Case: D.T.R. Nominees Proprietary Limited v Mona Homes Proprietary Limited and Another [1978] HCA 12 ; (1976-1977) 138 CLR 423
Outcome: discussed
applicants also rely upon the decision of the High Court in D.T.R. Nominees Proprietary Limited v Mona Homes Proprietary Limited and Another [1978] HCA 12 ; (1976-1977) 138 CLR 423. That case concerned a contract for the sale of land, completion being conditional upon registration of a plan of subdivision, a copy of which was attached to the contract. At the date of the contract the vendor had not lodged the plan but had lodged a plan for a larger subdivision of which the subject land was part, seeking approval of so much of the subdivision as related to that land. That plan was approved and registered. The vendor then required completion within 14 days. The purchasers purported to rescind the contract on the basis that the plan attached to the contract had not been registered, and that the vendor had thereby repudiated the contract. The vendor asserted that the purchasers had wrongfully repudiated the contract and purported to rescind, forfeiting the deposit. The purchasers commenced proceedings seeking a declaration that the contract had been validly rescinded upon the basis that in lodging the plan of subdivision the vendor had repudiated the contract, or that subsequent correspondence, asserting compliance with the term as to registration and calling for completion, had constituted repudiation. In the High Court the first question was whether or not an intention to repudiate the contract could be inferred from the vendor's conduct. At 432 Stephen, Mason and Jacobs JJ said (Aickin J concurring): No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him. As Pearson LJ observed in Sweet &amp; Maxwell Ltd v Universal News Services Ltd: "In the last resort, if the parties cannot agree, the true construction will have to be determined by the court. A party should not too readily be found to have refused to perform the agreement by contentious observations in a course of discussions or arguments ... ." In this case the appellant acted on its view of the contract without realizing that the respondents were insisting upon a different view until such time as they purported to rescind. It was not a case in which any attempt was made to persuade the [vendor] of the error of its ways or indeed to give it any opportunity to reconsider its position in the light of an assertion of the correct interpretation. There is therefore no basis on which one can infer that the [vendor] was persisting in its interpretation willy nilly in the face of a clear enunciation of the true agreement. The passage from Freedland which was cited in Bruce recognizes a distinction between breach and repudiation. In Bruce , as far as the report goes, there had been no actual failure by the employee to perform his duties in accordance with the proposed changes in arrangements, or any exercise of a purported right to do that which he was no longer required to do. Similarly, in Mona Homes , time not being of the essence of the contract, either the vendor had not yet breached the contract, or any breach did not provide a basis for determining it. In the present case, however, Mr Harrison not only indicated that he would not comply with the direction, but did not do so. This conduct continued from the time at which Mr Allard first raised the matter with him until he left the meeting on 2 May 2008. He has not demonstrated any basis for believing the direction to be unlawful. On his own version he wanted it reduced to writing for reasons that were extraneous to his employment. Whilst it is true that on 6 May 2008 Mr Bradley suggested that there was some question of discrimination or, perhaps, illegality about the direction, he also made no attempt to demonstrate any basis for that view. I see no basis upon which such a submission could be made. I do not accept that either man genuinely believed the direction to be unlawful. There is no basis for asserting that on 2 May 2008 Mr Harrison refused to comply with the direction because he considered it to be unlawful, or that he asserted a construction of his contract of employment which was inconsistent with that impliedly advanced by Mr Allard in giving the direction.