The Court held that a recital of acceptance of title in a decree for specific performance does not alter the substantive terms of the underlying contract, and that a vendor and purchaser summons may be used to resolve disputes about the meaning of such a decree even where liberty to apply is reserved.
Later decisions that cite Parer v Carlton
PARER v. CARLTON [1959] HCA 39; (1959) 101 CLR 515
Vendor and Purchaser
High Court of Australia
Dixon C.J.(1), McTiernan(1), Kitto(1), Menzies(1) and Windeyer(1) JJ.
CATCHWORDS
Vendor and Purchaser - Decree for specific performance of contract for sale and purchase of land - Open contract - Unencumbered fee simple - Recital in decree - "The plaintiff accepting the title of the defendant" - Whether plaintiff thereby obliged to accept fee simple subject to unregistered charge - Liberty to apply expressly reserved in decree - Dispute as to meaning of decree - Issue by plaintiff of originating summons for construction of decree - Whether such process competent - Equity Act 1901-1957 (N.S.W.), fourth schedule, r. 6.
HEARING
Sydney, 1959, September 1. 1:9:1959DECISION
The judgment of the COURT was delivered by DIXON C.J.:-2. The contract that was sued on was of the most informal character consisting of a letter. The property apparently was called Ford's Paddock and was held by the vendor under a certificate of title. The letter offered Ford's Paddock for 525 pounds. 5s. 0d. stating that it was exactly what the vendor had given for the paddock. That offer appears to have been accepted by a document which is not in evidence. During the hearing of the suit some questions were asked in cross-examination which elicited the fact that the vendor was considered to have given a charge over the subject property to her husband for 1,600 pounds. Of course, if it was saddled with an additional obligation of 1,600 pounds, it would mean that in effect the purchaser was obtaining Ford's Paddock not for 525 pounds. 5s. 0d. but for that sum plus 1,600 pounds or 2,125 pounds. 5s. 0d. (at p519)
3. At the time of the purchase it does not appear that the purchaser was aware of the supposed equitable mortgage or charge. (at p519)
4. The result of the suit was a decree for specific performance of the contract. The decree is dated 28th June 1956 and it recites that the plaintiff by his counsel accepted the title of the defendant - that is of the vendor - to the land the subject of the agreement thereinafter mentioned. After that recital the decree goes on: "This Court doth declare that the agreement constituted by the letter" - to which I have referred - "and the written acceptance of such offer", which is not in evidence, "by the plaintiff for the purchase by the plaintiff from the defendant of all that piece of land known as 'Ford's Paddock' and being the whole of the land in certificate of title", giving the volume and folio, "ought to be specifically performed and carried into execution." (at p519)
5. If you stop there and refer to the offer contained in the letter to which the decree refers, you find an open contract for the sale of an unencumbered estate in fee simple; for that is the natural construction of the agreement. That is what is decreed to be performed and carried into execution. You find that the price is 525 pounds. 5s. 0d. But that is preceded by a recital that the title has been accepted. The title as at that date consisted of a certifiate for an unencumbered estate in fee simple subject to two caveats about which we know nothing. They were not caveats to protect this supposed equitable charge or mortgage for 1,600 pounds. After the decree was made on 21st September 1956 a third caveat was put upon the title to protect that equitable charge or mortgage. That caveat is dated 18th April 1957. (at p519)
6. It appears to us to be quite plain that the decree read with the contract to which it refers must mean that the contract is to be executed and a price of 525 pounds 5s. 0d. paid as the purchase money and that for that price a transfer of the unencumbered estate in fee simple is to be made. (at p519)
7. It is not possible, we think, to construe the transaction in any other sense. It is the sense of the contract and the sense of the decree. (at p519)
8. The recital that title is accepted cannot turn the transaction into a sale for 525 pounds 5s. 0d. subject to an encumbrance for 1,600 pounds. (at p520)
9. After the decree controversy arose between the parties and a long correspondence ensued as to the form of the transfer and exactly what was to be done. The result of the controversy was the issue by the purchaser of a vendor and purchaser summons. The decree did contain an express liberty to apply; it concluded with a reservation of liberty to apply. (at p520)
10. The purchaser as plaintiff in the suit did not avail himself of that liberty to apply, but proceeded by an originating summons - issued in pursuance of r. 6 of the fourth schedule to the Equity Act, that is to say, by a vendor and purchaser summons. That seems an unexpected step. One would have anticipated that proceedings would have been taken under the liberty to apply provision to enforce the decree and to obtain the appropriate orders both for interpretation, if that were necessary, and for an order for the settlement of a proper transfer and to enforce its execution. (at p520)
11. Objection was taken by the vendor to the form of procedure so adopted in fact as unauthorized. It does not appear to be a matter of jurisdiction, but simply one of procedure. (at p520)
12. Rule 6 includes among the matters which may be dealt with by the procedure for which it provides any question arising out of or connected with a contract, not being a question affecting the existence or validity of the contract. (at p520)
13. We do not think the objection to the proceeding is a valid one. Unexpected as it may be and perhaps unnecessary, it appears to us to be a competent course to take and one which is open to no objection on jurisdictional grounds. The Supreme Court might, in its descretion, if it had so chosen, have said that it preferred to have the proceedings taken in the original suit, but that was not done. (at p520)
14. In these circumstances we think the judgment below was correct and the appeal should be dismissed with costs. (at p520)
ORDER
Appeal dismissed with costs.