Louinder v Leis [1982] HCA 28; (1982) 149 CLR 509 (11 May 1982)

HIGH COURT OF AUSTRALIA

LOUINDER v. LEIS [1982] HCA 28; (1982) 149 CLR 509

Vendor and Purchaser

High Court of Australia
Gibbs C.J.(1), Stephen(2), Mason(3), Wilson(4) and Brennan(5) JJ.

CATCHWORDS

Vendor and Purchaser - Contract of sale - Time - Stipulation - Time not of the essence - Failure of purchaser to tender transfer to purchaser by specified date - Whether vendor thereby entitled to give notice to complete - Whether vendor may give notice when purchaser in breach though not guilty of unreasonable delay.

HEARING

1982, February 11; May 11. 11:5:1982
APPEAL from the Supreme Court of New South Wales.

DECISION

May 11.
The following written judgments were delivered: -
GIBBS C.J. The facts of this case are set out in the judgment of Mason J. by Mason J., and in general with his reasoning, but would state for myself briefly why I consider that the appeal should be dismissed. (at p511)

2. The contract for the sale of the land in question from the appellant to the respondent did not fix any date for completion, and did not contain any stipulation that time should be of the essence of the contract. However, by cl. 4, it was provided that within twenty-eight days from the delivery of the vendor's statement of title the purchaser should at his own expense tender to the vendor for execution the appropriate assurance of the property. The statement of title was delivered on 2 November 1979, but, on 8 February 1980, when the appellant gave to the respondent a notice to complete the contract, the respondent had not tendered a transfer for execution. However, at the hearing at first instance no reliance was placed on the failure of the respondent to tender a transfer. Before the Court of Appeal, the appellant sought to argue that the failure of the respondent to tender a transfer within the time allowed by the contract was a breach of contract which provided sufficient justification for the giving of the notice to complete. Since the facts concerning the failure to comply with cl. 4 were not examined at first instance, and since evidence could possibly have been given that the appellant had waived the non-compliance (as indeed the evidence suggests), thus preventing the appellant's argument from succeeding, the Court of Appeal was correct in holding that it was not open to the appellant to take this point for the first time on appeal. (at p512)

3. It is common ground that if it was not open to the appellant to rely on a breach by the respondent of cl. 4, the appellant was not entitled to give the notice requiring completion of the contract unless the respondent had been guilty of unreasonable delay. In the circumstances of the case, which Mason J. has set out, it is impossible to conclude that the delay on the part of the respondent was unreasonable. (at p512)

4. What I have said is enough to dispose of the case, but the parties have directed argument to the question whether, if the appellant had been able to establish that the respondent was in breach of cl. 4, it would have been open to the appellant to give a notice to complete, and since that question appears to be an important one from a practical point of view, it appears appropriate to deal with it. There is no doubt that where a contract contains a promise to do a particular thing on or before a specified day, and time is not of the essence of the promise, the promisee can, generally speaking, only rescind for non-performance on that day if he has given a notice requiring performance within a specified reasonable time and there has been a failure to comply with that notice: Carr v. J. A. Berriman Pty. Ltd. [1953] HCA 31; (1953) 89 CLR 327, at pp 348-349 ; Balog v. Crestani [1975] HCA 16; (1975) 132 CLR 289, at p 296 . The question which arises is whether it is enough to enable the party not in default to give a notice that the other party is in breach of the contract or whether, as some text writers suggest, the notice can only be given to a party who has been guilty of unreasonable delay. The authorities which support the latter view are mainly based on the decision of Harman J. in Smith v. Hamilton (1951) Ch 174 . In that case the day for completion of the contract was 4 April, and it was held that the vendor could not, on 5 April, serve a notice on the purchaser "on the footing that there has been such impropriety on the part of the purchaser as entitles him, as it were, to engraft time on the contract": (1951) Ch, at p 181 . Harman J. particularly relied on Green v. Sevin (1879) 13 ChD 589, at p 599 , where Fry J. said:
"What right then had one party to limit a particular time within which an act was to be done by the other? It appears to me that he had no right so to do, unless there had been such delay on the part of the other contracting party as to render it fair that, if steps were not immediately taken to complete, the person giving the notice should be relieved from his contract."
Fry J. was there dealing with a case in which no time had been fixed by the contract for completion of the contract, as he himself pointed out immediately before the passage which Harman J. cited. It appears from the examination of the authorities by Wootten J. in Winchcombe Carson Trustee Co. v. Ball-Rand (1974) 1 NSWLR 477 that the cases before Smith v. Hamilton were cases in which no time for completion had been fixed by the contract, or in which a time originally fixed had been waived. Further, the judgment of Harman J. contains what has since been demonstrated to be an error of principle. His Lordship said, after referring to the condition that the purchase should be completed on 4 April (1951) Ch, at p 183 :
"But it is agreed that that date, except in special circumstances, is not an essential part of the contract, and therefore the condition is, I think . . . that the purchase shall be completed on April 4 or within a reasonable time thereafter."
Both before and after Smith v. Hamilton it was said in a number of cases that a clause providing for completion on a fixed date should, when time was not of the essence of the contract, be construed as meaning that completion could take place within a reasonable period after the date fixed. It has been convincingly shown by the House of Lords in Raineri v. Miles (1981) AC 1050 that this view was erroneous. It was there held that the breach of a contractual provision as to time which was not of the essence of the contract was a breach of the contract and entitled the injured party to damages, notwithstanding that the rules of equity would relieve the party in breach to the extent of allowing him to obtain specific performance. Once one rejects the notion that a clause providing for completion on a specified day means that completion may take place within a reasonable time thereafter, it is apparent that a party who fails to complete on the specified day is guilty of delay, within the meaning of the contract, whether or not the delay would, in the absence of the provision fixing the time, be regarded as unreasonable. In principle, it seems to me that such delay entitles the innocent party to treat the contract as at an end provided that, if time is not of the essence of the contract, he first gives a reasonable notice which is not complied with. I therefore respectfully agree with the statement in Neeta (Epping) Pty. Ltd. v. Phillips [1974] HCA 18; (1974) 131 CLR 286, at p 299 that where a contract of sale of land contains a stipulation as to time which is not of the essence of the contract, and one party is in breach or guilty of unreasonable delay, the party not in default may give a notice fixing a reasonable time for completion and making that time the essence of the contract. In my opinion this case laid down no new principle, in spite of the body of opinion to the contrary. The judgment of Fullagar J. in Carr v. J. A. Berriman Pty. Ltd. is in my opinion consistent with this view. In his clear statement of principle, Fullagar J. (1953) 89 CLR, at pp 348-349 did not suggest that, where there was a failure to perform on a specified day, it was necessary that there should in addition have been unreasonable delay before the party not in default became entitled to give a notice. (at p514)

5. Assuming that the appellant had not waived cl. 4, he would have been entitled to give the respondent a notice requiring him to tender a transfer within a reasonable time, and notifying him that the contract would be treated as at an end if the notice was not complied with. However, he would not have been entitled to give a notice requiring the respondent to complete the contract. Default in compliance with a covenant which fixes a time for performance of that covenant, when time is not of the essence, entitles the innocent party to make time of the essence and fix a reasonable time for performance of that covenant. If such a notice is not complied with, the party who gave the notice may rescind. However, mere breach of one contractual provision does not enable the injured party to re-write another. Of course, the circumstances of the breach might be such as to show that there was unreasonable delay in completion, and that would justify giving a notice to complete. In the present case, where there was no unreasonable delay, the breach of cl. 4 would have entitled the applicant to make time of the essence and limit a time for tender of the transfer, but it would not have entitled him to give a notice to complete. Even if this point had been open, the appellant would have failed. (at p514)

6. The appeal should be dismissed. (at p514)

STEPHEN J. I have had the advantage of reading the judgment of Mason J. and would, for the reasons stated by his Honour, dismiss this appeal. (at p515)

MASON J. By a contract dated 1 November 1979 the appellant agreed to sell and the respondent agreed to buy a property at Stanmore near Sydney for $79,500 which was payable as to $7,950 by way of deposit upon the signing of the contract and as to the balance on completion. The contract, which did not fix a time for completion, was in the usual form used in New South Wales. Clause 4 provided:
"The Purchaser shall be deemed to have waived any objection or requisition which he has not made and delivered to the vendor within twenty-one days after the delivery of the Vendor's statement of title. Within twenty-eight days from the delivery of the Vendor's statement of title the Purchaser shall at his own expense tender to the Vendor for execution the appropriate assurance of the property provided however that if the assurance requires the consent of the Minister for Lands or other prescribed authority the time for tender thereof under this clause shall be the twenty-eight day period aforesaid or fourteen days from the notification to the Purchaser of the consent having been granted, whichever is the later." (at p515)

2. Contracts were exchanged on 1 November 1979. On 8 February 1980 the appellant gave notice to complete, requiring completion no later than twenty-one days from the date of service of the notice. As completion did not then occur, the appellant gave a notice of rescission dated 4 March 1980. The respondent denied that the contract was validly rescinded and sought specific performance in the Supreme Court. The appellant cross-claimed, seeking a declaration that the contract was validly rescinded and an order that a caveat lodged by the respondent be removed. (at p515)

3. Helsham C.J. in Eq. described the property as "a sort of boarding house" in which rooms were let to occupants. There were nine flats downstairs and an owner's self-contained flat upstairs. A sewer line ran under the building. The respondent discovered this before he signed the contract. The existence of the sewer line constituted an obstacle to the borrowing of money on the security of the land. However, at the time when the contract was made the property was subject to a $30,000 mortgage under which interest was payable quarterly on the first days of November, February, May and August at 14 per cent reducible to 13 per cent per annum for prompt payment. (at p515)

4. According to his Honour the respondent wished to acquire the property as an investment and asked the appellant if he would stay on and look after it. The appellant agreed. The respondent did not require vacant possession and requested all but three of the occupants to continue in occupation. (at p516)

5. Although the respondent needed finance to complete the purchase the appellant refused to agree to the respondent taking over the existing mortgage. On 5 November, four days after contracts were exchanged, the respondent was informed that a $30,000 loan had been approved on the security of other premises which he owned at Kogarah. (at p516)

6. Conveyancing procedures continued until 23 November 1979 when requisitions on title were answered. They stopped on that date, seemingly as a result of a conversation between the parties. On 27 November the respondent's solicitor said in a telephone conversation with the appellant's solicitor "Your client and my client have spoken and there appears to be no great hurry to settle this matter". The respondent's solicitor took no further action until the following February. (at p516)

7. His Honour found that a conversation took place between the parties in November and accepted the appellant's version of it, the effect of which was that settlement was to take place in January. The parties had a further discussion at the end of January or in the beginning of February. There was a conflict of evidence as to the substance of the discussion. His Honour resolved this conflict in favour of the respondent. According to the respondent, in a telephone conversation the appellant asked him "Would you consider a three months' deferment of settlement?" and went on to say "I paid $1,000 interest and I would just as soon let it go for three months". The respondent said that he then consulted his solicitor, telephoned back a few days later to say that this was in order, only to be told by the appellant "I've changed my mind, my solicitor wants his money and I want to settle now". The appellant then asked the respondent if he could settle in a week. His reply was "I don't think that is possible. I don't know how long it will take". (at p516)

8. The respondent related the conversation to his solicitor, who then set about raising the balance of money necessary to complete the purchase. On 8 February 1980 she made application for a loan of $40,000 on the security of another property owned by the respondent at Stanmore. (at p516)

9. The notice to complete dated 8 February 1980 was, omitting formal parts, in the following form:
"WHEREAS by Contract of Sale dated the 1st November, 1979 made between SVAN LOUINDER as Vendor of the one part and you as Purchaser of the other part the said Vendor contracted to sell to you and you contracted to purchase from the said Vendor ALL THAT piece or parcel of land situated in the Municipality of Petersham Parish of Petersham County of Cumberland being Lot 15 in Deposited Plan No. 112 and being the whole of the land comprised in Certificate of Title Volume 2808 Folio 186 and known as 3 Aubrey Street, Stanmore at and for the price of Seventy Nine Thousand Five Hundred Dollars ($79,500.00) AND WHEREAS you paid the sum of Seven Thousand Nine Hundred and Fifty Dollars ($7,950.00) by way of deposit and agreed to pay the balance of purchase money in cash on completion of the said Contract AND WHEREAS the Vendor is ready and willing to complete the said Contract NOW YOU ARE HEREBY NOTIFIED that the said Vendor requires you to complete the Contract by no later than the expiration of Twenty One (21) days from the date of this service upon you by paying to the said Vendor or as he may direct the balance of purchase money of Seventy One Thousand Five Hundred and Fifty Dollars and if you fail to complete the said Contract within the time specified the said Vendor will treat the same as at an end and the deposit as forfeited and will hold you liable for their conveyancing costs and damages for breach of Contract." (at p517)

10. It was sent to the respondent's solicitor under cover of a letter which stated:
"Without prejudice to our client's rights under the said Notice our client has instructed us that he is prepared to refund the deposit moneys to your client and to release him from his obligations under the Contract for Sale in this matter provided that your client agrees to rescind the Contract as abovementioned within one week from today's date." (at p517)

11. The notice to complete was sent to the respondent by registered mail on the date on which it was signed. It was delivered to the respondent's home on 11 February. It was not received by the respondent himself until 13 February as he had been away on holiday. (at p517)

12. The money which the respondent sought to raise was received on 14 April 1980. The appointment to settle on that day had previously been communicated to the appellant's solicitor. He indicated that he did not propose to attend. The balance of purchase money was sent by post to him and he returned it. (at p517)

13. Helsham C.J. in Eq. thought that a notice to complete could not be given in the circumstances of the case unless there was conduct on the part of the appellant amounting to "great and improper delay, or gross delay, or other misconduct, or other circumstances of a special and extraordinary kind (per Street C.J. in Eq. in Halkidis v. Bugeia (1974) 1 NSWLR 423, at p 426 )". According to his Honour the only conduct urged against the respondent was delay. The delay that occurred was not in his view "gross or improper". The consequence was that the respondent was in his view entitled to specific performance. (at p518)

14. The appellant appealed to the Court of Appeal on the ground that he was entitled to give a notice to complete on 8 February 1980. When the appeal came on for hearing Mr. Bennett Q.C. applied for leave to add a further ground of appeal, namely that the respondent's breach of contract in failing to tender a transfer within the time allowed by cl. 4 was a sufficient reason for a notice to complete to be given. The Court of Appeal refused leave. On the appeal itself the Court agreed with the reasons assigned by Helsham C.J. in Eq. for holding that no occasion for giving a notice to complete had arisen. (at p518)

15. The appellant now appeals to this Court against the dismissal of his appeal and against the Court of Appeal's refusal to grant leave to add the further ground of appeal. The Court of Appeal took the view that there was a possibility that the respondent would suffer prejudice if the appellant was allowed to argue the case based on a breach of cl. 4, that point not having been raised at first instance, although the admitted facts disclosed that particulars of title were furnished by the appellant's solicitor on 2 November 1979 and that a transfer was not tendered within twenty-eight days of this date. Street C.J., with whose judgment on this question the other members of the Court agreed, thought that prejudice could arise because evidence as to the conversations between the parties and between their solicitors had not been elicited with this question in mind. His Honour had this to say:
"In the first place, there was no investigation of the full import of the conversation shortly prior to 28 November. Neither side was concerned to probe it or to probe the recollections of the parties or the solicitors with this particular point in mind. It could well be that within the context of what then passed between the parties and their solicitors something might have been said or implied having a very real bearing upon the necessity for the purchaser to submit the form of transfer strictly within the time stipulated in the contract.
In the second place, what passed between the parties in the month of January might well have had some effect as casting light upon either what was said or what was implicit within the conversation prior to 28 November."
This led Street C.J. to the conclusion that the matter had not been "fully investigated" in an evidentiary sense at first instance. (at p518)

16. The appellant submits that the conversations were fully explored, that, had the parties agreed that a transfer was not to be submitted in accordance with cl. 4, then evidence of such a claim would have been tendered at first instance because it had obvious relevance to the issue of gross and serious delay. My reading of the evidence of the conversations does not convince me that it was fully explored in the sense that it now reflects the totality of the available evidence on the cl. 4 issue. The parties did not then have this issue in mind; neither examination nor cross-examination was directed to it. Had waiver of the alleged breach been raised, as it certainly would have been raised, it is at least possible that the evidence would have been explored more thoroughly. And such evidence as we have, viewed in the light of the findings actually made by Helsham C.J. in Eq., points in the direction of a waiver. The relevant principle is expressed in the judgment of this Court (Latham C.J., Williams and Fullagar JJ.) in Suttor v. Gundowda Pty. Ltd. [1950] HCA 35; (1950) 81 CLR 418, at p 438 :
"Where a point is not taken in the court below and evidence could have been given there which by any possibility could have prevented the point from succeeding, it cannot be taken afterwards."
The Court of Appeal was right in applying this principle and in refusing leave to allow the cl. 4 point to be argued. (at p519)

17. The principal issue in the appeal is: in what circumstance is a party to a contract for the sale of land entitled to give notice to complete making time the essence of the contract? The appellant's prospects of success in the appeal depended very largely, if not entirely, on his obtaining leave to amend his notice of appeal. His failure on that issue almost inevitably means that he must fail on the appeal itself. But as the question sought to be raised is of particular importance in New South Wales, where it has been common practice to enter into contracts which do not fix a date for completion, we should deal with it. At the outset we need to keep in mind (a) the difference between a contract which does not fix a time for completion and one which does, though not making time of the essence; and (b) the difference between breach of an obligation to complete the contract on a stipulated date or within a reasonable time, as the case may be, and a breach of some other obligation imposed by the contract, for example cl. 4 of the instant contract. The entitlement to give notice having the effect of making time of the essence varies in these situations. (at p519)

18. A discussion of the topic necessarily demands some mention of the difference in attitude of the common law and equity to time stipulations in contracts. The date for completion is a term of the contract, breach of which would at common law entitle the innocent party to determine the contract and recover damages. If, however, the parties did not make time of the essence of the contract, equity would order specific performance, unless to do so would be unjust, and would prevent the innocent party from enforcing his common law rights (Canning v. Temby [1905] HCA 45; (1905) 3 CLR 419, esp at p426 ). By reason of the approach taken by equity a practice developed whereby an innocent party, after default by the other party, gave notice requiring completion of the contract within a reasonable specified time, thereby seeking to establish, if the notice was not complied with, that there had been such delay as to disentitle the party at fault from specific performance and to justify rescission of the contract. (at p520)

19. This practice, in its application to an open contract, was indorsed in Green v. Sevin (1879) 13 ChD 589 . The contract in Green v. Sevin was an open contract. Under such a contract, Fry J. (1879) 13 ChD, at p 599 pointed out, the purchaser was entitled to a reasonable time for performing his contract. His Lordship denied that one party had a right to limit the time for the doing of an act, independently of delay on the part of the other party, saying:
"It appears to me that he had no right so to do, unless there had been such delay on the part of the other contracting party as to render it fair that, if steps were not immediately taken to complete, the person giving the notice should be relieved from his contract."
Fry J. accepted that one party cannot remake the contract by unilaterally making time of the essence when consensually it is not so and went on to say:
"There must have been such improper conduct on the part of the other as to justify the rescission of the contract sub modo, that is, if a reasonable notice be not complied with."
There is, I think, nothing in the judgment or in the earlier authorities which it examines to support the view that his Lordship was asserting that in the case of a contract fixing a date for completion unreasonable delay justifying rescission, rather than mere delay in completing on the stipulated date, was an essential qualification of the innocent party's right to give a notice. (at p520)

20. Until Smith v. Hamilton (1951) Ch 174 there seems to have been no judicial authority for the proposition that an innocent party could not give a notice to complete a contract specifying a date for completion, time not being of the essence, unless the other party was guilty of unreasonable delay, as distinct from mere failure to complete on the date fixed. Certainly some of the text writers suggested that the principle stated in Green v. Sevin applied to contracts of this kind (see, for example, Williams on Vendor and Purchaser, 4th ed. (1936), pp. 54, 58, 990-991; cf. Walford, Contracts and Conditions of Sale of Land, 2nd ed. (1957), p. 315), but these suggestions lacked judicial support. (at p521)

21. However, in relation to contracts fixing a date for completion, time not being of the essence, there was authority for the proposition that "even when time was not originally of the essence of the contract it may be made so by a later notice, either before or after the day named in the contract, requiring completion by a particular day, if the time allowed is reasonable . . . ". So said Talbot J. speaking for himself and Humphreys J. in Bernard v. Williams (1928) 139 LT 22, at p 25 (citing Benson v. Lamb (1846) 9 Beav 502 (50 ER 438) ; Parkin v. Thorold (1852) 16 Beav 59 (51 ER 698) ; Crawford v. Toogood (1879) 13 ChD 153 ). Of these three cases only Parkin v. Thorold, a decision of Lord Romilly M.R., provides support for the proposition (1852) 16 Beav at p 71 (51 ER at p 703) . Some support is to be found in the judgment of Malins V.C. in McMurray v. Spicer (1868) LR 5 Eq 527, at p 542 , where the Vice-Chancellor said: ". . . I entirely accede to the doctrine laid down in Parkin v. Thorold . . . which is, that time not being of the essence of the contract originally, either of the parties may by subsequent notice make it so. There was no time fixed here, and the parties were at liberty at any period to make time of the essence of the contract". But this approach has not been adopted in the later cases, the correct view being that stated by Fry J. that one party cannot remake the contract by unilaterally making time of the essence in the absence of delay or default by the other party. (at p521)

22. In Smith v. Hamilton the principle stated by Fry J. in Green v. Sevin was applied to a contract which fixed a date for completion, time not being of the essence. Harman J. held that the effect of the contract was that completion was to take place on the date stipulated "or within a reasonable time thereafter" (1951) 1 Ch, at p 183 and that the innocent party could not be notice "make time of the essence" or rescind after the date fixed for completion and before a reasonable time had elapsed, the other party having indicated that her delay was temporary only. Harman J. (1951) 1 Ch, at pp 179-180 quoted the comment in the judgment of the Privy Council in Jamshed Khodaram Irani v. Burjorji Dhunjibha (1915) 32 TLR 156, at p 157 where Lord Haldane, with reference to time stipulations in contracts, said:
"But equity would not assist where there had been undue delay on the part of one party to the contract and the other had given him reasonable notice that he must complete within a definite time." (at p522)

23. The principle was again applied to a contract which fixed a date for completion, time not being of the essence, in In re Barr's Contract; Moorwell Buildings Ltd. v. Barr (1956) Ch 551, at p 556 , where Danckwerts J. said: " . . . at the time when the vendor purports to make time of the essence, the purchaser must be guilty of such default as to entitle the vendor to rescind the contract subject to its being done by a reasonable notice." (at p522)

24. Smith v. Hamilton was generally accepted in New South Wales as correctly stating the law (Moss, Sale of Land in New South Wales, 5th ed. (1973), pp. 408-409; Stonham, Law of Vendor and Purchaser (1964), pp. 744-745). It seems not to have been confirmed by judicial decision until Falconer v. Wilson (1973) 2 NSWLR 131 , although it was mentioned without disapproval by Hardie A-J.A. in Morgan v. Beeby (1968) 2 NSWR 609, at p 628 , where the contract evidently did not fix a time for completion, but did fix a time for delivery of the transfer, the purchaser being out of time. Smith v. Hamilton was likewise accepted in New Zealand (Woods v. Tomlinson (1964) NZLR 399, at pp 402-403 ; Baker v. McLaughlin (1967) NZLR 405, at p 411 ; Bow v. McGrath Builders Ltd. (1974) 2 NZLR 442, at pp 450-451 ; and Thomas v. Monaghan (1975) 1 NZLR 1, at pp 4-5 ). (at p522)

25. In Falconer v. Wilson Mahoney J. rejected the view that to enable a party to give notice it was necessary that (a) the recipient had been guilty of such default as would have entitled the first party to rescind at common law and (b) the recipient had been guilty of unreasonable delay or default. His Honour held that (b) alone was necessary to justify the giving of a notice. His Honour's acceptance of Smith v. Hamilton shows that he was not saying that any breach of any term of a contract would justify the giving of notice. He said (1973) 2 NSWLR, at p 139 :
"A term in a contract may be such that from the inception of the contract a breach of it would not give rise to a right of rescission; or it may be such that, although initially an essential term, the parties, by allowing the stipulated time to pass or otherwise, have reduced the term to one, a breach of which will not warrant recission . . . . In my opinion, in each of these cases, a party may, by giving a proper notice making time of the essence, bring into being a right of recission."
In each case it would be the default involved in non-compliance with the requirement of a reasonable notice that justifies the recission, though the default existing at the time the notice was given was insufficient to justify it. (at p523)

26. A more liberal approach was taken by Barwick C.J. and Jacobs J. in their joint judgment in Neeta (Epping) Pty. Ltd. v. Phillips [1974] HCA 18; (1974) 131 CLR 286, at p 299 , when they said:
"In cases where the contract contains a stipulation as to time but that stipulation is not an essential term then before a notice can be given fixing a time for performance, not only must one party be in breach or guilty of unreasonable delay, but also the party giving the notice must himself be free of default by way of breach or antecedent relevant delay. Only then may a notice be given fixing a day a reasonable time ahead for performance and making that time of the essence of the contract."
The reference to "breach" or "unreasonable delay" is explained by the circumstance that the passage is directed to stipulations as to time generally, viz. those which stipulate a date and those which call for performance within a reasonable time. The reference to "breach" applies to the former, "unreasonable delay" to the latter, and to the former where there has been a waiver of the breach or the innocent party is disentitled to rely on it. (at p523)

27. Their Honours pointed out that in relation to the giving of notice three questions arise: (1) Was the other party "in breach of any term of the contract or guilty of unreasonable delay?" (2) Was the innocent party in "breach of any term of the contract or guilty of any antecedent relevant delay?" (3) Was the time fixed reasonable in all the circumstances? What did their Honours intend by their expression "in breach of any term of the contract"? Did they have in mind "a mere breach of contract" or "a serious breach of contract"? Since Neeta (Epping) this question has been much debated. To me it seems that their Honours meant what they said and that they had in mind a breach of contract, whether serious or slight. (at p523)

28. This is the view which Wootten J. in Winchcombe Carson Trustee Co. Ltd. v. Ball-Rand Pty. Ltd. (1974) 1 NSWLR 477 took of the remarks made in Neeta (Epping). His Honour followed the view expressed by Barwick C.J. and Jacobs J. and declined to follow Smith v. Hamilton (1951) Ch 174 distinguishing Green v. Sevin (1879) 13 Ch D 589 on the ground that it related to an open contract. After an illuminating review of the authorities his Honour concluded that Smith v. Hamilton did not correctly state the law and that the principle expressed in Neeta (Epping) provided a more "certain framework for the conduct of conveyancing business than the law as stated" in the text books (1974) 1 NSWLR, at p 481 . (at p524)

29. In my view Barwick C.J. and Jacobs J. were right in saying that a mere failure to comply with a non-essential stipulation as to time justifies the giving of a notice having the effect of making time the essence of performance of that stipulation, even though the failure to comply does not involve an unreasonable delay. The non-essential stipulation as to time is a term of the contract enforceable by an action for damages and it is the breach of this term that justifies the giving of the notice. (at p524)

30. By virtue of s. 13 of the Conveyancing Act 1919 (N.S.W.) stipulations in contracts as to time which would not have been of the essence of such contracts in a court of equity "shall receive in all courts the same construction and effect as they would have heretofore received in such court". There has been an element of uncertainty affecting the operation of s. 13 arising from the longstanding controversy as to the true principle underlying equity's attitude to time stipulations. In Seton v. Slade (1802) 7 Ves Jun 265 (32 ER 108) Lord Eldon offered two alternative explanations. The first is that equity construes the contract differently by treating the time stipulation as formal only so that it is satisfied by compliance within a reasonable time. The second is that equity exercises a jurisdiction similar to relief against forfeitures and penalties, construing the contract as it would be construed at common law, but restraining the parties from an unconscionable exercise of their legal rights. The true position is that equity and common law differed not so much in the construction of the contract as in the consequences which they assigned to a breach of it. As Lord Cairns L.J. said in Tilley v. Thomas (1867) LR 3 Ch App 61, p 67 : "The legal construction of the contract . . . is, and must be, in equity the same as in a Court of law." See also Rolt L.J. (1867) LR 3 Ch App, at p 69 . To the same effect are the speeches of Lord Atkinson and Lord Parker of Waddington in Stickney v. Keeble (1915) AC 386, at pp 402, 417 , Lord Parker pointing out "that it was only for the purposes of granting specific performance that equity in this class of case interfered with the remedy at law" (1915) AC, at p 416 . Equity departed from the common law in insisting that a breach of a stipulation as to time only entitled the innocent party to rescind where time was of the essence of the contract. It was otherwise at common law. Consequently equity would intervene in appropriate cases to prevent the innocent party from enforcing his common law right to rescind and to assert her own rule. It follows that in such cases the operation of s. 13 converts the character of a time stipulation from essential to non-essential; it does not otherwise alter its terms or its construction. Thus the time stipulation is not read as if it called for performance by the stipulated date or "within a reasonable time" or "within a reasonable time thereafter". (at p525)

31. In this respect I agree with the recent decision of the House of Lords in Raineri v. Miles (1981) AC 1050 and that of the New South Wales Court of Appeal in McNally v. Waitzer (1981) 1 NSWLR 294 . I reject the view of Harman J. in Smith v. Hamilton and the earlier comment of Maugham J. in In re Sandwell Park Colliery Co.; Field v. The Company (1929) 1 Ch 277, at p 282 , that "a clause fixing the date for completion is equivalent to a clause stating that completion shall be on that date or within a reasonable time thereafter", notwithstanding subsequent indications of support for the view to be found in Babacomp Ltd. v. Rightside Properties Ltd. (1973) 3 All ER 873, at pp 875-876 ; Rightside Properties Ltd. v. Gray (1975) Ch 72, at p 83 ; Woods v. Mackenzie Hill Ltd. (1975) 1 WLR 613, at pp 615-616; (1975) 2 A11 ER 170, at p 172 ; cf. Phillips v. Lamdin (1949) 2 KB 33 . (at p525)

32. It has been suggested by C.T. Emery in "The Date Fixed for Completion . . . " in Conveyancer and Property Lawyer, vol. 42 (1978), p. 144, esp. at pp. 152-153, that Maugham J.'s comment reflects the thinking embedded in the speech of Lord Parmoor in Stickney v. Keeble (1915) AC, at p 426 . Indeed, the transfer of the principle in Green v. Sevin (1879) 13 Ch D 589 to contracts fixing a non-essential date for completion is more readily understood if the difference between the attitude of equity and common law was more marked than I have suggested, equity treating the stipulation as if it provided for completion on the date mentioned or within a reasonable time thereafter. In that event failure to complete on the date mentioned would not be a breach of contract; no breach would arise until the expiry of a reasonable time. (at p525)

33. Lord Diplock and Lord Simon of Glaisdale in United Scientific Holdings Ltd. v. Burnley Borough Council (1978) AC 904, at pp 924-929, 940-944 examined the legislative ancestors and relatives of s. 13 and the observations of Lord Parker of Waddington in Stickney v. Keeble (1915) AC, at p 416 . Referring to the approach of the Court of Chancery Lord Diplock said (1978) AC, at p 928 :
"Once the time had elapsed that was specified for the performance of an act in a stipulation as to time which was not of the essence of the contract, the party entitled to performance could give to the other party notice calling for performance within a specified period: and provided that the period was considered by the court to be reasonable, the notice had the effect of making it of the essence of the contract that performance should take place within that period."
Lord Simon expressed the matter rather differently. He said (1978) AC, at p 946 :
"In equity, and now in the fused system, performance had or has, in the absence of time being made of the essence, to be within a reasonable time. What is reasonable time is a question of fact to be determined in the light of all the circumstances. After the lapse of a reasonable time the promisee could and can give notice fixing a time for performance. This must itself be reasonable, notwithstanding that ex hypothesi a reasonable time for performance has already elapsed in the view of the promisee. The notice operates as evidence that the promisee considers that a reasonable time for performance has elapsed by the date of the notice and as evidence of the date by which the promisee now considers it reasonable for the contractual obligation to be performed."
Earlier his Lordship indicated that breach of a non-essential term gives rise to a right to damages (1978) AC, at p 945 . For reasons already given I regard Lord Diplock's statement as correct. It accords with Neeta (Epping) [1974] HCA 18; (1974) 131 CLR 286 and Raineri v. Miles (1981) AC 1050 . (at p526)

34. Accordingly, delay beyond the stipulated date will give rise to a liability in damages. But because equity treats the time stipulation as non-essential, mere breach of it does not justify rescission by the innocent party and will not bar specific performance at the suit of the party in default. Unreasonable delay in complying with the stipulation in substance amounting to a repudiation is essential to justify rescission. It is to this end that, following breach, the innocent party gives notice fixing a reasonable time for performance of the relevant contractual obligation. The result of non-compliance with the notice is that the party in default is guilty of unreasonable delay in complying with a non-essential time stipulation. The unreasonable delay amounts to a repudiation and this justifies rescission. (at p526)

35. If the Smith v. Hamilton (1951) Ch 174 view were to prevail and unreasonable delay were required to precede the giving of a notice one is then driven to ask "What is the point of insisting on the giving of a notice which itself is required to fix a reasonable time for performance?" The consequence would be to defer the innocent party's right to rescind until such time as the other party has delayed for two periods, each one of which constitutes an unreasonable delay. This solution to the problem unnecessarily protects the party at fault at the expense of the innocent party. The Neeta (Epping) solution is more just; it enables one party to initiate the action once the other party is in breach. And it provides a little more certainty in determining when a notice may be given. (at p527)

36. This solution is not unfair to the party who is guilty of a mere breach of contract. He is entitled to a notice which fixes a reasonable time in all the circumstances and those circumstances will include the fact that he has not been guilty of a serious breach of contract or of unreasonable or gross delay. (at p527)

37. There is nothing in all this to deny the correctness of the Green v. Sevin principle in its application to open contracts. There the existence of unreasonable delay, this being the relevant breach of contract, is an essential qualification for the giving of a notice. In this case because the notice itself must allow a reasonable time for completion, the party at fault, having been guilty of unreasonable delay, is entitled to a further period, being a reasonable time for completion. Because the initial period of delay is no more than a breach of a non-essential time stipulation, without more it cannot found an inference of repudiation. (at p527)

38. One question which the joint judgment in Neeta (Epping) leaves unresolved is whether a notice to complete the contract can be given when the relevant breach of contract justifying the giving of a notice is not a breach of an obligation to complete but a breach of another term of the contract. In principle breach of a non-essential term justifies the giving of a notice fixing a reasonable time for the performance of that term. Generally speaking it does not entitle the innocent party to give notice fixing a time for completion of the contract. There are of course exceptions to this rule. Sometimes a contract will contain a condition which requires to be performed on or before the date for completion. Unreasonable delay or default in complying with the condition may then amount to delay or default in completion justifying the giving of a notice to complete. At other times the delay or default in complying with a particular provision may be so inordinate as to justify the innocent party in fixing a reasonable time for completion, as, for example, when non-compliance with the particular provision has the practical effect of making it impossible to complete within the time stipulated or contemplated by the contract. It was such a situation that Barwick C.J. and Jacobs J. had in mind in Neeta (Epping) when, speaking of the purchaser's failure to send to the vendor a transfer within twenty-eight days of the giving of particulars of title, they said (1974) 131 CLR, at p 300 :
"Not only was this a breach but it involved a long delay which cannot be explained by the course of events at the office of the Commissioner of Stamp Duties. If it stood alone it would entitle the vendor to give a notice to complete." (at p528)

39. In re Stone and Saville's Contract (1963) 1 WLR 163; (1963) 1 A11 ER 353 was another example of such a situation. See the discussion in the judgment of Upjohn L.J. (with whom Diplock L.J. concurred) (1963) 1 WLR, at p 171; (1963) 1 A11 ER, at p 356 . See also Hunt v. Wilson (1978) 2 NZLR 261, at pp 271-272 , per Cooke J. Thus, the general rule that a breach of a non-essential term entitles the innocent party to give a notice having the effect of making time of the essence in respect of that term is qualified so as to permit the giving of a notice having the effect of making time of the essence of the contract in respect of completion when the breach of the particular stipulation amounts to a breach of the obligation to complete or has the practical effect of making it impossible to complete the contract within the time stipulated or contemplated by the contract. (at p528)

40. One final point should be mentioned. In Carr v. J.A. Berriman Pty. Ltd. [1953] HCA 31; (1953) 89 CLR 327 , Fullagar J. (with whose judgment all the other members of the Court concurred) said (1953) 89 CLR, at pp 348-349 :
"If either (a) time is not originally of the essence, or (b) time being originally of the essence, the right to rescind for non-performance on the day is lost by election, the promisee can, generally speaking, only rescind after he has given a notice requiring performance within a specified reasonable time and after non-compliance with that notice: see, e.g., Taylor v. Brown (1839) 2 Beav 180 (48 ER 1149) ; Stickney v. Keeble (1915) AC 386 ; Panoutsos v. Raymond Hadley Corporation of New York (1917) 2 KB 473 ."
This passage was referred to with evident approval by Gibbs J. (with whom Jacobs J. agreed) in Balog v. Crestani [1975] HCA 16; (1975) 132 CLR 289, at p 296 . Mahoney J.A. in his judgment in Perri v. Coolangatta Investments Pty. Ltd. Supreme Court of N.S.W. (Court of Appeal); Unreported; 5 August 1981. expressed the view that the proposition enunciated by Fullagar J. is not one of universal application for the reason that recission for breach of a non-essential term is only justified when the breach amounts to a repudiation of the contract or a fundamental breach. It is apparent from the language used by Fullagar J. that he was not intending to express a proposition of universal application. Certainly, as Mahoney J.A. recognized, what his Honour said applies to the completion of a contract for the sale of land. And there is no reason to think that it does not apply to provisions in a contract for the sale of land that are to be fulfilled within a reasonable time when those provisions constitute an essential step in the process of completion of the contract. (at p529)

41. In the event the appeal fails. There was no foundation for the vendors giving a notice to complete on 8 February 1980 as the contract did not fix a time for completion. The existence of unreasonable delay on the part of the purchaser was an essential qualification for the giving of a notice. The findings of fact made by the primary judge negated the existence of such delay. (at p529)

42. I would dismiss the appeal. (at p529)

WILSON J. I would dismiss the appeal. (at p529)

2. The contract did not fix a time for completion. In my opinion, there is ample support for the finding of the learned trial judge that there was no such unreasonable delay as would entitle the appellant to serve the notice to complete. (at p529)

3. Furthermore, I think that the Court of Appeal was correct in refusing leave to the appellant to rely on a ground not taken at the trial, namely, the failure of the respondent to tender to the appellant within the time stipulated by the contract the appropriate assurance of the property. It was in relation to this ground that the argument before this Court focused on the circumstances in which an innocent party to a contract for the sale of land may give a notice to complete. In this regard, I have had the advantage of reading the reasons for judgment prepared by my brother Mason. I agree generally with his Honour's discussion of the cases, and with his conclusions. In particular, I agree that any breach of a time stipulation which is not of the essence entitles a party, not himself in default, to give a notice to perform or complete, as may be appropriate to the circumstances of the case. (at p529)

BRENNAN J. It is common practice in New South Wales to enter into contracts for the sale of land which do not fix a date for completion. This case arises under such a contract. The relevant terms of the contract and the circumstances which have given rise to the case are set out in the judgment of my brother Mason, and for the purposes of this judgment I need recall only the following facts. The vendor (the appellant) and the purchaser (the respondent) agreed in November 1979 that they would settle the contract in January 1980. Their solicitors understood that there was "no great hurry to settle". In late January or early February 1980, the vendor asked whether the purchaser would agree to defer settlement for a further three months. The purchaser consulted his solicitor and, after a few days, spoke by telephone to the vendor and agreed to the deferment, to be told by the vendor that he had changed his mind. The vendor said he wanted to settle and asked if the purchaser could settle in a week. The purchaser said he did not think that was possible. No appointment to settle was proposed by the vendor or his solicitor. No tender of performance was made. (at p530)

2. On 8 February 1980 the vendor's solicitor signed and posted notices to the purchaser and to his solicitor requiring completion of the contract within 21 days from the date of service of the notice. The notices were delivered by post on Monday 11 February. On 13 February, the purchaser's solicitors wrote submitting a form of transfer for approval and execution by the vendor but denying that the notice to complete was effective. A notice of termination of contract was given by the vendor on 4 March. When the purchaser's solicitors arranged the purchaser's finance, they sought an appointment to complete on 14 April 1980 but completion was refused, the vendor maintaining that the contract had been terminated by his notice of 4 March. Helsham C.J. in Eq. in the Supreme Court of New South Wales decreed specific performance in proceedings brought by the purchaser and dismissed the vendor's summons for a declaration that the contract had been rescinded. (at p530)

3. The argument in this Court has focussed upon the efficacy of the notice to complete of 8 February 1980. The trial judge found that there was no unreasonable delay by the purchaser in completion prior to 8 February and that the contract remained on foot despite the non-completion of the contract within the time limited by the notice and despite the notice of termination on 4 March. His Honour did not find expressly that the reasonable time for completion which is implied in the contract (Reid v. Moreland Timber Co. Pty. Ltd. [1946] HCA 48; (1946) 73 CLR 1, at p 13 ) had expired either on 4 March or when the purchaser's tender of performance was refused. (at p530)

4. Had the vendor sought to establish that a reasonable time for completion by the purchaser had expired, he would have been bound to show that he had notified the purchaser of his readiness and willingness to complete (per Barton J. in Canning v. Temby [1905] HCA 45; (1905) 3 CLR 419, at p 430 ), the obligation to pay the price being coincident with the obligation to transfer (cf. Ryan v. Fergerson [1909] HCA 47; (1909) 8 CLR 731, at p 738 ). As the parties agreed to defer completion until late January or early February and as neither the vendor nor his solicitor thereafter gave any notice prior to 8 February that the vendor was ready and willing to complete, there was no delay in completion on the part of the purchaser prior to the issuing of that notice. From that time onwards - though his Honour does not find the fact expressly - there seems to have been no such delay as would warrant a finding that a reasonable time had expired before the purchaser sought completion on 14 April. (at p531)

5. If his Honour had found that there had been a delay by the purchaser in completing after the expiration of a reasonable time for completion, a question of some difficulty would have arisen, namely, whether the vendor was entitled at law to rescind and, if so, whether equity would regard it as "unfair for him to profit by the failure of the other to adhere to the requirement of the contract as to time, whether definitely fixed or indefinitely stated as 'reasonable'" (per Isaacs J. in Maynard v. Goode [1926] HCA 4; (1926) 37 CLR 529, at p 538 ). (at p531)

6. The vendor's case, however, rested on the effect of the notice to complete, asserting that it took effect to make time of the essence of the contract so that non-compliance with its terms entitled the vendor to rescind the contract. On this approach, it is relevant to determine whether the conditions governing the right to give a notice to complete had been fulfilled, and in particular whether the purchaser had been guilty of "unreasonable delay" in the sense in which Barwick C.J. and Jacobs J. used that term in Neeta (Epping) Pty. Ltd. v. Phillips [1974] HCA 18; (1974) 131 CLR 286, at p 299 . Whatever time "unreasonable" may connote, it is an epithet to describe a delay on the part of a purchaser in performing an obligation after the time when he was bound to do so; delay is not to be found in an interval of time between the making of the contract and the time for performing the obligation, though that interval may be relevant to the description of any subsequent delay. As I am of the opinion that there was no delay in any relevant sense on the part of the purchaser when the notice was given, I do not find it possible to sustain the vendor's case. I agree with Mason J. that the appellant's application to argue delay in the performance of the obligation in cl. 4 of the contract should be rejected and with the reasons which his Honour gives. I would therefore dismiss the appeal. (at p531)

7. I add what follows because, if I understand aright the argument upon which the appellant's case was put, it asserted that failure by a promisor to perform any obligation under a contract for the sale of land entitled the promisee to give a notice which would fix a day for completion under the contract, though the contract does not expressly fix a day. The time, thus precisely fixed, is then said to be of the essence of the contract. (at p532)

8. The majority of cases relating to notices to complete relate to contracts which fix a day for completion. The principles which they define are not easily translated to apply to contracts where no day is fixed, for the common law rule affecting the right to rescind - the right in the exercise of which equity might intervene - differs according to whether or not the contract stipulates a day for completion. (at p532)

9. At law, a stipulated day for completion of a contract for the sale of land is of the essence of the contract, and a failure to complete on or before the stipulated day is a breach of condition which entitles the innocent party to rescind. But equity, taking a different view of a time stipulation, would interfere with the legal remedy for the purpose of granting specific performance (Stickney v. Keeble (1915) AC 386, at p 416 ). It interferes only when it is possible without injustice to the parties to decree specific performance despite a plaintiff's delay in completion and it is only where that is possible that the rules of law are statutorily assimilated to the rules of equity (Conveyancing Act 1919 (N.S.W.), s. 13) (Holland v. Wiltshire [1954] HCA 42; (1954) 90 CLR 409, at pp 418, 419 ). When, on the passing of the day fixed by the contract for completion, the legal right to rescind arises, generally speaking the promisee can exercise his legal right to rescind for breach only after he has given a notice requiring performance within a specified reasonable time and after non-compliance with that notice (per Fullagar J. in Carr v. J. A. Berriman Pty. Ltd. [1953] HCA 31; (1953) 89 CLR 327, at pp 348-349 ). The effect of such notices was said by Griffith C.J. in Canning v. Temby (1905) 3 CLR, at p 426 "not to confer an offensive right or complete a cause of action, but to confer a defensive right in equity as well as at law to take advantage of the other party's default." (at p532)

10. A notice to complete is thus a step in securing the lifting of the equitable restraint upon the legal right to rescind. A notice to complete is sometimes said to make time of the essence. That is a convenient description of its effect, though it may be misunderstood. A valid notice makes time of the essence in that a consequence of non-completion within the time specified by the notice is to enable recission by the promisee to be given effect in equity as well as in law, equity taking the day specified in the notice to be the essential time for completion. Lord Diplock said in United Scientific Holdings Ltd. v. Burnley Borough Council (1978) AC 904, at p 928 :
"Once the time had elapsed that was specified for the performance of an act in a stipulation as to time which was not of the essence of the contract, the party entitled to performance could give to the other party notice calling for performance within a specified period: and provided that the period was considered by the court to be reasonable, the notice had the effect of making it of the essence of the contract that performance should take place within that period."
But a notice to complete does not make the time fixed by the contract of the essence; it makes the time fixed by the notice of the essence (see, e.g., Neeta (Epping) Pty. Ltd. v. Phillips (1974) 131 CLR, at p 299 ). (at p533)

11. A notice to complete does not alter the time fixed for performance by the contract. It affects the exercise of a legal right to rescind and then only if the case is "appropriate for the granting of equitable remedies by way of relief against the loss by a party of his contractual rights by reason of a failure on his part to perform the contract in precise accordance with its provisions as to time" (per Kitto J. in Holland v. Wiltshire (1954) 90 CLR, at p 418 ). Once the case ceases to be appropriate for the granting of equitable remedies, the parties are left to their remedies and liabilities at law, as Romilly M.R. said in Parkin v. Thorold (1852) 16 Beav 59, at p 71 (51 ER 698, at p 703) : ". . . if the party receiving such notice does not complete within the time so specified, equity will not enforce a specific performance of the contract, but leave the parties to their remedies and their liabilities at law". Apart from any evidentiary effect which a notice to complete may have, its operation affects only the relief, if any, which equity may afford to a party guilty of delay. (at p533)

12. When the contract in hand does not fix a day for completion and a reasonable time is expressed or implied, time is not of the essence at law (per Griffith C.J. in Canning v. Temby (1905) 3 CLR, at p 425 ), and no day is contractually fixed when a legal right to rescind will arise. It is difficult to see how a notice to complete can shorten the time for completion so as to make the day fixed by the notice of the essence of the contract. Even if equity should be able to hold that time is of the essence in a contract which does not fix a day for completion, a notice might affect only the equitable remedy; it could not affect the contractual time for completion. The subject matter of the contract in Macbryde v. Weekes (1856) 22 Beav 533 (52 ER 1214) was such as to induce Romilly M.R. to hold that time was of the essence though no day for completion was fixed by the contract. There had been some delay on the part of the vendor, and the purchaser gave a notice specifying a day for completion. The Master of the Rolls (1856) 22 Beav, at p 546 (52 ER, at p 1219) held that the vendor's failure to comply with the notice disentitled him to the assistance of the Court for the specific performance of the contract, but his Lordship said in the course of his judgment, after referring to the subject matter of the contract (1856) 22 Beav, at p 540 (52 ER, at p 1216) :
"In such a case, it is incumbent upon the vendor to use his utmost diligence to complete his part of the contract, although no time is specified in the contract; and in equity the purchaser is at liberty to fix a time for the completion of the contract, by giving reasonable notice for that purpose. No doubt this would have no operation at law; the difference being very marked between law and equity, so far as regards this question; law only considering time as of the essence of the contract, when it is expressly specified, whatever may be the condition of the parties and the property, but equity considering time essential in those cases only, in which injury would be inflicted upon one party by disregarding it." (at p534)

13. This case was relied on by O'Connor J. in Canning v. Temby in a dictum which gives some support to the notion that a notice may fix a day for completion under a contract which implies a reasonable time. In Canning v. Temby, the contract did not stipulate a day for completion, but the plaintiff vendor sought damages at law from the defendant purchaser for failure to complete on a date which the plaintiff contended to be a reasonable time. O'Connor J. said (1905) 3 CLR, at pp 431-432 :
"Before I refer to the expression 'reasonable time' I wish to make some observations as to the contention that time was of the essence of this contract. There are only two sets of circumstances in which that doctrine can be applied; one, where a specific date for completion is stated in the contract; the other, where, although no specific date is mentioned in the contract, a notice has been given by the party who wishes to insure completion within a specified time that the completion must take place within the period notified otherwise the contract will be rescinded. In Macbryde v. Weekes (1856) 22 Beav 533 (52 ER 1214) there was a contract of the latter kind under the consideration of the Court, and it was there held that, although there was no time for completion stated in the contract, it would be taken that the completion must be within a reasonable time, and that it was open to the party seeking completion to give notice that there must be completion on or before a certain date. Under such circumstances it was for the Court to say whether the date mentioned in the notice was a reasonable date for completion; and if the Court held that it was a reasonable date, then that date became the date for the completion of the contract, and the Court would hold, if the other circumstances so justified, that there must be a completion on that date, and that time in respect of that date became of the essence of the contract. As neither of these sets of circumstances arise here, the doctrine is inapplicable. The case then is that of a contract which must be completed within a reasonable time, and in the construction of contracts of that kind there is no difference in rules of construction at law or in equity." (at p535)

14. It is not clear whether his Honour was suggesting that a date mentioned in a notice becomes the contractual date for completion as distinct from the date from when, if completion does not occur, the parties are remitted to their legal rights. Macbryde v. Weekes does not support the former proposition. Griffith C.J. expressed his view in this way (1905) 3 CLR, at p 426 :
"I do not think, therefore, that the plaintiff's failure to give a notice appointing a day for payment of the purchase money is material to her claim for damages for breach of contract except so far as such a notice, if given and not attended to, would have been an element in considering whether the purchaser had failed to perform his contract within a reasonable time. In one sense, of course, time is always of the essence of a contract to be performed within a reasonable time. But that is not the sense in which the term 'of the essence' is used." (at p535)

15. A notice given to a promisor purporting to fix a day for completion under a contract which does not itself fix a day for completion cannot alter the time allowed by the contract, nor make that time of the essence. (at p535)

16. Another case in which the contract did not fix a day for completion was Green v. Sevin (1879) 13 ChD 589 where, after two years of inactivity, the vendor precipitately sought completion, served a nineteen-day notice to complete and on the twentieth day purported to rescind. He sued for a declaration that the contract had been rescinded. He failed, Fry J. holding that the notice was ineffective. His Lordship said (1879) 13 Ch D, at p 599 :
"It is to be observed that the contract for purchase had limited no time for completion, and that, therefore, according to the rule in this country, each party was entitled to a reasonable time for doing the various acts which he had to do. What right then had one party to limit a particular time within which an act was to be done by the other? It appears to me that he had no right so to do, unless there had been such delay on the part of the other contracting party as to render it fair that, if steps were not immediately taken to complete, the person giving the notice should be relieved from his contract. It has been argued that there is a right in either party to a contract by notice so to engraft time as to make it of the essence of the contract where it has not originally been of the essence, independently of delay on the part of him to whom the notice is given. In my view there is no such right. It is plain upon principle, as it appears to me, that there can be no such right. That which is not of the essence of the original contract is not to be made so by the volition of one of the parties, unless the other has done something which gives a right to the other to make it so. You cannot make a new contract at the will of one of the contracting parties. There must have been such improper conduct on the part of the other as to justify the rescission of the contract sub modo, that is, if a reasonable notice be not complied with."
His Lordship posits a case of "such delay on the part of the other contracting party as to render it fair that, if steps were not immediately taken to complete, the person giving the notice should be relieved from his contract." If his Lordship had meant that a party might be relieved from his contract before the contractual time for completion had expired, what principle could support it? But the context shows that his Lordship did not mean that. He had in mind a case where the contractual time had expired but the contractual time, being a reasonable time, was not of the essence of the contract at law. (at p536)

17. Fry L.J. may have had in mind a means of establishing that the party in default had delayed for so long that further delay or neglect in completing would amount to refusal to complete giving a right to rescind (cf. De Soysa v. De Pless Pol (1912) AC 194, at pp 202-203 ; Holland v. Wiltshire (1954) 90 CLR, at p 420 ). If that is what his Lordship had in mind, a case may arise where it will be necessary to decide whether the giving of a notice to complete after some initial delay will suffice to establish a day after which a right to rescind arises, or whether such a notice is merely evidentiary. This is not a case which raises that question. Here, there was no delay prior to the giving of the notice. And as there was no such delay thereafter as entitled the appellant to rescind, the appeal should be dismissed with costs. (at p536)

ORDER

Appeal dismissed with costs.