Legione v Hateley: 1982

(High Court of Australia) Purchasers of land were put on notice that unless they paid the price by 10th August the contract of sale would be rescinded. On 9th August the purchasers’ solicitor telephoned the vendor’s solicitors and spoke to the secretary of the partner in the firm who was handling the matter asking for a week’s extension of time. The secretary said, ‘I think that’ll be alright, but I’ll have to get instructions’. The question was whether that conversation could give rise to an estoppel.
Held: (Mason J. and Dean J) ‘Plainly that statement could not be treated as an agreement or representation that the vendors would extend the time for settlement until 17th August 1979. Nor can that statement properly be seen as containing any representation that, pending communication of instructions, the purchasers could, with impunity, disregard the time allowed for settlement by the notice of rescission. To the contrary, Miss Williams’ statement that she thought it would be alright but would have to get instructions intimated that she was not in a position to agree to what was, on a fair interpretation of Mr Gardiner’s account of the conversation, being put to her as a fait accompli.’ (Gibbs CJ and Murphy J) ‘But when Miss Williams said she thought it would be alright, and that she would have to get instructions, she must have meant, and the purchasers’ solicitors were entitled to believe, that the position was being left in abeyance until the instructions were received.’
Mason and Deane JJ defined a penalty: ‘A penalty, as its name suggests, is in the nature of a punishment for non-observance of a contractual stipulation; it consists of the imposition of an additional or different liability upon breach of the contractual stipulation’


Mason J and Dean J, Gibbs CJ and Murphy J


[1982-1983] 152 CLR 406




CitedIn re Dagenham (Thames) Dock Co; Ex parte Hulse CA 1873
The Court of Appeal in chancery heard an appeal from the Master of the Rolls from his refusal of the Master of the Rolls to make a declaration in the winding up of the purchaser company. The purchaser had sought a direction that if the balance of . .

Cited by:

CitedNorthstar Land Limited v Maitland Brooks Jacqueline Brooks CA 14-Jun-2006
The parties’ solicitors were to complete the sale and purchase of land. The purchaser asked for an extension of time beyond the appointed hour to complete. The vendor’s solicitor responded that he would take his client’s instructions. The purchaser . .
CitedCavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Lists of cited by and citing cases may be incomplete.

Legal Professions, Contract

Updated: 07 May 2022; Ref: scu.242527