Brothers v Park

In the case of *Brothers v Park*, the vendor and purchasers of a farming property disputed the consequences of a false representation made by the vendor regarding departmental approval for the use of part of the land for farming. The contract contained a clause allowing the purchasers to terminate if a letter evidencing this approval was not obtained, alongside a clause granting the purchasers a right of entry to prepare ground for crops in locations first approved by the vendor. Despite the representation being false and the letter unobtainable, the purchasers did not terminate the contract. The vendor subsequently purported to rescind the contract for other reasons and refused the purchasers entry, which was later held to be ineffective, and the sale was completed.

The central legal issues before the court were whether the purchasers' decision not to terminate the contract negated causation for the loss of profits from a further crop, whether such loss of profits was too remote, and whether the vendor's refusal of entry caused the loss of profits from the further crop, particularly given that specific locations for this crop had not been proposed or approved. The court also considered whether the vendor could raise the point on appeal that the loss of profits was not caused by the refusal of entry because locations were not proposed, when this point had not been taken at trial.

The court reasoned that causation for the loss of profits remained despite the purchasers' decision not to terminate, as this decision was a reasonable one made in consequence of entering the contract under the influence of the false representation. The loss of profits was held not to be too remote as it was within the contemplation of the parties. However, the court allowed the vendor to take the point on appeal that the loss of profits from the further crop was not caused by the refusal of entry because the necessary prior approval of locations had not been obtained. The court found that the vendor's conduct did not dispense with the need for prior approval of locations, and therefore this point succeeded, leading to a reduction in damages.

The appeal was upheld in part. The judgment and order for costs made on 11 November 2003 were set aside. In lieu thereof, judgment was entered for the purchasers for $570,112, taking effect on 11 November 2003, and the defendant was ordered to pay sixty per cent of the plaintiffs' costs. The appellant was ordered to pay the respondents' costs of the appeal.