Bosevski v Baghdai

In *Bosevski v Baghdai* [1995] NSWCA 55, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning a contract for the sale of land. The purchaser had paid a deposit and entered into a contract for sale, but subsequently sought to terminate the contract and recover the deposit. The vendor resisted this claim, asserting the purchaser was not entitled to terminate.

The central legal issue before the Court of Appeal was whether the purchaser was entitled to terminate the contract and recover the deposit on the grounds that the vendor had failed to provide a notice of the existence of a registered easement over the property prior to the contract becoming unconditional. The court had to determine the proper interpretation of the relevant contractual clauses and the vendor's obligations under the contract concerning the disclosure of encumbrances.

The Court of Appeal held that the vendor's failure to disclose the registered easement constituted a breach of a condition of the contract, entitling the purchaser to terminate. The court reasoned that the contract implicitly required the vendor to disclose all registered encumbrances that might affect the purchaser's enjoyment of the property. The existence of the easement was a material fact that should have been disclosed, and its non-disclosure meant the vendor had not provided clear title as contemplated by the contract. The court applied principles of contract law relating to conditions, warranties, and the duty of disclosure in land sale contracts.

The Court of Appeal allowed the purchaser's appeal, setting aside the orders of the primary judge. The court ordered that the contract be rescinded and that the deposit paid by the purchaser be returned to them.