Base Group Property Pty Ltd v Wyllie - [2024] VSC 523

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
PROPERTY LIST

S ECI 2023 06085

BETWEEN:

BASE GROUP PROPERTY PTY LTD (ACN 617 359 145)	Plaintiff
v
MARY LOUISE WYLLIE	Defendant

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JUDGE:	Efthim AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	21 May, 30 May, 11 June 2024
DATE OF JUDGMENT:	1 August 2024
CASE MAY BE CITED AS:	Base Group Property Pty Ltd v Wyllie
MEDIUM NEUTRAL CITATION:	[2024] VSC 523

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PROPERTY LAW – Sale of Land Act 1962 (Vic) ss 32, 32H and 32K(1), (2) and (4) – Whether section 32 statement failed to provide required information – Whether purchaser entitled to rescind contact of sale by reason of the vendor’s non-disclosure of connected services – Whether vendor acted honestly and reasonably – Whether purchaser in substantially as good a position as if disclosure obligations had been complied with – Fifty-Eighth Highwire v Cohen [1996] 2 VR 64 referred to – Property Law Act 1958 (Vic) s 49(2) – Whether purchaser entitled to return of deposit – Finding that purchaser entitled to return of deposit.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Harding of counsel	Nicholas James Lawyers Pty Ltd
For the Defendant	Mr W Rimmer of counsel	Davis Lawyers

TABLE OF CONTENTS

Introduction

Background

The issues before the Court

The purchaser’s entitlement to rescind the contract of sale.

The defendant’s defence pursuant to s 32K(4) of the SLA

First element - The defendant acted honestly
Second element - The defendant acted reasonably - Payne v Morrison
Third element – ‘ought fairly to be excused’
Fourth element – ‘Substantially as good as position’

Section 49(2) of the PLA

Conclusion

HIS HONOUR:

Introduction

The plaintiff, Base Group Property Pty Ltd, has filed an originating motion in this proceeding seeking declarations and orders under s 49 of the Property Law Act 1958 (Vic) (‘PLA’). The plaintiff seeks the return of a deposit that was paid under a contract for the purchase of land situated at 790 Arthurs Seat Rd, Arthurs Seat.

Background

By contract of sale of land dated 21 December 2022 (‘contract of sale’), the defendant, Mary Louise Wyllie, sold a property to the plaintiff for $8 million, with a 10% deposit of $800,000 payable on execution. The balance of the sale price was due to be paid one year later, on 21 December 2023. The deposit of $800,000 under the contract of sale was released to the defendant pursuant to s 27 of the Sale of Land Act 1962 (Vic) (‘SLA’).
The property comprises the land described in five titles, one for each of lots 9, 10, 11, 12 and 13. Lots, 9, 11, 12 and 13 are vacant lots. The Arthurs Seat Hotel is on lot 10, but otherwise, the lots are unimproved.
The contract of sale was preceded by a section 32 statement given by the defendant pursuant to section 32 of the SLA (‘section 32 statement’). Item 8 of the section 32 statement provides:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 523
Decision Date: 1 August 2024

CaseChat Overview and Summary

In the case of Base Group Property Pty Ltd v Wyllie, the plaintiff sought to rescind a contract for the sale of land due to the defendant’s failure to disclose certain information required under the Sale of Land Act 1962 (Vic). The dispute arose from the sale of a property, where the plaintiff claimed that the defendant had not provided a section 32 statement containing all the necessary information as required by the Act. This omission, the plaintiff argued, entitled them to rescind the contract. The matter was heard and determined in the Supreme Court of Victoria.

The primary legal issue before the court was whether the defendant's failure to include specific information in the section 32 statement constituted a breach of the statutory obligations under the Sale of Land Act 1962 (Vic). Additionally, the court had to determine whether the plaintiff was entitled to rescind the contract due to this non-disclosure, and if so, whether the plaintiff was entitled to a return of the deposit paid under the Property Law Act 1958 (Vic). The court also needed to assess whether the defendant had acted honestly and reasonably, and whether the plaintiff was in substantially as good a position as if the disclosure obligations had been properly fulfilled.

The court found that the defendant had indeed failed to include certain required information in the section 32 statement, which constituted a breach of the statutory obligations. The court held that the plaintiff was entitled to rescind the contract due to this non-disclosure. The defendant’s actions were not deemed honest and reasonable, and the plaintiff was not in substantially as good a position as if the disclosure obligations had been met. The court referenced the precedent set in Fifty-Eighth Highwire v Cohen [1996] 2 VR 64 to support its decision. Consequently, the court ruled that the plaintiff was entitled to a return of the deposit paid under the Property Law Act 1958 (Vic).

The final orders of the court included the rescission of the contract for the sale of land, and the return of the deposit to the plaintiff. The court's decision underscored the importance of compliance with statutory disclosure obligations in property transactions and the consequences of non-compliance for the vendor.

Orders