affect 76 WNSK Vendor and Purchaser--Sale of land-Contract Subject to the preparation of a H. C. OF
formal contract of sale which shall be acceptable to my solicitors on the above terms and conditions Whether concluded contract-Nature of sum paid as a " de- posit "-Intention of parties.
The expressions subject to contract," 'subject to the preparation of a formal contract" and others of similar import prima facie create an overriding condition SO that what has been agreed upon must be regarded as the intended basis for a future contract and not as constituting a contract of itself.
By a document dated 6th December 1951 C. agreed to sell a certain farming property to M. " subject to the preparation of a formal contract of sale which shall be acceptable to my solicitors on the above terms and conditions" and M. agreed to purchase such property on the above terms and conditions".
Held, that the document did not constitute a binding contract between C. M. paid the sum of £1,750 to the vendor's agent. C. said in evidence that on the date of signing of the document the agent said to her, in the presence of M. after its execution, Your farm has now been sold," and that she said to the agent, " what about the deposit ?" The agent then requested M. to give him a cheque and M. promised to do SO on the following day.
Held, that the sum of £1,750 was paid to the agent on terms requiring that if a formal contract should be executed the amount should be applied and treated as a deposit on the purchase as contracted for, and that otherwise it should be returned to M.
Chillingworth v. Esche (1924) 1 Ch. 97 applied. Held further that as the only relationship between M. and C. was constituted by the document of 6th December 1951 certain conduct of M., such as the making of structural alterations and additions to the property did not estop M. from denying that he had agreed to purchase the property.
Decision of the Supreme Court of Western Australia (Wolff J.) reversed.
APPEAL from the Supreme Court of Western Australia.
An originating summons issued out of the Supreme Court of Western Australia at the suit of Dalgety &Co. Ltd. against three defendants of whom the first was the present respondent, and the other two were the present appellants calling upon them to state the nature and particulars of their respective claims to a sum of £1,750 which had come into the possession of the plaintiff company.
On 6th December 1951 the parties to this appeal signed a memor- andum in the following terms I, Violet Christina Cameron, widow of Bowelling, agree to sell my farming property at Bowelling, being Wellington Location 4095 comprising…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Details
AGLC
Masters v Cameron [1954] HCA 72
Case
[1954] HCA 72
Decision Date
CaseChat Overview and Summary
The case of *Masters v Cameron* concerned a dispute between a vendor and a purchaser arising from a written agreement for the sale of land. The purchaser had paid a sum of money described as a "deposit" upon signing the document. The vendor subsequently sought to resile from the agreement, and the purchaser claimed the return of the deposit. The matter came before the Supreme Court and was subsequently appealed to the High Court of Australia.
The central legal issue before the High Court was whether the written document signed by the parties constituted a concluded contract for the sale of land, or if it was merely an agreement to agree, contingent upon the preparation and acceptance of a formal contract. This determination was crucial for deciding whether the purchaser was entitled to the return of the deposit paid.
The High Court held that the agreement was not a concluded contract. The phrase "subject to the preparation of a formal contract of sale & which shall be acceptable to my solicitors on the above terms and conditions" indicated that the parties intended to be bound only upon the execution of a formal contract that met the approval of the purchaser's solicitors. The court reasoned that until such a formal contract was prepared and accepted, there was no binding agreement. The sum paid as a "deposit" was therefore not a deposit in the legal sense of part payment under a concluded contract, but rather an amount paid on the understanding that a contract might or might not be concluded.
The High Court allowed the appeal, discharged the judgment of the Supreme Court, and ordered that the balance of moneys paid into court, after certain costs, be paid out to the appellants (the purchasers). The respondent (the vendor) was ordered to pay the appellants' costs of the proceedings in the Supreme Court and the amount of the plaintiff's costs paid to it.
Orders
Orders of the court
Appeal allowed with costs.
Judgment of the Supreme Court discharged.
In lieu thereof, order as follows, subject however to any order that the Supreme Court or a judge thereof may see fit to make in pursuance of par. (e) of the order of Wolff J. dated 1st October 1953 upon an application made by the plaintiff Dalgety &Co. Ltd. within fourteen days of this order:
(1) Out of the moneys paid into court let the balance remaining after payment of the costs ordered to be paid to the plaintiff by the order of 1st October 1953 be paid out of court to the appellants.
(2) Let the respondent pay to the appellants their taxed costs of the proceedings in the Supreme Court (including reserved costs) and the amount of the plaintiff's costs paid to it as aforesaid.