ON APPEAL FROM THE SUPREME COURT OF Contract-Sale of land-Completion on fixed date-Failure of vendor to complete on
such date-Notice by purchaser making time of essence of the contract and fixing later date for completion-Purchaser remaining in possession after later date so fixed for completion and harvesting growing crop-Election to treat contract as subsisting and not as terminated.
The plaintiff agreed to sell a farm to the defendant on 9th November 1926, the date for completion being 1st March 1928. Simultaneously with the agreement for sale the parties entered into a share-farming agreement for the year 1927 which gave the defendant the right to fallow part of the land during 1927 for his own use after taking possession on 1st March 1928. The defendant entered into possession under the share-farming agreement. The plaintiff failed to produce a clear title by 1st March 1928, and on 15th October 1928 the defendant gave a notice to the plaintiff requiring the agreement to be completed by 5th November and purporting to make that date of the essence of the contract. The plaintiff was ready to settle on 12th December. The defendant, in effect, continued in possession until after 5th November, alleging an agree- ment with the plaintiff to do SO for the purpose of harvesting the crop, but the learned trial Judge found that there was no such agreement and decreed specific performance of the agreement for sale, which decision was affirmed by the Full Court of the Supreme Court.
Held, by Gavan Duffy C.J., Starke, Dixon and McTiernan JJ. (Evatt J. dissenting), that the defendant, by continuing in possession of the land and harvesting the crop elected to affirm, and not to put an end to, the contract,
and was, therefore, precluded from relying upon the plaintiff's failure to com ply with the notice fixing 5th November as the final date for completion.
Question of the reasonableness of the notice given considered, Decision of the Supreme Court of South Australia (Full Court) affirmed
APPEAL from Supreme Court of South Australia.
The plaintiff, William Herbert Bruce, brought an action against Johann Wilhelm Wendt, claiming specific performance of an agreement in writing, dated 9th November 1926, for the sale of a farm in the Hundred of Gordon, South Australia, containing 1.747 acres for £9,608. The agreement also provided that the vendor was to build a house of a specific design on the land by 1st March 1927, to lay on water to the site of the house, to allow the purchaser to have a quantity of hay then stacked on the land, and to sell a stated quantity of posts which were to be provided by and paid for on 1st March 1928, which day was expressed to be the day for settlement of the sale of the land. The purchaser was to sign covenants with the first and second mortgagees and hand the vendor a mortgage for the balance on 1st March 1928, when possession…
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
Wendt v Bruce [1931] HCA 9
Case
[1931] HCA 9
Decision Date
CaseChat Overview and Summary
The plaintiff, William Herbert Bruce, sought specific performance of a contract for the sale of a farm to the defendant, Johann Wilhelm Wendt. The contract, entered into on 9 November 1926, stipulated a completion date of 1 March 1928. A simultaneous share-farming agreement allowed the defendant to possess and farm part of the land during 1927, with the right to fallow another portion after taking possession as purchaser on 1 March 1928. The plaintiff failed to provide clear title by the agreed completion date. On 15 October 1928, the defendant issued a notice making time of the essence and fixing 5 November 1928 as the new completion date, threatening to treat the contract as at an end if the plaintiff defaulted. The plaintiff was ready to settle on 12 December 1928. The defendant remained in possession of the land and harvested a crop sown in 1928. The trial judge found no agreement existed for the defendant to remain in possession to harvest the crop, yet decreed specific performance, a decision affirmed by the Full Court of the Supreme Court of South Australia.
The High Court was required to determine whether the defendant, by remaining in possession of the land and harvesting the crop after the date fixed by his notice, had elected to affirm the contract, thereby precluding him from relying on the plaintiff's failure to complete by that date. The court also considered the reasonableness of the notice period provided by the defendant.
A majority of the High Court held that the defendant's conduct in remaining in possession of the land and harvesting the crop constituted an election to affirm the contract. The legal principle applied was that a party cannot selectively adopt parts of a contract that are beneficial while rejecting those that are disadvantageous; they must either affirm or disaffirm the contract entirely. By continuing to occupy and benefit from the land and its produce, the defendant acted in a manner inconsistent with treating the contract as terminated. This conduct was deemed an unequivocal act demonstrating an intention to keep the contract on foot, thereby waiving any right to rely on the plaintiff's breach of the notice.
The appeal was dismissed, with the majority affirming the decision of the Supreme Court of South Australia. The court found that the defendant's actions amounted to an election to affirm the contract, and therefore, he was precluded from repudiating it based on the plaintiff's failure to meet the deadline set in the notice. The question of the reasonableness of the notice was considered secondary to the finding of election.