Lamshed v Lamshed [1963] HCA 60; (1963) 109 CLR 440 (10 December 1963)

HIGH COURT OF AUSTRALIA

LAMSHED v. LAMSHED [1963] HCA 60; (1963) 109 CLR 440

Specific Performance

High Court of Australia
McTiernan(1), Kitto(2) and Windeyer(3) JJ.

CATCHWORDS

Specific Performance - Laches as ground for refusal - Failure to prosecute legal proceedings with diligence - Defendant's position altered by entering into contract with third party.

HEARING

Adelaide, 1963, September 24, 30; October 1.
Sydney, 1963, December 10. 10:12:1963
APPEAL from the Supreme Court of South Australia.

DECISION

December 10.
The following written judgments were delivered:-
McTIERNAN J. In my opinion the reasons and judgment of Hogarth J. are right. disagree with my brothers Kitto and Windeyer JJ. on their view of the defence of laches I cite all that Hogarth J. stated in his reasons on that question:
"The third ground of defence relied upon by the defendant was that even if there is a contract enforceable at law against the defendant, nevertheless the equitable remedy of specific performance is no longer available on account of laches.
"The plaintiffs commenced this action on 5th April 1957, a little more than four months after the letters repudiating the contract were received by the plaintiffs and by Croser. The defendant appeared on 9th April 1957. The statement of claim was filed on 6th May 1957; and the defence was filed on 1st August 1957. No further steps were taken in the action until 26th March 1962, when the plaintiffs entered the action for trial. Certain interlocutory proceedings then took place. The action was first called on for hearing on 5th November 1962, but in the circumstances set out in the report of the case (1962) SASR 190 , the hearing was adjourned and, after amendments had been made to both the statement of claim and the defence, the hearing was eventually resumed on 24th April 1963.
"The period of a little over four months which elapsed after the defendant's repudiation of the contract included the period of harvest and also the Christmas period and the long vacation of the Court. There was some discussion and correspondence between the solicitors for the parties during that time, and I do not consider that there was any undue delay in commencing action.
"The defendant complains, however, that after the commencement of their action the plaintiffs did not prosecute it with due diligence; and that therefore whatever their rights may be at law, they are not entitled to invoke the equitable jurisdiction of the Court in the form of an order for specific performance.
"It does not lie in the mouth of the defendant to blame the plaintiffs for failing to proceed with the action by default, during the period between the filing and delivery of the statement of claim, and the filing and delivery of the defence.
"On the failure of the plaintiffs to deliver a reply within seven days of the defence, the pleadings were deemed closed, and every material statement of fact in the defence was deemed to have been denied and put in issue (O. 23, r. 4. At any time thereafter, (subject to compliance with O. 64, r. 11), either the plaintiffs or the defendant, if so minded, could have entered the action for trial. In fact, as I have said, the plaintiffs did not do so until 26th March 1962, some four and a half years later. I do not think that there was any undue delay after the case was entered for trial, for which the plaintiffs should be held responsible. In effect, therefore, it is the period of four and a half years to which I have just referred, which must be considered in this context.
"The evidence given on behalf of the plaintiffs, which I accept, as the reason for their not proceeding with the action, was twofold. Firstly, for family reasons, the plaintiffs wanted if possible to avoid taking the defendant into court. Secondly, they were advised by Mr. Rowe, who had wide experience in land values in that area, that in his opinion land values would decrease so that the defendant would find difficulty in getting another purchaser ready to buy his farm for 48,000 pounds as a cash transaction; and that therefore it was probable that in due course the defendant would be pleased to complete the contract, without the necessity of the plaintiffs' proceeding further with the action. In giving evidence Mr. Rowe said that his opinion was strengthened during the period in question owing to there being a severe drought in 1959. Contrary to his expectations, however, land prices in the district have increased. In cross-examination the plaintiff Elsie Helena Louisa Lamshed agreed that until the plaintiffs heard that the defendant had agreed to sell the farm to third parties, they 'had decided to abandon the claim altogether'. This plaintiff was an elderly woman who, in my opinion, when she was giving evidence, did not grasp the full import of the word 'abandon'. I do not accept her evidence as establishing that at any time the plaintiffs made any definite decision not to go on with their action against the defendant. As I see the position the plaintiffs' claim was deferred after the receipt of the defence, in the hope that for economic reasons the defendant would see fit to change his attitude and complete the contract.
"I would have no hesitation in deciding against the plaintiffs on this aspect if they had delayed issuing their writ during the period in question. If they had remained passive after receipt of the letter of the defendant's solicitors in November 1956, and had done nothing at all to enforce their rights until, for example, shortly before the expiration of the period limited by the Limitation of Actions Act, then in the ordinary course they could not expect the Court to decree specific performance of the contract.
"A party claiming specific performance must do so promptly and as soon as the nature of the case will permit; see e.g. Fry on Specific Performance, 6th ed. (1921) p. 514, par. 1100; Halsburys Laws of England, 3rd ed., vol. 36, p. 324, par. 470.
"These passages refer to the necessity of a plaintiff not only commencing, but also prosecuting his action with diligence. In support of this proposition counsel for both parties told me that they were unable to find any case in which delay subsequent to the commencement of proceedings had constituted laches so as to bar the right to specific performance. Mr. Ligertwood, for the defendant, however, referred to two cases in which the matter was mentioned. The first of these cases is Moore v. Blake (1816) 4 Dow 230 [1816] EngR 402; (3 ER 1147) , an appeal from the Irish Court of Chancery to the House of Lords. It is not necessary to discuss the facts of that case which did not involve a claim for specific performance. The passage relied upon by Mr. Ligertwood is in the speech of Lord Eldon where he said, 'Then we are to consider whether there is anything to bar the relief upon the authority of those cases - not of the cases which justify a dismissal on the ground of not commencing a suit in due time - but of those cases which justify a dismissal on the ground that, though begun in due time, it has not been prosecuted with due diligence' (1816) 4 Dow, at pp 242, 243 (3 ER, at pp 1151, 1152) . His Lordship went on to hold that the case before him did not fall within that principle. Mr. Ligertwood relies upon the passage, however, as an indication that the principle does exist.
"The second case upon which Mr. Ligertwood relied is the Marquis of Hertford v. Boore [1801] EngR 134; (1801) 5 Ves Jun 719 (31 ER 823) I do not regard this case, however, as being of any assistance to the defendant, since although the delay after the filing of the bill was referred to in argument, it was not referred to in the reasons for judgment.
"It is well established that the principle upon which courts of equity have operated is that a party cannot successfully call for specific performance of a contract unless he has shown himself, in the words of Lord Alvanley in Milward v. Earl of Thanet (1801) 5 Ves 720 n [1801] EngR 144; (31 ER 824) to be ready, desirous, prompt and eager. In my opinion a plaintiff does not automatically avoid the danger of his claim for equitable relief being barred, merely by the issue of his writ. He may be barred from equitable remedies if he does not prosecute his action with all the diligence which is reasonable in the circumstances. In determining, however, what delay will be sufficient to bar an equitable remedy, different considerations may well apply after the issue of a writ. A court could take the view that before the issue of the writ the party seeking specific performance has not committed himself, and the opposing party may be embarrassed, not knowing whether he will ultimately be held to his bargain or whether he is free to disregard it.
"Where, as in the present case, one party has notified the other that he repudiates liability under the contract, it is open to the party receiving that notice to elect to terminate the contract, and to claim damages for its breach; but it is also open to him to insist upon holding the first-mentioned party to the contract. Heyman v. Darwins Ltd. (1942) AC 356 , per Viscount Simon (1942) AC, at p 361 . If he chooses to do so, he himself continues to be bound by the contract: Hoad v. Swan [1920] HCA 50; (1920) 28 CLR 258, at p 264 ; Kinleyside v. Irwin (1961) WAR 169 .
"In my view the plaintiffs elected to continue to be bound by the contract at the latest when they issued the writ in this action. When once a writ had been issued it was open to the defendant to apply to have the action struck out for want of prosecution if he considered that the plaintiffs were not proceeding with proper dispatch. Although in that event the plaintiffs might later have commenced a second action, it is almost inconceivable that they should succeed in a claim for specific performance after allowing the first action to be struck out for want of prosecution. Furthermore, when once the pleadings had been closed, it was open to the defendant himself to enter the action for trial.
"Although delay subsequent to the issue of the writ may in some circumstances constitute laches so as to debar the plaintiff from an equitable remedy, a plaintiff may be regarded as proceeding with due diligence if, without undue delay, he takes the action to a stage where it is possible for the defendant himself to enter it for trial, even though the plaintiff then for some sufficient reason, allows a period, even perhaps an extended period, to elapse before he himself enters the action for trial. Where the plaintiff has a sufficient reason for not proceeding further with his action over a period, and, during that period, the defendant has the right to enter the action for trial if he wishes to do so, I consider that the plaintiff will not be debarred from his remedy unless the defendant is shown to be likely to suffer some prejudice as a result of the delay. I do not consider that the passage of time alone in these circumstances is sufficient to bar the remedy.
"In the present case the evidence is that early in 1962, rumour reached the plaintiffs to the effect that the defendant was negotiating to sell his farm to a third party. This led the plaintiffs to lodge a caveat at the Lands Title Office, and it was as a result of proceedings in this Court for the removal of the caveat that this action was eventually entered for trial.
"Taking into account the family relationship between the parties, I consider that the plaintiffs were acting reasonably in waiting in the hope and belief that the defendant would complete his contract without a court hearing. Litigation between members of a family is a misfortune which the parties do well to avoid if they can reasonably do so; and where a party seeks to avoid a court hearing I do not think that he should be prejudiced on that account, providing he acts reasonably and does not prejudice his opponent by delay.
"I do not consider that the defendant has suffered any prejudice owing to the delay in entering the action for trial. I consider therefore that the plaintiffs are not barred from the remedy of specific performance by laches". (at p447)

2. Neither Dorin v. Harvey [1845] EngR 1151; (1845) 15 Sim 49 (60 ER 534) nor Berry v. Elyard (1864) 3 SCR (NSW) Eq 67 is cited by Hogarth J. There is nothing in either case which I think shows that he erred on any question of principle. (at p447)

KITTO J. This is an appeal from a judgment of the Supreme Court of South Australia (Hogarth J.) for specific performance of an alleged contract for the sale of land. The respondents to the appeal, the plaintiffs in the action, alleged by their statement of claim that by an agreement in writing made between the appellant, the defendant, and themselves (under the firm name Lamshed & Co.) the appellant agreed to sell and the respondents agreed to purchase a certain grazing property of 1,189 acres under the provisions of the Real Property Act, 1886-1961 (S.A.), "together with all improvements erected thereon and chaffcutter, fire wood, scrap iron, lighting plant complete with fittings", for the sum of 48,000 pounds payable as to 1,000 pounds as a deposit on the signing of the contract and as to the balance on 1st March 1957. The appellant raised four defences. He denied that he had made any binding contract with the respondents; he said that the contract (if made) was not in writing and there was no memorandum or note of it signed by him or any authorized agent of his: see s. 26 of the Law of Property Act, 1936 (S.A.); he alleged laches on the part of the respondents; and he set up that they had acquiesced in denials by him of the existence of any binding contract and as a result were estopped from claiming equitable relief. It seems that at the trial a fifth defence was relied upon, though it is not to be found in the pleadings, namely that the appellant had sold the property to certain persons called Hallo who had entered a caveat ahead of any caveat by the respondents, and that as a consequence the interest of the Hallos in the land had priority over the interests of the respondents. The learned trial Judge decided in favour of the respondents the issues raised by all five defences. Each has been put to this Court by way of appeal. (at p448)

2. A strong attack has been made upon his Honour's finding that the contract alleged by the respondents was in fact made. It is common ground that the appellant signed the document upon which the respondents rely as containing the contract they allege. This he did on 24th September 1956. He had previously engaged an estate agent named Croser to find a purchaser for the property, and it was Croser who prepared the document, using a printed form for the purpose, and got the appellant to sign it. At that time the document corresponded in all respects with the contract alleged in the action, except that the deposit provided for was the usual ten per cent of the purchase price, namely 4,800 pounds, and as a consequence the balance of purchase money was stated at 43,200 pounds. A second contract form was partly filled in by Croser at the same time and was signed by the appellant; but so far as appeared at the trial it was never signed by the respondents. Croser repaired to the respondents, or some of them, and on the same day secured their agreement to buy the property for 48,000 pounds. But they insisted on paying only 1,000 pounds as deposit. Croser, in order to obtain their signatures to the first document above referred to, took it upon himself to alter the document by crossing out 4,800 pounds and substituting 1,000 pounds and by crossing out 43,200 pounds and substituting 47,000 pounds. This he did in the presence of the first and third respondents, saying that in his opinion 1,000 pounds would bind the contract as well as 4,800 pounds would. He initialled the alterations, and the first respondent then signed the document on behalf of all the respondents in the firm name. Croser returned to the appellant and told him that the respondents had signed the document but that only 1,000 pounds had been paid as deposit. There was a dispute at the trial as to whether Croser told the appellant of his having altered the contract; but the Judge found on ample material, including the appellant's own admission under cross-examination, that the appellant formed the belief that the alterations had been made. He did not re-execute the document, and contends that he never assented to it in its altered form; but he certainly did not say at the time that he dissented from it, and both then and on subsequent occasions he so conducted himself in dealing with Croser and in dealing with the respondents that any reasonable person in their position would have inferred that he was accepting the situation that the altered document constituted a contract binding upon him. (at p448)

3. Upon a careful review of all the subsequent events the learned Judge found that the appellant had ratified and adopted Croser's alteration of the document. This finding cannot be disturbed. In the argument on the appeal it was insisted that the finding that the appellant belived the alterations had been made fell short of a finding that Croser actually told him of the alterations: but all that is important for present purposes is that he had such a state of mind on the topic that subsequent conduct could amount to adoption of the altered document as his own. It has been strongly urged on the appellant's behalf, in conformity with evidence that he gave at the hearing, that his omission to dissociate himself immediately from Croser's action in altering the document proceeded from uncertainty as to his legal position, a strong objection to selling to the respondents because they had refused to pay the full deposit of 4,800 pounds, and a fear that if he said anything at that stage they might execute the second document, unaltered, and so bring about a binding contract. Perhaps it is true that his mind worked along some such lines, but the fact remains that his conduct on that occasion was consistent only with acceptance of the contract as altered. His undisclosed mental processes cannot control the legal situation. The main features of his subsequent conduct, which is no less significant, may be mentioned briefly. (at p449)

4. It was on the afternoon of 24th September 1956 that Croser had brought home to the appellant's mind the fact that he had altered the contract document and that a deposit of only 1,000 pounds had been paid. In the evening of the same day the appellant spoke to Croser on the telephone, telling him that another firm of estate agents was claiming commission. The conversation that took place was explicable only on the footing that a sale of the property to the respondents had been concluded. No suggestion came from the appellant that he thought otherwise or that he was dissatisfied in any way about the deposit or the alterations in the document. On the next morning the appellant spoke to three of the respondents, the conversations being in terms which assumed that a contract of sale was in force. At a later date the appellant asked Croser for the contract document. Croser's evidence as to the reason the appellant gave for wanting it was that he wished to see if the cast iron and scrap iron and wood were included in the sale. The appellant did not entirely agree with this evidence though he came close to doing so; but he admitted that Croser had referred him to his (Croser's) solicitor, saying that it was his habit when he sold a property to take the contract to his solicitor. The appellant did not suggest in his evidence that he then took the opportunity of denying that a sale of the property had been made. He later asked Croser's solicitor for the document and was given a copy with Croser's alterations shown, but still no comment came from him. All this happended before November 1956. (at p450)

5. It was not until early in November that the appellant gave the first overt indication that he was not satisfied to be bound by the contract. That was in a conversation with the first respondent, to whom he said, "You haven't got the place yet", adding when asked what he meant, "You didn't pay the full deposit". Then in a conversation with Croser, probably in the latter part of November 1956, he made his first reference to the alteration of the document, saying that because Croser had altered it he would not go on with the contract. The following passage in Croser's evidence is worth quoting: "I think he told me that he had had advice from a Q.C. in Adelaide and he was advised that the contract was null and void or something like that. He said he had been to Western Australia, I think, and he considered the land in W.A. wasn't as good as he expected to find it and he decided not to buy in W.A. I said, when he told me the contract was null and void, I said 'On what basis' and he said 'on account of the alteration of the contract'. I said 'Pat, you can't deny that you were advised of the alteration at that time and you raised no objection to the alteration because if you had I would have had no alternative but to go back to the purchaser and say "You either pay 4,800 pounds for the property or you will not be able to buy the property"'. He said 'At the time you called back with the signed contract I was going to mention it, but you kept on talking and I didn't ask the questions'. I said 'That is too silly because you had ample time to ask any questions you desired'." Thereafter the appellant's solicitors wrote letters to the respondents and to Croser saying that they had advised the appellant that no contract existed. Explanations given by the appellant in the witness box of his silences and of his reason for refusing to be bound by the document were disbelieved by the Judge, who inferred from the whole of the relevant evidence that he had had a change of heart which was not fully disclosed until the latter part of November. In the meantime his conduct so far as known to the respondents was such that, as his Honour thought, "it would be understood by any reasonable man as being an acceptance of the contract on the basis agreed by Croser, and that he did nothing effective to alter that state of affairs until his conversation with Croser in November". His Honour added: "During that period he obviously knew that the plaintiffs regarded themselves as liable to complete the purchase, and he knew that Croser, as his agent, was holding the deposit paid by the plaintiffs . . . I consider his overt acts (including his silence where in the circumstances something more positive was called for) amount to ratification by him of Croser's act". (at p451)

6. The conclusion thus stated was completely justified on the evidence and it must stand. It carries the consequence, as his Honour considered, that the defence of the absence of a signed memorandum or note of the contract must fail for the reason that the appellant agreed "that his handwriting should operate as a signature to what then became a complete agreement between the parties": cf. Stewart v. Eddowes (1874) LR 9 CP 311, at p 314 , Koenigsblatt v. Sweet (1923) 2 Ch 314 . (at p451)

7. I pass by the defence of laches for the moment. The fourth defence is stated in the pleadings as a defence that "the plaintiffs are in the circumstances estopped from enforcing the contract of sale on the grounds of . . . acquiescence in the rejection by the defendant of the contract (if any)". This amount to a defence of abandonment of the contract; that is to say it depends upon an inference that the contract was discharged by agreement, each party having become entitled to assume from a long-continued ignoring of the contract on both sides that the matter was off altogether: see Fitzgerald v. Masters [1956] HCA 53; (1956) 95 CLR 420, at p 432 . The trial Judge dealt with the defence by finding that the respondents at no time waived their claim and that the appellant at no time believed that they had done so. No other conclusion was possible on the evidence. An inference of abandonment of the contract is in these circumstances impossible. (at p451)

8. The fifth defence asserted that the Hallos, having entered with the appellant into a contract for the sale and purchase of the property, lodged a caveat under the Real Property Act ahead of any caveat by the respondents and thereby gained priority over them. To answer the arguments addressed to us in support of this defence it is enough to say that the lodging of a caveat does not turn the caveator's interest into a registered interest: it has the effect of a statutory injunction which continues in force until the caveat is removed or lapses. The appellant cannot perform his contract with the respondents save by getting rid of the Hallos' caveat. No doubt that could prove expensive; but if there were nothing else in the case he would have to be told that he must perform his contract whatever it cost him: Thomson v. Richardson (1928) 29 SR (NSW) 221, at p 224; 46 WN 77, at p 78 . The entry of a caveat by a purchaser does not put an end to the enforceability of a contract between the vendor and an earlier purchaser. (at p452)

9. There remains the defence of delay. The material facts are these. The appellant formally repudiated the document of 24th September 1956 as a binding contract by two letters of 27th November 1956 written by his solicitors to the respondents and Croser respectively. The respondents allowed four months to go by, that period being occupied by harvesting, Christmas holidays, the Court vacation and some discussion and correspondence between solicitors. Then on 5th April 1957, they issued their writ. The trial Judge considered the lapse of time up to that date of no consequence, and we are not asked to differ from him on the point. Pleadings occupied the period to 1st August 1957. Thereafter the action lay dormant for about four years and eight months, until the respondents on 26th March 1962 set the case down for trial. It is that period of delay that is in question now. The Judge found on the evidence that the respondents at no stage formed the intention of abandoning the contract. This was clearly a correct finding. The respondents' inaction was due to family considerations which related only to the prosecution of the action and not to the maintenance of the contract. The appellant is a brother of the first respondent, and the respondents hoped and believed that in time he would perform the contract without being taken to court, especially if, as they were advised would probably happen, land values should decline. But they were not willing that he should sell to strangers. When, early in 1962, he purported to sell to the Hallos and the Hallos placed a caveat upon the title, the respondents were stirred to take up the action again at the point it had reached in 1957. Eventually, after some interlocutory proceedings, it reached a hearing. (at p452)

10. There was a time in the history of equity jurisprudence when the case of Gibson v. Patterson [1737] EngR 80; (1737) 1 Atk 12 (26 ER 8) was regarded as a decision that in equity time was of no consequence and delay no impediment to decreeing specific performance of agreements. It seems that Lord Loughborough first showed that the case decided no such thing (see note to Lloyd v. Collett [1793] EngR 1609; (1793) 4 Bro CC 469 (29 ER 992) ), and the doctrine has ever since been maintained that the special remedy of specific performance is available to those only who are prompt to claim it. The degree of promptness required depends on the nature of the case and all its circumstances: Eads v. Williams (1854) 4 DeG M & G 674, at p 691 (43 ER 671, at p 678) , Barclay v. Messenger (1874) 43 LJ Ch 449, at p 456 . Accordingly there is little point in citing cases for the purpose of comparing the period of delay in the present case with the delay which has been considered fatal to claims for specific performance in the circumstances of other cases. The bare fact of delay is not enough. Where there is nothing at all in the circumstances to justify either a conclusion that the delay has been to the prejudice of the defendant or of any third party, or a conclusion that the plaintiff ought to be regarded as having abandoned any rights he ever had, specific performance is not ordinarily refused: Fitzgerald v. Masters (1956) 95 CLR, at p 433 . But a circumstance which is of importance, where it exists, is that the defendant has denied that he is bound by the contract. The case in which that has occurred has been called "the typical case" for refusing specific performance by reason of a delay of even a few months: Fitzgerald v. Masters (1956) 95 CLR, at p 433 . "In such cases (as those of purported rescission for breach of contract or under a special condition as to title) the purchaser who wishes to attack the validity of the rescission must always come very promptly to a court of equity. It is natural and reasonable that this should be required of him, for the vendor is not to be placed indefinitely in the position of not knowing whether he can safely deal with the property in question on the footing that the contract has ceased to exist": (3). By parity of reasoning, a definite denial by one party that he has ever become bound by a contract of sale to which the other seeks to hold him places a clear obligation upon that other to sue promptly if he is to obtain from a court of equity a decree for specific performance. Equity will not allow the possibility of its making such a decree to be held unfairly long over the head of the party who denies the existence of the contract and asserts a right to deal with the property as his own. This is a particular application of the general principle of laches as expounded in Lindsay Petroleum Co. v. Hurd (1874) LR 5 PC 221, at pp 239, 240 and Erlanger v. New Sombrero Phosphate Co. (1878) 3 App Cas 1218, at p 1279 . To repeat words from the latter case, "a court of equity requires that those who come to it to ask its active interposition to give them relief, should use due diligence, after there has been such notice or knowledge as to make it inequitable to lie by" (1878) 3 App Cas 1218, at p 1279 . (at p453)

11. Plainly it would have been inequitable for the respondents in the present case, if they wanted specific performance, to lie by until 26th March 1962, continuing to assert the existence of a contract but taking no proceedings and leaving the appellant in the position of not knowing whether any money he might spend on the property would benefit him or the respondents, or whether he was free to sell the property to a third party, or whether his estate, if he should die, would include the property or the purchase money for which the respondents said that he had agreed to sell it. With this view Hogarth J. agreed. But his Honour considered that the reasoning had no application to the circumstances of a case in which the parties who were alleging the existence of a contract had commenced an action for specific performance with reasonable promptitude and had carried it without undue delay to a point at which the other party might either have applied for it to be dismissed for want of prosecution or have set it down for trial himself. In such a case, his Honour thought, the plaintiffs' delay in setting the action down is no bar to their ultimate success, where they have had a sufficient reason for not proceeding and the defendant is not shown to be likely to suffer prejudice as a result of the delay. In the present case he thought that those conditions were fulfilled. (at p454)

12. With respect, I do not think that this view is sound. The fact that the appellant might either have got rid of the action without a trial or have forced it to trial is a circumstance to be considered, no doubt, but the conclusion does not necessarily follow that during the four years and eight months in question the appellant was not prejudiced by reason of uncertainty as to whether or not he would be required to perform the contract which the respondents said he had made. He was faced with the most emphatic form of assertion that the contract existed. Yet he found that for some reasons not disclosed to him his opponents seemed unwilling to proceed to a hearing. He might let a sleeping dog lie or take the risk of waking it. There were advantages and disadvantages in either course. The respondents had shown no intention of abandoning the rights they asserted, but their apparent lack of enthusiasm for a trial might well have encouraged him to hope, and as time went on even to believe, that they lacked faith in their cause and would let it die in the manner least likely to cause loss of face. To let this happen was certainly for him the cheapest and easiest course. True, relevant evidence might be lost as time went on; the memories of witnesses might become impaired; and if the appellant honestly thought he was in the right these possibilities would seem to him important. Moreover he had constantly to face serious uncertainty as to how he stood in regard to ownership of the property, and what difficulties he might cause for himself if he were to make improvements, enter into share-farming agreements or the like, or contract to sell the property. But, while by taking the offensive he might put an end to the uncertainty, he might lose the case. Perhaps better to let the litigation die of inanition. Such was the quandary in which the appellant was placed by the respondents' inaction. The decision under appeal means that there is nothing inequitable in a plaintiff's leaving a defendant in such a state of uncertainty for months and years, and then, when it pleases him, asking the court to decide the issue he has allowed to become stale and grant the remedy of specific performance. (at p455)

13. But it means even more than that. The respondents did not seek any injunction against sale of the property, and did not even take the simple step of entering a caveat. Ultimately, in 1962, the appellant, having waited for more than four years, sold the land to the Hallos. The case is therefore not one of bare delay; it is not even one in which all that can be said against the granting of relief is that the plaintiffs' delay has unfairly placed the appellant in a position of uncertainty over a substantial period; it is a case in which a defendant, not precipitately but at length, in circumstances which made it not altogether unreasonable to do so, has prejudiced his position; and it is a case in which third parties, not shown to be in any way at fault and not being warned by any caveat on the title, have acquired interests which will be defeated if a decree for specific performance should now be made. It seems to me a clear case for refusing relief on the ground of delay unless the law be that delay after action brought cannot afford a defence to a suit for specific performance. (at p455)

14. Fry L.J. did not think that that was the law. In par. 1100 of his book (6th ed. (1921) p. 514) he mentioned, as one form of delay that might constitute laches disentitling a plaintiff to the aid of the court, delay in not diligently prosecuting his action when instituted. He cited in this connexion Moore v. Blake (1808) 1 Ball & B 62 , in which Lord Manners as Lord Chancellor of Ireland held that laches in not prosecuting a suit was as strong a reason for refusing the discretionary remedy of specific performance as laches in not commencing a suit. The actual decision in that case was reversed on appeal to the House of Lords (1816) 4 Dow 230 [1816] EngR 402; (3 ER 1147) , and expressions in the speeches of Lord Eldon and Lord Redesdale may seem at first sight to suggest that a defence of delay in prosecuting a suit must fail if (as is the case here) the defendant might have moved to have the suit dismissed for want of prosecution. But the real point of the case seems to have been that the suit was for specific performance of an agreement to grant a lease subject to the payment to the defendant of a debt owing to him by the plaintiff. As is said in the last two lines of the report, the defendant might refuse to execute the lease until paid his debt. He was in the position of a mortgagee of the promised lease. Delay by the plaintiff in prosecuting the suit was therefore delay in paying the mortgage debt. Their Lordships appear to have considered that the defendant's proper remedy for that delay was to move, as a means of foreclosure, that the suit be dismissed for want of prosecution. The circumstances were very special. What is important in the judgments is Lord Eldon's acknowledgement of "those cases which justify a dismissal on the ground that, though begun in due time, it (the suit) has not been prosecuted with due diligence" (1816) 4 Dow, at p 243 (3 ER, at p 1152) . Lord Manners' judgment as a statement of general principle as to delay seems to be unimpaired and indeed reinforced. An example of the cases to which Lord Eldon referred in the words I have quoted is Dorin v. Harvey [1845] EngR 1151; (1845) 15 Sim 49 (60 ER 534) . That case, together with Moore v. Blake (1808) 1 Ball & B 69 , was followed in New South Wales in Berry v. Elyard (1864) 3 SCR (NSW) Eq 67 . (at p456)

15. The conclusion to which I have come, therefore, is that by the time the respondents set the action down for trial they had lost their right to specific performance and accordingly that remedy should have been refused. By the judgment of Hogarth J. the question of awarding damages to the respondents was adjourned for further consideration, and the respondents are entitled to have that question dealt with if they so desire. The judgment should be set aside in so far only as it declares that the agreement of 24th September 1956 ought to be specifically performed and carried into execution and orders and adjudges the same accordingly and orders that subject to an exception the defendant pay to the plaintiffs their costs of the action down to and including the judgment. Otherwise the judgment should be affirmed. It would seem right that the respondents should have the general costs of the action but should pay any costs referable to the issue of delay. The convenient course, however, is to leave the judge who disposes of the action to make an appropriate order both as to those and as to any subsequent costs in the Supreme Court. The respondents should pay the costs of the appeal. (at p457)

WINDEYER J. I have had the great advantage of reading the judgment of my brother Kitto. I agree in his conclusions, in the reasons by which they are supported, and in the order he proposes. The findings of fact of the learned trial judge that in law the contract remained afoot should certainly not be disturbed. They were amply supported by the evidence. But his Honour's view of the effect of the plaintiff's delay in prosecuting his case was, I think, mistaken. At common law, delay in prosecuting a cause after action brought can do no more than provide a ground for an application to dismiss the action for want of prosecution. The action having been begun, the statutes of limitations have ceased to run. To the rule of the common law Coke's words may be applied: "A right cannot die; trodden down it may be, but never trodden out". But commencing a suit in equity for specific performance did not have the same consequences as bringing an action at law. The Chancery Court could consider, when the case came on for hearing, whether it would grant its form of relief. And it seems to have exercised a discretion to say at any time vigilantibus, non dormientibus, iura subveniunt. (at p457)

ORDER

Appeal allowed with costs. Judgment of the Supreme Court set aside in so far as it declares that the agreement of 24th September 1956 ought to be specifically performed and carried into execution and orders and adjudges the same accordingly and orders that save and except as thereinafter appears the defendant pay to the plaintiffs their costs of the action down to and including the said judgment. Order that save as aforesaid the judgment be affirmed. Action remitted to the Supreme Court to be further heard as to damages and as to any further or other relief and as to the costs of the hearing already had in that Court and of any further proceedings in that Court.