Cheshire v Jennings (No 2)

The appeal concerned a dispute between the vendors, Cheshire and Jennings, and the purchasers, the plaintiffs, of a property at 15 Wyatt Road, Direk, South Australia. The purchasers sought to avoid the contract of sale, alleging that the vendors failed to disclose material information in the Form 1 Vendor's Statement. The matter was heard by the Full Court of the Supreme Court of South Australia, with Justices Peek, Doyle, and Livesey presiding.

The central legal issues before the court were whether the vendors were aware of an environmental assessment concerning PFAS contamination in the vicinity of the property, and whether this assessment constituted an "environmental assessment" for the purposes of question 2(5) of the Form 1. The court also had to determine if the failure to disclose this information prejudiced the purchasers, entitling them to avoid the contract under section 15(2) of the relevant Act.

The Full Court, in allowing the appeal, reasoned that it was open to the trial judge to find that the respondents were aware of the investigation given the extensive information campaign surrounding it. The court held that the essential purpose of a Form 1 is to provide purchasers with sufficient and accurate information for an informed decision. It further determined that the term "environmental assessment" in Form 1 should be interpreted broadly, encompassing various investigations and activities, and that a narrow interpretation requiring the assessment to pertain exclusively to the specific land was unduly restrictive. Consequently, the court concluded that the investigation into PFAS contamination qualified as an "environmental assessment" that should have been disclosed.

The court found that the trial judge had correctly determined that the purchasers would not have bought the house had they been informed of the environmental assessment, establishing prejudice for the purposes of the Act. Accordingly, the Full Court ordered that the purchasers were entitled to avoid the contract.