| HBF Dalgety Ltd v Morton | |
|---|---|
 | |
| Court | High Court of New Zealand |
| Full case name | HBF Dalgety Limited v John Gilbert Morton & Eleanor Dianne Morton |
| Decided | 26 June 1987 |
| Citation(s) | [1987] 1 NZLR 411 |
| Transcript(s) | High Court judgment |
| Court membership | |
| Judge(s) sitting | Hillyer, J |
| Keywords | |
| accord and satisfaction | |
HBF Dalgety Ltd v Morton [1987] 1 NZLR 411 is a leading case in New Zealand regarding accord and satisfaction; it reinforces the English case of Foakes v Beer [1] in New Zealand. [2] [3] [4]
HBF Dalgety, a real estate agency, sold on behalf of Mr Morton his farm, for which he was later charged the standard fee of $9,768.98. Two weeks after being invoiced this amount, Mr Morton sent back the invoice with the note attached of "my estimate of costs on a 'work done' basis, $2,450", and attached a cheque for $2,450, which was duly banked. HBF Dalgety then wrote a letter to Mr Morton saying they had not accepted his cheque as full settlement, and demanded he pay the balance of its fee of $7,318.98 ($13,645 in 2011 adjusted for inflation), which Mr Morton subsequently refused to pay, claiming accord and satisfaction.
As the court ruled that there was no genuine dispute on this debt, there was neither any "accord" nor any "satisfaction" and so Mr Morton was ordered to pay the full amount claimed. Hillyer J said
It seems to me as a matter of ordinary common sense, that if at the time a person receives a cheque he writes a letter saying that he is not accepting the cheque in full settlement, it would be hard to hold that he was behaving in such a way as to make people believe that he was
Consideration is an English common law concept within the law of contract, and is a necessity for simple contracts. The concept of consideration has been adopted by other common law jurisdictions, including the US.
Foakes v Beer[1884] UKHL 1 is an English contract law case, which applied the controversial pre-existing duty rule in the context of part payments of debts. It is a leading case from the House of Lords on the legal concept of consideration. It established the rule that prevents parties from discharging an obligation by part performance, affirming Pinnel's Case (1602) 5 Co Rep 117a. In that case it was said that "payment of a lesser sum on the day [i.e., on or after the due date of a money debt] cannot be any satisfaction of the whole."
Accord and satisfaction is a contract law concept about the purchase of the release from a debt obligation. It is one of the methods by which parties to a contract may terminate their agreement. The release is completed by the transfer of valuable consideration that must not be the actual performance of the obligation itself. The accord is the agreement to discharge the obligation and the satisfaction is the legal "consideration" which binds the parties to the agreement. A valid accord does not discharge the prior contract; instead it suspends the right to enforce it in accordance with the terms of the accord contract, in which satisfaction, or performance of the contract will discharge both contracts. If the creditor breaches the accord, then the debtor will be able to bring up the existence of the accord in order to enjoin any action against him.
Estoppel in English law is a doctrine that may be used in certain situations to prevent a person from relying upon certain rights, or upon a set of facts which is different from an earlier set of facts.
William Watson, Baron Watson, was a Scottish lawyer and Conservative Party politician. He was Lord Advocate, the most senior Law Officer in Scotland, from 1876 to 1880, and was then appointed a Lord of Appeal in Ordinary.
Pinnel's Case [1602] 5 Co. Rep. 117a, also known as Penny v Cole, is an important case in English contract law, on the doctrine of part performance. In it, Sir Edward Coke opined that a part payment of a debt could not extinguish the obligation to pay the whole.
Per incuriam, literally translated as "through lack of care" is a device within the common law system of judicial precedent. A finding of per incuriam means that a previous court judgment has failed to pay attention to relevant statutory provision or precedents.
D & C Builders Ltd v Rees [1965] EWCA Civ 3 is a leading English contract law case on the issue of part payment of debt, estoppel, duress and just accord and satisfaction.
Landmark Cases in the Law of Contract (2008) is a book by Charles Mitchell and Paul Mitchell, which outlines the key cases in English contract law.
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Collier v P & MJ Wright (Holdings) Ltd[2007] EWCA Civ 1329 is an English contract law case, concerning the doctrine of consideration and promissory estoppel in relation to "alteration promises".
In re Selectmove Ltd[1993] EWCA Civ 8 is an English contract law case, concerning the doctrine of consideration, and part payments of debt.
The Magnum Photo Supplies Ltd v. Viko New Zealand Ltd [1999] case was the last of numerous New Zealand cases cited regarding whether or not banking (depositing) a cheque received for part payment was legally accord and satisfaction. In this case, it was the only NZ case not subject to a dispute, that the creditor was successful in being able to claim for the balance from the debtor.
Haines House Haulage Co Ltd v Gamble [1989] 3 NZLR 221 is an often cited case in New Zealand, where a creditor banked a cheque tendered as "full and final settlement" of an account and was later unsuccessful at claiming the balance from the debtor. Its legal significance is that where a creditor banks a debtors cheque for a lesser amount and wants to still claim the balance from the debtor, they must notify the debtor within 10 days that the banked cheque was not accepted as full settlement.
Hart v O'Connor [1985] UKPC 1 is an important case in New Zealand, also relevant for English contract law, regarding mental capacity to enter into contract as well as regarding unconscionable bargains, which made it as far as the Privy Council.
Hirachand Punamchand v Temple [1911] 2 KB 330 is often cited as one of the exceptions to the accord and satisfaction rule laid out in Foakes v Beer. In that case, it is held that an agreement to accept part payment of a debt cannot validly discharge the entire debt. In Hirachand Punamchand v Temple, part payment of a debt is held to be valid because it is supplied by a third party and not the debtor.
Dunrae Manufacturing Ltd v CL North & Co Ltd [[1988] 2 NZLR 602] is a prominent case regarding accord and satisfaction and its application in New Zealand.
Homeguard Products Ltd v Kiwi Packaging Ltd [1981] 2 NZLR 322 was a case of the High Court of New Zealand, regarding whether the banking of cheques tendered as full settlement of disputed accounts. The High Court ruled that by banking the debtor's cheque, Kiwi Packaging consented to the terms attached to the cheque.
Airways Corp of New Zealand v Geyserland Airways Ltd [1996] 1 NZLR 116 is a New Zealand legal case involving the legal concept of acceptance.
Pendergrast v Chapman [1988] 2 NZLR 177 is a cited case in New Zealand regarding the consequences of cancellation of a contract under the Contractual Remedies Act 1979.