essence of the contract; in default of punctual payment of any instalment the agreement was to be null and void and all payments made under it were to be forfeited to the vendor. Default having been made, the vendor sued for a declaration that the agreement for sale was null and void and the purchaser counter-claimed for specific performance. The trial judge, whose decision was restored by the Judicial Committee, dismissed the action and decreed specific performance on the counter-claim. In McDonald v. Dennys Lascelles Ltd. (1933) 48 CLR 457, at p 470 , Starke J. appears to have thought that relief in the two last-mentioned cases was given against forfeiture of the instalments of the purchase money. However Dixon J., with whom Rich and McTiernan JJ. agreed, said that the view adopted in those cases "seems to have been that relief should be granted, not against the forfeiture of the instalments, but against the forfeiture of the estate under a contract which involved the retention of the purchase money" (1933) 48 CLR, at p 478 . It may have been this dictum that led Mr. Fullagar, as he then was, to submit in Real Estate Securities Ltd. v. Kew Golf Links Estate Pty. Ltd. (1935) VLR 114, at p 119 that "equity relieved the defaulting purchaser from the forfeiture of his interest in the land, and not of the moneys he had paid". Lowe J. agreed that in In re Dagenham (Thames) Dock Co.; Ex parte Hulse the relief given was from forfeiture of the purchaser's interest in the land, and that a similar explanation might be true of Kilmer v. British Columbia Orchard Lands Ltd., but he rejected the argument that the only relief that could be given to the purchaser was against forfeiture of his interest in the land; we are not concerned with that aspect of the matter. In our opinion it seems clear enough that in the cases mentioned equity did relieve against the forfeiture of the purchaser's interest in the land, but subsequent cases have rendered it doubtful whether relief can be given when the purchaser has failed to perform within the time stipulated an obligation in a case in which time was of the essence of the contract. (at p427)

23. The first of these later cases was Steedman v. Drinkle (1916) 1 AC 275 . The contract in that case contained a provision that if the purchaser should make default in any of the payments to be made the vendor should be at liberty to cancel the agreement and retain any payments made under it. It also provided that time was to be of the essence of the contract. The defaulting purchaser claimed specific performance and alternatively relief against forfeiture. The Judicial Committee held that "the stipulation in question was one for a penalty, against which relief should be given on proper terms"(66), but that there was no justification for decreeing specific performance. Their Lordships said (1916) 1 AC, at p 279 :
"Courts of Equity, which look at the substance as distinguished from the letter of agreements, no doubt exercise an extensive jurisdiction which enables them to decree specific performance in cases where justice requires it, even though literal terms of stipulations as to time have not been observed. But they never exercise this jurisdiction where the parties have expressly intimated in their agreement that it is not to apply by providing that time is to be of the essence of their bargain."
They distinguished Kilmer v. British Columbia Orchard Lands Ltd. (1913) AC 319 by saying that it appeared that the Board in that case had concluded that the stipulation as to time had ceased to be applicable, because the vendor had extended time for payment. The case was followed in Brickles v. Snell (1916) 2 AC 599 , although there the respondent abandoned any argument based on Kilmer v. British Columbia Orchard Lands Ltd., see at p. 605. These cases have naturally been followed in Australia and it has been accepted that where a condition making time of the essence of the contract has not been waived it is not possible to grant specific performance to a purchaser who is in default: Crabb v. Gleeson (1920) VLR 189, at pp 193-194 ; Stranger v. Aitken (1922) 43 ALT 405 ; Bull v. Gaul (1950) VLR 377, at p 381 ; Wilson v. Kingsgate Mining Industries Pty. Ltd. (1973) 2 NSWLR 713, at p 733 ; Tropical Traders Ltd. v. Goonan (1964) 111 CLR 41, at p 58 . In the last mentioned case, which was a decision of this Court, counsel appears not to have made any submission to the contrary, see p. 48; his contention was that the granting of an extension of time by the vendor amounted to a binding election not to exercise the right to rescind. The Court did not discuss the question that now arises. (at p428)

24. The three decisions in the Judicial Committee do not provide satisfactory authority on this question. It appears from the passage from McDonald v. Dennys Lascelles Ltd. (1933) 48 CLR, at p 478 , which has already been cited, that Dixon J. doubted the explanation of Kilmer v. British Columbia Orchard Lands Ltd. which was given in Steedman v. Drinkle and Brickles v. Snell. We respectfully share those doubts. The reasons for judgment in Kilmer v. British Columbia Orchard Lands Ltd. can only be read as saying that their Lordships intended to relieve against the forfeiture of the estate, and did not think it necessary to deal with the argument based on waiver, although in truth there may have been a waiver on the facts of the case. Further, in Steedman v. Drinkle (1916) 1 AC, at p 279 , it was accepted that it was correct for the Board in Kilmer v. British Columbia Orchard Lands Ltd. to relieve against the forfeiture of the moneys paid but it was not explained why if that were so it was not possible also to relieve against the forfeiture of the estate and thus to permit specific performance. It may have been thought that the matter was sufficiently discussed in Stickney v. Keeble (1915) AC 386 , the judgments in which case had quite recently been given in the House of Lords, but although that case contains an authoritative discussion of the maxim that in equity the time fixed for completion is not of the essence of the contract, and shows that that maxim has no application to cases in which the parties have stipulated that the time fixed should be essential (cf. at pp. 401-402 and 415-416) it does not deal specifically with the question of relief against forfeiture. Kilmer v. British Columbia Orchard Lands Ltd. (1913) AC 319 and In re Dagenham (Thames) Dock Co.; Ex parte Hulse (1873) LR 8 Ch App 1022 have more recently been accepted as correctly decided: see Starside Properties Ltd. v. Mustapha (1974) 1 WLR 816, at pp 821, 825; (1974) 2 All ER 567, at pp 571-572,576 , although without discussion of the present question. For all these reasons, it seems to us that we should reconsider the correctness of the principle adopted in Steedman v. Drinkle and Brickles v. Snell. (at p428)

25. A court of equity will grant specific performance notwithstanding a failure to make a payment within the time specified by the contract if there is nothing to render such an order inequitable. The fact that time for the performance of the stipulated obligation is of the essence of the contract generally makes the grant of specific performance inequitable in such a case. However, if it is just to relieve against the forfeiture which is incurred when the vendor retains payments already made under the contract, it is difficult to see why it should be unjust to relieve the purchaser against the forfeiture of the interest in the property that results in exactly the same circumstances. No doubt where the parties have chosen to make time of the essence of the contract the grant of relief against forfeiture as a preliminary to an order for specific performance will be exceptional. Nevertheless on principle we can see no reason why such an order should not be made if it will not cause injustice but will on the contrary prevent injustice. If relief against the forfeiture is granted, the objection to the grant of specific performance is removed. (at p429)

26. In the present case the circumstances revealed by the existing evidence indicate that it would be unjust for the vendors to insist on the forfeiture of the purchasers' interest in the land. Important among those circumstances is the fact that the purchasers have erected on the land a house of considerable value and if the contract is rescinded the vendors will receive an ill-merited windfall. Further there are the facts that the purchase moneys were tendered only four days after the notice expired, and that the late payment was explained by the terms of the letter from the vendors' solicitors. The breach by the purchasers was neither wilful nor apparently serious. To enforce the legal rights of the vendors in these circumstances would be to exact a harsh and excessive penalty for a comparatively trivial breach. However, an opportunity should be given to the vendors to establish whether they have suffered damage as a result of the purchasers' failure. Moreover it will be necessary for the court to consider what terms should be imposed on the purchasers as a condition of the grant of relief. Clearly they should be required to pay the balance of the purchase price and interest, although at what rate will be a matter that requires consideration. Whether the purchasers should in addition be required to pay anything in respect of damages or costs depends on the evidence and argument that may be adduced. (at p429)

27. As we have already indicated, in our opinion the appeal should be dismissed. However, in the circumstances we concur in the order that the case be remitted to the Supreme Court for determination of the respondent's claim to be relieved from the forfeiture of her interest under the contract of sale. (at p430)

MASON AND DEANE JJ. The detailed facts are set out in the judgment of Gibbs C.J. and Murphy J. Except to the extent necessary for the purposes of discussion, it is unnecessary that we repeat them. The primary issue which presently arises for determination is whether Mr. and Mrs. Legione, who were vendors under a contract for the sale of certain land at Nar Nar Goon in Victoria to Mrs. Hateley and her late husband as purchasers, are, as a result of a telephone conversation between their solicitor's secretary and the solicitor for the purchasers, estopped from asserting that the contract is at an end. The basis of the propounded estoppel is an alleged representation as to the approach which the vendors would adopt if, pending receipt and communication by the vendors' solicitors of instructions, the purchasers were to disregard the requirements of a notice of rescission which had been served upon them. In the event that the issue as to estoppel is determined adversely to Mrs. Hateley, it will be necessary to consider whether the appeal should nevertheless be dismissed on a ground raised, on Mrs. Hateley's behalf, for the first time on the hearing of this appeal. That ground is that the circumstances were such that Mr. and Mrs. Hateley were entitled, upon appropriate terms, to be relieved of any forfeiture of their interest under the contract in the subject land and the improvements thereon. (at p430)

2. It is customary to recognize three general classes of estoppel, namely, of record, of writing and in pais (see, e.g., Coke's Littleton, 352a). Estoppel in pais includes both the common law estoppel which precludes a person from denying an assumption which formed the conventional basis of a relationship between himself and another or which he has adopted against another by the assertion of a right based on it and estoppel by representation which was of later development with origins in Chancery. It is commonly regarded as also including the overlapping equitable doctrines of proprietary estoppel and estoppel by acquiescence or encouragement. (at p430)

3. Notwithstanding their diverse origins, one may discern a common principle underlying the established emanations of estoppel in pais. The classic statement of that principle is that of Dixon J. in Thompson v. Palmer (1933) 49 CLR 507, at p 547 :
"The object of estoppel in pais is to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment. Whether a departure by a party from the assumption should be considered unjust and inadmissible depends on the part taken by him in occasioning its adoption by the other party. He may be required to abide by the assumption because it formed the conventional basis upon which the parties entered into contractual or other mutual relations, such as bailment; or because he has exercised against the other party rights which would exist only if the assumption were correct, as in Yorkshire Insurance Co. v. Craine (1922) 2 AC 541, at pp 546-547 ; cp. Cave v. Mills (1862) 7 H &N 913, at pp 927-928; (158 ER 740, at pp 746-747) ; Smith v. Baker (1873) LR 8 CP 350, at p 357 ; Verschures Creameries Ltd. v. Hull and Netherlands Steamship Co. (1921) 2 KB 608, at p 612 ; and Ambur Nair v. Kelu Nair (1933) 60 IA 266, at p 271 ; or because knowing the mistake the other laboured under, he refrained from correcting him when it was his duty to do so; or because his imprudence, where care was required of him, was a proximate cause of the other party's adopting and acting upon the faith of the assumption; or because he directly made representations upon which the other party founded the assumption. But, in each case, he is not bound to adhere to the assumption unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted." (at p431)

4. For present purposes, two comments need to be made upon the above "statement of the recognized grounds of preclusion" (per Dixon J. in Grundt v. Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641, at p 676 ). The first is that the reference to an "unjust" departure was not seen by Dixon J. as a charter for idiosyncratic concepts of justice and fairness. His Honour made that clear in his judgment in Grundt's Case (1937) 59 CLR, at pp 675-676 where, shortly before referring to his judgment in Thompson v. Palmer, he said:
"The justice of an estoppel is not established by the fact in itself that a state of affairs has been assumed as the basis of action or inaction and that a departure from the assumption would turn the action or inaction into a detrimental change of position. It depends also on the manner in which the assumption has been occasioned or induced. Before anyone can be estopped, he must have played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it. But the law does not leave such a question of fairness or justice at large. It defines with more or less completeness the kinds of participation in the making or acceptance of the assumption that will suffice to preclude the party if the other requirements for an estoppel are satisfied." (at p432)

5. The other comment is that Dixon J.'s remarks in Thompson v. Palmer do not distinguish between an assumption founded upon a representation of existing fact and an assumption founded upon a representation as to future conduct. At the time when Thompson v. Palmer was decided the doctrine of consideration was thought to be a significant obstacle to the acceptance of an assumption founded upon a representation (or promise) as to future conduct as a basis of an ordinary estoppel by representation. Moreover, such an acceptance would have been contrary to authority which, at the time, must have appeared compelling to any Australian Court (see, e.g., Jorden v. Money (1854) 5 HLC 185 (10 ER 868) ; Chadwick v. Manning (1896) AC 231 ; George Whitechurch Ltd. v. Cavanagh (1902) AC 117, at p 130 ; Yorkshire Insurance Co. Ltd. v. Craine (1922) 31 CLR 27, at p 38 ; but cf. Greater Sydney Development Association Ltd. v. Rivett (1929) 46 WN (NSW) 99 ). Dixon J.'s subsequent judgment in Grundt's Case (1937) 59 CLR, at p 674 perhaps suggests that his reference in Thompson v. Palmer to an assumption founded upon a direct representation should be construed as a reference to an assumption founded upon a representation of fact. But this is by no means clear. His Honour referred on no less than five occasions to the "state of affairs" assumed by the parties (1937) 59 CLR, at pp 674-676 , once as part of the larger expression "the facts or state of affairs assumed" by the parties (1937) 59 CLR, at p 676 . And it may be that he took a broad view of what was a representation of fact or a representation of existing fact. After all, much judicial ingenuity had been employed in seeking to demonstrate that a statement of intention with respect to a future occurrence could amount to a statement of present fact. (at p432)

6. Be this as it may, there is strong authority in equity for a limited doctrine of promissory estoppel - representations (or promises) as to future conduct - restricted to precluding departure from a representation by a person in a pre-existing contractual relationship that he will not enforce his strict contractual rights. In Hughes v. Metropolitan Railway Co. (1877) 2 App Cas 439 a question arose as to the effect of subsequent negotiations for a surrender of lease upon a lessor's entitlement to insist upon compliance with the terms of a notice to repair. In the course of his speech holding that the lessor was not entitled to forfeit the lease, Lord Cairns L.C. made the following comments which have commonly been seen as the source of an equitable doctrine of promissory estoppel (1877) 2 App Cas, at p 448 :
". . . if parties who have entered into definite and distinct terms involving certain legal results - certain penalties or legal forfeiture - afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties."
(See also, to the same effect, per Lord Blackburn (1877) 2 App Cas, at p 452 .) In Birmingham and District Land Co. v. London and North Western Railway Co. (1888) 40 Ch D 268, at p 286 , Bowen L.J., after quoting the above passage from the speech of Lord Cairns L.C., said:
"The truth is that the proposition is wider than cases of forfeiture. It seems to me to amount to this, that if persons who have contractual rights against others induce by their conduct those against whom they have such rights to believe that such rights will either not be enforced or will be kept in suspense or abeyance for some particular time, those persons will not be allowed by a Court of Equity to enforce the rights until such time has elapsed, without at all events placing the parties in the same position as they were before. That is the principle to be applied." (at p433)

7. However, the generality of the comments of Lord Cairns L.C. and Bowen L.J. is by no means consistent with statements in the House of Lords, the Privy Council and this Court which assert, without any qualification, that there must be a misrepresentation of existing facts, and not of mere intention, in order to found an estoppel against a person who seeks to enforce a legal right. In particular, in Chadwick v. Manning (1896) AC, at p 238 , Lord Macnaghten, speaking for the Privy Council in an appeal from a decision of the Supreme Court of New South Wales (Owen C.J. in Eq.) to the effect that the appellant was estopped from enforcing an indemnity which the respondent had executed in his favour, said:

"His Honour's judgment, it will be seen, is rested entirely on the doctrine of equitable estoppel by representation . . . . Assuming, however, that Mr. Chadwick is chargeable with a representation which may have misled Sir William, it appears to their Lordships that the conclusion at which his Honour arrived is in direct conflict with the law laid down by the House of Lords in Jorden and Wife v. Money (1854) 5 HLC 185 (10 ER 868) . The headnote to that case, the accuracy of which was not challenged by the learned counsel for the respondents, is in the following words: 'Where a person possesses a legal right, a Court of Equity will not interfere to restrain him from enforcing it, though, between the time of its creation and that of his attempt to enforce it, he has made representations of his intention to abandon it. Nor will equity interfere, even though the parties to whom these representations were made have acted on them, and have, in full belief in them, entered into irrevocable engagements. To raise an equity in such a case, there must be a misrepresentation of existing facts, and not of mere intention.'"

(See also, e.g., the specific statements in Craine v. Colonial Mutual Fire Insurance Co. Ltd. (1920) 28 CLR 305, at p 324 , and Yorkshire Insurance Co. Ltd. v. Craine (1922) 31 CLR 27, at p 38 , to the effect that a representation to raise estoppel must be "of an existing fact", statements which are usually followed by the concession that a statement of intention may amount to a statement of fact.) In Marquess of Salisbury v. Gilmore (1942) 2 KB 38, at p 51 , MacKinnon L.J. attempted a reconciliation of the comments of Bowen L.J. with what "the voices of infallibility, by a narrow majority" had held in Jorden v. Money, by the process of distorting a representation as to future conduct into a strait jacket of present descriptive fact: a statement of intent to pull down a building at a future time was treated as a statement that the building "is doomed to demolition" at that future time. (at p434)

8. In our view, nothing is to be gained either by such attempts at forced reconciliation or by an analysis of the relevant cases aimed at showing that statements of the kind found in Chadwick v. Manning were not necessary to the actual decision in the particular case. It is preferable to acknowledge that a choice has to be made between these statements and the clear acceptance, in subsequent cases in the Privy Council and the House of Lords, of a doctrine of promissory estoppel which may operate to preclude the enforcement of rights at least between parties in a pre-existing contractual relationship (see Tool Metal Manufacturing Co. Ltd. v. Tungsten Electric Co. Ltd. (1955) 1 WLR 761, at pp 763-764, 783, 798-799; (1955) 2 All ER 657, at pp 660, 674, 685-686 ; Ajayi v. R. T. Briscoe (Nigeria) Ltd. (1964) 1 WLR 1326, at p 1330; (1964) 3 All ER 556, at p 559 ; Woodhouse A.C. Israel Cocoa Ltd. S.A. v. Nigerian Produce Marketing Co. Ltd. (1972) AC 741, at pp 755-756 ). The clear trend of recent authorities, the rationale of the general principle underlying estoppel in pais, established equitable principle and the legitimate search for justice and consistency under the law combine to persuade us to conclude that promissory estoppel should be accepted in Australia as applicable between parties in such a relationship (see Reed v. Sheehan (1982) 56 FLR 206, at pp 230-231; 39 ALR 257, at p 277 ). (at p435)

9. Since the parties in the present case were in a pre-existing contractual relationship, it is unnecessary to consider whether, as apparently envisaged by Denning J. in Central London Property Trust Ltd. v. High Trees House Ltd. (1947) 1 KB 130, at pp 134-135 , the doctrine of promissory estoppel should be accepted as a general doctrine applicable regardless of the existence of that relationship. Nor is it necessary, for the purposes of the present case, to consider whether the doctrine of promissory estoppel should be treated as an extension of estoppel in pais into a field where the doctrine of consideration otherwise predominates or whether it should be seen as an independent equitable doctrine. In either case, it is clear that there is general correspondence between the "grounds of preclusion" of an ordinary estoppel by representation and the "grounds of preclusion" of a primissory estoppel and that a number of rules which have been established as applicable to estoppel in pais are also applicable to promissory estoppel. Two of those rules are presently relevant. (at p435)

10. First, it has long been recognized that a representation must be clear before it can found an estoppel in pais (Low v. Bouverie (1891) 3 Ch 82, at pp 106, 113 ; Newbon v. City Mutual Life Assurance Society Ltd. (1935) 52 CLR 723, at p 738 ; Woodhouse A.C. Israel Cocoa Ltd. S.A. v. Nigerian Produce Marketing Co. Ltd. (1972) AC, at pp 755-756, 768, 771 ). "Every estoppell, because it concludeth a man to alleadge the truth, must be certaine to every intent, and not to be taken by argument or inference" (Coke's Littleton, 352b). In Western Australian Insurance Co. Ltd. v. Dayton (1924) 35 CLR 355, at p 375 , Isaacs A.C.J., referring to the requirement that a representation must be "unambiguous" if it is to found an estoppel in pais said:

13. The relief to which a defaulting purchaser is entitled if he loses his right to specific performance is relief against the forfeiture of the purchase price other than a reasonable deposit (McDonald v. Dennys Lascelles Ltd. (1933) 48 CLR 457 ; Mayson v. Clouet (1924) AC 980 ; Linggi Plantations Ltd. v. Jagatheesan (1972) 1 MLJ 89 (PC) ). The purchaser has no entitlement to relief against forfeiture of the equitable interest that he would have had but for his default and that he has lost by reason of that default. (at p458)

14. The respondent lost her interest in the land because she did not pay the residue of the price at the time she had promised, though she had agreed that time was of the essence of her contract. There is no equitable jurisdiction to relieve against the consequences of failure to pay the residue of the purchase price by the due date when the parties have agreed that the time of payment is of the essence of their contract (cf. per Lord Wilberforce in Shiloh Spinners Ltd. v. Harding (1973) AC 691, at p 723 ). The purchaser, having lost her right to specific performance, has lost the benefit of the expenditure which she outlaid in putting a dwelling on the land. The appellants have obtained the benefit of that expenditure, but that circumstance does not destroy or sterilize the stipulation that time should be of the essence of the contract. If it had been possible to relieve the respondent against forfeiture of her interest in the land, the vendors' position would have required consideration (see Shiloh Spinners Ltd. v. Harding (1973) AC, at p 722 ). The question whether it would have been unjust to the vendors to foist a late payment of purchase moneys upon them would have required consideration. That question was not investigated at the trial and it cannot be investigated on appeal to this Court. However, as I am unable to uphold the new argument relied on by the respondent, I would allow the appeal and restore the judgment of Murray J. (at p459)

15. Perhaps it should be mentioned that the respondent has sought no remedy against the appellants for unjust enrichment, and therefore that question has not been considered. (at p459)

Orders

Allow the appeal. Set aside the order of the Full Court of the Supreme Court of Victoria and the order of Murray J. No order as to costs of the proceedings in this Court.

Remit the case to the Supreme Court of Victoria for determination of the respondent's claim to be relieved from the forfeiture of her interest under the contract of sale.

In the event that the respondent succeeds in obtaining an order for the enforcement of the contract on the further hearing of the proceedings in the Supreme Court of Victoria, no order as to the costs of the appeal from Murray J. to the Full Court of the Supreme Court. In the event that the respondent fails to obtain such an order for the enforcement of the contract, order that the respondent pay the appellants' costs of the appeal to the Full Court.

Reserve costs of the proceedings at first instance, including the costs of the hearing before Murray J., and costs of the proceedings on remitter to the Supreme Court, to be dealt with by the judge of the Supreme Court before whom the matter comes on further hearing.