(1989) 166 CLR 623

166 C.L.R.] OF AUSTRALIA.
623
LAURINDA PTY. LIMITED AND OTHERS ApPELLANTS;

PLAINTIFFS,
AND
CAPALABA PARK SHOPPING CENTRE

PTY. LIMITED RESPONDENT.
DEFENDANT,
ON APPEAL FROM THE SUPREME COURT OF QUEENSLAND.
Landlord and Tenant ~ Agreement for lease - Landlord to deliver registrable H. C. OF A.

lease - Time fo; delivery notfIXed - Failure to deliver within reasonable 1988-1989.
time - Whether repudiation - Notice requiring delivery within fourteen '-r--'
1988,
days in default lessee "reserves rights" - Failure to deliver - Rescission eke. 4.
- Effectiveness of notice - Whether reasonable time allowed for
compliance - Whether reservation of rights sufficient warning of 1989,
intention to rescind. May 2.
By a written agreement for lease of part of a shopping centre, the lessor MasonCJ.,
agreed to procure the registration of a formal lease or to deliver a Brennan.
registrable lease to the lessee, the term of which was to commence on the Deane,
Dawson and
opening of the centre. The lessee executed the lease, authorized the lessor GaudronJJ.
to complete any details required for registration, and paid the stamp duty
and registration fees. Shortly after the opening of the centre the lessee
asked for a copy of the lease and repeated the request some three months
later. The lessor replied that the lease had been executed and would be
provided "as soon as we are able to". About five months later the lessee
gave the lessor fourteen days in which to complete registration, in default
of which it said that it reserved its rights in respect of the lessor's default.
The lessor did not comply and the lessee purported to rescind the
agreement.
Held, that the lessor's conduct in failing to deliver a registrable lease to
the lessee was a repudiation of the agreement which entitled the lessee to
treat it as ended.
Carr v. J. A. Herriman Pry. Ltd. (1953), 89 C.L.R. 327; Louinder v. Leis
(1982), 149 C.L.R. 509; Shevill v. Builders Licensing Board (1982), 149
C.L.R. 620; and Progressive Mailing House Pry. Ltd. v. Tabali Pry. Ltd.
(1985),157 C.L.R. 17, applied.
Brennan, Deane and Dawson n., Mason C.l. contra, considered that
the lessee's fourteen day notice was ineffective to make time of the essence,
by Deane and Dawson n. because it did not convey that time was being
made of the essence of the contract or that the lessee would regard itself as
624 HIGH COURT [1988-1989.
H.C. OF A. entitled to rescind in the event of non-eompliance, and by Brennan J.
19881989. because it did not communicate the lessee's intention to treat the end of the
'-r-' fourteen day period as of the essence for performance of the lessor's
LAURINDA
PTY. LTD. obligation to complete registration.
v. Balog v. Crestani (1975), 132 C.L.R. 289, at pp. 296-300, considered.
CAPAlABA Mason c.J., Brennan, Deane and Dawson JJ. considered that the time
PARK allowed by the notice to complete was not reasonable in all the circum-
SHOPPING
CENTRE
stances.
PTY.LTD. Sindel v. Georgiou (1984) 154 C.L.R. 661, at p. 670, applied.
Decision of the Supreme Court of Queensland (Full Court) reversed.
ApPEAL from the Supreme Court of Queensland.

On 31 October 1985 a deed of agreement was executed between
Capalaba Park Shopping Centre Pty. Ltd. ("Capalaba"), Laurinda
Pty. Ltd. ("Laurinda") and several guarantors of Laurinda's obli-
gations, by which Capalaba agreed to grant Laurinda a lease of
premises forming part of a retail centre that Capalaba was in the
course of constructing. By cl. 6.1 Capalaba agreed to grant Laurinda
a lease in the form set out in a schedule, the term to commence on
the earlier of the opening date of the centre and the date on which
Laurinda commenced business at the premises. Clause 1.55 required
Laurinda to pay for the stamping and registration of the lease.
Clause 6.2 provided for the execution of the lease
contemporaneously with the deed and for the lease to be delivered to
Capalaba's solicitors who were authorized upon the date of com-
mencement of the term to fill in various details and to sign it
"correct for the purpose of registration on behalf of the Lessee". The
lease was executed by Laurinda and delivered to Capalaba's
solicitors. The centre opened on 1 December 1985 and Laurinda
commenced business on 3 December 1985. On 3 January 1986
Laurinda paid the fees required for the stamping and registration of
the lease. At about that time Laurinda asked for a copy of the lease.
By letter of 14 March 1986 it again asked for a copy of the lease.
Capalaba's solicitors responded that the lease had been executed and
would be provided "as soon as we are able to". On 21 August 1986
Laurinda's solicitors wrote to Capalaba's solicitors stating that "in
view of the unexplained and lengthy delay, it appears reasonable
that our clients require your client to complete registration within
fourteen days from the date hereof', and that if this were not done
their clients would "reserve their rights in respect of your client's
default". The lease was not registered within the stipulated time and
on 5 September Laurinda's solicitors wrote that their clients no
longer regarded themselves as bound by the lease or guarantee.
Laurinda and the guarantors sued Capalaba in the Supreme Court
of Queensland for a declaration that the lease had been validly
166 c.L.R.] OF AUSTRALIA. 625
determined. Connolly J. made the declaration. An appeal by H.C.OF A.
1988-1989.
Capalaba to the Full Court (Matthews, Carter and Dowsett 11.) was '-y-J
allowed. Laurinda then appealed, by special leave, to the High LAURINDA
PrY. LTD.
Court. V.
CAPAlABA
PARK
D. F. Jackson Q.c. (with him K. C. Fleming and N. 1. SHOPPING
Thompson), for the appellants. Capalaba's failure to take the steps CENTRE
J>ry. LTD.
necessary to procure registration or to produce a lease in registrable
form showed that it was prepared to carry out its part of the
agreement only as and when it suited it. The lessee was thus entitled
to treat the agreement as ended: Associated Newspapers Ltd. v.
Bancks (l); Carr v. 1. A. Berriman Pty. Ltd. (2); Shevill v. Builders
Licensing Board (3); Progressive Mailing House Pty. Ltd. v. Taba/i
Pty. Ltd. (4). The case was not one of mere delay in performing an
obligation but of refusal to perform a vital obligation, to grant a
legal lease, until Capalaba chose to do so. No notice requiring
performance was necessary. If Capalaba's conduct did not entitle the
lessee to treat the agreement as ended, the unreasonable delay
entitled the lessee to give a notice to complete: Louinder v. Leis (5).
The judge correctly found unreasonable delay. Notwithstanding the
observations of Gibbs J. in Balog v. Crestani (6), the notice was not
defective by reason of the fact that it did not expressly state that the
lessee would treat the agreement as ended if it were not complied
with: Vandyke v. Vandyke (7); Taylor v. Raglan Developments Pty.
Ltd. (8). The critical question is not whether the notice states an
intention to rescind but whether it conveys that the party giving it is
making time essential in respect of the performance of the obligation
in question. The letter of 21 August 1986 did that. Alternatively,
the rights reserved were rights in respect of default, and included the
right to rescind. The letter was addressed to solicitors who would
have understood this.
1. E. Gallagher Q.c. (with him A. E. Lyons), for the respondent.

Any obligation upon Capalaba to register or produce a registrable
lease was an open one in respect of which time was not of the
essence: Louinder v. Leis (9). Before it could terminate, the lessee
(I) (1951) 83 C.L.R. 322, at (5) (1982) 149 C.L.R. 509, at

pp. 339-340. p.527.
(2) (1953) 89 C.L.R. 327, at (6) (975) 132 C.L.R. 289, at
pp. 351-352. p.296.
(3) (1982) 149 C.L.R. 620, at (7) (1976) 12 A.L.R. 621, at p. 633.
pp. 625-626. (8) [1981)2 N.S.W.L.R. 117, at
(4) (1985) 157 C.L.R. 17, at pp. 33, p.133.
40. (9) (1982) 149 C.L.R., at pp. 520,
527.
626 HIGH COURT [1988-1989.
H. C.OF A. had to serve a notice to complete: Louinder v. Leis; Perri v.
19881989.
'-y-J Coolangatta Investments Pty. Ltd. (10); Green v. Sevin (11). The
LAURINDA mortgagee's consent was a condition going to title or conveyance:
PrY. LTD. Perri v. Coolangatta Investments Pty. Ltd. (12); Property and
V.
CAPALABA Bloodstock Ltd v. Emerton (13); Eastham (Inspector of Taxes) v.
PARK
SHOPPING
Leigh London and Provincial Properties Ltd. (14). The respondent
CENTRE did not evince an intention not to perfonn its obligations. [He
PrY. LTD. referred to Michael Realty Pty. Ltd. v. Carr (15).] Repudiation is a
serious matter which is not lightly to be inferred: Shevill v. Builders
Licensing Board (16); Spettabile Consorzio v. Northumberland Ship-
building Co. Ltd. (17). [He also referred to Decro- Wall International
S.A. v. Practitioners in Marketing Ltd. (18).] The letter of 21 August
1986 was inadequate as a notice making time of the essence because
it failed to allow a reasonable time for Capalaba to perfonn. [He
referred to Wendt v. Bruce (19).] It failed to draw attention to the
possibility of tennination for non-eompliance: Balog v. Crestani (20);
Lenneberg v. McGi" (21); Chapman v. Larrescy (22); O'Brien v.
Dawson (23).
D. F. Jackson Q.c., in reply. In detennining whether the time

fixed by the notice was reasonable, regard should be had to the
period that elapsed before the notice was given.
Cur. adv. vult.
1989, May 2. The following written judgments were delivered:-

MASON c.J. The question raised by this appeal is whether the
first appellant ("Laurinda'') was entitled to tenninate for breach an
agreement for lease between itself as intending lessee and the
respondent ("Capalaba") as intending lessor. The agreement was
constituted by a deed dated 31 October 1985 between Capalaba
(described as "the lessor"), Laurinda (described as "the lessee") and
the second appellants (described as "the guarantor"). The deed
recited that Capalaba proposed to construct, or was constructing, a
retail centre in accordance with plans and specifications and that
(10) (1982) 149 c.L.R. 537. (18) 11971J I W.L.R. 361, at p. 380.
(11) (1879) 13 Ch. D. 589. (19) (1931) 45 C.L.R. 245.
(12) (1982) 149 C.L.R., at p. 551. (20) (1975) 132 C.L.R. 289.
(13) [1968J Ch. 94. (21) (1919) 19 S.R. (N.S.W.) 83.
(14) [1971J Ch. 871. (22) (1978)1 N.S.W.L.R. 592.
(15) 11977) I N.S.W.L.R. 553. (23) (1941) 41 S.R. (N.S.W.) 295, at
(16) (1982) 149 C.L.R., at p. 633. p.304.
(17) (1919) 121 L.T. 628, at
pp. 634-635.
166 C.L.R.] OF AUSTRALIA. 627
Capalaba had agreed to grant and Laurinda had agreed to take a H. C.OF A.
1988-1989.
lease of shop 79 in the centre, the demised premises being '-...-'
designated on a plan annexed to the deed. LAURINDA
J>rv. LTD.
Clause 6.1 of the deed provided that Capalaba would grant and V.
Laurinda would accept a lease of the demised premises for the term CAPALABA
PARK
and with and subject to the covenants and provisions set forth in SHOPPING
the fonn of lease being annexure "B" to the deed. Annexure "B" CENTRE
specified a term of six years but it did not specify the dates of J>rv. LTD.
commencement and termination, which were left blank, as indeed MasoneJ.

were other particulars in the fonn of lease such as the annual rental
and the monthly instalments of rental. The deed itself made
provision for ascertaining the date of commencement of the lease
which, as events transpired, was 1 December 1985.
Clause 6.2 provided:
"The Lease and two counterparts thereof shall con-
temporaneously with the execution hereof be executed by
the Lessee and delivered to the solicitors for the. Lessor
Messrs. Flower & Hart AND the Lessee hereby irrevocably
authorises empowers and directs such solicitors upon the date
of commencement of the Lease pursuant to Clause 6.1 hereof
or so soon thereafter as is practicable to complete the Lease
by-
(a) inserting therein the said date of cOmmencement and the
date of termination;
(b) inserting therein a plan.of the Demised Premises in a fonn
acceptable to the office of the Registrar of Titles (such plan to
be prepared by the Architect or a surveyor appointed by the
Lessor) and delineating the Demised Premises in red on such
plan;
(c) inserting therein the yearly rental and the monthly
instalments thereof calculated in accordance with Clause 16
hereof;
(d) any necessary formal matters or description of the Land or
the Demised Premises or references to dealing or plan numbers;
(e) inserting therein the date thereof; and
(1) signing the Lease correct for the purpose of registration on
behalf of the Lessee.
"
"The Lessee shall pay to the Lessor upon demand all legal costs
and all other costs disbursements and expenses of and
incidental to the preparation execution and stamping of these
presents (including the Schedules and annexures hereto) and all
stamp duties and taxes hereon together with the Lessor's costs
of and incidental to the preparation of the plan referred to in
Clause 6.2(b) hereof."
"The obligations of the Lessor and the Lessee are not
628 HIGH COURT [1988-1989.
H. C. OF A. conditional or in any way dependent upon the preparation and
1988-1989. execution of the Lease and are not affected by any default or
'---,.--'
delay in or waiver or extension of time for the preparation and
LAURINDA
PrY. LTD.
execution of the Lease, but despite the non-eompletion of the
V. Lease, from and after the date of commencement and
CAPALABA throughout the term of the Lease, the Lessor will be bound to
PARK perform all its obligations and the Lessee will be bound to
SHOPPING
CENTRE
perform all its obligations in each case as set out in this Deed
PrY. LTD. and the Lease."
Mason C.J.
The deed acknowledgc;d that Capalaba could mortgage or charge
the land and Laurinda agreed to accept and be bound by the terms
and conditions of any necessary consent to the lease by the
mortgagee or chargee (cl. 10). The deed incorporated a guarantee by
the second appellants of performance by Laurinda of the terms,
covenants and conditions on its part under the deed (d. 13.1) and it
was made a condition precedent to Capalaba's obligation to grant
the lease that the second appellants should execute and deliver a
guarantee of the performance by Laurinda of its obligations under
the lease (d. 13.2). Such a guarantee was executed and delivered.
On or about. the date of execution of the deed, Capalaba and
Laurinda executed a lease which also contained a number of blanks,
namely the commencement and termination dates and the amounts
of the annual and monthly rental. The lease did not incorporate a
sketch plan delineating the demised premises in red, as contemplated
by d. 6.2 of the deed. The lease provided that such a sketch plan so
delineating the demised premises was to be annexed, but it was not
made an annexure.
Laurinda entered into possession of shop 79 on or before 3
December 1985 and continued thereafter to carry on business there.
Laurinda paid to Capalaba the rental provided for by the deed and
the lease. On 3 January 1986 Laurinda paid $2,317 to Capalaba's
solicitors pursuant to d. 15.1 of the deed. It may be that the
payment was also made with an eye to cl. 1.55 of the executed form
of lease. That dause, which partly mirrored d. 15.1 of the deed,
contained a wider description of the work for which Laurinda was
to bear the burden of costs. For example, d. 1.55 mentioned the
negotiation and registration of the lease, the obtaining of any
necessary consent to the lease from the local authority or mortgagee
of the land and the stamp duty and registration fees payable on the
lease and any counterpart, as well as other costs, charges and
expenses.
Laurinda remained in occupation of shop 79 until 5 September
1986 when it vacated the premises and the appellants purported to
rescind the agreement for lease on the ground that Capalaba had
repudiated the agreement or was in breach of essential conditions of
that agreement as a result of Capalaba's failure to register the lease H. C. OF A.
19881989.
or to deliver a lease in registrable form. Capalaba treated the "---.---'
appellants' rescission as a wrongful repudiation of the agreement. LAURINDA
I>rY. LTD.
On 3 October 1986 Capalaba re-entered the premises, the appellants v.
having ceased to pay rent in respect of the premises. CAPALABA
PARK
The blanks in the executed form of lease had not been filled in by SHOPPING
the solicitors for Capalaba by 3 October 1986 and so it was CENTRE
incapable of operating as a lease. In January 1987, after Laurinda PrY. LTD.

had commenced the proceedings which have given rise to this Masone.J.
appeal, Capalaba's solicitors filled in the blanks. However, the
solicitors did not incorporate in the lease the sketch plan identifying
the demised premises. In the result the filling in of the blanks did
not convert the document into an effective lease. So much is now
common ground between the parties.
On 31 October 1986 the appellants commenced an action inter
alia for a declaration that "the Lease dated in or about October
1985" had been validly determined by Laurinda on or about 5
September 1986, an order for the return of the sum of $2,317,
damages and interest. The appellants claimed that it was a term of
the deed that Capalaba would grant and complete the lease by the
date on which Laurinda opened shop 79 for business and that
Capalaba failed to comply with this term of the deed. The
appellants also claimed that it was a term of the agreement for lease
that Capalaba would expeditiously procure the registration of the
lease or, alternatively, procure registration of it within a reasonable
time and that Capalaba had failed to comply with this term of the
agreement.
By its defence Capalaba disputed that the terms alleged by the
appellants were terms of the deed or of any agreement for lease.
And Capalaba denied that it was guilty of any unreasonable delay
in completing the transaction. Capalaba contended that the
appellants' rescission was no more than a wrongful repudiation, that
Laurinda owed $3,318.22 by way of unpaid rent from 1 September
1986, that this amount had not been paid by Laurinda or the
second appellants and that it was entitled as against the first and
second appellants to payment of that amount, damages and interest.
Other issues arose on the pleadings. However, having regard to the
points argued in this Court, I need not refer to them or to the
conclusions reached by the courts below in relation to them.
At trial Connolly J. concluded that the subject-matter of the
contract contained in the deed was a lease capable of registration
under the Real Property Act 1861 (Q.). Connolly J. also concluded
that it was the obligation of Capalaba at least to bring into existence
a lease in registrable form. The performance of this obligation
630 HIGH COURT [1988-1989.
H.C.OF A. entailed the production of the executed forms of lease to its
1988]989.
'-y---' solicitors to enable them to complete the form on the date of
LAURINDA commencement, namely 1 December 1985, or so soon thereafter as
PrY. LTD. was practicable. At all material times the executed forms of lease
v.
CAPALABA were in Melbourne. But there was no reason why they could not
PARK
SHOPPING
have been made available to the solicitors had Capalaba decided to
CENTRE make them available. Moreover, Connolly J. considered that, in
PrY. LTD. order to produce a lease in registrable form, Capalaba required the
Mason c.J. consent of the mortgagee. Indeed, the form of lease annexed to the
Deed contained a form of consent to the lease by Citicorp Australia
Ltd., the mortgagee of the land. Again Capalaba could have
obtained the consent of the mortgagee promptly had it chosen to do
so. In addition to finding that there was an express obligation to
bring into existence a lease in registrable form, Connolly J. was
disposed to find that there was an implied obligation to do so.
His Honour then proceeded to determine the issue of repudiation
in favour of the appellants. He found that a reasonable time had
expired long before September 1986. He reviewed the correspon-
dence between the solicitors for the parties and the oral evidence.
He rejected the appellants' contention that a letter dated 21 August
1986 from their solicitors to Capalaba's solicitors constituted a
notice requiring performance which entitled the appellants to
rescind without more when performance did not take place as
required. However, his Honour found that Capalaba was not
prepared to complete the agreement by delivering a lease in
registrable form until it suited Capalaba to do so. Capalaba was
contemplating a reorganization of its finances with the possibility
that the existing mortgage might be paid out and a new mortgage
substituted. Capalaba's solicitors considered that considerable work
and expense might be involved if a fresh mortgage were to be
substituted when leases of the shops in the Centre were already
registered. Capalaba's non-performance in this situation, in his
Honour's view, amounted to repudiation entitling the appellants to
terminate the agreement.
Connolly J. therefore declared that the agreement for lease was
validly determined by Laurinda on or about 5 September 1986 and
gave judgment for Laurinda for $2,152.25, being the amount of
costs paid by Laurinda less an amount which was refunded, and
judgment for the appellants on the counterclaim. Capalaba was
ordered to pay the costs of the action and counterclaim.
On appeal the Full Court (Matthews, Carter and Dowsett 11.)
came to a different conclusion. They thought that, because the term
of the contract on which the decision depended (cl. 6.1 of the deed)
was a promissory condition, the appellants, as the parties requiring
performance, were bound, in the circumstances of the case, to give H.C. OF A.

1988-1989.
an effective notice stating that in the event that the delay continued '-.r-J
they would no longer be bound by the agreement. In their Honours' LAURINDA
PrY. LTD.
view, the letter of 21 August 1986 was not such a notice. They V.
pointed out that the trial judge had found that Capalaba had no CAPALABA
PARK
intention of denying registered leases to lessees of shops in the SHOPPING
shopping centre. The Full Court inferred that this finding must be CENTRE
taken to apply to Laurinda as the lessee of shop 79. Moreover, they PIT. LTD.
noted that it could be inferred that Capalaba, which had MasonC.J.

experienced difficulty in securing tenants, was anxious to maintain
such tenancies as it had of shops in the Centre. In the result the
Full Court allowed the appeal with costs, set aside the declaration
and orders made at the trial and ordered that judgment be entered
for Capalaba for such sums by way of damages or other sums owing
as might be assessed by the Master.
In this Court it was common ground between the parties that the
deed required Capalaba to register the lease or, if not, to deliver a
registrable lease to Laurinda. It seems to have been assumed that
cl. 6.1 of the deed created this obligation, though Capalaba did not
actually identify the precise source of the obligation. The obligation
to grant a lease created by cl. 6.1 carries with it an obligation to
deliver a lease in registrable form. But, absent other circumstances,
the clause would not require Capalaba to register the lease. The
notion that Capalaba was bound to register the lease arises from
cl. 1.55 of the form of lease which required Laurinda to pay the
costs of registration and, as I have already mentioned, from the fact
that Laurinda paid $2,317 to Capalaba on 3 January 1986. The
appellants assert that the payment covered the costs of registration
of the lease. This assertion is not denied by Capalaba. Any
obligation on Capalaba to register the lease was an equitable
obligation arising from the form of lease itself rather than from the
agreement for lease constituted by the deed.
Clause 6.2 contemplated that Capalaba's solicitors would fill in
the blanks in the executed form of lease upon the date of
commencement of the lease (l December 1985) or so soon
thereafter as was practicable. It was not suggested that the
solicitors' authority to fill in the blanks in the lease terminated at
some time after it became practicable to complete the lease, though
I have some difficulty in reading the clause as conferring an
authority on the solicitors which continued indefinitely whilst the
agreement remained on foot. That, however, is not how the parties
seem to have treated the clause. In these circumstances the presence
of cl. 6.2 throws little, if any, light on the time within which
Capalaba was obliged to perform the obligation now in question.
632 HIGH COURT [1988-1989.
H.C.OF A. Clause 15.7 has more significance. The first part of the clause
1988-1989.
'-,--' specifically provides that the obligations of Capalaba and Laurinda
LAURINDA (a) are not conditional or in any way dependent upon the
PrY. LTD.
V.
preparation and execution of the lease and (b) are not affected by
CAPALABA any default or delay in the preparation and execution of the lease.
PARK
SHOPPING
The second part of the clause provides that, despite non-eompletion
CENTRE of the lease, from and after the date of commencement and
PrY. LTD. throughout the term of the lease, each party will be bound to
Mason C.J. perform all its obligations in the deed and the lease. The effect of
the provision referred to as (b) above is that the obligations of
Laurinda under the deed continue unaffected, notwithstanding any
delay on the part of Capalaba in preparing or executing the lease.
The second part of the clause plainly imports that non-eompletion
of the lease is not in itself a legitimate ground or justification for
Capalaba or Laurinda refusing to perform its obligations under the
deed or the lease. Laurinda submits that those obligations
necessarily include the obligations imposed on Capalaba by cl. 6
which, according to the argument, extend to the registration of the
lease or at least the delivery of a registrable lease. But the
obligations mentioned in the second part of cl. 15.7, which were to
continue to bind the parties, are those which bind the parties in
their character as lessor and lessee respectively. They do not include
the obligation to complete the lease (which extends to the delivery
of a registrable lease) under cl. 6. As the object of the provision is to
ensure that the lessor-lessee relationship between the parties is to
continue to subsist for such time as the lease remains uncompleted,
the provision does not incorporate in the obligations to which it
refers the obligation to complete the lease. The word "non-
completion" is not defined and there is no basis for confming it or,
for that matter, "delay" in the first part of the clause, to
circumstances beyond the control of Capalaba. Indeed, it may be
that the second part of cl. 15.7 was inserted in the deed with a view
to preserving to Capalaba some flexibility in completing the formal
lease. Be that as it may, cl. 15.7 recognized that, notwithstanding
non-eompletion, the agreement constituted by the deed continued to
be binding so as to create an equitable lease, the agreement being
capable of specific performance: York House Pty. Ltd. v. Federal
Commissioner of Taxation (24); see also Moore v. Dimond (25).
However, it is necessary to read ell. 6 and 15.7 together. When
the two clauses are read together, it would not be legitimate to read
cl. 15.7 as conferring an option on Capalaba to dispense with the
(24) (1930) 43 C.L.R. 427, at (25) (1929) 43 C.L.R. 105, at

pp. 435-436, 439. pp. 123-124.
completion of the lease. In other words, the obligation to complete H.C. OF A.
1988-1989.
the lease under cI. 6 remains, thouih no time for completion is L.-,-'
fixed. Mere delay on the part of Capalaba in performing a non- LAURINDA
PrY. LTD.
essential contractual obligation cannot justify a refusal by Laurinda V.
to perform its obligations. Something more - whether it be conduct CAPALABA
PARK
amounting to a clear repudiation by Capalaba of the requirement to SHOPPING
complete or failure to comply with a valid notice given by Laurinda CENTRE
PrY. LTD.
fixing a time for completion and making time of the essence in that
respect - would be required. MasoneJ.
This conclusion disposes of any suggestion that Capalaba's failure
to register the lease or to deliver a registrable lease was a breach of
an essential condition of the agreement constituted by the deed. The
deed did not make time of the essence in any relevant respect. Nor
did the deed fix a time within which registration or delivery of the
lease was to take place. On the contrary, as I have explained, the
deed contemplated that Laurinda's obligations would continue to
subsist despite any delay in completion of the lease.
The appellants' principal submission is that Capalaba's conduct
amounted to a repudiation of the agreement entitling Laurinda to
treat the agreement as at an end. The appellants submit that
Connolly J. was correct in holding that Capalaba's failure to
procure registration or deliver a registrable lease demonstrated that
Capalaba was not prepared to carry out its part of the agreement
until it suited it.
It is evident that Connolly J., in reaching his conclusion upon
this point, had in mind the observations of Fullagar J. in Carr v.
J. A. Berriman Pty. Ltd. (26) where his Honour said with reference
to the facts of that case:
"It is in this state of affairs that the building owner announces
that he has engaged another contractor to carry out a large
part of the work comprised in the contract. A reasonable man
could hardly draw any other inference than that the building
owner does not intend to take the contract seriously, that he is
prepared to carry out his part of the contract only if and when
it suits him."
Fullagar J. went on to say that the intention evinced was "an
intention not to be bound by the ,contract" and that, upon that
intention being shown to exist, the other party was entitled to treat
the contract as at an end (27). What his Honour said in this respect
accords with later statements upon the topic by members of this
(26) (1953) 89 C.L.R. 327, at (27) (1953) 89 C.L.R., at pp. 351-

p. 351. 352.
634 HIGH COURT [1988-1989.
H. C.OF A. Court. In Shevill v. Builders Licensing Board (28), Gibbs C.l. stated
1988-1989.
'-r-' that:
LAURINDA ". .. a contract may be repudiated if one party renounces his
PTY. LTD. liabilities under it - if he evinces an intention no longer to be
V.
CAPALABA
bound by the contract ... or shows that he intends to fulfil the
PARK contract only in a manner substantially inconsistent with his
SHOPPING obligations and not in any other way ..."
CENTRE
PrY. LTD. See also Progressive Mailing House Pty. Ltd. v. Tabali Pty.
Ltd. (29).
Masone.J.
There is a difference between evincing an intention to carry out a
contract only if and when it suits the party to do so and evincing an
intention to carry out a contract as and when it suits the party to do
so. In the first case the party intends not to carry out the contract at
all in the event that it does not suit him. In the second case the
party intends to carry olit the contract, but only to carry it out as
and when it suits him. It is much easier to say of the first than of
the second case that the party has evinced an intention no longer to
be bound by the contract or to fulfil it only in a manner
substantially inconsistent with his obligations and riot in any other
way. But the outcome in the second case will depend upon its
particular circumstances, including the terms of the contract. In
some situations the intention to carry out the contract as and when
it suits the party may be taken to such lengths that it amounts to an
intention to fulfil the contract only in a manner substantially
inconsistent with the party's obligations and not in any other way.
It is necessary to review the correspondence. On 28 November
1985 Capalaba's solicitors infonned Laurinda's solicitors that the
deed and the lease had been executed and would be sent shortly by
Capalaba to its solicitors. On 14 March 1986 a finn of accountants
who appear to have been acting for all the appellants requested
Capalaba's solicitors "to forward a copy of the above lease at your
earliest opportunity". The letter continued:
"They consider that four months is a reasonable time for you
to have complied with their request particularly as they were
under pressure by you to execute the lease without adequate
time to study the provisions of such lease."
It seems to have been assumed in the courts below that this was a
request for the delivery of a registrable lease pursuant to Capalaba's
obligation under cl. 6 of the deed. I do not read the letter in this
way. The request was not that the lease be registered or that a
registrable lease be delivered. The tenns of the letter suggest that a
request of a like nature to that made on 14 March 1986 had been
(28) (1982) 149 C.L.R. 620, at (29) (1985) 157C.L.R. 17, at
pp. 625-626. pp. 33,40.
166 C.L.R.) OF AUSTRALIA. 635
made four months earlier. Perhaps the letter of 28 November 1985 H.C. OF A.
1988-1989.
was sent in response to such a request. However, the fact that the '----r--'
letter of 14 March was not sent by the appellants' solicitors lends LAURINDA
some additional force to the notion that this letter called for a copy I'rY. LTD.
lI.
of the documentation rather than a performance by Capalaba of its CAPALABA
PARK
obligation to register the lease or deliver a registrable lease. Be that SHOPPING
as it may, the letter of 14 March assumes that the lease CENTRE
I'rY. LTD.
documentation has been completed and asserts that a reasonable
time has already elapsed for the delivery of a copy of the lease. Mason c.J.
Capalaba's solicitors replied on 25 March 1986 in these terms:
"The lease documents were forwarded to Melbourne for
execution by the Lessor in October last year. They have not
been returned. However, we have been advised that they have
been executed by the Lessor. We expect that they will be
returned in the not too distant future. We will provide your
client with its stamped parts of the documents as soon as we
are able to."
At about this time Laurinda was seeking a buyer for the business
which it was conducting on the leased premises. On 21 April 1986
the manager of the shopping centre acknowledged that it had
received advice to this effect and warned that the approval of
Capalaba was required before an assignment could be made and
that Laurinda would remain responsible for the payment of rent
and outgoings in the. event that it vacated the premises until the
premises were re-let.
Subsequently on 21 August 1986 the appellants' solicitors wrote
to Capalaba's solicitors. After stating that the appellants were
concerned that the lease had not been registered despite the fact
that the documentation had been executed and should have been
completed over ten months before, the letter continued:
"It is clearly of critical importance to our clients that the
Lease be registered immediately to safeguard their rights of
tenure.
To that end our clients have already paid to your firm on
6th January this year sufficient funds to allow registration of
the Lease to be effected by your client.
In such circumstances, and in view of the unexplained and
lengthy delay, it appears reasonable that our clients require
your client to complete registration within fourteen days from
the date hereof.
If the registration is not completed within that time then our
clients naturally reserve their rights in respect of your client's
default."
Capalaba's solicitors responded by letter dated 3 September 1986
stating merely that they had referred the letter of 21 August to
Capalaba for its instructions which would be communicated as soon
636 HIGH COURT [1988-1989.
H. C.OF A. as they were received. It appears that even at this stage Capalaba
1988-1989.
'-.--' had taken no steps to obtain the mortgagee's consent to the lease, to
LAURINDA complete the lease in accordance with cl. 6 or to make arrange-
PTY. LTD.
v.
ments for stamping the lease.
CAPALABA The correspondence culminated in the letter dated 5
PARK
SHOPPING
September 1986 from the appellants' solicitors to Capalaba's
CENTRE solicitors which asserted:
PrY. LTD.
"In the circumstances, this failure to respond adequately in the
Masone.J. time limit by our letter of 21st August 1986 can only be
treated as a repudiation of the implied undertaking by your
client to secure registration of the lease within a reasonable
period."
The letter went on to advise that the appellants no longer regarded
themselves as bound by the lease and guarantee with the
consequence that the. relationship between the parties was at an
end.
If for the moment we put to one side the question whether the
letter of 21 August 1986 validly fixed a time for registration of the
lease, this correspondence demonstrates an attitude on the part of
Capalaba which was not only dilatory but also cavalier and
recalcitrant. Capalaba was remiss in failing to respond in a more
positive way to the appellants' requests, especially after the letter of
21 August. More than that, Capalaba's solicitors had on two
occasions made incorrect statements about the progress of the
matter. There was the incorrect statement in the letter of 28
November 1985 that the lease had been executed and would be sent
"shortly". Then there was the statement in the letter of 25 March
1986 that the lease documents would be returned by Capalaba to its
solicitors "in the not too distant future" and that the stamped parts
of its documents would be provided to Laurinda "as soon as we are
able to". Moreover, in the face of the letter of 21 August 1986,
Capalaba's solicitors only say on 3 September that they have
referred the letter for instructions. And this correspondence needs to
be read in the light of Capalaba's failure to take steps to obtain the
mortgagee's consent to the lease, to complete the lease in
accordance with cl. 6.2 and to make arrangements for stamping the
lease. Although the matter is finely balanced, the unjustified delay
on the part of Capalaba between March and 3 September 1986,
accompanied by incorrect statements and unfulfilled assurances
sustained the inference of repudiation drawn by Connolly J. Based
on Capalaba's unwillingness to deliver a registrable lease to
Laurinda, it seems to me that Capalaba's intention was only to
perform the contract in a manner substantially inconsistent with its
obligations, such as would allow Laurinda to treat Capalaba as H. C. OF A.

1988-1989.
having repudiated the contract. '-y---'
The Full Court appears to have reached the opposite conclusion LAURINDA
PrY. LTD.
on the footing that the case against Capalaba amounted to no more v.
than a case of delay and that mere delay is never a sufficient CAPALABA
PARK
foundation for inferring an intention to repudiate. Whether the SHOPPING
statement that mere delay can never support an inference of CENTRE
PrY. LTD.
intention to repudiate can be sustained as a universal proposition
may be put to one side because cl. 15.7 specifically deals with the Mason CJ.
situation in this case. However, the short answer to the approach
taken by the Full Court is that the circumstances, as I have
outlined, amount to more than a case of mere delay. Capalaba's
delay was accompanied, as Connolly J. found, by an intention not
to complete the contract until it suited it.
Although my conclusion on the issue of repudiation makes it
unnecessary to deal with the appellants' submission that the letter of
21 August validly fixed a time within which Capalaba was bound to
complete the agreement by registering the lease, it is as well that I
should deal with the question in view of its general importance.
Capalaba does not now dispute that there had been unreasonable or
unnecessary delay on its part in completing the agreement before 21
August 1986 such as would entitle Laurinda to give notice to
complete, fixing a reasonable time within which completion was to
take place: see Louinder v. Leis (30); Green v. Sevin (31); Smith v.
Hamilton (32). But Capalaba submits that the notice given on 21
August was defective because it failed to notify Capalaba that in the
event of non-eompliance the appellants would treat the agreement
as at an end and because the time limited for completion was not
reasonable.
The first point, found against the appellants by the Full Court
and Connolly J., was discussed by Gibbs J. in Balog v.
Crestani (33). There his Honour pointed out (34) that the authorities
that relate to contracts for the sale of land:
"... very strongly suggest, even if few of them actually decide,
that to be effective the notice requiring performance must
inform the party to whom it is given that the party giving it
will treat the contract as at an end if the notice is not complied
with."
Later his Honour went on to say (35):
"Today, when adherence to form is not generally much
(30) (1982) 149 C.L.R. 509. (33) (1975) 132 C.L.R. 289, at
(31) (1879) 13 Ch. D. 589. pp. 296300.
(32) [1951] Ch. 17 t. (34) (1975) 132 C.L.R., at p. 296.
(35) (1975) 132 C.L.R., at p. 298.
638 HIGH COURT [1988-1989.
H. C. OF A. esteemed, it may be thought that it ought to be enough that a
1988-1989. party requires performance within a specified reasonable time,
'-.--'
and indicates that he will rely on his rights if the other party
LAURINDA
PrY. LTD.
fails to comply with his requirement, although a prudent
V. solicitor may prefer to use the accepted formula rather than
CAPALABA face the prospect of litigation."
PARK
SHOPPING For my part I agree with the suggestion made by Gibbs J. that it
CENTRE
is not necessary that the notice should state that the party will treat
PrY. LTD.
the contract as at an end in the event of non-compliance with the
Mason C.J. requirement stated in the notice and that it is sufficient if the notice
indicates that the party giving it may choose to rely on his rights in
that event. However, the notice must convey a definite and specific
intent to require strict compliance with the terms of the contract
within a reasonable time, so that the recipient will be made aware
that the party giving the notice may elect to treat the contract as at
an end at the conclusion of such reasonable time unless compliance
is forthcoming. In the present case Capalaba was aware that
Laurinda wished to dispose of its business and regarded the matter
as urgent. The surrounding circumstances were not only sufficient
to found an inference of repudiation by Capalaba in the face of the
demands of Laurinda; they are also clearly capable of demonstrating
that, given the expiry of a reasonable period, Laurinda would regard
the contract as at an end. In these circumstances, it can scarcely be
suggested that the notice did not alert Capalaba to the possibility
that non-compliance might result in termination of the contract.
Accordingly, I would not hold that the notice given on 21 August
was ineffective on this ground.
I turn now to the question whether the time limited by the notice
was reasonable. The time limited was thirteen days because the
notice was not received until 22 August. In judging whether the
time allowed was reasonable the Court must consider all the
circumstances of the case, including any unnecessary delay on the
part of the party to whom the notice is given before it is given:
Stickney v. Keeble (36). There Lord Parker of Waddington
observed (37):
"In considering whether the time so limited is a reasonable time
the Court will consider all the circumstances of the case. No
doubt what remains to be done at the date of the notice is of
importance, but it is by no means the only relevant fact. The
fact that the purchaser has continually been pressing for
completion, or has before given similar notices which he has
waived, or that it is specially important to him to obtain early
completion, are equally relevant facts ... It would be unjust
and inequitable to allow the vendor to put forward his own
(36) (1915] A.C. 386. (37) [1915) A.c., at p. 419.

unnecessary delay in the face of the purchaser's frequent H. C.OF A.
requests for expedition as a ground for allowing him further 1988-1989.
time or as rendering the time limited by such a notice as that to ..............
LAURINDA
which I have referred an unreasonable time." J>ry. LTD.
See also pp. 398, 415 and 426; Ajit v. Sammy (38). McMurray v. V.
CAPALABA
Spicer (39), which held that time before the service of a notice to PARK
complete is to be excluded in computing whether delay is a defence SHOPPING
CENTRE
to a suit for specific performance of a contract for sale of land (40) J>ry. LTD.
has no application to the computation of what is a reasonable time
Masone.J.
for completion for the purposes of a notice to complete. In saying
this I am not to be taken as necessarily endorsing what was said in
McMurray v. Spicer.
The notice to complete rested the right of the appellants to
rescind the contract upon Capalaba's failure to secure registration.
The adequacy of the time limited by the notice must be considered
in that light. On the view which I have expressed earlier as to the
effect of the letter of 14 March 1986, there is no clear evidence that
the appellants were pressing Capalaba before 21 August 1986 to
complete performance of the agreement and the notice given that
day constitutes the first express demand made by the appellants for
performance of the agreement in the relevant respect. In computing
the reasonableness of the time limited by that notice it is relevant to
take account of the time which Capalaba already had to complete
performance of the agreement but it is necessary to bear in mind
that there was no explicit pressure from the appellants during that
time to do so. The appellants had pressed without success for
completion pursuant to cl. 6, but this was a demand of a more
limited nature.
Capalaba called evidence from Mr. Lockhart, a solicitor, with a
view to establishing that the time limited was inadequate for the
purpose of having the lease stamped and registered. Mr. Lockhart
stated that in his experience it would be unlikely that a shopping
centre lease would be stamped and registered within fourteen days,
though he agreed that documents could be stamped and registered
on an urgent basis.
On this point Connolly J. said:
"... I am far from persuaded that the contract could not have
been stamped, endorsed with the mortgagee's consent and
tendered within the 14 days limited. It must be remembered
that when this notice was given, those advising the first
plaintiff [Laurinda] could have had no knowledge that the lease
had not been completed by the defendant's solicitors before it
(38) [1967]1 A.C. 255, at p. 258. (40) (1868) L.R. 5 Eq., at pp. 537-
(39) (1868) L.R. 5 Eq. 527. 538.
640 HIGH COURT [1988-1989.
H. C. OF A. was despatched to Melbourne for execution by the defendant.
19881989. That completion was, as has been seen, a purely mechanical
C-.,---'
exercise. Nor had the first plaintiffs advisers any way of
LAURINDA
PTY. LTD. knowing that the consent of the mortgagee, though freely
V. available, had not been obtained. Nor had they been told that
CAPALABA the contract, although executed, had not been stamped,
PARK although they might have conjectured as much from the fact
SHOPPING
CENTRE
that it had not been brought, in its fully executed form, into
PTY. LTD. Queensland."
Masone,).
The problem with his Honour's approach, viewed from the
appellants' standpoint, is that the onus must rest with the party
giving the notice of showing that the time limited by the notice is
reasonable judged as at the time the notice is given. Consequently,
the primary judge's observations do not amount to a finding that
the time fixed by the notice was reasonable.
The question is one of fact and it falls to be determined by
reference to evidence which, as one might expect on an issue of this
kind, is rather indefinite. However, the evidence of Mr. Lockhart is
sufficient to raise a serious doubt in my mind as to the prospect of
having the lease stamped and lodged for registration within the
period of thirteen days limited by the notice. Of course this is not a
decisive consideration because it is relevant to have regard to the
opportunity which Capalaba had to attend to these matters before
the notice was given.
In Sindel v. Georgiou (41) the Court said:
"Although in Ajit v. Sammy ... the Privy Council held that
a six day notice to complete was reasonable in the circum-
stances of that case, it is our view that strong circumstances
must be shown to justify the giving of a notice to complete
which allows less than fourteen days for completion."
In my view, no such circumstances have been shown to be present
in this case. The time allowed by the notice was therefore
insufficient.
But there is strictly no need to decide this point. The finding of
repudiation by Capalaba necessitates the allowing of the appeal and
the restoration of the orders of Connolly J.
BRENNAN J. The Chief Justice has set out the facts and identified
the relevant provisions of the agreement for lease between the first
appellant ("Laurinda', as lessee and the respondent ("CapaIaba") as
lessor. Although Laurinda did all that was reasonably necessary on
its part towards obtaining a stamped and registered lease or a
(41) (1984) 154 C.L.R. 661, at p. 670.

stamped lease in registrable form and although Capalaba had had a H.C. OF A.
1988-1989.
reasonable time in which to stamp and to procure registration of the '--r-'
lease or in which to deliver to Laurinda a stamped and registrable LAURINDA
Pry. LTD.
lease, Capalaba failed to do so. It was common ground that V.
Laurinda had purportedly rescinded the agreement on the ground of CAPALABA
PARK
Capalaba's failure. Two questions arise: (1) was Capalaba's failure a SHOPPING
breach of a term of the agreement for lease? if so, (2) was it a breach CENTRE
pry. LTD.
which entitled Laurinda to rescind?
Brennan J.
The terms ofthe contract
On the appeal, it was conceded that Capalaba was under an
implied obligation "to effect registration and to effect it within a
reasonable time". A covenant by a registered proprietor of land
under the Real Property Act 1861 (Q.) to grant a lease of the land
for a term exceeding three years is not performed until an
appropriate instrument of lease is registered: see ss. 43 and 52 and
cf. the Real Property Act 1877 (Q.), s. 18. Though the intending
lessee be put into possession under an agreement for lease, he has
no legal title to the agreed term until an appropriate instrument of
lease is registered: see Taylor v. Land Mortgage Bank of
Victoria (42); Ahem v. L. A. Wilkinson (Northern) Ltd. (43);
National Trustees, Executors and Agency Co. ofAustralasia Ltd. v.
Boyd (44). Therefore a covenant to grant a legal lease of such land
for a term exceeding three years necessarily implies that an
appropriate instrument of lease will be registered. Otherwise the
lessor would be unable to confer on the lessee the title to the
leasehold interest to which the lessee is entitled under the covenant.
The lessor's obligation comprehends at least the delivery to the
intending lessee of an appropriate instrument capable of registration
and, in my opinion, comprehends also the procuring of its
registration. The time to be implied for performance of the
intending lessor's obligation is a reasonable time: see Reid v.
Moreland Timber Co. Pty. Ltd. (45); Louinder v. Leis (46). Time
was not of the essence of Capalaba's implied promise to procure
registration of an appropriate instrument of a six-year lease from
Capalaba to Laurinda.
The right to rescind

A right in one party to rescind a contract will arise when the
(42) (1886) 12 V.L.R. 748, at (45) (1946) 73 C.L.R. 1, at p. 13.

p.755. (46) (1982) 149 C.L.R. 509, at
(43) [1929] St. R. Qd 66. p.530.
(44) (1926) 39 C.L.R. 72, at p. 82.
642 HIGH COURT (1988-1989.
H. C. OF A. other party repudiates a contract generally, but it may also arise
19881989.
'-.,---' when the other party repudiates a term of the contract. A right to
LAURINDA rescind depends on the importance of the term repudiated. Here, the
?IT. LTD.
V.
subject of the agreement was the granting of a legal lease for a term
CAPALABA of six years. The implied promise by Capalaba to procure
PARK
SHOPPING
registration of an appropriate instrument was thus at the heart of
CENTRE the agreement. It was a promise of such importance to the promisee
?IT. LTD.
that it would not have entered into the contract unless it had been
Brennan J. assured of substantial performance and this ought to have been
apparent to the promisor. It answered the criterion of an essential
promise in the sense that an outright repudiation of the promise
would have entitled Laurinda to rescind. The criterion of an
essential promise which I have stated in terms relevant to the
present case is derived from the criterion expressed by Jordan C.l.
in Tramways Advertising Pty. Ltd. v. Luna Park (NS. w:) Ltd. (47)
and frequently adopted in this Court, most recently in Ankar Pty.
Ltd. v. National Westminster Finance (Australia) Ltd. (48), but I
have modified it by using the term "substantial performance" rather
than the usual formula of "a strict or a substantial performance".
The modification is necessary when, no day for performance being
stipulated and the subject matter of the promise not being such as
to require strictly timeous performance, time is not of the essence of
the promise either in law or in equity: Canning v. Temby (49);
Louinder v. Leis (50). When time is not of the essence, the promisee
must have been willing to enter into the contract without an
assurance that the promise would be performed strictly, albeit with
an assurance that the promise would be performed substantially.
Thus, Laurinda would not have been entitled either at law or in
equity to rescind the contract as soon as a reasonable time for
procuring registration had elapsed. As Griffith C.J. said in Canning
v. Temby (51):
"In one sense, of course, time is always of the essence of a
contract to be performed within a reasonable time. But that is
not the sense in which the term 'of the essence' is used."
Where an essential term - in the sense defined - is to be
performed within a reasonable time, there being no stipulated day
for performance, and that time passes without performance, the
innocent party does not acquire a right to rescind unless the
defaulting party repudiates or has repudiated his obligation to
(47) (1938) 38 S.R. (N.S.W.) 632, at (49) (1905) 3 C.L.R. 419, at p. 425.
pp. 641-642. (50) (1982) 149 C.L.R., at p. 533.
(48) (1987) 162 C.L.R. 549, at (51) (1905) 3 C.L.R., at p. 426.
p.556.
perform. Barwick c.J. and Jacobs J. observed in Neeta (Epping) H.C.OFA.
1988)989.
Pty. Ltd. v. Phillips (52): . '-....,--'
"Contracts for the sale of land, creating as they do equitable LAURINDA
interests in the land, do not easily go off except pursuant to an PrY. LTD.
v.
express condition of the contract or pursuant to an express CAPAlABA
repudiation or a repudiation clearly to be inferred." PARK
SHOPPING
The same observation may be applied to agreements for lease. More CENTRE
than a mere failure in timeous performance is necessary to warrant PrY. LTD.
an inference of repudiation, but delay may be so serious as to Brennan J.
amount to a refusal to perform and in such a case an innocent party
has a right to rescind: see De Soysa v. De Pless Pol (53); Holland v.
Wiltshire (54).
The difference between a contract which contains a stipulated
day for performance of an essential term and a contract which,
expressly or impliedly, requires performance within a reasonable
time is important when the question is whether, on failure to
perform within the time limited by the contract, the innocent party
is entitled to rescind. In the former case, a right to rescind arises at
law when the stipulated day passes; in the latter, that right does not
necessarily arise when the reasonable time expires but only when
repudiation is clearly to be inferred from the circumstances in which
the delay occurs. Delay will amount to repudiation if the defaulting
party "evinces an intention no longer to be bound by the contract
... or shows that he intends to fulfil the contract only in a manner
substantially inconsistent with his obligations and not in any other
way": Shevill v. Builders Licensing Board (55); Progressive Mailing
House Pty. Ltd. v. Tabali Pty. Ltd. (56). H the inference to be
drawn from the circumstances is that the defaulting party intends to
perform an essential promise after some minor delay, repudiation
cannot be inferred; but if the inference is that the defaulting party
intends so to delay performance that the promisee will be
substantially deprived of the benefit of the promise, repudiation can
be inferred. The inference is not lightly drawn: Progressive Mailing
House Pty. Ltd. v. Tabali Pty. Ltd. (57).
However, a reservation on the part of the promisor that he may
perform the promise if it suits his convenience to do so is not
inconsistent with repudiation of the contract or promise. Thus
(52) (1974) 131 C.L.R. 286, at (55) (1982) 149 C.L.R. 620, at
p.306. pp. 625-626.
(53) [1912] A.C. 194, at pp. 202- (56) (1985) 157 C.L.R. 17, at
203. pp. 33,4Q.
(54) (1954) 90 C.L.R. 409, at (57) (1985) 157 C.L.R., at p. 32.
p.420.
644 HIGH COURT (1988-1989.
H. C. OF A. Fullagar J. was able to say in Carr v. J. A. Berriman Pty. Ltd. (58):
1988-1989.
'-r--' "it is correct ... to say ... that a failure to remedy the breach
LAURINDA might continue so long and in such circumstances as to evince
PrY. LTD. an intention on the part of the building owner no longer to be
v. bound by the contract. In other words, the only legitimate
CAPALABA
PARK inference might be that he is saying: 'Not only have I broken
SHOPPING my contract by not doing the thing on the due day, but I am
CENTRE not going to do the thing at all', or 'I am not going to do the
PrY. LTD. thing at all unless and until I find it convenient to do if:'
Brennan J. When delay in performance is prolonged, the point at which
repudiation might be inferred is necessarily uncertain. The promisor
and promisee are likely to regard the circumstances differently. To
provide a firm foundation for the inference of repudiation, it is
prudent for the promisee to give a notice to complete. In Louinder
v. Leis (59), Mason J. said:
"Unreasonable delay in complying with the stipulation in
substance amounting to a repudiation is essential to justify
rescission. It is to this end that, following breach, the innocent
party gives notice fixing a reasonable time for performance of
the relevant contractual obligation. The result of non-eom-
pliance with the notice is that the party in default is guilty of
unreasonable delay in complying with a non-essential time
stipulation. The unreasonable delay amounts to a repudiation
and this justifies rescission."
That was said in reference to delay beyond a stipulated date. It does
not follow that delay beyond the stipulated reasonable time
necessarily amounts to repudiation. But if, the stipulated reasonable
time having elapsed, a notice to complete allowing a further
reasonable time is given, a failure to comply provides a firm
foundation for an inference of repudiation.
A right to rescind is one thing; fairness in the exercise of that
right is another. In some circumstances, equity asserts a jurisdiction
to restrain the exercise of a right to rescind. As I attempted to
explain in Louinder v. Leis (60), a notice to complete does not make
time of the essence of the contract when the contract itself does not
do so, but it is a step towards lifting an equitable restraint on the
exercise of a right to rescind which arises aliunde. Therefore, when
a contract requires performance of an essential promise within a
reasonable time and a valid notice to complete on or before a
specified day is given by the innocent party, the significance of the
notice is twofold: primarily, it fixes a day when, if the default is not
(58) (1953) 89 c.L.R. 327, at (60) (l982) 149 C.L.R., at pp. 532-
p.349. 536.
(59) (1982) 149 C.L.R., at p. 526.
remedied, the party in default will be held to have repudiated the H. C. OF A.
1988-1989_
promise; and, secondarily, it will show that, for equity's purposes, it '---r--'
is fair for the innocent party to exercise that right: see per Fry J. in LAURINDA
Green v. Sevin (61), and per Isaacs J. in Maynard v. Goode (62). PrY. LTD.
v.
Where a contract contains a promise to be performed within a CAPALABA
PARK
reasonable time, a notice to complete does not insert the time it SHOPPING
prescribes into the contract and make that time of the essence, but CENTRE
the notice is evidence which may support the inference of PIT. LTD.
repudiation, from which the innocent party's right to rescind arises Brennan J.
and it clears the way for the exercise of that right.
When a reasonable time is prescribed for performance of an
essential term of a contract, a notice to complete requiring
performance of that term by a specified day can be given only if the
party to whom it is given is already in breach of his contractual
obligation: Neeta (Epping) Pty. Ltd. v. Phillips (63). But it would be
futile to give a notice if, in the event of the default complained of
persisting beyond the time limited by the notice, repudiation were
not to be inferred from the circumstances then existing. Therefore,
in considering whether the time limited by a notice is reasonable in
such a case, it is necessary to consider whether an inference of
repudiation would be drawn from non-performance if that were to
persist beyond that time.
The Shopping Centre opened on I Decem~r 1985. That was the
C<?mmencing date of the term of the proposed lease. Capalaba's
solicitors had written on 28 November 1985 to advise that Capalaba
had executed the lease and a copy would be sent "shortly". On 3
January 1986 Laurinda paid to Capalaba's solicitors the costs of and
incidental to stamping and registration. On 14 March 1986
Laurinda asked for a copy of the lease and, by reply dated 25 March
1986, Capalaba's solicitors advised that the lease had been executed
by Capalaba, that the solicitors expected it to be returned "in the
not too distant future" and that they would provide Laurinda "with
its stamped parts of the documents as soon as we are able to". The
solicitors' expectation was not realized. Laurinda heard nothing
further from them, despite Capalaba's learning in April 1986 that
Laurinda wished to dispose of its business. Then the letter of 21
August 1986 required Capalaba "to complete registration within
fourteen days from the date hereof". The letter was delivered to
Capalaba's solicitors on 22 August. There was no evidence that
Laurinda had earlier demanded or been refused performance by
(61) (1879) 13 Ch. D. 589, at (62) (1926) 37 C.L.R. 529, at

p.599. p.538.
(63) (1974) 131 C.L.R., at p. 299.
646 HIGH COURT [1988-1989.
H. C. OF A. Capalaba of its obligation to stamp and register the lease. Laurinda
19881989.
'--y--J had been put into and left in peaceful possession of the premises.
LAURINDA Clause 15.7 of the agreement for lease kept the obligations of lessor
PrV. LTD.
V.
and lessee on foot despite any default or delay in the preparation or
CAPALABA execution of the lease. In these circumstances, delay in the stamping
PARK
SHOPPING
and registration of the lease long after a reasonable time has expired
CENTRE is not as indicative of repudiation as would be a delay in completing
PIT. LTD. a contract of sale of land. At the time when the letter of 21 August
Brennan J. 1986 was written, it could not reasonably have been inferred from
Capalaba's delay in stamping and registering the lease that it did not
intend to be bound by its promise to register the lease. Does its
failure to stamp and register within the fourteen days allowed by
the letter of 21 August tip the balance? The answer depends on
whether the letter was an effective notice to complete, and there
were two reasons advanced for holding that it was not.
The first found favour before the trial judge and before the Full
Court. Connolly J. held that the letter of 21 August was not an
effective notice to complete because it did not inform Capalaba that
Laurinda would treat the contract as at an end if the notice was not
complied with. In Balog v. Crestani (64), Gibbs J. raised but did not
answer the question whether it was essential to the validity of a
notice to complete that it should notify the giver's intention to
rescind in the event of non-eompliance. As the purpose of a notice is
to fix a day for the completion of a contract or the performance of a
term of a contract so that the parties' respective rights will be
ascertained thereafter as though the contract had stipulated for that
day to be of the essence, it must be sufficient that the party giving
the notice makes it clear that the terminal day specified in the
notice is thereafter to be treated as of the essence for the
performance of the contract (or of the relevant term of the contract,
as the case may be). The reasons advanced by Deane and
Dawson 11. for this view are, in my respectful opinion, compelling.
The letter of 21 August 1986 stated that, in the event of non-
compliance "our clients naturally reserve their rights in respect of
your client's default". Although this is an intimation that Laurinda
is contemplating the exercise of rights which it contends will arise
by reason "of your client's default", it falls short of communicating
Laurinda's intention to treat the end of the fourteen-day period as
of the essence for performance of Capalaba's obligation to complete
registration. For this reason, I would agree with the conclusion of
Connolly J. and the Full Court that the letter of 21 August 1986
(64) (1975) 132 C.L.R. 289, at pp. 296-298.

was not an effective notice to complete. This conclusion led H.C. OF A.
19881989.
Connolly J. to hold that he was constrained to reject the letter "as a '-y-'
notice requiring performance non-eompliance of which, without LAURINDA
?rY. LTD.
more, entitled [Laurinda] to rescind". v.
His Honour did not have to decide whether the time limited by CAPALABA
PARK
the letter of 21 August was unreasonably short. That is the second SHOPPING
reason advanced for holding that the letter was not an effective CENTRE
PTy. LTD.
notice to complete. Connolly J. said: "as to sufficiency of time I am
far from persuaded that the contract could not have been stamped, Brennan J.
endorsed with the mortgagee's consent and tendered within the 14
days limited."
The onus to establish that the time was reasonable rested on
Laurinda. The only evidence was that of Capalaba's solicitor who
said that "it would be unlikely to expect that you could get a
shopping centre lease stamped and registered within 14 days"
although application for expedited stamping and eXpedited regis-
tration could be made to the relevant authorities. Having regard to
this fact and the factors earlier mentioned, I should think that the
thirteen days effectively allowed for registration was unreasonably
short. I would not draw an inference merely from Capalaba's non-
performance in registering the lease, which continued until the time
limited by the letter had expired, that Capalaba had repudiated the
contract.
However, his Honour found that Capalaba simply declined to
perform its obligation "until it suited it" and that Laurinda "was
entitled to regard the conduct of [Capalaba] as repudiatory in a
relevant sense and to treat the contract as discharged". The finding
was based in part upon facts which emerged at the trial, showing
that Capalaba had deliberately delayed in executing the lease,
securing the mortgagee's consent, stamping and registering the lease
(or tendering a registrable lease) because Capalaba's commercial
interests were better served by delay.
Repudiation is not ascertained by an inquiry into the subjective
state of mind of the party in default; it is to be found in the
conduct, whether verbal or other, of the party in default which
conveys to the other party the defaulting party's inability to
perform the contract or promise or his intention not to perform it or
to fulfIl it only in a manner substantially inconsistent with his
obligations and not in any other way. In Freeth v. Burr (65), Lord
Coleridge c.J. spoke of acts or conduct which "do or do not
amount to an intimation of an intention to abandon and altogether
(65) (1874) L.R. 9 C.P. 208, at p. 213.

648 HIGH COURT [1988-1989.
H.C.OF A. to refuse performance of the contract" or of acts and conduct which
19881989.
'-.,-' "evince an intention no longer to be bound by the contract". This
LAURINDA was followed by the Earl of Selborne L.C. in Mersey Steel and Iron
PrY. LTD.
V.
Co. v. Naylor, Benzon & Co. (66):
CAPALABA "I am content to take the rule as stated by Lord Coleridge in
PARK
SHOPPING
Freeth v. Burr, which is in substance, as I understand it, that
CENTRE you must look at the actual circumstances of the case in order
PrY.Lm. to see whether the one party to the contract is relieved from its
future performance by the conduct of the other; you must
Brennan J. examine what that conduct is, so as to see whether it amounts
to a renunciation, to an absolute refusal to perform the
contract, such as would amount to a rescission if he had the
power to rescind, and whether the other party may accept it as
a reason for not performing his part."
And in Carswell v. Collard (67), Lord Herschell L.C. stated the
question precisely:
"Of course, the question was not what actually influenced the
defender, but what effect the conduct of the pursuer would be
reasonably calculated to have upon a reasonable person."
Forslind v. Bechely-Crundall (68) is in accord with this view, though
Lord Shaw of Dunfermline (69) may be thought to go beyond Lord
Herschell's test in emphasizing the effect of the defaulting party's
conduct on the mind of the innocent party.
The question whether an inference of repudiation should be
drawn merely from continued failure to perform requires an
evaluation of the delay from the standpoint of the innocent party.
Would a reasonable person in the shoes of the innocent party
clearly infer that the other party would not be bound by the
contract or would fulfIl it only in a manner substantially
inconsistent with that party's obligations and in no other way?
Different minds may easily arrive at different answers. H one looks
merely at Capalaba's conduct in the circumstances known to
Laurinda when the letter of 21 August 1986 was written,
Capalaba's failure to register the lease did not amount to
repudiation. The shortness of the time for registration limited by
that letter and the absence of an intimation in the letter that that
time would be regarded as of the essence deprive the letter of 21
August of the effect which a valid notice to complete would have
had. Looking solely at Capalaba's delay in registering the lease, the
position was analogous to that which Dixon J. found to exist in
(66) (1884) 9 App. Cas. 434, at (68) 1922 S.c. (H.L.) 173.
pp. 438-439. (69) 1922 S.C., at pp. 191-192.
(67) (1893) 20 R. (H.L.) 47, at
p.48.
Dimond v. Moore (70) where, in a dissent which turned on the H.C. OF A.
1988-1989.
facts, he said: '-y---'
"But if they wished to rely upon the lessor's failure to perfonn LAURINDA
her contract within a period of time as distinguished from some PrY.Lm.
v.
refusal by her to observe the obligations imposed upon her, it CAPALABA
was necessary for the lessee to name some time by which PARK
perfonnance was demanded, and in doing so to fix a period SHOPPING
CENTRE
sufficient to enable her solicitors to receive her instructions." PTY.Lm.
I would not infer repudiation merely from non-registration within
Brennan J.
the time limited by the letter. However, I am unable to agree with
the Full Court who, accepting that the notice was ineffectual, held
that "until an effectual notice was given the delay continued but
that alone was insufficient to make evident any intention on the
part of [Capalabal that it would not be bound by the contract".
Repudiation may be established without proof of an effective notice
to complete. The absence of an effective notice means that the other
evidence must be examined to detennine whether a clear inference
of repudiation should be drawn, but it does not preclude the
drawing of that inference.
If the evidence showed no more than fourteen days of continued
non-registration of the lease after 21 August 1986, I would not draw
the inference of repudiation. But the letter of 21 August was
followed by Capalaba's solicitors' letter of 3 September 1986. After
assurances that the lease had been executed and the costs of
stamping and registration had been paid, advice was given in
March 1986 that the lessee's stamped parts of the lease would be
provided as soon as the lease was available after its return from
Melbourne expected "in the not too distant future", but there was
no further communication from Capalaba or its solicitors. Then,
stimulated by Laurinda's letter of 21 August 1986, Capalaba's
solicitors, on the eve of the expiration of the time limited, advise
merely that they have referred the letter to their client "for its
response", undertaking to advise their "client's instructions". The
long and unexplained delay from March to September 1986 ending
with a letter stating that the solicitors required further instructions
with respect to completing what had been promised over five
months earlier is sufficient foundation for the drawing of an
inference of repudiation. It is the inference which Laurinda drew
and, although it cannot be said that no other reasonable inference is
open, it is a reasonable inference which can be clearly drawn. I have
vacillated in arriving at this conclusion but, having arrived at it, I
would allow the appeal and restore the judgment of Connolly J.
(70) (1931) 45 c.L.R. 159, at pp. 179-180.

650 HIGH COURT [1988-1989.
H. C. OF A. DEANE AND DAWSON 11. The background facts and the relevant
19881989.
~ provisions of the Deed of Agreement for Lease ("the contract")
LAUR1NDA between the respondent ("the lessor") and the first appellant ("the
PrY. LTD.
V.
lessee") are set out in the judgment of the Chief Justice. Except to
CAPALABA the extent necessary for the purposes of discussion, we shall avoid
PARK
SHOPPING
repetition of them.
CENTRE The primary object of the contract was the grant by the lessor to
PrY. LTD.
the lessee of a legal lease of the subject premises for a term of six
years commencing, in the events which occurred, on 1 December
1985. The due discharge of the lessor's obligation to grant such a
lease involved, at the least, the production to the lessee of an
executed lease in registrable form. It was an implied term of the
contract that the lessor would discharge that obligation within a
reasonable time after the commencement date of the lease. In that
regard, we agree with the Chief Justice that cl. 15.7 of the contract,
when read with cl. 6.1, did not excuse the lessor from performance
of the obligation to grant a registrable lease. The effect of cl. 15.7
was to confirm what would have been the position iIi any event,
namely, that mere delay in performance of that obligation would
not affect the existence of a binding equitable lease or entitle the
lessee to terminate the contract: see Real Property Act 1877 (Q.),
s. 51. As the Chief Justice points out, something more - whether
failure by the lessor to comply with a notice making time of the
essence or conduct constituting repudiation by the lessor - was
required to justify the lessee's purported termination of the contract.
On the appeal to this Court, the lessor did not dispute that, by 21
August 1986 which was more than eight months after the
commencement date of the lease, the lessee was entitled to give to
the lessor an appropriate notice making time of the essence for the
performance by the lessor of its obligation under the contract to
produce to the lessee a lease of the subject premises in registrable
form. If the letter of 21 August from the solicitors for the lessee
constituted such an appropriate notice, the lessee was entitled, upon
non-compliance with its terms, to terminate the contract. In
circumstances where the lessor had obtained the fees for stamping
and registering the lease from the lessee, the lessor does not suggest
that that letter was necessarily ineffective to make time of the
essence of the contract for the reason that it went further than
requiring the production of a lease in registrable form and required
the lessor "to complete registration" of the lease. The dispute
between lessor and lessee about the form and contents of the letter
is now confined to the significance of the failure of the letter to
state that the lessee would, in the event of non-compliance, treat the
contract as at an end and to the question whether the period of time
which the notice allowed for compliance was, in all the circum- H. C.OF A.
1988-1989.
stances, adequate. Nothing turns in the present case upon whether '--y-'
the letter should be seen as a notice to complete the contract or as a LAURINDA

PrY. LTD.
notice to perfonn a fundamental obligation under it and it is V.
convenient to treat it as a notice to complete. CAPALABA
PARK
At first instance in the Supreme Court of Queensland, SHOPPING
Connolly J. regarded himself as constrained by authority to hold CENTRE
PrY. LTD.
that the failure of the letter of 21 August to make clear that the
lessee would, in the event of non-compliance, treat the agreement as DeaneJ.
being at an end prevented it from being effective to make time of Dawson J.
the essence. The Full Court indicated agreement with his Honour's
conclusion in that regard. While there are statements in the cases
which lend considerable support for that view (see, e.g., Fry J.'s
reference to "rescission ... sub modo" in Green v. Sevin (71); Ajit v.
Sammy (72); Lenneberg v. McGirr (73); and the cases referred to by
Gibbs J. in Balog v. Crestani (74) but cf., e.g., per Lord
Langdale M.R. in Taylor v. Brown (75) and in King v. Wilson (76)
and per Romilly M.R. in Pegg v. Wisden (77)), the overall weight of
actual decisions to that effect is less clear (see Balog v. Crestani (78),
and the discussion and cases mentioned in Butt, "The Modem Law
of Notices to Complete" Australian Law Journal, vol. 59 (1985)
260, at pp. 270-272). Certainly, there is no decision of this Court
that a notice is ineffective to make time of the essence of the
contract unless it states that the party giving it will treat the
contract as at an end if the notice is not complied with.
While law and equity stood apart and unqualified by statutory
provisions about the effect of contractual stipulations as to time, the
lessor's breach of an implied tenn requiring that it discharge a
fundamental obligation within a reasonable time would have
entitled the lessee to tenninate the contract at law. That right at law
was, however, a barren one since equity would intervene, at the suit
of the party in default, to grant relief against the loss of the contract
by ordering specific perfonnance or, in some cases, by restraining
proceedings at law. In that sense and speaking generally, it could be
said that express or implied contractual stipulations about the time
for the completion of a contract or the perfonnance of a
fundamental tenn were of the essence of the contract at law but
(7 I) (1879) 13 Ch. D. 589, at (75) (1839) 2 Beav. 180, at p. 183

p.599. (48 E.R. 1149, at p. 1150).
(72) [1967) 1 A.C. 255, at p. 258. (76) (1843) 6 Beav. 124, at p. 126
(73) (1919) 19 S.R. (N.s.W.) 83, at (49 E.R. 772, at p. 773).
pp.86-87. (77) (1852) 16 Beav. 239, at p. 244
(74) (1975) 132 C.L.R. 289, at [51 E.R. 770, at p. 772).
pp. 296-297. (78) (1975) 132 C.L.R., at pp. 297-
298.
652 HIGH COURT [1988-1989.
H. C. OF A. were not of the essence in equity unless there was an express or
19881989.
'-,---' implied contractual provision to that effect. If, however, the
LAURINDA innocent party gave an appropriate notice to the party in default
PrY. LTD.
V.
requiring completion or performance within a reasonable time fixed
CAPALABA by the notice, equity would not, in the event of continued default
PARK
SHOPPING
after the expiry of that further time, intervene to preclude the
CENTRE effective exercise of the common law right to terminate. The
PrY. LTD.
continued default in the face of the notice disentitled the party in
Deane J. breach to such equitable relief because it would not be inequitable
Dawson J. for the innocent party to terminate the contract after due warning
had been given of the consequence of continued default. In a real
sense, the effect of the notice was to make the reasonable time
which it fixed for performance of the essence in equity as well as at
law and it has traditionally been so described (see, e.g., King v.
Wilson (79); Pegg v. Wist/en (80); Stickney v. Keeble (81); Neeta
(Epping) Pty. Ltd. v. Phillips (82); Balog v. Crestani (83)). As
Brennan J. commented in Louinder v. Leis (84):
"A notice to complete is thus a step in securing the lifting of
the equitable restraint upon the legal right to rescind. A notice
to complete is sometimes said to make time of the essence.
That is a convenient description of its effect, though it may be
misunderstood. A valid notice makes time of the essence in
that a consequence of non-completion within the time specified
by the notice is to enable rescission by the promisee to be given
effect in equity as well as in law, equity taking the day specified
in the notice to be the essential time for completion.... But a
notice to complete does not make the time fixed by the
contract of the essence; it makes the time fixed by the notice of
the essence ..."
With the fusion of law and equity and the prevalence of rules of
equity as to contractual stipulations about time (see, e.g., Property
Law Act 1974 (Q.), s. 62) it is ordinarily unnecessary to describe the
effect of a valid notice to complete otherwise than in the traditional
terminology of making time of the essence. Nevertheless, in
identifying the requirements of a valid notice to complete or
perform, it may be important to bear in mind that the purpose and
operation of such a notice must be explained by reference to
equitable doctrine and that the rules regulating the requirements of
such a notice reflect the traditional equitable notions of fairness and
good conscience. It is so in the present case.
(79) (1843) 6 Beav., at pp. 126-127 (82) (1974) 131 C.L.R. 286, at
[49 E.R., at p. 773). pp. 298-299.
(80) (1852) 16 Beav., at p. 244 [51 (83) (1975) 132 C.L.R., at p. 299.
E.R., at p. 772). (84) (1982) 149 C.L.R. 509, at
(81) (1915) A.C. 386, at p. 418. pp. 532-533.
The innocent party who makes time of the essence of a contract H. C.OF A.
19881989.
by an effective notice to complete within a nominated time is bound '-y--J
by the notice in the sense that the time nominated for completion LAURINDA
PrY. LTD.
becomes of the essence for him as well as for the defaulting party: V.
see, e.g., Quadrangle Development and Construction Co. Ltd. v. CAPALABA
PARK
Jenner (85); Balog v. Crestani (86). If - where completion involves SHOPPING
action on his part - the innocent party himself fails to complete CENTRE
. PrY. LTD.
within that time, the other party will be able to take account of the
then existing circumstances in determining whether to rescind the Deane J.
contract or to institute proceedings for its enforcement. The party Dawson J.
giving the notice enjoys the like advantage since he may waive his
right to terminate the contract for non-eompliance with the
requirements of the notice and bring proceedings for specific
enforcement of the contract. This mutuality of the respective
positions of the parties accords with equitable principle and the
interdependent character of the contractual obligations involved.
That being so, it would be anomalous if equity were to require that
a notice to complete should unequivocally state that the party
giving it will, in the stipulated circumstances, treat the contract as at
an end in a context where it is unnecessary that he have any such
unequivocal intention at the time of giving the notice and where,
even if he had such an unequivocal intention at that time, he might
subsequently waive the right to treat the contract as at an end and
bring proceedings for its enforcement. Moreover, it is somewhat
difficult to see why, as a matter of bare principle, a notice fixing a
time for completion or performance does not, in the absence of
other grounds for termination, constitute a repudiation of the
contract if it unequivocally states that the party giving the notice
will, on the expiry of what is subsequently held to be an
unreasonably short period, act on the basis that the contract is at an
end. True it is that these difficulties will be avoided or overcome if
such an unequivocal statement in a notice to complete or perform is
read as not meaning what it says but as being subject to an implied
qualification that the party giving the notice will not treat the
contract as at an end at all unless he both desires and is entitled to
rescind at the expiry of the time which the notice fixes (cf. Woodar
Investment Development Ltd. v. Wimpey Construction U.K.
Ltd. (87)). However, such distortion of the ordinary meaning of
words serves only to illustrate the undesirability and potentially
misleading consequences of a requirement that a notice to complete
(85) [1974)1 W.L.R. 68, at p. 71; (86) (1975) 132 C.L.R., at p. 298.
[1974) 1 All E.R. 729, at (87) [1980) 1 W.L.R. 277; [1980) ]
p.732. All E.R. 571.
654 HIGH COURT [1988-1989.
H. C. OF A. contain such an unequivocal statement. The notions of fairness and
1988-1989.
'--y-' good conscience which inspire the traditional doctrines of equity
LAURINDA point strongly against any such inflexible requirement.
PrY. LTD.
V.
It is important that courts tread warily in disturbing current
CAPALABA perceptions about the effect of conveyancing precedent or practice.
PARK
SHOPPING
Notwithstanding that need for caution, the weight of past authority
CENTRE is debatable and clearly inadequate to justify this Court in insisting
PTv. LTD.
upon a requirement that a notice to complete must unequivocally
DeaneJ. state that, in the event of non-eompliance, the party giving the
Dawson J. notice will treat the contract as at an end. That is not, of course, to
suggest that a notice will be effective to make time of the essence of
a contract with the consequence that the party giving the notice will
be entitled to rescind in the event of non-eompliance if it is
inadequate to convey to a reasonable person in the position of the
recipient that that is its purport and effect. The whole point of
equity's intervention in relation to stipulations as to time was that,
in the absence of express or implied contractual provision to the
contrary, it regarded it as inequitable or unconscionable for a party
to a contract to rescind for breach of a time stipulation without
having given reasonable warning to the party in default. It seems to
us, however, that, in modern circumstances, a notice will be
adequate to convey such a warning if, but only if, it conveys either
that the time fixed for performance is made of the essence of the
contract or that the party giving the notice will, in the event of non-
compliance, be entitled (or regard himself as entitled) to rescind. A
notice, particularly one between solicitors, can convey those matters
by implication.
The letter of 21 August 1986 from the lessee's solicitors contained
no mention of termination of the contract. Nor did it state that time
was being made of the essence or that the lessee would, in the event
of non-eompliance, be, or regard itself as being, entitled to rescind.
After referring to the lessor's unexplained and lengthy past delay
and the importance to the lessee that a lease be registered
"immediately" to safeguard its "rights of tenure", the letter merely
stated that "it appears reasonable that our clients require your client
to complete registration within fourteen days from the date hereof"
and that "[ilf the registration is not completed within that time then
our clients naturally reserve their rights in respect of your client's
default". We have found the question whether those statements, in
a letter between solicitors, were adequate to make time of the
essence of the contract a difficult one. It may be that, in some
circumstances, a requirement of completion within a nominated
time and a reservation of "rights in respect of ... default" would be
adequate to convey that time was being made of the essence of the
contract or that the person giving the notice would regard himself H. C. OF A.
1988-1989.
as entitled to rescind in the event of non-eompliance. On balance, ~
however, it appears to us that they were inadequate to convey LAURINDA
PTy. LTD.
either of those matters in the circumstances of the present case. It V.
follows that the letter was ineffective to make time of the essence of CAPALABA
PARK
the contract. SHOPPING
It is strictly unnecessary that we consider the question whether CENTRE
the letter of 21 August 1986 was ineffective to make time of the' PIT. LTD.
essence for the further reason that it failed to allow a reasonable DeaneJ.
time for the procuring of registration (and, necessarily, stamping) of Dawson J.
the lease. We have, however, formed a firm view on that question

and it would seem appropriate that we express it. We agree with the
Chief Justice that the evidence in the present case failed to establish
that the effective period of thirteen days allowed by the notice as
the time in which the lessor was required "to complete registration"
was, in the circumstances, such a reasonable time. We would add
that that period would, in our view, have been a reasonable one in
the circumstances of the present case if all that the notice had
required had been the production of an executed lease in registrable
form.
There remains for determination the question whether, even
accepting that the letter of 21 August 1986 was inadequate to make
time of the essence of the contract, the lessee was, by 5 September
1986, entitled to rescind the contract by reason of repudiation by
the lessor. That question was resolved in the lessee's favour by
Connolly J. at first instance and in the lessor's favour by the Full
Court. It can be said at once that we are in substantial agreement
with the reasoning of Connolly J. in relation to it.
It is not suggested on behalf of the lessor that it was ever
envisaged that the arrangement between the lessor and the lessee
should be allowed to remain indefinitely as an executory agreement
to grant a lease for the stipulated term of six years. Indeed, in
circumstances where the contract expressly provided for the form,
content and execution of an actual lease and where the lessor had
obtained from the lessee the fees for stamping and registering such a
lease, it is difficult to see how such a suggestion could plausibly
have been made. It is true that, in a case such as the present, the
practical significance of the existence of a legal demise for the
agreed term is reduced by the fact that equity will, where specific
performance of the agreement for lease would be ordered, treat the
promised lease as subsisting. None the less, the grant of the actual
leasehold estate for the agreed term was, as has been said, the
primary object of the contract. The existence of a registered lease
can be of critical importance particularly in circumstances where, as
656 HIGH COURT [1988-1989.
H. C. OF A. here, there is a mortgage of the legal estate or where, again as here,
1988-1989.
'--.-' the lessee is desirous of disposing of his leasehold interest. As will be
LAURINDA seen when reference is made to the correspondence between their
PrY. LTD.
v. respective representatives, the importance which the lessee placed
CAPALABA upon the grant of a legal demise was made plain to the lessor.
PARK
SHOPPING
Indeed, it is reasonable to infer, as Connolly J. did, that the lessor's
CENTRE solicitors' letter of 28 November 1985 was in response to a request
PrY. LTD.
made on behalf of the lessee for the executed lease.
Deane J. By cl. 6.2 of the contract, the lessee irrevocably authorized,
Dawson J. empowered and directed the lessor's solicitors "upon the date of
commencement of the Lease ... or so soon thereafter as is
practicable" to complete the lease by inserting therein the dates of
commencement and termination, the yearly rental and the monthly
instalments, any necessary formal matters or descriptions and "a
plan of the Demised Premises in a form acceptable to the office of
the Registrar of Titles". The lessee executed a form of lease which
was required to be completed by the insertion or addition of the
above specific matters. No step was taken by the solicitors for the
lessor to complete the form of lease. By their letter of 28 November
1985, the lessor's solicitors advised that the contract and the lease
had been executed by the lessor and would be sent "shortly" to the
lessor's solicitors. They were not so sent. On 14 March 1986, the
lessee's accountants wrote to the lessor's solicitors asking that a
copy of the "lease" be forwarded "at your earliest opportunity". It
matters not whether that letter is read as a demand for a copy of the
document which constituted the executed lease or as a demand that
a lease in registrable form be produced. Either way, it was a demand
that the stage be at least reached where an executed lease in
registrable form was brought into existence.
The reply of the lessor's solicitors to the letter of 14 March 1986
took the matter backwards rather than forwards. The information
that the lease would be sent "shortly" which had been contained in
the letter of 28 November 1985 became, some four months
afterwards, a bland statement of expectation that the lease would be
returned, by the lessor to its solicitors, "in the not too distant
future", whatever that might mean. No explanation was advanced
as to why the lessee still could not be given a copy of an executed
lease. The lessee was told that it would simply have to wait until the
lessor's solicitors were "able to" provide "its stamped parts of the
documents", whenever that might be. The plain fact was that,
unknown to the lessee, the form of lease had not even been
completed by the insertion of the material which, under cl. 6.2 of
the contract, the lessor's solicitors should have inserted in the form
executed by the lessee as soon as was "practicable" after the
commencement of the agreed term. The reason why the formal H. C. OF A.

1988-1989.
lease had not been completed, registered or made available to the '-...-'
lessee was that it suited the commercial interests of the lessor to LAURINDA
PrY. LTD.
refrain from producing, the registrable lease while it negotiated new v.
financial arrangements. CAPALABA
PARK
It is in the above context that one must examine the effect of the SHOPPING
letter of 21 August 1986 from the lessee's solicitors. That letter CENTRE
PrY. LTD.
stressed the importance to the lessee, which had (to the lessor's
knowledge) been seeking to dispose of the business carried on on the DeaneJ.
premises, that a formal lease be registered immediately. It pointed DawsonJ.
out that the lessee had paid the necessary registration fees some
eight months earlier. It also pointed out that the lessor's delay was
both "unexplained and lengthy". Even though that letter was
ineffective to make the time allowed "to complete registration" of
the essence of the contract, it plainly drew the lessor's attention to
the unreasonableness of its past approach and to the need for
prompt action to bring about a situation in which an executed lease
in registrable form existed to be stamped and registered. The lessor's
response was its solicitors' letter which was not posted until 3
September 1986, that is, the day before the last day allowed by the
notice. That response bordered on the contemptuous. It conveyed
no explanation of past failure to honour either contractual
obligation or subsequent assurances. It contained no assurances at
all as to the future. It merely advised that the letter of 21 August
had been referred to the lessor for its "response" and that the
lessor's "instructions" would be communicated when they were
"received". In fact, the lessor was, even at that stage, still
deliberately refraining, for its own commercial purposes, from
performing its contractual obligation. It had still not sought the
mortgagee's consent, which was necessary before any lease could be
registered. Indeed, there still did not exist a completed form of lease
capable of being registered.
The question which must now be answered is whether the lessor's
conduct up to and including the letter of 3 September 1986 was
such as to constitute repudiation of the contract.
Lord Wright's oft-quoted admonition that "repudiation of a
contract is a serious matter, not to be lightly found or inferred"
(Ross T. Smyth & Co. Ltd. v. T. D. Bailey, Son & Co. (88) is, no
doubt, a wise one. It should not, however, be allowed to cloud the
fact that an allegation of repudiation of contract in a civil case does
not involve an assertion that the alleged repudiator subjectively
intended to repudiate his obligations. Thus, it is of little assistance in
(88) [19401 3 All E.R. 60, at p. 71.

658 HIGH COURT [1988-1989.
H. C. OF A. the present case to identify reasons why the lessor was unlikely to
1988-1989.
'---y--' have subjectively desired to repudiate its agreement to grant a lease.
LAURINDA An issue of repudiation turns upon objective acts and omissions and
PTY.Lm.
v.
not upon uncommunicated intention. The question is what effect
CAPALABA the lessor's conduct "would be reasonably calculated to have upon a
PARK
SHOPPING
reasonable person" (per Lord Herschell L.e., Carswell v.
CENTRE Collard (89); Fors/ind v. Beche/y-Crundall (90)). It suffices that,
PTY.Lm.
viewed objectively, the conduct of the relevant party has been such
Deane J. as to convey to a reasonable person, in the situation of the other
Dawson J. party, repudiation or disavowal either of the contract as a whole or
of a fundamental obligation under it.
In the present case, the alleged repudiation by the lessor was of
the fundamental obligation to produce a lease of the subject
premises in registrable form. Clearly, there was unreasonable delay
on the part of the lessor in the performance of that obligation. That
delay was deliberate and was for the lessor's own commercial
purposes. Its significance, from the viewpoint of a reasonable person
in the position of the lessee, was heightened by an absence of
explanation in the face of the lessee's requests and complaints and
by the dishonouring of assurances given as to future conduct.
Indeed, even the assurance that the lease had been executed by the
lessor was misleading since it now appears that no completed form
of lease had even been brought into existence. The letter of 21
August 1986 from the lessee's solicitors served to bring matters to a
head. The totally unresponsive reply of 3 September 1986 seems to
us to have taken the matter to a stage where the combined effect of
dishonoured assurances, continued failure to produce a lease in
registrable form and continued refusal properly to address the
lessee's legitimate requirements and complaints was, to adapt words
used by Fullagar J. in Carr v. J. A. Berriman Pty. Ltd. (91), such
that a reasonable man could hardly draw any other inference than
that the lessor was not prepared to take its primary obligation under
the contract seriously.
It is not necessary for repudiation of a contract that the
repudiator make plain that he will never perform his contractual
obligations at all. What Lord Dunedin described (Fors/ind (92)) as
the assumption of "a shilly-shallying attitude in regard to the
contract" and what Lord Shaw of Dunfermline (93) called
"procrastination ... persistently practised" can, in some circum-
stances, reach the stage of repudiation even though accompanied by
(89) (1893) 20 R. (R.L.) 47, at (91) (1953) 89 C.L.R. 327, at

p.48. p. 351.
(90) 1922 S.C. (R.L.) 173, at (92) 1922 S.C., at p. 190.
p.190. (93) 1922 S.c., at p. 192.
assurances of ultimate performance at some future time. In that H.C.OF A.
19881989.
regard, the law was correctly stated by Lord Shaw in the following '--,-'
extract from his judgment in Forslind (94) which is directly in point LAURINDA
PrY. LTD.
to the circumstances of the present case: V.
"IT, in short, A, a party to a contract, acts in such a fashion of CAPALABA
ignoring or not complying with his obligations under it, B, the PARK
SHOPPING
other party, is entitled to say: 'My rights under this contract CENTRE
are being completely ignored and my interests may suffer by PTY.Lm.
non-performance by A of his obligations, and that to such a
fundamental and essential extent that I declare he is treating Deane J.
Dawson J.
me as if no contract existed which bound him.' ... In business
over and over again it occurs - as, in my opinion, it occurred
in the present case - that procrastination is so persistently
practised as to make a most serious inroad into the rights of the
other party to a contract. There must be a stage when the
person suffering from that is entitled to say: 'This must be
brought to an end. My efforts have been unavailing, and I
declare that you have broken your contract relations with
me.'''
Lord Shaw (94) went on to point out that "the question whether the
stage has been reached when procrastination or non-performance"
constitutes repudiation is essentially one of fact. That question will,
as has been said, only be properly answered in the affirmative when
procrastination or non-performance has marked the stage of
conveying to a reasonable person, in the situation of the other
party, repudiation or disavowal either of the contract as a whole or
of a fundamental obligation under it. It was, in our view, correctly
resolved by the learned trial judge in the lessee's favour in the
present case when he held that the lessor's conduct constituted
repudiation of the contract w~ch entitled the lessee to terminate it.
It follows that we would allow the appeal, set aside the orders of
the Full Court of the Supreme Court and restore the orders made
by the learned primary judge. The respondent should pay the costs
of the appeals to the Full Court of the Supreme Court and to this
Court.
GAUDRON J. The question raised in this appeal is whether the

first appellant, Laurinda Pty. Ltd. ("the lessee'), has rescinded an
agreement for lease between it and the respondent, Capalaba Park
Shopping Centre Pty. Ltd. ("the lessor''). The lessee's obligations
were guaranteed by its directors, the second appellants, John Ahem,
Elizabeth Joan Ahern, John Norman Holdway and Suzanne Jann
Holdway ("the guarantors;. IT the lessee rescinded the agreement it
(94) 1922 S.c., at pp. 191-192.

660 HIGH COURT [1988-1989.
H.C.OFA. is entitled to judgment and orders as made at first instance by the
19881989.
'--y--' Supreme Court of Queensland (Connolly J.). If it did not, the lessor
LAURINDA is entitled to the judgment and orders, the subject of the present
hY.Lm.
v.
appeal, made by the Full Court of the Supreme Court consequential
CAPALABA upon the allowing of an appeal by the lessor from the decision and
PARK
SHOPPING
orders of Connolly J.
CENTRE It is necessary to refer in some detail to the facts and the terms of
hY.Lm.
the agreement. The agreement is embodied in a deed of agreement
Gaudron J. executed on 31 October 1985 by the lessor, the lessee and the
guarantors. The deed of agreement recites that the lessor then
proposed to construct or was then in the course of constructing a
retail centre upon certain land at Capalaba and that the lessor had
agreed to grant and the lessee had agreed to take a lease of certain
premises forming part of the centre, those premises being identified
on a plan annexed to the deed. Clause 6.1 of the deed is in these
terms:
"The Lessor will grant and the Lessee will accept a lease of the
Demised Premises for the term and with and subject to the
covenants and provisions set forth in the form of lease annexed
hereto marked 'B' ('the Lease') to commence on the earlier of
the two following dates namely-
(a) the Official Opening Date; and
(b) the date on which the Lessee opens the Demised Premises
for business."
Annexure "B" (hereafter called "the lease") is a document in form
which, if properly completed, is capable of registration as a lease
under the Real Property Act 1861 (Q.) and Real Property Act 1877
(Q.). By d. 1.55 of the lease, provision is made for the payment by
the lessee of, inter alia, "stamping and registration of this Lease and
. " any necessary consent hereto from ... any mortgagee of the
Land ...". The term of the lease is specified as six years. As events
transpired, the official opening date was 1 December 1985 and the
lessee opened for business on 3 December 1985.
Clause 6.2 of the deed provides for the annexed lease and two
counterparts to be executed by the lessee contemporaneously with
the deed and to be delivered to the lessor's solicitors who are
thereby irrevocably authorized, empowered and directed "upon the
date of commencement of the Lease ... or so soon thereafter as is
practicable to complete the Lease" (emphasis added) by inserting the
date of commencement and termination, a plan of the demised
premises in a form acceptable to the office of the Registrar of Titles,
the yearly rental and monthly instalments, any necessary formal
matters and the date, and by signing the lease correct for the
purpose of registration on behalf of the lessee. The lease was
executed by the lessee and delivered to the lessor's solicitors as H. C. OF A.
1988-1989.
provided. '-r-'
Clause 13 of the deed is a guarantee by the guarantors of "the LAURINDA
PrY. LTD.
due observance and performance of all the terms covenants and V.
conditions on the part of the Lessee herein". The guarantors also CAPALABA
PARK
executed a separate deed of guarantee, bearing date 8 October 1985, SHOPPING
guaranteeing the lessee's obligations set forth in the lease annexed CENTRE
to the deed. PrY. LTD.

Pausing at this point, the terms of cl. 6.2 of the deed, the form of Gaudron J.
the lease annexed to the deed and the terms of cl. 1.55 of the lease
make it clear that performance by the lessor of its obligation under
cl. 6.1 involved, at the very least, the execution and delivery to the
lessee of a registrable lease. The time of performance and the
respective rights of the lessor and lessee pending performance were
elaborated in cl. 15.7 of the deed in the following terms:
"The obligations of the Lessor and the Lessee are not
conditional or in any way dependent upon the preparation and
execution of the Lease and are not affected by any default or
delay in or waiver or extension of time for the preparation and
execution of the Lease, but despite the non-eomp1etion of the
Lease, from and after the date of commencement and
throughout the term of the Lease, the Lessor will be bound to
perform all its obligations and the Lessee will be bound to
perform all its obligations in each case ~ set out in this Deed
and the Lease."
Clause 15.7 has the effect that "default or delay in ... the
preparation and execution of the Lease" and "non-oompletion of the
Lease" (which expression, having regard to the authorization in
cl. 6.2 "to complete the Lease", would seem to refer to the
insertions and signings necessary to render the lease registrable) do
not of themselves constitute grounds for the non-performance of the
obligations contained in the deed. However, cl. 15.7 does not relieve
the lessor from the obligation to execute and deliver a registrable
lease for it expressly provides that the lessor remains "bound to
perform all its obligations ... as set out in [the] Deed and the
Lease". This last consideration and the general rule that reasonable
time will be implied when none is expressly provided (see Reid v.
Moreland Timber Co. Pty. Ltd. (95)) require that cl. 15.7 be
construed as permitting default and delay in the execution of the
lease and non-eompletion of the lease only for a reasonable time
after the agreed commencement date. In this Court, it was accepted
by the lessor that the agreement obliged the lessor to deliver a
registrable lease within a reasonable time. That position approxi-
(95) (1946) 73 c.L.R. 1, at p. 13.

662 HIGH COURT [1988-1989.
H. C. OF A. mates, but is not precisely the same as, the one I would adopt as the
19881989.
'-y-.J proper meaning of cl. 15.7.
LAURINDA As earlier mentioned, the lessee commenced business in that part
PrY. LID.
V.
of the centre the subject of the agreement and the intended lease on
CAPALABA 3 December 1985. On 3 January 1986 the lessee paid to the lessor's
PARK
SHOPPING
solicitors $2,317 being the fees and outlays estimated by the
CENTRE solicitors for the registration of the lease. It seems that at some time
PTY.LTD.
a request was made to the lessor's solicitors for a copy of the lease,
Gaudron J. for on 14 March 1986 a letter was forwarded on behalf of the
directors of the lessee (as previously noted, they also being the
guarantors) to the lessor's solicitors requesting a copy of the lease
and observing that the directors "consider that four months is a
reasonable time for you to have complied with their request
particularly as they were under pressure by you to execute the lease
without adequate time to study the provisions of such lease".
The letter of 14 March elicited a reply dated 25 March: the
documents had been forwarded to Melbourne for execution by the
lessor in October 1985 and had not yet been returned; advice had
been received that they had been executed; it was expected that
they would be returned in the not too distant future. The reply
concluded with an assurance that the lessee's stamped parts would
be provided "as soon as we are able to".
By 21 April it had come to the attention of the lessor's agent that
the lessee was interested in assigning its lease if a purchaser for its
business could be found. However, nothing further was heard from
the lessor or its solicitors as to the steps being taken to render the
lease registrable. On 21 August 1986 a letter was forwarded by the
solicitors acting for the lessee and its directors/guarantors to the
lessor's solicitors stating that searches revealed that the lease had
not been registered. The letter noted that ten months had elapsed
since the documentation was completed, that registration was of
critical importance for the safeguarding of rights of tenure, and that
sufficient funds had been paid to allow registration to be effected by
the lessor. The letter then stated: "In [the] circumstances, and in
view of the unexplained and lengthy delay, it appears reasonable
that our clients require your client to complete registration within
fourteen days from the date hereof." The letter proceeded to assert
that in the event registration was not completed within the fourteen
days the lessee and the guarantors "reserve their rights in respect of
your client's default". The letter was received by the lessor's
solicitors on 22 August. On 3 September (the twelfth day following
receipt of the letter of 21 August) the lessor's solicitors responded
acknowledging receipt, and indicating that they had forwarded a
copy of the letter to the lessor for its response and that they would H. C. OF A.
1988-1989.
advise of their client's instructions when received. '--v--'
On 5 September the solicitors for the lessee and guarantors LAURINDA
PrY. LTD.
replied to the letter of 3 September, noting (correctly, in my view) v_
that the letter of 3 September was totally unresponsive to the CAPALABA
PARK
justifiable concern of their clients about registration and that the SHOPPING
long delay was unexplained. The letter proceeded to characterize CENTRE
"this failure to respond adequately in the time limit [sic] by our PrY. LTD.
letter of 21st August 1986" as "a repudiation of the implied Gaudron J.
undertaking by your client to secure registration of the lease within
a reasonable period". The letter concluded by advising that the
lessee and the guarantors "no longer regard themselves as bound by
the Lease and Guarantee".
The present proceedings were instituted by the lessee and
guarantors on 31 October 1986. During the hearing it was
ascertained that the lessor's solicitors filled in the blanks in the lease
form in January 1987, but did not, even at that late stage, insert the
plan identifying the demised premises as was required for regis-
tration. Nor was the consent of the lessor's mortgagee, also
necessary for registration, by then endorsed on the lease. The only
explanation ever proffered for the delay in completion of the lease
was proffered in the course of the hearing: the lessor was giving
consideration to a reorganization of its fmances involving the
discharge of the existing mortgage over the shopping centre and the
registration of a new mortgage.
At first instance Connolly J. held that the letter of 21 August
1986 did not constitute an effective notice to complete entitling the
lessee to rescind for breach of a term thereby made essential as to
time. His Honour considered the letter defective in so far as it failed
to indicate the course of action intended to be taken by the lessee in
the event of default: see Balog v. Crestani (96). His Honour added
that he was ''far from persuaded" that it was insufficient as to time.
However, his Honour held that the lessee was entitled to regard the
lessor's conduct as repudiatory and to treat the contract as
discharged. On appeal, the Full Court (Matthews, Carter and
Dowsett JJ.) found both these issues in favour of the lessor. Their
Honours held that the delay of the lessor did not constitute
repudiation and that an effective notice to complete (which
Connolly J. found had not been given) was necessary to entitle the
lessee to rescind.
It may at once be noted that the letter of 5. September did not
assert that the lessor's delay amounted to repudiation. Instead, it
(96) (1975) 132 C.L.R. 289.

664 HIGH COURT [1988-1989.
H. C.OF A. asserted that the "failure to respond adequately in the time limit [sic]
1988-1989.
'--.,.--' by our letter of 21st August 1986" constituted repudiation. Of
LAURINDA course, if the delay of the lessor is itself a matter entitling rescission,
PrY. LTD.
V.
the letter of 5 September effected that result: Shepherd v. Felt and
CAPALABA Textiles ofAustralia Ltd. (97).
PARK
SHOPPING
Although there is much criticism of the terms used (see, e.g., Jane
CENTRE Swanton, "Discharge of Contracts for Breach", Melbourne Univer-
PrY. LTD. sity Law Review, vol. 13 (1981), p. 69) and suggestions that the
Gaudron J. terms may give expression to distinctions lacking any real difference
(see, e.g., Kirby P. in J. & C. Reid Pty. Ltd. v. Abau Holdings Pty.
Ltd. (98)) the generally accepted formulation of the relevant law is
that a party to a contract may elect to bring the obligations arising
under that contract to an end in the event of repudiation,
fundamental breach or breach of an essential term by the other
party to the contract: see Shevill v. Builders Licensing Board (99);
Stem v. McArthur (1); J. W. Carter, Breach of Contract (1984),
pp. 60-61. For reasons founded in equitable principle, failure to
perform an obligation which is otherwise fundamental or essential
on a stipulated date or, if no date be stipulated, within a reasonable
time does not entitle the other party to bring the contractual
obligations to an end unless the time of performance is expressly or
impliedly made essential by the contract or is made essential by an
effective notice to complete: Carr v. J. A. Berriman Pry. Ltd. (2);
Louinder v. Leis (3); Stem v. McArthur (4). Given the difficulty
inherent in the idea that a notice to complete can add to or alter the
effect of a contractual stipulation, there is much to be said for the
view that failure to comply with a notice to complete (whether that
failure is on the part of the giver or the recipient) is properly to be
seen as evidence of unwillingness or inability to perform the
contract and hence as amounting to repudiatory conduct: see
Louinder v. Leis (5), per Mason J.; per Brennan J. (6). See also Stem
v. McArthur (7), per Brennan J. If that be so, requirements as to
form and time for an effective notice to complete are no more than
those which are necessary in the particular circumstances of the
case to constitute non-compliance with the notice evidence of
unwillingness or inability to perform the contract, a view which
(97) (1931) 45 C.L.R. 359. (3) (1982) 149 C.L.R. 509, at

(98) [1988) N.S.W. Conv. R. 55- pp. 512,519-520,529,532-
416. 533.
(99) (1982) 149 C.L.R. 620, at (4) (1988) 165 C.L.R., at pp. 509-
pp. 625-626. 511,520-521.
(1) (1988) 165 C.L.R. 489, at (5) (1982) 149 C.L.R., at p. 526.
pp. 509-511. (6) (1982) 149 C.L.R., at pp. 533-
(2) (1953) 89 C.L.R. 327, at 536.
pp.348-349. (7) (1988) 165 c.L.R., pp. 520-521.
seems to be implicit in Balog. Because I have formed the view that H. C. OF A.
1988-1989.
the lessor's delay coupled with failure to make adequate response to I...-.,.--'
the letter of 21 August constitute repudiation entitling the lessee to LAURINDA
terminate the obligations under the agreement, it is unnecessary to PrY. LTD.
v.
decide whether that letter constitutes an effective notice to CAPALABA
complete. However, I should say that, in my view, neither the PARK
SHOPPING
failure to effect registration of the lease nor the failure to tender a CENTRE
registrable lease within the time limited by that letter could be PrY. LTD.
characterized as repudiatory conduct. Put in other words, the time GaudronJ.
limited by the letter was not sufficient to constitute failure to
register the lease or failure to tender a registrable lease within that
time evidence of unwillingness or inability to perform the contract.
The present matter has at all stages been conducted on the basis
that the agreement between the lessor and the lessee did not make
time essential for the delivery of a registrable lease. That assumption
is open to question. In Perri v. Coolangatta Investments Pty.
Ltd. (8) Mason J. pointed out that "[t]here is a natural reluctance on
the part of courts to classify a provision which looks to the
happening of an event within a reasonable time as one which makes
time of the essence, more particularly when that time is implied and
is not expressed". As his Honour then pointed out "it is undesirable
that the rights of the parties should rest defmitively and conclus-
ively on the expiration of a reasonable time, a time notoriously
difficult to predict". The force of these observations is obvious, but
the observations do not deny the possibility of a provision being so
construed, including by resort to necessary implication. In the
context of the construction I would adopt of cl. 15.7 of the deed
one particular factor suggests that such an implication might
properly be made in the present case. The lessee's obligations
contained in the deed were the subject of a guarantee embodied in
that deed. Clause 15.7 of the deed imported the obligations of the
lessee set out in the annexed form of lease, and those obligations are
thus the subject of the guarantee contained in the deed, although, it
seems, they would on execution and completion of the lease,
become the subject of the separate guarantee in the deed of
guarantee bearing date 8 October 1985. While the lease remained
unregistered - as it must if there were delay or default in execution
or if it remained uncompleted - the guarantors' rights of
subrogation were limited to those rights of the lessee flowing from
the deed. In the event of registration those rights would extend to
(8) (1982) 149 C.L.R. 537, at pp. 554-555.

666 HIGH COURT [1988-1989.
H.C.OF A. the lessee's rights flowing from the registered lease. This consider-
1988-1989.
'--,--J ation and the special nature of the relationship between creditor and
LAURINDA surety (as to which see Ankar Pty. Ltd. v. National Westminster
PrY. LTD.
v. Finance (Australia) Ltd. (9)) are persuasive indications of the
CAPALABA essentiality of the delivery of a registrable lease within a reasonable
PARK
SHOPPING
time of the commencement date specified in cl. 6.1 of the deed. The
CENTRE fact that these matters were not advanced in support of the
PIT. LTD.
essentiality of delivery of a registrable lease within a reasonable time
Gaudron J. does not deprive them of all significance: they provide part of the
context in which the lessor's conduct falls for characterization as
repudiatory or otherwise.
There is no very precise formulation of the necessary import of
conduct before it will be characterized as repudiatory. In Carr (10)
Fullagar J. (with whom Dixon e.J., Williams, Webb and Kitto JJ.
agreed) expressed the issue in terms of the only legitimate inference
being that the party in breach was not going to perform the
contractual obligation at all or was not going to perform it unless
and until convenient so to do. His Honour characterized the
conduct under consideration in that case as such that "[a)
reasonable man could hardly draw any other inference than that the
building owner does not intend to take the contract seriously, that
he is prepared to carry out his part of the contract only if and when
it suits him" (11). The thrust of the observations in Carr is that for
conduct to be characterized as repudiatory it should either convey
an intention not to be bound at all or give rise to uncertainty as to
whether the contractual obligation will be performed. But a less
restricted view has developed. In Shevill (12) Gibbs e.J. (with whom
Murphy and Brennan JJ. agreed) referring, inter alia, to the decision
in Ca", identified the manifestation of an intention "to fulfil the
contract only in a manner substantially inconsistent with [the)
obligations and not in any other way" as conduct constituting
repudiation. That statement was accepted as correct in Progressive
Mailing House Pty. Ltd. v. Tabali Pty. Ltd. (13). It was expressly
recognized in Ca" (10) that breach which did not itself entitle the
other party to rescind might remain unremedied for so long and in
such circumstances as to constitute repudiation: see also Associated
Newspapers Ltd. v. Bancks (14); Tabali (15), per Brennan J.
In the present case breach occurred as soon as a reasonable time
for delivery of a registrable lease had expired. At first instance
(9) (1987) 162 C.L.R. 549. (13) (1985) 157 C.L.R. 17, at
(10) (1953) 89 C.L.R., at p. 349. pp. 33,44.
(11) (1953) 89 C.L.R., at p. 351. (14) (1951) 83 C.L.R. 322, at
(12) (1982) 149 C.L.R., at pp. 625- pp. 339-340.
626. (15) (1985) 157 C.L.R., at p. 40.
Connolly J. held that by 21 April 1986 "[t]he situation had gone H. C.OF A.
1988-1989.
beyond one of dilatoriness on the part of the lessor which could '--,-J
cause no real prejudice to [the lessee]". From this 1 infer that his LAURINDA
PIT. LTD.
Honour was also holding that a reasonable time for performance V.
had then expired. In any event, there is nothing in the materials to CAPALABA
PARK
suggest that delivery of a registrable lease could not have been SHOPPING
effected within that period, even if matters had proceeded with no CENTRE
PTY. LTD.
more than leisurely dispatch. Accordingly, in my view, there was a
breach not later than 21 April. Gaudron J.
Mere failure to deliver a registrable lease within a reasonable time
of the agreed commencement date could not itself amount to the
manifestation by the lessor of an intention to render performance
only in a manner inconsistent with its obligation. But in the present
case the relevant considerations extend far beyond the mere breach.
The breach remained unremedied for a very substantial period of
time in circumstances which did not themselves suggest any
explanation for the failure to remedy, in which explanation was
never proffered and in which performance was never offered. The
failure to proffer explanation or offer performance occurred in
circumstances in which the lessor's agent knew or ought to have
known that failure to remedy the breach had the potential to cause
serious prejudice to the lessee and in which the lessor must have
known that the guarantors' rights of subrogation to a registered
lease would be held in abeyance until registration was effected. By
21 August the only inference reasonably availabl~ to the lessee was
that the lessor intended to perform the contract only in a manner
inconsistent with its obligation.
The letter of 21 August was sufficient to alert the lessor to the
fact that the lessee and its guarantors were insisting upon
performance by the lessor of its contractual obligation, an obligation
which, although it has been treated as non-essential as to time, was
otherwise the very essence of the contract. Failure to respond to
that letter with either an explanation for the delay or an offer of
speedy performance was all that was further necessary to convey to
the lessee, as the only reasonably available inference, that the lessor
intended to render performance only in a manner substantially
inconsistent with its obligation. The lessor's conduct constituted
repudiation which the lessee was entitled to and did accept.
The appeal should be allowed.
Appeal allowed with costs.
Set aside the orders of the Full Court of the
Supreme Court of Queensland dated 9 June
668 HIGH COURT (1988-1989.
H.C. OF A. 1988 and in lieu thereof order that the appeal
1988-1989.
'-r-' to that Court be dismissed with costs.
LAURINDA
Pry. LTD. Solicitors for the appellants, Philip D. Hishon & Co.
V. Solicitors for the respondent, Flower & Hart.
CAPALABA
PARK
SHOPPING R.A.S.
CENTRE
PrY. LTD.

(1989) 166 CLR 623

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166 C.L.R.] OF AUSTRALIA.

LAURINDA PTY. LIMITED AND OTHERS ApPELLANTS;

CAPALABA PARK SHOPPING CENTRE

ON APPEAL FROM THE SUPREME COURT OF QUEENSLAND.

Landlord and Tenant ~ Agreement for lease - Landlord to deliver registrable H. C. OF A.

ApPEAL from the Supreme Court of Queensland.

1. E. Gallagher Q.c. (with him A. E. Lyons), for the respondent.

(I) (1951) 83 C.L.R. 322, at (5) (1982) 149 C.L.R. 509, at

D. F. Jackson Q.c., in reply. In detennining whether the time

Cur. adv. vult.

1989, May 2. The following written judgments were delivered:-

commencement and termination, which were left blank, as indeed MasoneJ.

incapable of operating as a lease. In January 1987, after Laurinda PrY. LTD.

performance, were bound, in the circumstances of the case, to give H.C. OF A.

noted that it could be inferred that Capalaba, which had MasonC.J.

(24) (1930) 43 C.L.R. 427, at (25) (1929) 43 C.L.R. 105, at

(26) (1953) 89 C.L.R. 327, at (27) (1953) 89 C.L.R., at pp. 351-

obligations, such as would allow Laurinda to treat Capalaba as H. C. OF A.

(36) (1915] A.C. 386. (37) [1915) A.c., at p. 419.

(41) (1984) 154 C.L.R. 661, at p. 670.

The right to rescind

(42) (1886) 12 V.L.R. 748, at (45) (1946) 73 C.L.R. 1, at p. 13.

(61) (1879) 13 Ch. D. 589, at (62) (1926) 37 C.L.R. 529, at

(64) (1975) 132 C.L.R. 289, at pp. 296-298.

(65) (1874) L.R. 9 C.P. 208, at p. 213.

(70) (1931) 45 c.L.R. 159, at pp. 179-180.

the letter should be seen as a notice to complete the contract or as a LAURINDA

(7 I) (1879) 13 Ch. D. 589, at (75) (1839) 2 Beav. 180, at p. 183

the lease. We have, however, formed a firm view on that question

commencement of the agreed term. The reason why the formal H. C. OF A.

(88) [19401 3 All E.R. 60, at p. 71.

(89) (1893) 20 R. (R.L.) 47, at (91) (1953) 89 C.L.R. 327, at

GAUDRON J. The question raised in this appeal is whether the

(94) 1922 S.c., at pp. 191-192.

to the deed. PrY. LTD.

(95) (1946) 73 c.L.R. 1, at p. 13.

(96) (1975) 132 C.L.R. 289.

(97) (1931) 45 C.L.R. 359. (3) (1982) 149 C.L.R. 509, at

(8) (1982) 149 C.L.R. 537, at pp. 554-555.

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