Dunworth v Mirvac Qld Pty Ltd

The case of Dunworth v Mirvac Qld Pty Ltd concerns a dispute between the appellant, who agreed to purchase a residential apartment, and the respondent, the seller. The original completion date was 12 May 2009, but the appellant sought to rescind the contract on 28 January 2011, alleging she was induced to enter the contract by false, misleading and deceptive representations. The respondent had counter-claimed for specific performance, which was granted with a completion date of 8 February 2011. The apartment was subsequently flooded and damaged on 13 January 2011, rendering it unfit for occupation as a dwelling. The respondent offered to complete necessary restoration work and delay completion by four months. The appellant purported to exercise her statutory right to rescind the contract under s 64 of the Property Law Act 1974 (Qld) on 28 January 2011, and applied for a declaration that the contract had been validly rescinded and for dissolution of the order for specific performance.

The primary legal issues the court had to decide were whether the trial judge erred in failing to determine certain questions of law, whether the right of rescission under s 64 of the Property Law Act 1974 (Qld) could subsist beyond the contractually appointed date for completion in circumstances where there was a subsequent order for specific performance, whether the apartment must have been uninhabitable as at the date of rescission, and whether the respondent’s capacity to restore the apartment was relevant. The court also needed to determine whether rescission of a contract after an order for specific performance is made requires the leave of the court, whether such rescission requires vacation of that order, and whether a declaration should be made that the contract was validly rescinded.

The court found that the trial judge erred in failing to determine certain questions of law. The court held that the right of rescission under s 64 of the Property Law Act 1974 (Qld) could subsist beyond the contractually appointed date for completion in circumstances where there was a subsequent order for specific performance. The court further held that the apartment did not need to be uninhabitable as at the date of rescission, and that the respondent’s capacity to restore the apartment was relevant. The court held that rescission of a contract after an order for specific performance is made does not require the leave of the court, nor does it require vacation of that order. The court also held that a declaration should be made that the contract was validly rescinded.

The orders of the court were that the appeal be allowed, the orders and directions made on 7 February 2011 be set aside, and the order for specific performance made on 10 December 2010 also be set aside. The court declared that on or about 28 January 2011 the appellant validly rescinded her contract with the respondent dated 25 June 2007. The respondent’s cross appeal was dismissed, and the respondent was ordered to pay the appellant’s costs of the appeal and the hearing in the Trial Division, to be assessed on the standard basis.