Clarke v Mariotis - [2009] VSC 279

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

No. 5792 of 2009

CHRISTINE ANNE CLARKE	Plaintiff
v
JIM MARIOTIS	Defendant

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	17 April 2009
DATE OF JUDGMENT:	15 July 2009
CASE MAY BE CITED AS:	Clarke v Mariotis
MEDIUM NEUTRAL CITATION:	[2009] VSC 279

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PROPERTY LAW – Vendor and purchaser summons – Special condition in contract of sale gave purchaser right to rescind if building report shows major structural defect – Report revealed drainage problems and corrosion in columns commenced – Whether contract validly rescinded – Property Law Act 1958, s 49(1).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P P Bravender-Coyle	Mingos Kay Lawyers
For the Defendant	Mr W F Rimmer	John Bennison

HIS HONOUR:

The plaintiff in this application under s 49(1) of the Property Law Act 1958 was the purchaser from the defendant, under a contract of sale dated 22 December 2008, of 3A Braeside Avenue, Camberwell being the land more particularly described in certificate of title volume 10985 folio 272 for a price of $715,000 payable as to $71,500 by way of deposit on 23 December 2008 and the balance on 27 February 2009. A residential dwelling was located on the land. The contract included the following special condition:

“18This sale is subject to the purchaser obtaining a building report within 3 days of the purchaser signing this contract. If the report shows a major structural defect the purchaser may end this contract but only if the purchaser serves written notice on the vendor together with a copy of the report within 7 days of the purchaser signing this contract. All monies must be immediately refunded to the purchaser if the contract is ended.”

The plaintiff duly paid the deposit and retained solicitors to act for her on the purchase.

The plaintiff also retained Engel Homes Pty Ltd to provide a pre-purchase residential inspection report. A director, Werner Engel, carried out an inspection of the property on 22 December. On the following day Engel Homes Pty Ltd gave the plaintiff a written residential inspection report prepared by Mr Engel. The report runs to 24 pages and includes certain passages to which reference must be made. Commencing on page 2 the following is stated -

“INSPECTION SUMMARY
3A Braeside Avenue, Camberwell Vic 3124
This townhouse/site requires remedial work to prevent water from the front, or building in front, from seeping under the rear building. This is a major concern as long term serious damage could occur to 3A. The remaining items listed in this report are fairly typical for the type and age of building, and which should form part of an ongoing maintenance and rectification program. Refer to pages 15, 16, and 17 for detailed notes, which should be carefully read in conjunction with the ratings on each page of the checklists, as well as other information enclosed, and if you require further information, please feel free to…

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 Clarke v Mariotis

Details

AGLC: Clarke v Mariotis [2009] VSC 279
Case: [2009] VSC 279
Decision Date: 15 July 2009

CaseChat Overview and Summary

Clarke and Mariotis appeared before the court in a matter concerning a contract for the sale of property. The dispute arose when the purchaser, Clarke, sought to rescind the contract based on the discovery of significant structural defects, as outlined in a special condition of the contract. The vendor, Mariotis, argued that the contract had not been validly rescinded. The court was required to determine whether Clarke's right to rescind under the special condition in the contract was properly exercised and if the contract was, therefore, validly terminated.

The primary legal issue before the court was whether the special condition in the contract, which allowed Clarke to rescind if a building report indicated a major structural defect, was properly exercised. The court needed to consider the specific terms of the contract, the findings of the building report, and whether the defects disclosed were indeed "major structural defects" within the meaning of the contract. Furthermore, the court had to examine if the contract was validly rescinded in accordance with the Property Law Act 1958, section 49(1).

The court found that the building report did indeed reveal significant structural issues, including drainage problems and corrosion in the columns. These issues met the criteria of "major structural defects" as defined in the special condition of the contract. The court held that Clarke had properly exercised the right to rescind the contract under the terms agreed upon. The vendor's argument that the defects were not sufficient to warrant rescission was rejected. Consequently, the court determined that the contract was validly rescinded.

The final orders of the court confirmed the valid rescission of the contract and directed the parties to return any monies paid under the contract. The court also ordered that Clarke be reimbursed for any reasonable expenses incurred in connection with the rescission.

Orders