Meehan v Jones
149 CLR 57142 ALR 463
(Decision by: WILSON J)
Between: MEEHAN
And: JONES
Judges:
Gibbs C.J.
Mason J.
Murphy J.
Wilson J.
Subject References:
Vendor and Purchaser
Judgment date: 17 September 1982
Canberra
Decision by:
WILSON J
I have had the advantage of reading the reasons prepared by Mason J. I agree with his Honour that each of the issues in the appeal should be resolved in favour of the appellant, with the result that there should be an order for specific performance of the contract. There is nothing of substance that I can usefully add to his Honour's reasons, but I wish to make some brief observations.
The first observation relates to the general question whether a purchaser, in deciding whether finance is on satisfactory terms, is bound to act both honestly and reasonably. It is not necessary to decide the question for the purposes of this case because the finance was obtained. It seems to me that the weight of the authorities discussed by his Honour favours the conclusion that, subject always to the construction of the contract in the particular case, the court will imply no greater obligation on the purchaser than that he is obliged to act honestly in determining whether the available finance is satisfactory. I am inclined to think there is force in this view. The clause is there for the protection of the purchaser. Clearly he must make reasonable efforts to secure finance. But the question whether he is able and willing to assume the burden involved in accepting particular terms may well be answered by reference to subjective considerations which cannot readily be the subject of objective assessment as to their reasonableness. The requirement of an honest judgment may be thought to provide the vendor with the maximum protection which is available under the clause. However, it is sufficient for me, like Mason J., to refrain from expressing a concluded view.
The second observation relates to the question whether Sunshine was ever nominated by the appellant. It seems to me to be clear that the evidence does not sustain the contention of the respondents. Nor would I think that such a nomination was to be expected merely from the fact that Sunshine, pursuant to an arrangement which was entirely collateral to the contract, undertook the operation of the refinery. The involvement of Sunshine as operator was entirely consistent with the nomination by the purchaser of another company as owner.
I make a third observation merely for the sake of completeness. Brief reference was made in the course of argument by the first respondent to special conditions 2 and 3 in support of a submission that the contract was not capable of specific performance. I do not think that these conditions are of any materiality to the resolution of the appeal. Condition 2 is set out in the judgment of Dunn J. It is merely an acknowledgment by the parties of the intention of the purchaser or his nominee to enter into an agreement with Charlie Jones in respect of his personal services and an undertaking by the purchaser to procure such an agreement at or prior to the completion date. Condition 3 is a clause solely for the benefit of the purchaser, and is waived by both the purchaser and his nominee.
I would allow the appeal, and make an order for specific performance.