Case: Greaves v Wilson Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575 
Outcome: applied
One of those authorities was Gardiner v Orchard [1910] HCA 18 ; (1910) 10 CLR 722, particularly the passage from Isaacs J, including the following, concerning a clause similar to cl 14 (at 739 740): 'In considering whether such a clause justifies a vendor in any given case in cancelling his contract, the Court must bear in mind three things: First, the purpose of every such condition, which is a matter of law, and is stated in the passage quoted from Greaves v. Wilson ((1858) 25 Beav. 290 [53 E.R. 647]); next, the necessity for bona fides on the part of the vendor in using his power for that purpose: see also Woolcott v. Peggie ((1889) 15 App. Cas. 42). This is a question of fact, and is admitted here. The third essential is that the cancellation must be reasonable. Reasonableness is a question of fact, dependent on the whole of the circumstances, though one of those circumstances consists always of the wording of the contract itself.' The reference to Greaves v Wilson was explained by Stephen J as follows (at 552): 'His Honour's reference to Greaves v. Wilson ((1858) 25 Beav. 290 [53 E.R. 647] is to a passage in which Sir John Romilly M.R. said ((1858) 25 Beav., at p. 293 [53 E.R., at p.649]) that such conditions were introduced to meet the case where a vendor finds that he is to be put to: " ... so much expense and trouble as to make it unreasonable that he should be called upon to do it." The learned Master of the Rolls emphasized that it was always "a question of the reasonableness of the thing required". As early as 1841 Lord Langdale M.R. had used reasonableness as a test of the validity of the vendor's rescission in his judgment in Page v. Adam ((1841) 4 Beav. 269, at p. 285 [49 E.R., 342, at p. 348]).' 173 There was further discussion of cl 14 in Pierce Bell Sales Pty Ltd v Frazer [1973] HCA 13 ; (1973) 130 CLR 575. Barwick J, after referring to the decision in Godfrey Constructions , said (at 587): 'Broadly it may be said that the vendor will not be allowed to use his contractual right if it would be unconscionable in the circumstances to do so.' Later he said (at 588): 'According to my view of the contract between the parties, the obligation to transfer to the appellant the fee simple in the land was central and fundamental to their bargain. It must be a relatively rare case, in my opinion, in which cl. 14 can conscionably be used to avoid performance of such an obligation.' Gibbs J cited with approval the following passage from Viscount Radcliffe in Selkirk v Romar Investments Ltd ([1963] 1 WLR 1415 at 1422 1423) (at 590): 'Thus, it has been said that a vendor, in seeking to rescind, must not act arbitrarily, or capriciously, or unreasonably. Much less can he act in bad faith. He may not use the power of rescission to get out of a sale 'brevi manu', since by doing so he makes a nullity of the whole elaborate and protracted transaction. Above all, perhaps, he must not be guilty of 'recklessness' in entering into his contract, a term frequently resorted to in discussions of the legal principle and which their Lordships understand to connote an unacceptable indifference to the situation of a purchaser who is allowed to enter into a contract with the expectation of obtaining a title which the vendor has no reasonable anticipation of being able to deliver.'