Havyn Pty Ltd v Webster

In *Havyn Pty Ltd v Webster*, the New South Wales Court of Appeal considered a dispute arising from a contract for the sale of land. The purchaser, Havyn Pty Ltd, alleged misrepresentation by the vendor, Mr. Webster, regarding the size of the property as depicted in a sales brochure. Despite discovering the alleged misrepresentation, the purchaser affirmed the contract but subsequently failed to complete the purchase. The vendor sought to rely on a Notice to Complete and terminate the contract, and also claimed damages for breach of contract and forfeiture of the deposit. The purchaser counterclaimed, alleging misleading and deceptive conduct under the *Fair Trading Act 1987* (NSW) and seeking the return of the deposit under section 55(2A) of the *Conveyancing Act 1919* (NSW).

The Court of Appeal was required to determine several key legal issues. Firstly, whether the vendor was entitled to terminate the contract and claim damages for breach, given the purchaser’s affirmation of the contract after discovering the alleged misrepresentation and the absence of causation between the misrepresentation and the failure to complete. Secondly, whether the vendor's conduct constituted misleading or deceptive conduct in trade or commerce under the *Fair Trading Act*, considering the use of the word "approximately" and the presence of a disclaimer in the brochure, and whether the purchaser's conduct severed the chain of causation for any such misleading conduct. Finally, the Court had to consider whether it was proper to exercise its statutory discretion to order the return of the deposit, and if so, on what terms.

The Court of Appeal found that while the vendor's representation regarding the property size, even with the word "approximately," could be considered misleading or deceptive conduct, the purchaser's subsequent affirmation of the contract and the lack of causation between the misrepresentation and the failure to complete meant the vendor was not entitled to terminate the contract on that basis. However, the Court held that the purchaser was in breach of the contract by failing to complete, and the vendor was entitled to damages for that breach. The Court also determined that the purchaser was entitled to judgment for the deposit paid, as the vendor's conduct in seeking to forfeit the deposit after the purchaser's failure to complete, in circumstances where the misrepresentation was not the cause of that failure, weighed against the vendor in the exercise of the statutory discretion.

The appeal was allowed in part, and the cross-appeal was dismissed. The orders of the primary judge were set aside and varied. The Court ordered that the purchaser pay damages to the vendor for breach of the contract, to be ascertained by the Master. The Court also ordered that judgment be entered for the purchaser in the sum of $92,739, representing the deposit, together with interest. Each party was ordered to bear their own costs of the appeal and in the court below.