Case: Scarf v Jardine (1882) 7 App Cas 345
Outcome: applied
his classic speech in Scarf v Jardine (1882) 7 App Cas 345 at 360-361 Lord Blackburn discussed the principles upon which the doctrine of election had developed. He said that where a person had an option to choose one or other of two inconsistent things, when once he or she had made his or her election, it cannot be retracted: Scarf 7 App Cas at 360. He emphasised that the election had to be communicated ( Scarf 7 App Cas at 361): '... to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act I mean an act which would be justifiable if he had elected one way and would not be justifiable if he had elected the other way the fact of his having done that unequivocal act to the knowledge of the person concerned is an election.' And, his Lordship said that where there is a right to elect '... the party is not bound to elect once; he may wait and think which way he will exercise his election, so long as he can do so without injuring other persons ...' ( Scarf 7 App Cas at 360, emphasis added). Lord Blackburn emphasised that election involved, first, the making of the choice between one of two inconsistent rights and, secondly, the notification or communication of that choice to the party against whom the rights existed in a way that affected that other party. Hence, in Immer 182 CLR at 43 Deane, Toohey, Gaudron and McHugh JJ referred to the party being '... confronted with the necessity of making a choice'. In Tropical Traders Ltd v Goonan [1964] HCA 20 ; (1964) 111 CLR 41 at 55 Kitto J said that the person with the choice might keep the question open '... so long as it did nothing to affirm the contract and so long as the [other party's] position was not prejudiced in consequence of the delay'. He said that when the vendor in that case told the purchaser that it would not rescind a contract for the sale of land before a particular date if the purchaser paid an additional sum for interest, costs and expenses, the vendor was doing no more than promising that it would not elect to rescind the contract before that date if the conditions were complied with. Kitto J said that in that case a grant of an extension of time was not an election to affirm but, rather, amounted to an announcement of an intention to refrain from electing either way until the money had been paid or the extended time for performance had elapsed: see too Champtaloup v Thomas [1976] 2 NSWLR 264 at 268C-269B per Glass JA; 273D-274D per Mahoney JA; Street CJ agreeing with both at 266: Hunter BNZ Finance v GC Maloney Pty Ltd (1988) 18 NSWLR 420 at 435C-436B per Giles J: GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 ; (2003) 128 FCR 1 at 89-92 [356] - [364] per Finn J. And, as the judgment of the Exchequer Chamber written by Blackburn J (see Scarf 7 App Cas at 360) established, this principle applies to a party to a contract who discovers his entry into it was induced by the fraud of the other: Clough v London &amp; North Western Railway Co (1871) LR 7 Ex 26 at 34-35. 22.2 Consideration