Burner v Sanctuary Homes Pty Ltd and Dimov

Burner (the appellant) appealed to the Court of Appeal of New South Wales against a District Court judgment that found in favour of Sanctuary Homes Pty Ltd and Dimov (the respondents). The dispute concerned the purchase of land, where a portion of the purchase price was deferred pending the completion of building work and the issuance of an occupation certificate. The appellant, as the purchaser, had directed their agent to repay these deferred funds, but subsequently refused to pay the balance of the purchase price, leading to a dispute over whether the building work had been completed.

The central legal issues before the Court of Appeal were whether the respondents' cause of action was based on fraud or deceit, and consequently, whether the limitation period under the *Limitation Act 1969* (NSW) had commenced. Specifically, the court had to determine if the respondents had discovered the alleged fraud or deceit less than six years before the commencement of proceedings, as required by sections 14 and 55 of the Act. This involved an examination of the elements of common law fraud.

The Court of Appeal found that the respondents had failed to establish the necessary elements of common law fraud. The court reasoned that the appellant's conduct, while potentially constituting a breach of contract or a failure to meet contractual obligations, did not meet the high threshold required for fraud or deceit at common law. The appellant’s refusal to pay the balance of the purchase price, in the context of the dispute over building completion, was not demonstrably based on an intention to deceive or defraud the respondents at the time the agreement was made or when the funds were directed to be repaid. Therefore, the respondents' claim was out of time.

The Court of Appeal allowed the appeal, set aside the orders and judgment made in the District Court, and entered judgment for the appellant. The respondents were ordered to pay the appellant’s costs in both the District Court and the Court of Appeal.