Pleading a Substantive Condition Precedent to Relief

In Sara Investments (NSW) Pty Limited v West Asset Holdings Pty Ltd [2022] NSWCA 207, the plaintiff, at trial – being respondent on appeal – sought specific performance of a contract for sale of a commercial property for a price of $7.385m.  A specific performance decree was granted.  The defendants – as appellants on appeal – contended that the respondent had failed to prove that it was ready, willing and able to perform the contract.  In the course of dismissing the appeal Brereton JA (Meagher and Mitchelmore JJA agreeing) wrote (at [12]):

Although the appellants’ written submissions asserted that it was necessary for West to aver and prove that it was ready, willing and able to complete, that is incorrect, and the issue was not alive on the pleadings. By UCPR r 14.11, a statement to the effect that the plaintiff is ready and willing or was at all material times ready and willing to perform an obligation is taken to be implied in its pleading, and if not traversed in the defence is taken to be admitted:  Gates v WA & RJ Jacobs Ltd [1920] 1 Ch 567 at 570 (P O Lawrence J); Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 620 (Mason CJ and Dawson J);  Dalswinton Pastoral Company v Cole [2006] NSWSC 570 at [5] (Hamilton J). The defences did not traverse the implied allegation that the plaintiff was ready, willing and able to complete, so readiness, willingness and ability were therefore deemed to be admitted and not in issue at the trial.

Uniform Civil Procedure Rules 2005 (NSW) r 14.11 – operative in Sara – prescribes that apropos of a “condition precedent” necessary for a party’s case – including that “the party is ready and willing, or was at all material times ready and willing, to perform an obligation” – then it is implicit in a party’s pleading that such condition “has been satisfied”.  The analogue thereof in the Uniform Civil Procedure Rules 1999 (Qld) is generic in drafting:

153 Condition precedent

(1)  An allegation of the performance or occurrence of a condition precedent necessary for the case of a party is implied in the party’s pleading.

(2)  A party who denies the performance or occurrence of a condition precedent must specifically plead the denial.

The predecessor of such rule was Order XXII, r 12 of the Rules of the Supreme Court (Qld) – albeit in similar terms to r 153 – was construed by one High Court judge, as long ago as 1925, as obviating the need for a plaintiff seeking specific performance to plead that it was ready, willing and able to perform:  Baird v Magripilis (1925) 37 CLR 321 at 330-331 per Higgins J.  Despite Higgins J being in dissent in that case – albeit singular in treatment of that issue – his Honour’s construction was canvassed with approval in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 620.

If an “implied” condition precedent is sought to be contested by a defendant, then a denial – duly explained under r 166, along with any material facts part and parcel of any affirmative case in relation thereto – ought be specifically pleaded by such defendant.  In the event of such denial, the persuasive onus of performance or fulfilment of the germane condition precedent is borne by the plaintiff:  Bank of New South Wales v Laing [1954] AC 135 at 153; Gilbert v Goodwin [2003] QSC 380 at [17].

UCPR r 153 applies in other instances.  Readiness and willingness to perform is also an element of a cause of action for damages for contract breach and, thereby a r 153 “condition precedent”:  Foran v Wright (1999) 168 CLR 385 at 402.

See Cairns City Council v Brits [2005] QCA 94 at [28], in which it was held that r 153 applied to a condition precedent in the nature of a local authority’s statutory power to charge the amounts sought to be recovered in a civil proceeding.  See also Fraser v The Irish Restaurant & Bar Co Pty Ltd [2008] QCA 270 which concerned a money claim under contract when money was expressed payable upon certain conditions.

While r 153 enjoys a broad reach, care need be exercised to distinguish, on the one hand, a condition precedent to recovery under a cause of action, and, on the other hand, a material fact which is the essence of such cause of action: eg  Zuk v Miller [1957] SASR 25, concerning due search and enquiry in a statutory motor vehicle claim against the Nominal Defendant.