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1933 Supreme(SC) 48

Privy Council At Palestine
Sir George Lowndes, Wright , Justice Lords Tomlin, JJ.
Abdullah Bey Chedid and others -Appellant
Versus
Tenenhaum -Resopndent
Appeal No. 47 of 1932
Decided On : 09-10-1933

Advocates Appeared:
Pleineas Grass, Wilfred Greene , Wilfred Barton, Tomlin Thorpe

To recover damages for breach of concurrent obligations in a contract, the plaintiff must prove their own readiness and willingness to perform. Evidence of the plaintiff's inability to perform shifts the burden to them to demonstrate they were capable of fulfilling their obligation at the material time.

Headnote:(A) Contract Law - Concurrent Obligations - Readiness and Willingness - Recovery of Damages - In an action to recover damages for breach of contract involving concurrent obligations, the plaintiff's readiness and willingness to perform their part of the contract is a condition precedent to the right to recover damages.

(B) Onus of Proof - While readiness and willingness may not need to be expressly pleaded, the onus of proving it remains on the plaintiff. In the absence of contrary evidence, this onus may be easily discharged; however, if the defendant produces evidence of the plaintiff's inability to discharge the obligation, the plaintiff must satisfy the court that they were in a position to perform their obligation at the material moment.

Facts of the case:
A contract was entered into for the sale of land, which included a clause for liquidated damages and a penalty in the event of a breach by either party. The time for the transfer of the land was extended by mutual consent. The buyer subsequently claimed a refund of the deposit and the stipulated penalty damages, alleging the seller failed to transfer the land by the agreed date. The seller counter-claimed, asserting that the buyer was in default as they lacked the funds to pay the balance of the purchase price.

Findings of Court:
The court found that the seller did not proffer a valid transfer on the agreed date, making the buyer entitled to a refund of the deposit. However, the buyer failed to provide evidence of their ability to pay the remaining purchase price, especially after the seller produced evidence of the buyer's financial distress and inability to settle other debts.

Issues: Whether a plaintiff seeking damages for breach of contract involving concurrent obligations must establish their own readiness and willingness to perform their part of the contract.

Ratio Decidendi: The court held that for concurrent obligations, the plaintiff must prove they were ready and willing to perform their part to recover damages. Since the buyer failed to discharge the onus of proving their financial capacity to complete the purchase at the material time, they were not entitled to damages, despite the seller's failure to transfer the title.

Result: Appeal partly allowed.

Legal Category Hierarchy

  • contract law
    • breach of contract
      • concurrent obligations
      • liquidated damages
    • land law
      • transfer of title
  • practice and procedure
    • evidence
      • burden of proof

Facts.-

On 14th July 1925 C had entered into a contract with the plaintiff-respondent where he agreed to sell and the respondent agreed to purchase certain miri land situated at Haifa in Palestine. The purchase under the contract had not been completed at the death of C. The price fixed by the contract was £E 260 per dunum. £E.6,000 was paid on the signing of the contract, and the balance of the price £E.28,000 was to be paid at the transfer into the name of the respondent. The contract contained also the following clause :

"5. If the first Party commits breach of any terms of this contract, he shall return to the second party the £E.4,000 received by him and shall pay to him. £E.10,000 as liquidated damages and penalty for the non carrying out of this contract, and if the second party commits breach of any terms of this contract, he shall pay to the first party £E.10,000 as liquidated damages and penalty after deduction of the £E. 4,000 paid."

The prescribed period for the transfer after the payment of the price was postponed with the consent of both parties to 30th November 1927 and the heirs of C, whereby the respondent as he did not have the sum owing to the then present conditions, asked the heirs of C to give a year's period to 30th November 1928, under the conditions therein contained.

The conditions in effect provided : (1) for the payment then made of an additional deposit of £E.5,000; (2) for the extension of the time for payment of the balance to 30th November 1928; and (3) for the reduction of the penalty under clause of original contract from £E.10,000 to £E.7,000. The plaintiff alleged that the vendor had not transferred the land to him by the agreed date, and therefore he claimed the refund of deposit and stipulated damages of £E.7,000. The defendant put in a defence and counter-claim in which he alleged that he had offered to transfer the land by due date and that the plaintiff was in default in not accepting the same and that the real reason of the refusal of the respondent to accept the transfer was that he had no money to pay the balance of the purchase price and he was himself in default and accordingly the defendant counter-claimed to keep the deposit and to be paid a further sum of £E.5,000 to make up damages or penalty of £E.7,000. Their Lordships found that the defendant did not on the agreed date proffer a transfer which the plaintiff was bound to accept and to that extent the plaintiff had made good his case. Accordingly the plaintiff was held entitled to a refund of the deposit. But as the plaintiff was not in a position to perform his part of the contract (that is, to pay the remainder of the purchase price) he was not entitled to recover any damages for breach of contract.

Lord Tomlin.-

(After stating facts and concluding that appellant 1 did not on 30th November 1928 proffer a transfer which the respondent was bound to accept his Lordship proceeded). There remains the question as to the readiness and willingness of the respondent to perform his part of the contract. Their Lordships' attention has not been directed to any provision of the Turkish law or any local ordinance which deals with the question whether in an action to recover damages for breach of contract the plaintiff is bound to establish his readiness and willingness to perform his part. In the absence of any such provision their Lordships are of opinion that regard must be had to the English law applicable in the case of concurrent obligations.

Readiness and willingness to carry out his obligation has always been a condition precedent to the plaintiff's right to recover damages in respect of breach of one of two concurrent obligations. It is true that to-day in England it need not be expressly pleaded, but the onus of proving it is nevertheless on the plaintiff. That onus, in the absence of any evidence to the contrary adduced by the defendant, may be easily discharged, nor is a tender of money necessary in the case of an obligation to pay mo







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