When Conveyanes Go Wrong – Purchaser’s Remedies for Vendor
Breaches
Lecture by:Laina Chan, Barrister Nine Wentworth Chambers,
Sydneywww.ninewentworth.com.auTelephone: (02) 8815 9211For: Television Education Network
Introduction
Vendor obligations and the common law
concept of caveat emptor.
Megarry and Wade – The Law of Real Property (5th edition) at 611-612
“A good title means a title free
from encumbrances. The term
'encumbrances' covers all
subsisting third party rights such
as leases, rentcharges,
mortgages, easements and
restrictive covenants. It also
includes statutory liabilities, if
they are not merely potential or
imposed on all property
generally.”
Flight v Booth“is in a material and substantial
point, so far affecting the subject
matter of the contract that it may
reasonably be supposed, that,
but for such misdescription, the
purchaser might never have
entered into the contract at all.”
– Section 18 of the Australian
Consumer Law states that ‘a person
must not, in trade or commerce,
engage in conduct that is misleading
and deceptive or likely to mislead or
deceive’.
– The terms “misleading” or “deceptive”
are not defined in the Act.
Constraints placed on vendors
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 “Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of "mere silence" or of a duty of disclosure can divert attention from that primary question. Although "mere silence" is a convenient way of describing some fact situations, there is in truth no such thing as "mere silence" because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.”
S55A(2) of the Conveyancing Act provides:
‘A vendor under a contract for the sale of land:
(a) shall, before the contract is signed by or on behalf of the purchaser, attach to the contract such documents, or copies of such documents, as may be prescribed, and
(b)shall be deemed to have included in the contract such terms, conditions and warranties as may be prescribed.’
Legislative Constraints
• Prescribed documents – Schedule 1• Prescribed warranties – Schedule 3 of the Conveyancing
(Sale of Land)Regulation 2010• Implied warranties
Conveyancing (Sale of Land) Regulations 2010
Remedies• Rescission• Return of deposit• Right to damages for breach of contract
reserved
How the legislation works in practice
Contaminated Land
Vitek v Estate Homes Pty Limited [2010] NSWSC 237
Flood related development controls
Hijazi v Raptis (2002) 11 BPR 20, 487
CH Real Estate Pty Limited (trading as Raine &Horne Commercial Penrith) v Jain Ran Pty Limited (2010) 14 BPR 27, 361
Road Widening
Timanu Pty Limited v Clurstock Pty Limited (1988) 15 NSWLR 338
• Kobol Holdings Pty Limited v Johnson [1987] ANZ ConvR 137
Whether Land reserved for acquisition by a public authority
Other risk to land
Mandalidis v Artline (1999) 47 NSWLR 568
Non disclosure of relevant development
control plan
The Verman v McLaughlin (1990) 70 LGRA
Argy v Blunts (1990) 94 ALR 719
Incorrect description of zoning of the land
Building without approval
Marinkovic v Pat McGrath Engineering Pty
Limited (2004) 61 NSWLR 150
Incorrect description of vendor’s title
Wongala Holdings Pty Limited v Beynon & Ors (1997) 8 BPR 15, 765
Conclusion