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Borda v Burgess

Borda v Burgess

Case [2003] NSWSC 1171 11 December 2003

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CITATION: Borda v Burgess [2003] NSWSC 1171

HEARING DATE(S): 17/10/03

JUDGMENT DATE:
11 December 2003

JURISDICTION:
Equity Division

JUDGMENT OF: Young CJ in Eq

DECISION: Declaration made that deposit validly forfeited. First defendant to pay plaintiff's costs.

CATCHWORDS: CONVEYANCING [24]- Defect in title- Mining lease affecting land- Defect in title or a mere defect in quality- Held defect in quality- Vendor did not have to disclose the defect in quality- Effect of prohibition on making certain requisitions- Whether prevents rescission for defect covered by prohibition. CONTRACT [135][137]- Election- Right to rescind in purchaser dehors contract- Whether purchaser must know both of defect and of right to rescind for defect- Authorities discussed.

LEGISLATION CITED: Coal Acquisition Act 1981, s 5
Conveyancing Act 1919 s 55(2A)
Conveyancing (Sale of Land) Regulation 2000, Schedule 3 Part 3(12)
Mining Act 1992, s 164

CASES CITED: Adderton v Festa Holdings Pty Ltd [2003] NSWSC 1065
Cameron v Lewis (1975) 1 BPR 9137
Carpenter v McGrath (1996) 40 NSWLR 39
Coastal Estates Pty Ltd v Malevende [1965] VR 433
Crampton v French [1996] ANZ Conv R 156
Crump v Wala [1994] 2 NZLR 331
Eighth SRJ Pty Ltd v Merity (1997) 7 BPR 15,189
Fletcher v Manton (1940) 64 CLR 37
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50
Immer (No 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26
Khoury v Government Insurance Office of NSW (1984) 165 CLR 622
Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268
Macro v Thompson (No 3) [1997] 2 BCLC 36
Miller v Minister of Mines [1963] AC 484
Nardell Colliery Pty Ltd v NSW Coal Compensation Review Tribunal [2003] NSWSC 462
Nottingham Patent Brick & Tile Co v Butler (1885) 15 QBD 261
Peyman v Lanjani [1985] Ch 457
Re Hoffmann (1989) 85 ALR 145
Rignall Developments Ltd v Halil [1988] Ch 190
Sargent v ASL Developments Ltd (1974) 131 CLR 634
The Kanchenjunga [1987] 2 Ll LR 509
The Uhenbels [1986] 2 Ll LR 294
Waddell v Wolfe (1874) LR 9 QB 515

PARTIES :
Kenneth Charles Borda (P)
Scott Raymond Burgess (D1)
Jurds Real Estate Pty Ltd (D2)

FILE NUMBER(S): SC 2327/03

COUNSEL: R R I Harper (P)
G P F Rundle (D)

SOLICITORS: Garland Hawthorn Brahe (P)
White & Downey (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Thursday 11 December 2003

2327/03 – BORDA v BURGESS

JUDGMENT

1 HIS HONOUR: The plaintiff as vendor and the first defendant as purchaser, entered into a contract for the sale of land in the 2000 edition of the standard form for the sale and purchase of land at Quorrobolong near Cessnock. The contract was dated 2 July 2002; the purchase price was $485,000 with a deposit of $48,500 which was duly paid. The contract provided that the completion date was 2 December 2002.

2 On 4 December 2002 the solicitor for the…

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.

Continue reading Borda v Burgess

Details

AGLC: Borda v Burgess [2003] NSWSC 1171
Case: [2003] NSWSC 1171
Decision Date: 11 December 2003

CaseChat Overview and Summary

Borda was the purchaser of a property in New South Wales from Burgess. The property was affected by an existing mining lease which was unknown to the purchaser at the time of purchase. The purchaser sought to rescind the contract on the basis of a defect in title. The High Court of Australia was required to determine whether the defect was one of title or a mere defect in quality, and if the prohibition on certain requisitions prevented the purchaser from rescinding the contract.

The court found that the defect was not in the title but rather in the quality of the property. The court held that a mere defect in quality did not amount to a defect in title and therefore the vendor was not required to disclose the defect. The court also found that the prohibition on making certain requisitions did not prevent the purchaser from rescinding the contract for a defect that was covered by the prohibition. The court held that a purchaser must know both of the defect and of their right to rescind for the defect in order to exercise the right to rescind.

The court held that the purchaser was not entitled to rescind the contract as they did not know of their right to rescind until after the contract had been executed. The court found that the purchaser's knowledge of the defect was not enough to entitle them to rescind the contract. The court further held that the prohibition on making certain requisitions did not apply to defects in quality and therefore did not prevent the purchaser from rescinding the contract.

The court ordered that the contract between the parties was valid and binding and that the purchaser was not entitled to rescind the contract. The court also ordered that the purchaser pay the vendor the balance of the purchase price and that the vendor complete the sale of the property to the purchaser.

Orders