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Suttor v Gundowda Pty Ltd

Suttor v Gundowda Pty Ltd

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Case Copied 26 September 1950 54 min read

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GUNDOWDA PROPRIETARY LIMITED

ON APPEAL FROM THE SUPREME COURT OF Specific Performance-Station property-Purchase-Option-Extension-Alleged

failure to exercise-Contract-Provisions-Conduct of parties-Alleged mis- representation by purchaser's agent-Finding of trial judge-Belated defence- SYDNEY,

Practice of appellate court-Time, essence of contract-Treasurer's consent to July 25-28,

sale-Failure to obtain within period expressly provided-Effect Deemed to be cancelled "-Contract void, or voidable by one or both parties--Contractual requirementContinuation in employment on specified terms and conditions- Sept. 26.

Deed between purchaser and employees of vendor-National Security (Economic Organization) Regulations, regs. 6 (1), (10), 10 (1).

Upon the hearing of an appeal the defendant raised for the first time the defence that the plaintiff's agent had been guilty of sharp practice and that in all the circumstances it would be inequitable and oppressive specifically to enforce the contract and that the plaintiff should be left to its remedy, if any, at law. This defence did not form one of the grounds of appeal.

Held, that if the defence had been raised in the court below relevant evidence might have been tendered with respect to the questions of fact which must necessarily be decided, therefore it was now too late to raise that defence.

A contract, dated 20th October 1947, for the sale of a pastoral property provided, by cl. 12, that in the event of the consent of the Treasurer not being obtained within two months of that date, or within such further period as might be mutually agreed upon by the parties, the contract should be deemed to be cancelled and upon the vendor returning to the purchaser any deposit neither party should be under any further liability to the other for any sum for damages, costs or otherwise. The purchaser's agent resided on the property with the defendant, and had frequent relevant conversations

81 CLR 419

with him, from 29th November to 8th December 1947 and from 27th Dec- ember to 30th December 1947. The Treasurer's consent in writing was obtained on 5th January 1948. On 15th January 1948, the vendor's solicitor, by letter, informed the purchaser's solicitor that the Treasurer's consent not having been obtained within the said period of two months the contract was no longer effective after 20th December 1947.

Held, that the non-receipt of the Treasurer's consent by 20th December 1947, did not effect an automatic cancellation of the contract because: (1) cl. 12 of the contract should be construed as making the contract not void but voidable, the question of who might avoid it depending on the event; and (2) the evidence proved, the Statute of Frauds not having been pleaded, an oral agreement between the parties prior to 20th December 1947 that the time for the Treasurer's consent should be extended for a reasonable period after that date.

New Zealand Shipping Co. Ltd. v. Société des Ateliers et Chantiers de France (1919) A.C. 1, discussed and applied.

Held, that cl. 12 of the contract was a condition subsequent and was not affected by reg. 6 (10) of the National…

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

Case: [1950] HCA 35
Decision Date: 26 September 1950

CaseChat Overview and Summary

The High Court of Australia heard an appeal from the Supreme Court of New South Wales concerning a dispute over a contract for the sale of a pastoral property, "Gundowda". The plaintiff, Gundowda Pty. Ltd., sought specific performance of the contract against the defendant, Charles Ernest Suttor. The contract, dated 20 October 1947, involved the sale of the property on a walk-in walk-out basis for £85,000, with additional provisions for the vendor's lifetime residence in the homestead, an annuity, and the continued employment of three named individuals.

The legal issues before the court included whether the contract was automatically cancelled due to the failure to obtain the Treasurer's consent within the stipulated two-month period, whether the plaintiff's agent had engaged in fraudulent misrepresentation or sharp practice, and whether the contract's provisions regarding employee retention rendered specific performance an inappropriate remedy. The defendant also raised the defence of hardship, arguing that enforcing the contract would expose him to significant income tax liabilities.

The High Court affirmed the trial judge's decision that the non-receipt of the Treasurer's consent by the specified date did not automatically cancel the contract. This was based on two key findings: firstly, that clause 12 of the contract should be interpreted as making the contract voidable rather than void, with the option to avoid resting with the parties; and secondly, that the evidence established an oral agreement to extend the time for obtaining consent for a reasonable period, notwithstanding the Statute of Frauds not having been pleaded. The court also found that the defence of fraudulent misrepresentation was not established, and that the belated defence of sharp practice, not having been raised in the court below, could not be considered on appeal as it required further factual determination. The court further held that the provision for employee retention did not preclude specific performance, as the primary obligation was the purchaser's entry into a deed with the employees.

The High Court dismissed the appeal and affirmed the order for specific performance of the contract of 20 October 1947. The court found that the defendant had waived any right to cancel the contract under clause 12 due to the delay in obtaining the Treasurer's consent, as his conduct throughout the period indicated a continued intention to proceed with the sale. The court also rejected the arguments regarding misrepresentation and hardship, finding that the defendant had not discharged the onus of proving these defences.

Orders