Mullins v Kelly-Corbett

[2011] HCATrans 123

[2011] HCATrans 123

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B 1 of 2011

B e t w e e n -

MICHELLE ALICIA MULLINS

Applicant

and

DONNA MARIE KELLY-CORBETT

Respondent

Application for special leave to appeal

GUMMOW J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 13 MAY 2011, AT 10.38 AM

Copyright in the High Court of Australia

MR P.J. DUNNING, SC:   May it please the Court, I appear with my learned friend, MR N.H. FERRETT, for the applicant.  (instructed by Conroy & Associates Solicitors)

MR R.J. ANDERSON:   May it please the Court, I appear with my learned friend, MR S.L. TOLG, for the respondent.  (instructed by Shand Taylor Lawyers)

GUMMOW J:   Yes, Mr Dunning.

MR DUNNING:   Thank you, your Honours.  Your Honours, this application raises a short but, in our respectful submission, important point in relation to the repudiation of contracts and that short point is this.  Where, in circumstances with an executive contract, a party repudiates the contract and the innocent party is thereby confronted with its alternatives, may that innocent party both act upon that repudiatory conduct so as not to be ready for the date of settlement but also not act upon it, in our submission, to call for settlement on the date in question.  That is the short point.  Their Honours in the Court of Appeal and, indeed, the learned judge below took the view that that was a matter that had been determined against us in Foran v Wight.  In our respectful submission, that is not a proper characterisation of the holding of this Court in Foran v Wight and to ‑ ‑ ‑

GUMMOW J:   Just a minute.  What do you say about paragraph [38], the additional difficulty referred to there, paragraph [38] of the Court of Appeal, page 36 of the application?

MR DUNNING:   His Honour Justice Muir makes that observation, but he does not seem, in our respectful submission, to elevate it beyond a passing observation because earlier – your Honours will see this at paragraph [35] and [36] – his Honour says that the findings that were made by the primary judge were open to him and one of those findings, in particular [35]d is a finding that vacant possession could not be given.  That is so is re‑enforced by the terms of e where his Honour says:

In all other respects the plaintiff could have fulfilled her obligations under the contract –

So there is, in our respectful submission, a clear finding at first instance not disturbed in the Court of Appeal that the vendor was not ready, willing and able at any time during that day for settlement.

Your Honours, the manner in which the Court of Appeal determined that there was no basis to go outside Foran v Wight is really recorded critically in paragraphs [17] to [19] of Justice Muir’s reasons on page 28 of the appeal record and, in particular, the extracted passage of Chief Justice Mason in Foran v Wight and the qualification to which his Honour refers, which is set out in paragraph [19] of Justice Muir’s reasons, and that is:

if the repudiating party by his refusal to perform or other conduct intimates to the innocent party that he need not perform an obligation which is a condition precedent to the performance by the repudiating party . . . and does not retract that intimation –

then performance is excused.  His Honour held that, and the other members of the Court of Appeal agreed with him, that that statement of principle even extended to the situation where the innocent party in the face of the repudiatory conduct chooses to act upon the repudiatory conduct so as not to be ready but was still perfectly at liberty to call for settlement otherwise in accordance with the terms of the contract rather than what, in our respectful submission, is the proper characterisation of the holding in Foran v Wight that the innocent party was entitled to allow time for performance to arrive and then determinate for actual breach rather than actually calling for performance.

Our learned friend at paragraphs 17 and 18 of his outline on page 59 of the appeal record seeks to deal with what we respectfully submit is the error in the courts below of saying that it is both permissible to act upon the repudiatory conduct so as not to be ready but not act upon it so as to call for performance otherwise strictly in accordance with a contract by what is recorded there and, in particular, in paragraph 18 where the submission is made against us:

Understood in the manner analysed above, it is clear that a reference to ‘acting’ on the intimation is a reference to the innocent, terminating party, acting so as not to put themselves in a position to tender performance.

In our respectful submission, that is a limitation that is not apparent from the terms of the holdings in this Court in Foran v Wight.  May I take your Honours please briefly to certain of the passages in Foran v Wight in this regard.  First of all, can I take your Honours please to Justice Brennan, as his Honour then was, at page 417.  Your Honours, at about point 7 on the page, his Honour says:

But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed –

There is no suggestion there that one may both act on it in part and not act on it in other part.  Similarly, your Honours, at page 421 at about point 5 in that paragraph that starts “I would hold” for about the next five lines and again, your Honours, at the foot of page 421 in the last four lines.  May we then take your Honours please to page 427 and, your Honours, about the second full paragraph on that page but about six lines into it where it starts, “and B abstains from performing” for about the next eight lines. 

Finally, your Honours, at page 432 at about point 1 on the page, where his Honour makes clear that his reference to “acted upon” means an innocent party who chooses to rely in all senses upon the repudiatory intimation that has been given and not, as was the case here, choose to rely in part and not rely in other parts.  Your Honours, a similar characterisation, in our respectful submission, is apparent from the reasoning of Justice Deane at page 434 at about point 7 on the page, your Honours, starting:

The purchasers acted on the faith of that intimation . . . They ceased their efforts to arrange finance with the consequence that they were neither ready nor able to complete –

Again, there is no suggestion that his Honour countenanced the notion that a party could rely in part and not rely in other part.  Similarly, your Honours, in the reasons of Justice Dawson at page 450 on the foot of that page, the paragraph starting, “Under the contract” and, critically, your Honours, going over to page 451 at about the fourth line:

The vendors intimated, however, that they could not settle within that time and impliedly intimated that it would be useless for the purchasers to attempt to do so.  Unless there was some reason preventing them from doing so, the purchasers were entitled to rely –

In our submission, that is the critical point, unless there was some reason preventing them from doing so and one reason to prevent you from doing so as an innocent party is if you have chosen not to rely on it, and here there was a decision not to rely on it but, in fact, to call for performance strictly in accordance with the contract no doubt in the hope that the purchaser would produce the money and the contract would settle, but having done that, the vendor assumed the risks associated with it.

CRENNAN J:   I think the respondent deals with these arguments at page 59, paragraphs 17 and 18, that “acting upon” must mean reliance by the innocent party upon the intimation of non‑performance.

MR DUNNING:   Yes, but, your Honour, in our respectful submission, the manner in which our learned friend contends it should be relied upon, the

manner in which the Court of Appeal relied upon it, would see an innocent party both entitled to act upon it in part and not entitled to act upon it in part, that is, to act upon it so as not to have vacant possession but not act upon it to call for performance by the tender of the money on that day and in other parts the vendor to turn up at the titles office and have the certificate of title and be otherwise in a position to settle the contract.

Your Honour, that is the short point that is raised.  If your Honour is not persuaded by that point, leave would inevitably be refused.  Our point is that you cannot both call for performance and thus not be relying upon the repudiatory conduct and not get yourself ready for the performance which you have called for and so I am entitled to that because I am entitled not to rely upon – as I am entitled to rely upon the intimation you made. 

Your Honours, I was going to give you one final reference and that is the decision of Justice Gaudron in Foran v Wight at page 459, that first full paragraph starting “It was said by Lord Ackner”.  It follows, your Honours, that it is our submission that the holding of the Court of Appeal was not consistent with the reasoning certainly of the majority in Foran v Wight and probably with the minority reasoning of his Honour the Chief Justice and that there is no limitation on “acts upon”, as our learned friend would contend. 

Your Honours, that leaves the position as it was described in Peter Turnbull and if I can give your Honours two brief references to that at page 48 of the appeal record.  There is a quote from the Chief Justice in Peter Turnbull.  It starts on that page and goes over to page 49.  Then, your Honours, in paragraph [16] of our outline we recount what Justice Taylor said and at about line 30 on that page we draw particular attention to this:

The promisee, if he pleases, may treat the notice of intention as inoperative, and await the time when the contract is to be executed –

We pause to note that that is not what occurred here.  They did not treat the notice of contention as inoperative and it necessarily follows that the well known qualification of the obligation to the ready, willing and able simply is not engaged in this regard.  Your Honours, as I say, it is a short point.  If there are any other matters we can expand upon, but otherwise they are our submissions.

GUMMOW J:   Thank you, Mr Dunning. 

MR DUNNING:   Thank you, your Honours.

GUMMOW J:   We do not need to call on you, Mr Anderson. 

We are not satisfied that this case raises an issue of principle.  Rather, it turns upon the particular circumstances in which the conveyancing transaction was conducted by the parties.

Special leave is refused with costs.

AT 10.51 AM THE MATTER WAS CONCLUDED