SARGENT v ASL DEVELOPMENTS LTD
131 CLR 6344 ALR 257
(Judgment by: STEPHEN J)
Between: SARGENT
And: ASL DEVELOPMENTS LTD
Judges:
McTiernan ACJ
Stephen JMason J
Subject References:
Contract
Real property
Rescission
Election
Judgment date: 25 October 1974
SYDNEY
Judgment by:
STEPHEN J
The advent of town planning legislation and the control of land uses which it involves has meant that if sales of land are to be undertaken to the satisfaction of both vendor and purchaser the planning status of the land being sold must be known; attention must be paid to restrictions upon the use to which it may be put and to any disadvantages to which it may be otherwise subject because of the announced intentions of local planning and construction authorities. In New South Wales the position has been sought to be met by the inclusion in standard forms of contracts of sale of a clause concerned specifically with this question of the disclosure of such restrictions or burdens.
Unfortunately such provisions have given rise to much litigation due, in large measure, to the failure of those concerned with the drawing of contracts of sale to ensure that the contemplated machinery for disclosure is allowed to operate as it was intended. The standard forms contemplate the annexure to the contract of a certificate obtained from the local municipal council which will contain information about such matters. If contracts are prepared and exchanged without such a certificate being annexed then, in the absence of any appropriate amendment to the standard form of contract, the apparent object of this feature of the standard form miscarries and the effect upon the rights of the parties may be both doubtful and curious.
These three appeals are just such cases; their facts sufficiently appear in the reasons for judgment of my brother Mason. Two other appeals which have come before this Court and in which judgment is now to be given also arise out of a similar failure to annex the contemplated certificate; they give rise to problems similar to those encountered in the present cases and make it desirable that I should now state in some detail my conclusions concerning the consequences in law of the omission of such a certificate.
Two quite distinct questions arise. The first concerns the interpretation and effect of the relevant contract clause, numbered 16 in the 1965 edition of the standard form of contract. The second question only arises if, as I consider to be the case, that clause operated adversely to the present respondent by affording to the vendors a right of rescission because of the failure to have any certificate annexed to the contracts; this question is whether or not the vendors by their conduct thereafter lost their right to rescind.
The first question is exclusively a matter of construction; it has been the subject of decisions in the New South Wales Supreme Court, the leading case being that of Wolczyk v Barr. [F1] There the Court of Appeal Division held that, despite the failure to annex any certificate or make any appropriate amendment of the form of contract, cl. 16 nevertheless operated according to its terms so that if the subject land was in fact affected by, in that instance, interim development the right of rescission arose.
The learned primary judge, Mahoney J., applied the decision in Wolczyk v Barr [F2] and the appellants rely upon it, their complaint being that his Honour, having held that they acquired a right of rescission under cl. 16, also held that by their subsequent conduct they lost that right. It is the respondent which attacks Wolczyk v Barr and it does so upon three grounds. First it contends that when to the printed contents of the 4th Sch. nothing is added, the certificate to which that schedule refers not being annexed, this is tantamount to a blank in that schedule, to the making of no statement at all as to any affecting of the land by any town planning; there is a non-statement rather than the statement of a negative. Although such a situation might, it is said, amount to non-disclosure it cannot amount to a statement and it is to "stated" rather than to "disclosed" that the relevant part of cl. 16 refers.
I reject this submission; had the 4th Sch. been wholly blank the terms of cl. 16, that the property was affected "otherwise than as stated in" that schedule, would, in my view, convey that the property was entirely unaffected, just as the appearance of scheduled affecting matters would constitute a statement of what did affect the property. No different result flows from the schedule's printed reference to a certificate; if none be annexed the result is a situation in which any affecting town planning provision will be one by which the land is affected "otherwise than as stated ..." This would clearly be the result had that phrase been followed by words such as ", if stated at all"; the absence of such words does not, I think, affect the meaning.
The second ground taken by the respondent is to treat cl. 16 as concerned with instances of common mistake because it confers the right of rescission upon both parties; then it is said that the omission of the certificate amounts to a failure to state the basis of the parties' common belief and in its absence the clause has no operation. Whatever may have been the reason for the granting of a right of rescission to the vendor as well as to the purchaser I see no reason for attributing to cl. 16 any operation other than that which its plain meaning calls for; it permits of rescission if the land be affected otherwise than as stated in the schedule so that, so long as the clause is not struck out of the contract, a failure to state any affecting matters in the schedule will permit of rescission whenever in fact the land is relevantly affected.
The respondent's final submission in its attack upon Wolczyk v Barr [F3] treats the affixing of a certificate as a mere ministerial act, the omission of which can be made good by deeming an appropriate certificate to have in fact been annexed to the contract. Because certificates originate with a disinterested third party, the council, their contents are not, it is said, debatable; the parties have agreed that that which the council certifies shall be the subject of the annexure and where, as here, no question of recent change in zoning arises the missing certificate may be deemed to have in fact been annexed.
This misconceives, I think, the function of the clause, which is to set out in the contract the planning status of the land so that the contracting parties may agree upon its sale and purchase on the footing of the status thus revealed; there is to be an agreed, disclosed statement of any affecting of the land by planning provisions, anything not so stated giving rise to a right of rescission. Fundamental to this concept is that the parties should have before them, when executing the contract, an agreed statement of planning status, which of course may indicate the total absence of all planning. This is a quite different concept from that which the respondent's contention would achieve, wherein the parties, perhaps in ignorance of planning status, would leave to a third party's certificate the determination of planning status. Clause 16 aims at a statement of the basis upon which the parties contract and inherent in it is the element of knowledge, at the time of contract, of what is that basis; to leave that to the unknown determination of the council radically alters the concept fundamental to the clause. The case of Bosaid v Andry, [F4] relied upon by the respondent in this connection, is a very different case and does not appear to me to lend any support to the contention.
In my view the decision of Wolczyk v Barr [F5] stands unaffected and unless distinguishable ought to be followed. It cannot, I think, be distinguished on the particular facts of the present appeals. It was sought to do so upon the ground that in these three appeals the three rescinding vendors had either direct or imputed knowledge of the zoning of their land at the date of contract. It does not in fact appear what was the relevant situation in Wolczyk v Barr but it is said that the opening words of cl. 16 - "Should it be established that ..." - render the clause inapplicable where a party knows before contract what is the correct planning status of the land. This phrase, so it is said, contemplates a case in which at some time after the date of contract it is learned for the first time that the property is relevantly affected in a manner not disclosed in the 4th Sch.; where a vendor knows all along that the property is so affected nothing, it is said, has been "established" and cl. 16 never begins to operate.
This contention has obvious attractions; it would prevent the clause from being employed in the curious circumstances of which the vendors have availed themselves, circumstances which are not likely to have been contemplated by the framer of the clause. Nevertheless the contention, in my view, fails. "Should it be established prior to completion" means, in my view, no more than "Should it be the fact, known prior to completion", coupled also, I think, with the concept that it is such a fact as the rescinding party must be prepared to establish by evidence before a court if his rescission be challenged. The language of the clause is such that its operation is in no way made to depend upon the prior state of knowledge of either of the parties; it is expressed to apply whenever, following any legal challenge to the validity of a rescission notice given under the clause, the party giving it can satisfy a court that the property was in fact relevantly affected at date of contract in a respect not stated in the schedule. It is not without significance that the relevant fact is inherently incapable of being known before date of contract, for that fact has a precise temporal limitation, it is the state of being affected by planning provisions "at the date of this agreement". A rescinding party's knowledge may, when combined with his subsequent conduct, deny him the right to rely upon the clause, as will hereafter appear, but his prior knowledge of existing zoning will not, in my view, prevent the initial operation of the clause.
It follows that I consider cl. 16 to be applicable whenever a rescission notice purports to have been given under it so long as in any proceedings in which its validity is brought into question the rescinding party can then satisfy the court that at date of contract the land was relevantly affected in a manner not disclosed in the schedule.
I turn now to the second main question raised by these appeals; whether the vendors, having had conferred upon them a right of rescission as a result of the absence from the 4th Sch. of any statement that the lands were affected by a planning scheme, lost that right at some time before seeking to exercise it some thirty-two months after the right first arose.
It is not by mere delay that it is said that the right of rescission was lost but rather by conduct evincing an intention to keep the contracts on foot at a time when the alternative, but inconsistent, right of rescission had become available. The vendors having two inconsistent rights were, it is said, bound to elect as between them and having elected to treat the contracts as subsisting they were thereafter bound by their election and thus forfeited their right of rescission.
The doctrine of election as between two inconsistent legal rights is well established but certain of its features are not without their obscurities. The doctrine only applies if the rights are inconsistent the one with the other and it is this concurrent existence of inconsistent sets of rights which explains the doctrine; because they are inconsistent neither one may be enjoyed without the extinction of the other and that extinction confers upon the elector the benefit of enjoying the other, a benefit denied to him so long as both remained in existence. As Williston points out (Contracts, 3rd ed., vol. 5, par. 683) the doctrine is not out of harmony with the general rule that a binding surrender of a right requires a sealed release or consideration; by surrendering one right the elector thereby gains an advantage not previously enjoyed, the ability to exercise to the full the other inconsistent right.
In many instances what may pass for an application of the doctrine is in truth but the inevitable consequence of the party's conduct, a consequence that would follow even if no such doctrine existed. Thus in the common case of avoidance of a contract for breach it is not any doctrine of election that prevents the avoiding party subsequently from enforcing the contract but rather the fact that the contract has, by his act of avoidance, ceased to exist; such a situation is revealed by the facts discussed by Lindley J. in Evans v Wyatt. [F6] On the other hand if he chooses instead to keep the contract on foot and sue for damages rather than rescind for breach recourse must be had by the other party either to election or, if the facts will support it, to an estoppel if that breach should later be sought to be relied upon so as to avoid the contract. All this is made clear in the judgment of Jordan C.J. in O'Connor v S.P. Bray Ltd. [F7] In the present appeals the doctrine of election is directly in question since the issue is not whether following rescission the vendors may enforce the contracts but rather whether acts on their part consistent with the continued existence of the contracts prevent their subsequent purported rescission from being effective.
For the doctrine to operate there must be both an element of knowledge on the part of the elector and words or conduct sufficient to amount to the making of an election as between the two inconsistent rights which he possesses (Craine v Colonial Mutual Fire Insurance Co Ltd; [F8] United Australia Ltd v Barclays Bank Ltd [F9] ).
The nature of the knowledge which an elector must possess is a matter upon which the authorities are somethat at variance. An elector must at least know of the facts which give rise to those legal rights, as between which an election must be made; without that knowledge the doctrine of election will not be available to make irrevocable his choice of one particular right, although in appropriate circumstances an estoppel may still arise which produces that very consequence and this without any such requirement of knowledge on the part of the party who is estopped. The extent of knowledge of relevant facts necessary for the doctrine of election to apply has been described as "full knowledge of the material facts" (Bennett v L. & W. Whitehead Ltd [F10] ). In Elder's Trustee & Executor Co Ltd v Commonwealth Homes & Investment Co Ltd [F11] a knowledge of circumstances such as will provide information from which the decisive fact giving rise to the legal right is "a clear if not a necessary inference" was held to be sufficient. [F12]
The extent of knowledge will no doubt usually give rise to little difficulty; it is when the nature of the requisite knowledge is in issue, whether knowledge of the facts giving rise to the legal rights suffices or whether, on the contrary, there must also be knowledge of the right of election as between two available, inconsistent legal rights, that contrariety exists. Some authorities, such as Scarf v Jardine, [F13] omit all discussion of the nature of the requisite knowledge; others speak simply of knowledge of the facts from which the legal rights arise (Matthews v Smallwood [F14] ); some expressly deny the need for knowledge of legal rights, knowledge of the facts alone sufficing (Jordan C.J. in O'Connor v S.P. Bray Ltd [F15] ); others again, especially in the field of election of remedies by an injured worker, require actual knowledge of the right to elect (Young v Bristol Aeroplane Co Ltd, [F16] but see also; [F17] Dey v Victorian Railways Commissioners [F18] ).
In Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd, [F19] where the right of a lessor to rely upon a defect in his lessee's statutory application for the grant of a new tenancy was in question, Lord Reid and Lord Pearson formed a minority on the issue whether the lessor had, by its conduct, waived that defect but their treatment of the knowledge requisite to establish such a "waiver" did not differ in substance from the views of Lord Diplock, one of the majority. Lord Pearson, in whose views Lord Reid concurred, concluded [F20] that the only knowledge which must be shown so as to bind the lessor to its act of waiver was knowledge of the relevant facts, it being unnecessary to show that there was also knowledge of "the legal position resulting from the relevant facts". Lord Pearson and Lord Reid each spoke in terms of "waiver" but their observations were, I think, directed to the doctrine of election. Of the members of the majority on this issue Viscount Dilhorne, who spoke of the question as one of election, [F21] appears to have regarded knowledge of the legal position as necessary before a binding election could have arisen; [F22] Lord Diplock on the other hand spoke of the making of an election between inconsistent rights in distinguishing that from the case in hand and regarded it as enough that an elector should there know "of the facts which give rise in law to these alternative rights". [F23]
In this Court, in the Elder's Trustee Case, [F24] their Honours dealt with this question in some detail and after referring to the judgment of Jordan C.J. in O'Connor v S.P. Bray Ltd [F25] and to Mr. J. S. Ewart's book on the subject, both of which sources deny the need for more than knowledge of the facts giving rise to the legal right, expressed a clear preference for this view in those cases in which the conduct of the elector is unequivocal; as where, despite knowledge of a breach going to the root of the contract, he exercises rights by virtue of the contract which rights would not exist unless that contract remained in force. Only where the conduct is not so unequivocal, amounting to no more than some evidence of election to affirm, will knowledge of the right of election be relevant and then only because, viewed in its light, his conduct may, as a matter of "natural inference", be regarded as constituting an affirmation of the contract. [F26]
In Coastal Estates Pty Ltd v Melevende [F27] the members of the Full Court of the Supreme Court of Victoria, conscious of the apparent conflict of authority, each undertook an analysis of the cases and concluded that where the right of rescission for misrepresentation was in question an election to treat the contract as remaining on foot rather than to rescind could only arise if there was knowledge both of the relevant facts and of the inconsistent legal rights from which a choice was to be made. Both Sholl J. [F28] and Adam J. [F29] regarded the presence of some detriment to the other party, a form of estoppel, as necessary before acts of affirmation of the contract could, in the absence of any knowledge of the alternative legal right to rescind, destroy the right of rescission.
As might be anticipated in the multi-jurisdictional American scene, the United States authorities on the there much litigated topic of election of remedies and election in pais disclose a similar absence of unanimity concerning the knowledge necessary to create an irrevocable election, although the clear weight of opinion appears to require knowledge only of the relevant facts and not of the legal rights - American Jurisprudence, 2d., vol. 25, pp. 663-664.
The present appeals are concerned only with the vendors' choice between rescission of the contracts under cl. 16 and affirmation of the contracts. The right of rescission here in issue is, therefore, quite different from that under consideration in the Coastal Estates Case, [F30] a distinction made by Herring C.J. who refers to the view of Mr. Ewart concerning an express right of rescission conferred by the contract and concludes that in such a case "the parties to a contract are to be deemed aware of the elections that the terms of their contract give them or at any rate are to be precluded from denying knowledge of them". [F31]
Not only is this distinction, with respect, well founded but it provides a measure of reconciliation of conflicting authority as well as resolving the matter so far as concerns the present appeals. Where election is in question between contracting parties and, as in these appeals, the contract itself confers the inconsistent rights there can be no question whether a party had knowledge of his choice of rights. He is deemed to know the terms of his own contract and the rights it confers, at all events he cannot take advantage of his own ignorance (L'Estrange v F. Graucob Ltd [F32] ); moreover he must take his contract as bearing whatever meaning the court will assign to it when it is called upon to interpret it, he is bound "by the interpretation which a court of law may put upon the language of the instrument." (Stewart v Kennedy, per Lord Watson [F33] ).
With other instances of election, not involving a choice between contractually conferred rights, these appeals are not concerned, but it may be that a failure to give weight to the distinction between those instances and the case of contractually conferred rights has led to misunderstanding; thus where Jordan C.J., in O'Connor v S.P. Bray Ltd, [F34] insists upon the need for knowledge only of the facts he illustrates the point by reference to cases of contractually conferred rights whereas Sholl J. when, in the Coastal Estates Case, [F35] he regards that insistence as unsound, is concerned with a quite other right, the right conferred by law to rescind ab initio for fraudulent misrepresentation. Again in the Kammins Ballrooms Case, [F36] where the "legal right" was a consequence of the non-observance of a statutory requirement, Viscount Dilhorne [F37] refers to Matthews v Smallwood, [F38] a case of contractually conferred rights, immediately before the passage in what I take his Lordship to regard knowledge of more than the relevant facts as being necessary to give rise to an election situation. I am not to be taken as concluding that where contractually conferred rights are not in issue there can be no binding election without knowledge of the right to elect. It is not necessary for me to decide the point and I do no more than draw attention to the distinction made by Herring C.J. in the Coastal Estates Case [F39] as explanatory of some of the conflict of authority on this topic.
In the present appeals I conclude that, contrary to the appellants' contentions, all that need be established in order for the doctrine of election to apply is knowledge by the vendors of the facts giving rise to inconsistent legal rights; the appellants are to be taken to know of their rights of rescission conferred by cl. 16 and, of course, of their right to enforce the contracts according to their terms. If they then knew of the relevant facts giving rise to the rights of rescission, that is, the existence of a planning scheme affecting the lands sold, that is enough to invoke the doctrine. Their own interpretation or understanding of the nature of extent of their contractual rights will be irrelevant, so that it matters not at all whether they were aware of the existence of cl. 16 or of its effect as it came to be enunciated in Wolczyk v Barr; [F40] it is enough that they knew of facts which have brought cl. 16, as so interpreted, into operation.
The words or conduct ordinarily required to constitute an election must be unequivocal in the sense that it is consistent only with the exercise of one of the two sets of rights and inconsistent with the exercise of the other; thus for a lessor to continue to receive rent under a lease will be consistent only with his rights as lessor and inconsistent with the exercise of a right to determine the lease (Viscount Dilhorne in the Kammins Ballrooms Case; [F41] Herring C.J. in the Coastal Estates Case; [F42] Kitto J. in Tropical Traders Ltd v Goonan [F43] ). However, less unequivocal conduct, only providing some evidence of an election, may suffice if coupled with actual knowledge of the right of election (Elder's Trustee Case [F44] ). There need be no expressed intention to elect, nor will an express disclaimer of such an intention be of any avail in preserving one right if in fact there be an exercise of another inconsistent right (Croft v Lumley; [F45] Matthews v Smallwood [F46] ). For an election there need be no actual, subjective intention to elect (Scarf v Jardine [F47] ), an election is the effect which the law attributes to conduct justifiable only if such an election had been made (per Kitto J. in Tropical Traders Ltd v Goonan [F48] ); cf. S. Kaprow & Co Ltd v Maclelland & Co Ltd , per Wrottesley L.J. [F49] .
On the question of detriment to the other party as an ingredient in election there exists, again, a divergency of views. Many of the leading cases on the topic make no reference to detriment and, in speaking of the irrevocability of an election, seem to treat that as arising, regardless of whether or not the other party has acted upon it to his detriment, as soon as the fact of election is communicated to the other party (e.g. Scarf v Jardine, per Lord Blackburn [F50] ) or indeed regardless perhaps of communication (e.g. Matthews v Smallwood [F51] ). On the other hand, in Spencer Bower and Turner: Estoppel by Representation (1966), at pp. 323-325, election is treated as necessarily involving detriment, although detriment is there given a wide meaning. It may be that in very many of the decided cases involving election some detriment to the other party can be discovered on an examination of the facts but the authorities in this Court are consistent in their silence as to detriment, regarding the elector's act of disaffirmation or adherence to the contract as itself completing the election without more (Craine's Case; [F52] Fullers' Theatres Ltd v Musgrove; [F53] Elder's Trustee Case; [F54] Tropical Traders Ltd v Goonan [F55] ). Perhaps Newbon v City Mutual Life Assurance Society Ltd [F56] throws most light upon the matter. There this Court dealt with two distinct issues, election and estoppel, and their treatment of the former, when contrasted with that accorded to the latter, satisfies me that no question of detriment was thought to be a necessary ingredient in election.
Mr. Ewart's book on Waiver Distributed points in a like direction; he concludes, at p. 93, that, despite what was said by Lord Blackburn in Scarf v Jardine, [F57] which was a case of election as between possible defendants, in the case of an election irrevocably to affirm a contract the election need not be communicated to the other party; where there is no need for communication there can scarcely be room for detriment suffered by the uninformed party. In the case of disaffirmation of a contract the terms of the contract will usually themselves, either expressly or by necessary implication, require communication (Ewart, op. cit., pp. 91-92), but where they do and the giving of notice determines the contract then, as Jordan C.J. has explained in O'Connor v S.P. Bray Ltd, [F58] the notice itself puts an end to the contract, "the communicated choice is conclusive ... The alternative right necessarily vanishes". There can then be no question of detriment having to be shown before the elector is prevented from seeking to enforce the alternative and vanished right. I conclude that at least in the case of election between affirmation of a contract or its disaffirmation pursuant to rights conferred by that contract detriment to the other party is not a necessary element in election, whatever may be the position in other election situations. Although concerned with election in quite different circumstances, the judgment in Myers v Ross, [F59] makes the point succinctly when it is said that an election "knowingly made, cannot be withdrawn even though it has not been acted upon by another to his prejudice" and this because "Estoppel depends upon what a party causes his adversary to do. Waiver by election depends upon what the party himself intends to do, and has done".
If the foregoing principles be applied to the present appeals they readily provide an answer in the case of Mrs. Sargent's contract and that in which Mr. and Mrs. C.T. Sargent were vendors. In these two cases the vendors knew at the date of contract that the lands they were selling were affected by a planning scheme, being zoned as "rural and non-urban" or "non-urban". This is enough to satisfy the requirement that an elector should have knowledge of the facts giving rise to his legal rights. The right of rescission conferred by cl. 16 arose, inter alia, should the property be "affected by any town and country planning scheme" made under Pt XIIA of the Local Government Act 1919 as amended and the planning scheme of which these vendors were aware was in fact such a scheme. Their two inconsistent rights were either to insist on continued performance by the purchaser of its obligations under the contracts of sale or instead to rely upon the right of rescission under cl. 16. Their conduct which amounted to an election in favour of the former right consisted of the receipt over a period of some thirty-two months of quarterly interest payments under the contracts, their demand for and receipt of certain payments of moneys in recoupment of increases in rates paid to the vendors and which it had been agreed under the contracts that the purchaser should bear, and their involvement in the steps taken by the purchaser to have the lands brought under the provisions of the Real Property Act.
These constitute unequivocal acts affirming the contracts and it follows that these vendors, having thereby made their election, could not thereafter rely upon the right to rescind conferred by cl. 16. Were detriment, contrary to my view, a necessary element it is clear that it would be satisfied in these appeals. I would accordingly dismiss the appeals by these two vendors.
The position of the third appeal is different only because there was in the case of the Turnbulls no evidence that either of them had at any material time any knowledge of the matters referred to in cl. 16; they otherwise are in the same position as are the three Sargents save that they received no reimbursement of rate moneys, and their receipt of moneys under the contract was of instalments of the purchase price rather than of interest.
While the Turnbulls had no knowledge of the applicable town planning provisions their solicitor did; before the date of contract he had applied for and had received an appropriate certificate for annexure to the contract, although in fact it did not come to be so annexed. The question is, then, whether this knowledge on the part of their solicitor will operate so as to attract to the acts of affirmation the irrevocability of an election.
The answer to this question may, I think, be approached in either of two ways and with the same result. Election as between inconsistent contractual rights does not call for any conscious choice as between two sets of rights, it being enough that there should be intentional and unequivocal conduct together with knowledge of the facts giving rise to the legal rights. There need not, therefore, be a consciously "choosing mind", as there must, in fraud, be a "wicked mind". Now where, as in this case, a vendor employs a solicitor to attend to the carrying out of the legal aspects of a sale he necessarily authorizes that solicitor to attend to all the usual aspects of conveyancing practice; that authority will here extend to the obtaining of the necessary planning certificate and the solicitor's knowledge, gained from that certificate, may properly be imputed to his clients since it was acquired both for the purpose of that transaction and in the course of it (Bradley v Riches; [F60] Re Philip-Stephan Photo Litho and Typographic Process Co Ltd; [F61] Dixon v Winch; [F62] Ayrey v British Legal and United Provident Assurance Co Ltd [F63] ).
Again, where a vendor so arranges matters that his solicitor undertakes on his behalf the carrying out of a conveyancing transaction as a whole he thereby not only authorizes his solicitor to perform all necessary steps but also places the solicitor in the position of acquiring at first hand knowledge of relevant facts, at the same time depriving himself of the opportunity of acquiring such first hand knowledge. If any such steps taken by the solicitor happen to constitute acts of affirmation of the continued existence of the contract they will be binding upon the client (Provincial Insurance Co of Canada v Leduc [F64] ). If they be unequivocal and are performed at a time when the solicitor has himself acquired knowledge of facts giving rise to a right to rescind the contract the client will, without the need to attribute to him the knowledge of his solicitor, be bound by those acts of affirmation as on an election; the duly authorized conduct of the solicitor, who has acquired the relevant knowledge, will, without either conduct or knowledge on the client's part, constitute an effective election not to rescind the contract (Hough v Guardian Fire and Life Assurance Co Ltd; [F65] Ayrey's Case [F66] ).
On the findings of fact of the learned trial judge it is not clear whether the payments of instalments of purchase price made by the purchaser were received by the Turnbulls' solicitor, who by the terms of the contract was expressly authorized to receive them, or by the Turnbulls personally. But whichever was the case one or other of the foregoing approaches to the matter will result in an irrevocable election affecting them. It is clear that the Turnbulls' solicitor, then having knowledge of the zoning of the land, received from the purchaser's solicitor a form of application to bring the land under the Real Property Act for his perusal and, if approved of by him, for completion and execution by the Turnbulls. This form he later returned to the purchaser's solicitor duly completed and executed. This too was conduct consistent only with the contract then remaining on foot and it is conduct which the Turnbulls, by their execution of the application, can be seen to have authorized. It constitutes, in my view, a further act of election binding upon the Turnbulls.
I would accordingly also dismiss the Turnbulls' appeal.