Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  •   Notable Unreported Decision

Inness v Waterson A/T for Cobok Family Trust

 

[2006] QCA 155

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Inness v Waterson A/T for Cobok Family Trust [2006] QCA 155

PARTIES:

LISA ANNE INNESS
(plaintiff/respondent)
v
ROBERT DUNCAN WATERSON AS TRUSTEE FOR THE COBOK FAMILY TRUST – INSTRUMENT NUMBER 703945210
(defendant/appellant)

FILE NO/S:

Appeal No 10889 of 2005

DC No 2389 of 2005

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

12 May 2006

DELIVERED AT:

Brisbane

HEARING DATE:

24 April 2006

JUDGES:

Williams and Keane JJA and Philippides J

Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDER:

  1. Appeal dismissed
  1. Appellant to pay the respondent’s costs of and incidental to the appeal to be assessed on the standard basis

CATCHWORDS:

GENERAL CONTRACTUAL PRINCIPLES – OFFER AND ACCEPTANCE – ACCEPTANCE – WITHIN WHAT TIME – where the appellant (vendor) and respondent (purchaser) entered into a contract for the settlement of property on a particular date – whether a conveyancing clerk (Ms Bishop) in the office of the appellant’s solicitors had bound the appellant to an extension of time for settlement of the contract – whether the trial judge erred in preferring the evidence of the respondent as opposed to another witness (Ms Bishop) in relation to a crucial telephone conversation – whether Ms Bishop’s actions were within her apparent authority as an employee of the law firm acting for the appellant

Barclay v Messenger (1874) 43 LJ Ch 449; 30 LT 351, applied

Clough v The London & North Western Railway Company (1871) LR 7 Exch 26, applied

Howe v Smith (1884) 27 Ch D 89, considered

IVI P/L v Baycrown P/L [2005] QCA 205; Appeal No 11264 of 2004, 10 June 2005, distinguished

Jones v Dunkel (1959) 101 CLR 298, considered

Legione v Hateley (1983) 152 CLR 406, applied

Nowrani Pty Ltd v Brown [1989] 2 Qd R 582, distinguished

Spencer v Cali [1986] 2 Qd R 456, applied

Tropical Traders Ltd v Goonan (1964) 111 CLR 41, applied

COUNSEL:

K D Dorney QC, with S T Courtney, for the appellant

P L O’Shea SC for the respondent

SOLICITORS:

Ferguson Cannon Lawyers for the appellant

Flower & Hart Lawyers for the respondent

  1. WILLIAMS JA:  The facts relevant to this appeal are fully set out in the reasons for judgment of Keane JA and there is no need for me to repeat them.  I agree with the reasoning of Keane JA for concluding that the appeal should be dismissed, but I wish to deal specifically with the contention of senior counsel for the appellant that, accepting the evidence of the respondent, the legal consequence of the agreement between the respondent and Bishop in the telephone conversation at about noon on 14 February was to "vary the terms of the Contract of Sale so as to extend the time for completion of the Contract of Sale from Friday 14 February 2003 to Monday 17 February 2003."  Undoubtedly counsel was emboldened to put his submission that way because the learned judge at first instance held that Bishop was "someone who had the authority to vary an essential element of the contract without seeking instructions, i.e. to grant an extension of time for settlement".
  1. It should immediately be noted that for there to be a variation of an essential term of a contract there would ordinarily have to be consideration, and where necessary there would have to be a memorandum of that variation in writing.
  1. In my view what occurred in the instant case was not a variation of an essential term of the contract, but rather an extension of time for performance with time remaining of the essence. It is clear from numerous authorities that merely granting an extension of time does not constitute a variation of the contract. Sometimes the distinctions may be difficult to identify as McPherson J (as he was then) said in Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 at 588, but in most cases a careful analysis of the facts will resolve the issue.  Nowrani was clearly a case of variation and not one involving a mere extension of time.
  1. In general, where circumstances entitle a party to a contract to elect whether to treat the contract as continuing to be binding or to disaffirm the contract, that right is not lost if not immediately exercised. That principle was authoritatively stated by the Exchequer Chamber in Clough v The London & North Western Railway Company (1871) LR 7 Exch 26 at 34.  The judgment went on to say that the party having that right "may keep the question open so long as he does nothing to affirm the contract. … We think that so long as he has made no election he retains the right to determine it either way, subject to this, that … if in consequence of his delay the position even of the wrong-doer is affected, it will preclude him from exercising his right to rescind." (34-5)
  1. Although Clough is not referred to by Sir George Jessel MR in Barclay v Messenger (1874) 43 LJ Ch 449; 30 LT 351, I would regard his decision as a specific application of the general principle referred to in Clough.  Jessel MR said relevantly:

"If a man says a contract is to depend upon payment of money by a certain day, and the party entitled to receive the money says I will extend you time, I will give you a week or a month, why that should put the party in a better position than if it had originally been put in the contract, I cannot conceive.  It appears to me plain that a mere extension of time, and nothing more, is only a waiver to the extent of substituting the extended time for the original time and not an utter destruction of the essential character of the time." (LJ Ch at 456; LT at 354)

  1. That passage has been regularly cited with approval: Holland v Wiltshire (1954) 90 CLR 409 at 415 per Dixon CJ, Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at 53 per Kitto J, Mehmet v Benson (1965) 113 CLR 295 at 305 per Barwick C.J. and Spencer v Cali [1986] 2 Qd R 456 per Andrews J at 460 and per Connolly J at 466. 
  1. That a mere extension of time was properly categorised as a qualification on the right to elect to terminate the contract because of non-performance on the stipulated day, was recognised by Fry L. J. in Howe v Smith (1884) 27 Ch D 89 at 103-4; there he said:

"This was not a stipulation postponing the time for completion generally, but merely limiting the exercise of a consequential power."

In turn that passage was incorporated into the reasoning of Kitto J in Tropical Traders Ltd v Goonan at 55. 

  1. How an extension of time operates in law is discussed in Holland v Wiltshire, Tropical Traders Ltd v Goonan and Spencer v Cali.  The reasoning of Kitto J in Tropical Traders Ltd v Goonan is the most important.  He confirmed the authority of Barclay v Messenger at 54 and went on to say at 55:

"The granting of the extension of time, therefore, far from constituting an election by the appellant to affirm the contract, was the announcement of an intention to refrain from electing either way until either the 17,500 pounds should have been paid or 14 January should have arrived.  Not that election is a matter of intention.  It is an effect which the law annexes to conduct which would be justifiable only if an election had been made one way or the other."

  1. Earlier that learned judge had said (at 53) that "the real questions which arise in relation to the granting of the extension are first whether it amounted to a binding election not to rescind for non-payment on 6 January, and secondly, if it did, amount to such an election, whether it was ineffectual to fix 13 January as a date in respect of which time was of the essence." In my view treating a mere extension of time as "an election not to rescind" identifies the true nature of the granting of such an extension. That to my mind is clearly established by the reasoning in that judgment.
  1. All that really leads to the conclusion that Connolly J precisely and accurately summarised the law in Spencer v Cali at 466 where he said:

"…a mere extension substituting a new date for the date for performance stipulated in the contract will not destroy essentiality either generally or for the performance of the obligation in respect of which the extension is granted: Mehmet v Benson at 305.  If time is an essential condition, to extend it does not waive the effect of the stipulation as a condition: Holland v Wiltshire (1954) 90 C.L.R. 409 at 415 per Dixon C.J. citing Jessell M.R. in Barclay v Messenger (1874) 30 L.T. 351 at 354 and Talbot J in Bernard v Williams (1928) 139 L.T. 22 at 25.  While an extension of time in particular circumstances may destroy essentiality: Kilmer v British Colombia Orchard Lands Ltd [1913] A.C. 319 as explained in Goonan’s case at 53, an extension without more is only a qualified and conditional waiver of the original stipulation and constitutes no more than a promise not to elect to rescind before the extended time: Goonan’s case at 55."

Further, as Connolly J observed at 470, if the contract did not settle on the extended date the innocent party's right to rescind would be for the failure to complete on the original date.

  1. The facts as found in this case demonstrate that an extension of time was granted from the Friday to the Monday with time remaining of the essence. The appellant merely waived his right to elect to rescind because of non-payment on the Friday and was obliged to accept tender if made on the Monday.
  1. The question then becomes whether Bishop had authority to grant an extension in that sense. The test to be applied is derived from the passages in Legione v Hateley (1983) 152 CLR 406 quoted by Keane JA in his reasons.  Clearly there was ample evidence to support the finding at first instance that Bishop had the appropriate authority. 
  1. It follows that the appeal should be dismissed with costs.
  1. KEANE JA:  The issue for determination in this appeal is whether the learned trial judge was correct in concluding that the respondent was entitled to specific performance of a contract for the sale of land notwithstanding the respondent's failure to complete the contract on the agreed date for settlement.  In particular, the issue is whether the trial judge was correct in concluding that a conveyancing clerk in the office of the appellant's solicitors had bound the appellant to an extension of time for settlement until the next business day. 

Background

  1. The contract in question was made on 11 November 2002. The appellant was the vendor and the respondent was the purchaser. It is common ground that the contract provided for settlement on Monday, 10 February 2003. Time was expressed to be of the essence. Butler McDermott & Egan were nominated as the appellant's solicitors and Bell Dixon Butler were nominated as the respondent's solicitors.
  1. As a result of further negotiations between the parties, it was agreed in writing on 7 February 2003 that the date for settlement should be extended to Friday, 14 February 2003. That date was to coincide with the respondent's sale of another property owned by her.
  1. Settlement of the contract between the appellant and the respondent was to be effected at the offices of Butler McDermott & Egan at 12 noon on 14 February 2003, with Butler McDermott & Egan acting as the unpaid agents of Bell Dixon Butler.
  1. The respondent was a clerk working in the office of Bell Dixon Butler. As I have noted, she had intended to use funds from the sale of her other property to complete her purchase from the appellant. It had been arranged that, following the settlement of that transaction, she would effect a telegraphic transfer of the settlement funds to Butler McDermott & Egan. In the course of the morning of Friday, 14 February 2003, it became apparent that this other sale would not be completed until the following Monday. At about noon, the respondent spoke on the telephone to Ms Bishop, the clerk in the office of Butler McDermott & Egan acting on behalf of the appellant. It was common ground that Ms Bishop initiated this conversation.
  1. According to the respondent, she informed Ms Bishop that there was a "problem with the release of mortgage on the other property that needed to be settled and - and that we would be requesting an extension of time to the Monday". According to the respondent, Ms Bishop replied: "No problem, just rearrange the settlement with the bank."
  1. The respondent made a note of this conversation at the time it occurred. That note recorded:

"Time 12 pm.

Butler, McDermott & Eagan [sic] phoned re TT of funds -

Advised sett cancelled & extension required.

All OK to extend.

Westpac Nambour Ph 07 5441 1533

Amanda132 558 mortgage centre

Advised sett cancelled"

  1. The respondent said that the bank details recorded in her diary note came from no source other than Ms Bishop.
  1. The respondent caused Bell Dixon Butler to send a facsimile dated 14 February 2003 to Butler McDermott & Egan at about 2.00 pm on Friday, 14 February 2003. It read relevantly as follows:

"Unfortunately, settlement for our clients Hervey Bay property was not effected today as the Bank concerned did not receive the release form in time for settlement.  This settlement has now been extended to Monday 17 February 2003.

     In this regard we have been instructed by our client to request an extension to the settlement date of this transaction to 17 February 2003 with time to remain of the essence.

     Would you please advise whether you [sic] clients are agreeable to extend the settlement date to Monday.  We will forward an amended settlement statement in due course."

  1. Ms Bishop did not revert to the respondent on Friday, 14 February 2003. The respondent said that, had she been informed on the Friday that an extension would not be granted, she could and would have settled the contract using other funds which were available to her.
  1. Early on Monday, 17 February 2003, Butler McDermott & Egan sent a fax to Bell Dixon Butler referring to their fax of 14 February, and advising "our client does not agree to extend the date for settlement to Monday 17 February 2003. Accordingly, the contract is at an end." This letter was signed by Ms Bishop. The respondent's solicitors sent an urgent fax at 12.42 pm on 17 February 2003 confirming that the necessary funds had been telegraphically transferred to the trust account of Butler McDermott & Egan, and requesting that the matter be settled "at your earliest convenience". It would seem that these facsimile transmissions must have crossed with each other although the respondent's evidence was that the fax from Butler McDermott & Egan came to her attention at "about noon" on 17 February 2003.
  1. The respondent's solicitors faxed a letter on 17 February 2003 setting up the respondent's version of the conversation of Friday, 14 February 2003, and asserting that the date for settlement had been extended to 17 February 2003.
  1. The respondent subsequently commenced proceedings against the appellant for specific performance of the contract.
  1. Ms Bishop's account of the crucial conversation between herself and the respondent differed from the respondent's account. According to Ms Bishop, on 14 February 2003, she spoke to someone from Butler McDermott & Egan, whose identity she could not recall, who asked "for an extension of time … And something to do with a prior sale and I said, 'Okay, fine, put it in writing and I'll seek my client's instructions'." Ms Bishop said that this reflected her practice in such matters.
  1. It seems that, on 17 February, Ms Bishop made a note of this conversation. The note was not tendered in evidence. There is, therefore, no clear evidence of the precise terms of her note of 17 February; but some aspects of it were referred to in her evidence. In cross-examination, Ms Bishop admitted that some aspects of her note were erroneous. Ms Bishop's evidence was that she was very busy on the afternoon of Friday, 14 February. Her recollection was, understandably, somewhat limited.
  1. Ms Bishop said in evidence that she spoke to her client, the appellant, on the evening of 14 February. There was a note of the conversation, but, once again, it was not tendered. Ms Bishop said that her client's instructions were to refuse the request for an extension. Ms Bishop said that she rang her client again on the morning of Monday, 17 February 2003 to confirm his instructions that no extension was to be granted.
  1. In cross-examination, Ms Bishop agreed that she had written the single word "Monday" on the letter from Bell Dixon Butler dated 13 February 2003 relating to this contract in respect of the settlement proposed for 12.00 noon on 14 February 2003. Ms Bishop could not recall when she made this note, or why she made it; but she said that she made this note on what was the latest document in her file when she made the note. It may safely be inferred that this note was made on Friday, 14 February 2003. There was no reason why it would have been made on either the day before or the Monday itself.
  1. It may be noted here that, in the correspondence which passed between Butler McDermott & Egan and Bell Dixon Butler, Ms Bishop was expressly identified as the "File Contact". Ms Bishop had herself signed the letter of 10 February 2003 which confirmed that settlement was to be effected on 14 February 2003. The appellant was plainly aware of Ms Bishop's role on his behalf within the office of Butler McDermott & Egan. On 26 November 2002, the appellant sent a facsimile transmission to his bank advising of the making of the contract in question and informing the bank that Butler McDermott & Egan would be acting as his solicitors with Ms Bishop as one of the "contact" persons within that firm.

The decision of the trial judge

  1. The trial judge found that both parties were able to settle on 14 February 2003. In particular, in relation to the respondent, her Honour found that the respondent could have funded the settlement of the contract from other sources available to her, had it been necessary for her to do so. There is no challenge to this finding.
  1. The trial judge found that, although it was contrary to her usual practice, Ms Bishop had indeed agreed to extend the time for settlement of the contract until 17 February 2003. In so finding, her Honour clearly accepted the evidence of the respondent in preference to the evidence of Ms Bishop.
  1. The trial judge also concluded that the grant of the extension of time for settlement was within Ms Bishop's apparent authority.

The appeal

  1. In this Court, the appellant advances two broad submissions. First, it is submitted that the learned trial judge erred in preferring the evidence of the respondent to that of Ms Bishop in relation to the crucial conversation. Secondly, it is submitted that, in any event, such an agreement by Ms Bishop was not within her apparent authority on behalf of the appellant.
  1. As to the first of these submissions, the appellant acknowledges the difficulties which confront a party who seeks to challenge a finding of fact based on an assessment of the credibility of witnesses, but asserts that the trial judge's reasons are so deficient and inconsistent as to warrant the conclusion that her Honour's finding was "glaringly improbable", or "contrary to compelling inferences",[1] and to require that her Honour's finding in the respondent's favour be set aside.  The appellant seeks to make a number of points in this regard.
  1. First, the appellant points to her Honour's acknowledgement that the fax which the respondent caused to be sent at 2.00 pm on 14 February 2003 was "difficult to reconcile with the [respondent's] evidence of an extension".[2]  That is because this letter is itself a request for an extension of time rather than a confirmation of an extension which has already been granted.  It also recognises the need for the appellant's solicitors to seek his instructions.
  1. But as her Honour pointed out,[3] there was a basis for reconciling the terms of this facsimile with the respondent's version of the conversation in the respondent's evidence.  The respondent had drafted the letter on her word processor prior to her conversation with Ms Bishop.  She had simply failed to amend the draft before presenting it for signature to her supervising solicitor.  Moreover, it is hardly suspicious that the respondent would have sought written confirmation of the oral grant of the extension as a matter of good order.
  1. Next, it is said on the appellant's behalf that it is improbable that Ms Bishop would have told the respondent to "rearrange the settlement with the bank". In her evidence, Ms Bishop said that it would have been "unethical" for the respondent to contact the appellant's banker directly, and that she would not have encouraged such a course. But there would have been nothing "unethical" in the respondent contacting the appellant's banker with the consent of the appellant or his agents. The question is whether Ms Bishop gave that consent. In relation to that question, it is significant that there is no suggestion that the respondent obtained the bank's telephone details, recorded in the respondent's diary note of 14 February, from any source other than Ms Bishop. The respondent's diary note which records the bank's contact details is a compelling indication that Ms Bishop did indeed consent to the respondent rearranging the settlement with the bank.
  1. The appellant also seeks to make much of the respondent's acknowledgment in cross-examination that she knew that the appellant's conveyancing clerk would need to have instructions to grant an extension. But the respondent did not say that she knew that the appellant had not given Ms Bishop instructions in advance sufficient to enable Ms Bishop to agree to the respondent's request for an extension of one business day for settlement. In this regard, there had already been an extension for a short period. It would not have been unreasonable for the respondent to have assumed that the appellant had indicated to Ms Bishop a general willingness to accommodate any request for a short further extension. In any event, this aspect of the issue was simply not explored with the respondent. The point which the appellant seeks to make fails, in my view, because the appellant did not establish that the respondent must have known that Ms Bishop was speaking without instructions.
  1. Next, the appellant contends that the failure of the respondent to call her supervising solicitor to confirm her version of events was a serious deficit in the respondent's case. The appellant sought to invoke the principle in Jones v Dunkel.[4] 
  1. In relation to this contention, the only inference which might be drawn in accordance with the decision in Jones v Dunkel is that the evidence of the supervising solicitor who was not called would not have assisted the respondent's case.  One may accept that such an inference should be drawn.  One cannot, however, go further and infer that the solicitor was in a position to give evidence which would have contradicted the respondent's evidence of her conversation with Ms Bishop.  There may be several reasons why the solicitor's evidence would not have assisted the respondent.  Not the least obvious of these reasons may have been the lack of any relevant recollection on the part of the solicitor.
  1. More generally, it may be said, in response to the appellant's first submission, that her Honour's conclusion in relation to the crucial conversation is supported by the terms of the respondent's contemporaneous note, Ms Bishop's notation "Monday", and Ms Bishop's understandably limited recollection of the conversation. It is also supported by the consideration that it would have been odd for the respondent to have proceeded as she did if she had not been assured that all was "OK to extend": she had the means to settle in the absence of a clear extension. There is also the consideration that the appellant had previously agreed to an extension. There was no suggestion that Ms Bishop had been told by the appellant a further extension of one business day would have had adverse consequences for the appellant which might have put Ms Bishop on her guard. It is also significant that Ms Bishop did not seek to speak to her client until the evening of 14 February 2003 when the time for settlement had passed. Her inaction in this regard may be explained as being due to the fact that she was, as she said, very busy. It is also consistent with the conclusion that she had agreed to extend the settlement until the next working day, and, therefore, did not need to trouble herself about this sale further on the Friday. That Ms Bishop was "very busy" may also help to explain a departure from her usual practice.
  1. It must also be said that a finding against the respondent on this point would have required the trial judge to conclude that the respondent's diary note of the crucial conversation was a fabrication. Her Honour was evidently not disposed to make a finding so adverse to the character of the respondent. This Court is clearly at a disadvantage to the learned trial judge in its ability to assess the likelihood that the respondent was the sort of person who would indulge in the fabrication of evidence. The trial judge was also better placed than this Court to assess whether Ms Bishop's evidence appeared to be an actual recollection of events or a reconstruction affected by her client's instructions given after the time for settlement had passed on 14 February 2003.
  1. In relation to the appellant's second submission, it is established by authority that it is within the apparent authority of a solicitor acting for a party in a conveyance to extend the time for settlement of a contract.
  1. In Tropical Traders Ltd v Goonan,[5] the granting of a "mere extension" of time as "an act of grace"[6] was treated as "only a waiver to the extent of substituting the extended time for the original time".[7]  Such a grant, however it may be expressed, is treated as having effect as an intimation of a willingness to limit the exercise of the vendor's power to rescind by reason of non performance by the purchaser on the due date until after non performance on the extended date.  In Spencer v Cali,[8] a mere extension was described as "only a qualified and conditional waiver of the original stipulation", or "a promise not to elect to rescind before the extended time".
  1. It will be seen that the courts have taken this approach to what I have referred to as a "mere extension". As McPherson J (as he was then) observed in Nowrani Pty Ltd v Brown,[9] the "distinction between waiver and variation is at times difficult to identify".  Any such difficulty in the present case is resolved by reference to binding authority.  For the purpose of determining whether the appellant was bound by Ms Bishop's grant of an extension, the present case no more involves a variation of contract, as opposed to a unilateral grant of an extension, than the statements by Miss Williams, the clerk of the solicitors for the vendor in Legione v Hateley.[10]  In that case, four of the members of the High Court affirmed that the granting of extension by way of a temporary indulgence was within the apparent authority of a solicitor's clerk as an incident of the performance of a solicitor's role in a conveyancing transaction.  The role performed by Ms Bishop on the appellant's behalf in this case is indistinguishable from the role performed by Miss Williams on behalf of the vendors in Legione v Hateley.  In Legione v Hateley, Gibbs CJ and Murphy J said:[11]

"It is of course clear that neither the solicitors, nor Miss Williams, had any actual authority from the vendors to make any representation to the purchasers that the vendors’ rights would be kept in abeyance. But the vendors had authorized the solicitors to act for them in completing the sale. Within reasonable limits, the solicitors, having been entrusted by the vendors with the conduct of the negotiations, must be treated as having the authority which, within the course of the negotiations, they purported to exercise: cf Crabb v Arun District Council ([1976] Ch 179 at 193). 'The solicitor is to be regarded as the alter ego of the client and the rights of the other party to the contract cannot be made to depend upon the diligence or lack of diligence exhibited by the solicitor in his dealings with his client': Sargent v ASL Developments Ltd ((1974) 131 CLR 634 at 659); see also at p 649. It was of course the conduct of the vendors that gave the solicitors ostensible authority to act on their behalf. The authority extended to actions carried out in the ordinary course of business by such members or employees of the firm as ordinarily acted for it. When the solicitors selected or permitted Miss Williams to speak on their behalf, in their capacity as solicitors for the vendors, her words bound the vendors."

  1. In the same case, Mason and Deane JJ said:[12]

"As we followed the argument, the suggested representation was to the effect that the vendors would not rely on any right to treat the contract as at an end provided that settlement took place either on 17 August 1979 or within a reasonable time after the solicitor for Mr and Mrs Hateley was advised that the vendors were not prepared to extend the time for settlement until that day (whichever was the earlier). If what was said on 9 August 1979 by Miss Williams of the firm of solicitors acting for the vendors to Mr Gardiner, who was the solicitor acting for Mr and Mrs Hateley, amounted to such a representation, it was within the ostensible authority of the solicitor for the vendors to make it on behalf of the vendors. It is true that the evidence indicates that Miss Williams was but the secretary of that solicitor. She was, however, the person to whom Mr Gardiner was connected when he asked to speak to the person dealing with the matter. More importantly, examination of the correspondence between solicitors indicates that it was Miss Williams who had signed in her own name, on behalf of the vendors’ solicitors, a letter advising that the vendors were not prepared to extend the due date for completion of the contract of sale and a subsequent letter enclosing a copy of the notice of rescission."

  1. This Court must, of course, accept the authority of the observations in Legione v Hateley.  They are sufficient to dispose of this case in the respondent's favour.  One may venture the further observation, however, that, in point of principle, a case of waiver or promissory estoppel relating to a "mere extension" (which is within the apparent authority of a solicitor charged with the completion of a conveyance pursuant to a contract), may be distinguished from a case of variation of contract (which is not within the apparent authority of a solicitor) on the basis that the latter case requires consideration moving from each party; which, in cases such as Nowrani v Brown Pty Ltd,[13] will be established by a fresh set of mutual promises rearranging generally the contractual milestones.
  1. The appellant sought to rely upon the decision of this Court in IVI P/L  v Baycrown P/L.[14]  There it was said that "the boundaries of the ostensible authority of an agent are drawn according to what the principal represents, whether implicitly or explicitly, about the authority of the agent".  But IVI P/L v Baycrown P/L was not concerned with the ostensible authority of a solicitor engaged to complete a contract on behalf of a party, but with the anterior question whether the making of the contract is within the scope of a solicitor's apparent authority.  That question was answered in the negative in the absence of a holding out by the principal of the solicitor as having that authority.  The passages which I have cited from the judgments in Legione v Hateley show that the engagement of a solicitor by a client to complete a conveyancing transaction involves a holding out of the solicitor as authorised to grant an indulgence by way of an extension of time for completion where that does not involve an actual variation of the terms of the contract.  On the authority of Legione v Hateley, the granting of a mere extension of time must be treated as one of "the usual aspects of conveyancing practice".[15]
  1. For the sake of completeness, I should also say that, to the extent that it may be thought to be desirable to eschew reference to "waiver" in relation to "mere extensions" of time,[16] the present case might also be analysed in terms of promissory estoppel bearing in mind that the respondent could and would have completed the contract on 14 February 2003 had Ms Bishop not agreed to an extension on behalf of the appellant.

The respondent's notice of contention

  1. It should be noted that the respondent sought to maintain the judgment in her favour by invoking equitable doctrines supporting relief from forfeiture. Having regard to my conclusion that the appellant's challenge to the judgment should be rejected, it is unnecessary to deal with the arguments which arise in relation to the respondent's notice of contention.

Conclusion and orders

  1. In my respectful opinion, the appeal should be dismissed. The appellant must pay the respondent's costs of and incidental to the appeal to be assessed on the standard basis.
  1. PHILIPPIDES J:  The appellant appeals against orders of the learned trial judge for specific performance of a contract for the sale of land made on 11 November 2002 between the appellant as vendor and the respondent as purchaser, which was due to settle on 14 February 2003. The learned trial judge found that during a telephone conversation with the respondent on Friday, 14 February 2003, Ms Bishop, a conveyancing clerk employed by the appellant’s solicitors had agreed to an extension of the contract to Monday, 17 February 2003.  The learned trial judge also found that Ms Bishop had ostensible authority to grant the extension so that, notwithstanding a lack of actual authority, the appellant was bound by the grant of the extension.  The appellant challenges both those findings.
  1. I agree with Keane JA’s reasons that none of the matters raised on the appeal indicate a basis for interfering with the learned trial judge’s finding that an oral extension was granted.
  1. Nor is there any basis for concluding that the trial judge erred in finding that the granting of the extension was within Ms Bishop’s ostensible authority. While a solicitor engaged to bring to completion a contract for the sale of land does not have ostensible authority to vary the terms of the contract, as McPherson J (as he was then) recognised in Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 at 588, in considering the extent of a solicitor’s authority to bind the client, a distinction may be drawn between a variation of the contract and a mere extension of time which operates as a waiver.  Ms Bishop had on an earlier occasion corresponded with the respondent concerning a previous extension granted on behalf of the appellant from 10 to 14 February 2003.  I agree for the reasons stated by Keane JA that the further oral extension from 14 February 2003 to 17 February 2003 constituted no more than a mere extension of time for completion and, on the basis of Legione v Hateley (1982-1983) 152 CLR 406, the appellant was bound by such an extension, it being one of the usual aspects of conveyancing practice.  That the oral extension in the present case operated as a mere extension of time and not as a variation of the contract is supported by a long line of authority including Tropical Traders Ltd v Goonan (1964) 111 CLR 41 and Spencer v Cali [1986] 2 Qd R 456. 
  1. I would add an observation that the view that what was done by Ms Bishop amounted to a variation of the essentiality of time and was thus outside her apparent authority might be seen to be supported by the decision in George v Pottinger [1969] Qd R 101 at 107-108.  But, to the extent that that case suggests that the granting of a mere extension of time amounts to a variation of essentiality, and that as such is outside the ostensible authority of a solicitor engaged to act in a conveyance, it must be doubted in the light of established authority such as Tropical Traders Ltd v Goonan, Spencer v Cali and Legione v Hateley.  I note that the appellant did not seek to rely on the approach in George v Pottinger in support of the confining of the scope of Ms Bishop’s ostensible authority and it is therefore not necessary to deal further with it or form a concluded view of it.
  1. Finally, I observe that the evidence did not disclose any knowledge by the plaintiff as to Ms Bishop’s actual authority which precluded reliance on the latter’s ostensible authority; there was no evidence of knowledge by the plaintiff of an absence of actual authority by Ms Bishop.
  1. Accordingly, I agree that the appeal should be dismissed with costs.

Footnotes

[1] Cf Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at 128 [28] - [29], 139 [66]; CSR Limited v Della Maddalena [2006] HCA 1; (2006) 224 ALR 1 at 8 [20] - [21].

[2] Innes v Waterson & Anor, unreported, District Court of Queensland, No D19 of 2003, 14 December 2005 at [23].

[3] Innes v Waterson & Anor, unreported, District Court of Queensland, No D19 of 2003, 14 December 2005 at [23].

[4] (1959) 101 CLR 298.

[5] (1963 - 1964) 111 CLR 41.

[6] (1963 - 1964) 111 CLR 41 at 51.

[7] (1963 - 1964) 111 CLR 41 at 53.

[8] [1986] 2 Qd R 456 at 466.

[9] [1989] 2 Qd R 582 at 588.

[10] (1983) 152 CLR 406.

[11] (1983) 152 CLR 406 at 421 (citations footnoted in original).

[12] (1983) 152 CLR 406 at 437 - 438.

[13] [1989] 2 Qd R 582 at 588.

[14] [2005] QCA 205 esp at [42].

[15] Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 649.  See also at 659.

[16] Cf Sargent v ASL Developments Limited (1974) 131 CLR 635 at 647, 655; Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406, 422 - 424, 449 - 452, 472 - 473, 491 - 498; Freshmark Limited v Mercantile Mutual Insurance (Australia) Limited [1994] 2 Qd R 390 at 397 - 403.

Close

Editorial Notes

  • Published Case Name:

    Inness v Waterson A/T for Cobok Family Trust

  • Shortened Case Name:

    Inness v Waterson A/T for Cobok Family Trust

  • MNC:

    [2006] QCA 155

  • Court:

    QCA

  • Judge(s):

    Williams JA, Keane JA, Philippides J

  • Date:

    12 May 2006

  • White Star Case:

    Yes

Litigation History

No Litigation History

Appeal Status

No Status