Vendor and Purchaser—Power of vendor to rescind agreement for sale of land—Time of essence of contract—Purchaser in possession—Failure of purchaser to pay balance of purchase money on due date or on extended date—Previous acceptance of instalments and interest after due dates—Acceptance of interest to due date—Whether election not to rescind—Provision requiring notice before re-entry for breach of covenant in lease—Application to right or option to purchase land when purchaser in possession—Landlord and Tenant Act, 1912 (W.A.) s. 3*.
Decisions
1964, March 23. The following written judgments were delivered:- KITTO J. This is an appeal from a judgment of the Supreme Court of Western Australia (Jackson S.P.J.) dismissing a claim by the appellant for a declaration that a certain agreement for sale made between it and the respondents on 6th January 1958 had been lawfully rescinded by it, and upholding a counterclaim by the respondents for specific performance of that agreement. (at p49)
2. The agreement provided for the sale by the appellant and the purchase by the respondents of two lots of land in Perth of which the appellant is the registered proprietor. The agreed price was 47,500 pounds, payable by a deposit of 10,000 pounds (500 pounds before the signing of the agreement and 9,500 pounds on 6th January 1958), four sums of 5,000 pounds each payable at twelve monthly intervals from the date of the agreement, and the balance, 17,500 pounds, sixty months from that date. The agreement provided for the payment by the respondents of interest at 5 1/2% per annum on the balance of purchase price outstanding, the interest to be payable on the same days as the annual instalments of purchase price. It is clear, I think, that the annual instalments here referred to include the final payment of 17,500 pounds. Of the remaining stipulations of the agreement four only need be mentioned. Clause 5 provided that possession should be given and taken on the date of the agreement, and that the sale should be deemed to have taken place as from that date. By cl. 11 it was agreed (inter alia) that if the purchasers should fail to pay the deposit or the balance of the purchase money or any other moneys payable at the respective times appointed all moneys paid by them should be absolutely forfeited to the vendor and it should be lawful for the vendor to rescind the contract without notice. By cl. 12 it was agreed that time should be of the essence of the contract in all respects. Clause 14 provided that upon payment in full of the balance of purchase money and all other moneys payable under the contract the appellant at the cost and expense of the respondents should execute a proper registrable transfer of the land and do all that was necessary on its part to secure the registration thereof. (at p50)
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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AGLC
Tropical Traders Ltd v Goonan [1964] HCA 20
Case
[1964] HCA 20
Decision Date
CaseChat Overview and Summary
Tropical Traders Ltd (the vendor) sought to rescind an agreement for the sale of land against Goonan (the purchaser), who was in possession of the property. The dispute centred on the purchaser's failure to pay the balance of the purchase money by the due date, and subsequently by an extended date. The vendor contended that time remained of the essence of the contract and that they were entitled to rescind.
The primary legal issues before the High Court of Australia were whether the vendor had elected not to rescind the contract by previously accepting late payments of instalments and interest, and whether the vendor's right to rescind was affected by the purchaser's possession of the land. The court also considered the applicability of section 3 of the Landlord and Tenant Act 1912 (W.A.), which required notice before re-entry for breach of covenant in a lease, to the vendor's right to rescind an agreement for sale where the purchaser was in possession.
The court held that the vendor's acceptance of late payments did not constitute an election not to rescind. It reasoned that each late payment was a breach of contract, and the vendor's acceptance of such payments, along with interest, did not necessarily waive their right to enforce the time stipulations for future payments, particularly when time was expressly of the essence. The court further determined that section 3 of the Landlord and Tenant Act 1912 (W.A.) did not apply to the vendor's right to rescind the contract for sale, as the relationship was not one of landlord and tenant, but rather vendor and purchaser under an agreement for sale. The vendor's right to rescind was therefore not fettered by the notice requirements of that section.
The High Court found in favour of the vendor, allowing the rescission of the contract.