W & R Pty Ltd v Birdseye

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SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

W & R PTY LTD v BIRDSEYE

[2008] SASC 321

Judgment of The Full Court

(The Honourable Chief Justice Doyle, The Honourable Justice Duggan and The Honourable Justice Anderson)

26 November 2008

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - REPUDIATION - DELAY AND PROVISIONS AS TO TIME

Appeal from District Court order for specific performance of two contracts for the sale of vacant land - appellant sold two blocks of land to respondent - respondent failed to pay the deposit when due - respondent failed to settle on the nominated date - appellant served notice of termination on respondent - notice of termination provided by vendor contained errors - purchaser subsequently transferred amount greater than nominated deposit into broker's account - vendor attempted to arrange new settlement dates - purchaser failed to settle on new settlement dates - notice to complete was sent by vendor - notice to complete contained errors - purchaser payed additional amounts into broker's account - purchaser failed to settle on date nominated in notice to complete - vendor sent second notice of termination - vendor purported to terminate the contracts because of purchaser's alleged acts of repudiation.

Held: Failure to pay the deposit when due gave right to termination - notice of termination was adequate.

Land and Business (Sale and Conveyancing) Act 1994 (SA) s 5, s 7 and s 17, referred to.

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - REPUDIATION - WHAT AMOUNTS TO REPUDIATION

Whether purchaser's conduct repudiatory.

Held, by majority:  There was no repudiatory conduct by purchaser.

Brien v Dwyer (1978) 141 CLR 378; Romanos v Pentagold Investments Pty Ltd (2003) 217 CLR 367; Concut Pty Ltd v Worrell (2000) 75 ALJR 312; Devries v Australian National Railways Commission (1993) 177 CLR 472; State Rail Authority (NSW) v Earthline Constructions Pty Ltd (in liq) (1999) 73 ALJR 306; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623; Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 82 ALJR 345, applied.
Stern v McArthur (1988) 165 CLR 489; Legione v Hateley (1983) 152 CLR 406; Elizabeth City Centre Pty Ltd v Corralyn Pty Ltd (1994) 63 SASR 235; Commissioner of Taxation v Reliance Carpet Co Pty Ltd (2008) 82 ALJR 968; Carr v J A Berriman Pty Ltd (1953) 89 CLR 327; Shevill & Anor v The Builders Licensing Board (1982) 149 CLR 620; Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359; Taylor v Oakes, Roncoroni & Co (1922) 127 LT 267; Shiloh Spinners Ltd v Harding [1973] AC 691; Louinder v Leis (1982) 149 CLR 509, discussed.
Forslind v Bechely-Crundall [1922] SC (HL) 173; Holland v Wiltshire (1954) 90 CLR 409; Taylor v Raglan…

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Details
Case
[2008] SASC 321
Decision Date

CaseChat Overview and Summary

The appeal by W & R Pty Ltd against a decision of the District Court was about the specific performance of two contracts for the sale of vacant land. The respondent, Birdseye, had failed to pay the deposit when due and subsequently did not settle on the nominated date. The appellant had then served a notice of termination due to the respondent's failure to settle, but the notice contained errors. Despite this, the respondent transferred the deposit amount into the broker's account, and the appellant attempted to arrange new settlement dates, which the respondent also failed to meet. The appellant then sent a notice to complete, which also contained errors, and the respondent transferred additional amounts into the broker's account. The appellant then sent a second notice of termination, claiming that the respondent's conduct amounted to repudiation.

The legal issues in this case involved the interpretation of the contracts, the validity of the notices of termination, and whether the respondent's conduct amounted to repudiation. The court had to determine whether the errors in the notices of termination were significant enough to render them ineffective and whether the respondent's actions constituted a repudiation of the contract. The court also needed to consider whether estoppel by convention applied to the situation.

The court found that the errors in the notices of termination were not significant enough to render them ineffective. The court held that the respondent's conduct did amount to repudiation because the respondent had failed to settle on the nominated dates and had transferred the deposit amount into the broker's account despite the errors in the notices of termination. The court also found that estoppel by convention did not apply in this case because the respondent had not assumed a state of affairs as the basis for the transaction. The court held that the appellant was entitled to terminate the contracts and that the respondent's appeal should be dismissed.

The final orders of the court were that the appeal by Birdseye be dismissed and that the orders of the District Court be affirmed. The court also awarded costs to W & R Pty Ltd.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I agree with the Judge on the question of interest.Conclusion For those reasons I would dismiss the appeal. DUGGAN J: I agree with the reasons for judgment of the Chief Justice. I add these observations.Estoppel The nature of estoppel by convention is summarised in Spencer Bower, The Law Relating to Estoppel by Representation, (3rd ed):[1]This form of estoppel is founded, not on a representation of fact made by the representor and believed by the representee, but on an agreed statement of facts the truth of which has been assumed, by the convention of the parties, as the basis of a transaction into which they are about to enter. When the parties have entered into their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped against the other from questioning the truth of the statement of facts so assumed.[1] Spencer Bower & Turner, The Law Relating to Estoppel by Representation (3rd ed, 1977), p157-160 In Con-Stan Industries of Australia Proprietary Limited v Norwich Winterthur Insurance (Australia) Limited (Con‑Stan)[2] the Court stated that estoppel by convention requires the assumed state of affairs to be an assumed state of fact. The Chief Justice in the present case has commented on the authorities decided since then which provide support for the argument that the doctrine extends to questions of law. He expressed the same view in Acil v England[3] where he pointed out that the reasoning in Con-Stan appears to be out of step with more recently expressed views by members of the High Court.[4][2] (1986) 160 CLR 226 at 244-245[3] (unreported, Supreme Court of South Australia, Doyle CJ, 1 November 1995)[4] Ibid at [32]. See also Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) [2007] VSCA 280 at [72]‑[73]. In The Bell Group Ltd (In Liq) v Westpac Banking Corporation (No 9)[5] (Bell) Owen J also discussed developments in the law since Con-Stan and expressed the view that a promissory estoppel by representation or an estoppel by convention can arise from an assumption of law. He pointed out that in Waltons Stores (Interstate) Ltd v Maher[6] Brennan J was of the view that the assumed state of affairs to which a party might be bound by way of estoppel in pais (which includes estoppel by convention) can relate to a matter of mixed fact and law. Owen J also referred to the observation of Deane J in Foran v Wight[7] that estoppel by conduct extends to a representation or induced assumption of law and fact. Owen J observed that this view had been accepted as applying to estoppel by convention in Government Employees Superannuation Board v Martin[8] and Sumampow v Mercator Property Consultants Pty Ltd.[9][5] [2008] WASC 239[6] (1988) 164 CLR 387[7] (1989) 168 CLR 385, 435[8] (1997) 19 WAR 224[9] [2005] WASCA 64 at [180]-[181] In MK & JA Roche Pty Ltd & Ors v Metro Edgley Pty Ltd & Anor[10] Hodgson JA (Beazley JA and Ipp JA concurring) held that there could be an estoppel as to rights and not merely as to facts. He referred to EsleaHoldings Ltd v Butts[11] and Heggies Bulkhaul v Global Minerals Australia.[12][10] [2005] NSWCA 39 at [71][11] (1986) 6 NSWLR 175 at 185-189[12] (2003) 59 NSWLR 312 at [147]-[154]

Ratio Decidendi

Legal Principle Established

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