Besier v Foster [1952] HCA 14; (1952) 94 CLR 526 (17 March 1952)

HIGH COURT OF AUSTRALIA

BESIER v. FOSTER [1952] HCA 14; (1952) 94 CLR 526

Contract

High Court of Australia

Dixon C.J.(1), McTiernan(1), Williams(1), Webb(1) and Fullagar(1) JJ.

CATCHWORDS

Contract - Specific performance - Sale of land for fixed sum or such other sum as might be approved by Commonwealth authority under Commonwealth regulations - Application to Commonwealth authority - Cessation of regulations before decision - Provision by State Act for dealing with applications pending before Commonwealth authority - Whether decision by State authority a fulfillment of contractual term.

HEARING

Melbourne, 1952, March 14, 17. 17:3:1952

APPEAL from the Supreme Court of Tasmania.

DECISION

THE COURT delivered the following oral judgment:-

The plaintiff succeeded in the Supreme Court of Tasmania in an action for what may, we think, shortly be called a residential business together with the land which formed it. The business which was called "Ingomar" was carried on in Hobart and was well-known. The action for specific performance was resisted upon a number of grounds. We find it necessary to deal with only one of them, a ground upon which we think that the action should fail. The agreement was made on 9th August 1948 at the time when the National Security (Economic Organization) Regulations (Cth.) were still in force and applicable to Tasmania. It is true that it was not very long before they went out of force, at all events in relation to future transactions. They went out of force on 20th September 1948. Whether on 9th August 1948 the parties contemplated them going out of force or not is perhaps a matter into which it is not material to inquire. They may have done so or they may have not. But they had to take account of the regulations as they existed and they did so by making a provision in the contract which provided that the purchase money should be as follows: for the purchase of the land the sum of 26,500 pounds or such sum as may be approved by the delegate of the Treasurer under the National Security (Economic Organization) Regulations whichever is the lesser; for the goodwill of the business so carried on the sum of 2,500 pounds; and for the plant the sum of 1,000 pounds. The regulations continued in force until 20th September 1948. By S.R. 1948 No. 121 notified on 16th September 1948 a new regulation numbered 25 was inserted in the National Security (Economic Organization) Regulations. Regulation 25 (1) enabled the Treasurer by declaration published in the Gazette to declare that, from and including a date specified in the declaration, sales of land should, in the State or Territory of the Commonwealth specified in the declaration, cease to be controlled under the regulations. Sub-regulation (2), however, said that where such a declaration was made in relation to a State or Territory of the Commonwealth, Pts.III and IIIA of these regulations and Pt. VI of these regulations, in so far as that Part applies in relation to Pt. III or IIIA, should not have effect in respect of transactions entered into in that State or Territory on or after the date specified in the declaration. The point has been raised whether sub-reg. (2) does not mean that although a declaration was made the regulations were to continue in force in relation to transactions such as this. But we shall not deal with that question. The Act of the State of Tasmania for the control of land sales, called the Land Sales Control Act 1948, was assented to on 17th September 1948 and came into force in pursuance of sub-s. (2) of s. 1 on 20th September 1948. On that date a declaration published in the Commonwealth Gazette pursuant to reg. 25 (1) prescribed and declared that land sales in Tasmania should cease to be controlled by the regulations as from 20th September 1948. The Land Sales Control Act 1948 in the State of Tasmania then took up the business of land sales control. Section 5 sub-s. (5) provides that where before the date of the commencement of this Act an application for consent to a transaction affecting land was made under the Commonwealth regulations, but no decision on the application was given before that date, the Minister may deal with the application as if this Act had been in force when it was made and the application had been made under this Act. Section 13 provides that the Minister may, by writing under his hand, delegate all or any of his powers and functions under the Act (except the power of delegation), in relation to any matter or class of matters, so that the delegated powers and functions may be exercised by the delegate with respect to the matter or class of matters specified in the instrument of delegation. Had it been necessary to consider the operation of sub-s. (2) of the new reg. 25, difficulties might have arisen as to the operation of sub-s. (5) of the State Act. We pass over that matter. In fact a delegate of the Minister constituted under s. 13 of the Land Sales Control Act went on to deal with the application that had been made to the federal authority for consent. It is said that the result of his consideration of that application was to lead him to give his consent to a price for the real estate of 15,548 pounds . The steps by which that is supported are in dispute but in the end an unqualified consent was endorsed on the contract to the transaction at that sum. (at p529)

2. We shall not enter upon the questions which were discussed as to the sufficiency of that or the sufficiency of the consents which were given. What we shall place our decision upon is the plain meaning of the provision which we have read from the contract, the provision which states that the price may be a lower sum approved by the delegate of the Treasurer under the National Security (Economic Organization) Regulations. No consent was given to the contract for the higher sum of 26,500 pounds and any approval or consent which was obtained capable of satisfying the terms of the provision was given only by the State authority. It is clear that the clause specifies the federal authority, the delegate of the Treasurer under the National Security (Economic Organization) Regulations, and we think that the plaintiff cannot escape the consequences of the fact that the condition which those words prescribe was never fulfilled, with the result that the condition on which the obligation of the contract as a sale at a lower price depends was never fulfilled. To escape from that it has been argued that the words "the delegate of the Treasurer" in the National Security (Economic Organization) Regulations, whilst literally referring to the federal authority, are really directed at specifying what may be called the legal authority for the time being who may exercise land sales control on the same principles as appear from the Economic Organization Regulations. The argument is that there is nothing except the legal position of the delegate of the Treasurer under the National Security (Economic Organization) Regulations to lead to the selection of him as the person to fix the lower price and that in reality and in substance those words are merely directed to prescribe the legal authority as he may be from time to time constituted provided that the principles upon which the authority proceeds are the same or substantially the same as those which the National Security (Economic Organization) Regulations contemplated. Accordingly, they should, as it is submitted for the plaintiff, be construed as in substance providing for the possibility of the transfer of authority from Commonwealth to State. (at p529)

3. We think that there cannot be found in the words any such wide intention. They speak for themselves. They are definite and they satisfy the authority which is erected by the Commonwealth. The argument that Commonwealth authority as distinguished from State authority is non-essential is an argument which disregards what the words say and attempts to introduce into them a change of actual meaning. It is however next submitted that an implication should be drawn from the surrounding circumstances and from the text of the contract that in case of a transfer of land sales control from the Federal to the State governments (provided the new authority acts upon the same principles) the contract should proceed as under that new authority and the new authority should fulfil the function which the paragraph of the contract expressly reposes in the delegate of the Treasurer under the Commonwealth regulations. To make an implication to the effect of that described appears to us to go beyond anything warranted by the principles upon which implications are made to give efficacy to a contract where a term has been unexpressed or some matter has been omitted. In fact the parties may or may not have contemplated the possibility of a new authority arising and the old authority ceasing. Upon either hypothesis they have expressed themselves in exact terms and there is no basis for introducing into their contract an unexpressed term as a necessary implication to overcome the difficulty in which one party to the contract finds himself. As this is a matter which is fatal to the success of the action for specific performance we think we should pronounce upon it now and not proceed to investigate the other matters raised by way of defence, some only of which we have adverted to. The appeal should therefore be allowed and the judgment of Gibson J. restored. (at p530)

4. The order will be: - Appeal allowed with costs. Order of the Supreme Court discharged. Appeal to the Supreme Court dismissed with costs. Order of Gibson A.J. restored. (at p530)

ORDER

Appeal allowed with costs. Order of the Supreme Court discharged. Appeal to the Supreme Court dismissed with costs. Order of Gibson A.J. restored.