Le Cornu & Kurda v Place on Brougham Pty Ltd - [2013] SADC 32

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LE CORNU & KURDA v PLACE ON BROUGHAM PTY LTD
[2013] SADC 32
Judgment of His Honour Judge Cuthbertson
15 March 2013
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - STATUTORY PROTECTION OF PURCHASERS
Sale of land under the Land and Business (Sale and Conveyancing) Act 1994 (SA) – Action by purchasers for return of deposit paid on rescission – Whether the community lot, the subject of sale, must be in existence at time of service of Vendor's Statement - Whether Vendor's Statement accurate – Whether statutory right to rescind has been lost by conduct of purchaser – Defence of election and estoppel.
HELD: Not necessary for community lot to have been created at time of service of Vendor's Statement – Conduct of purchasers in continuing to try to on-sell the property after becoming aware of asserted defects in Vendor's Statement constituted election by conduct to affirm the contract. Purchasers estopped from denying the validity of the contract.
Community Titles Act 1994; Land and Business (Sale and Conveyancing) Act 1994; Real Property Act 1886 S 223LB; Land and Business (Sale and Conveyancing) Regulations 1995, referred to.
Myles Pearce & Co Pty Ltd v Alfredo Leuci, Robert Martin & Roslyn Jean Martin (1997) 193 LSJS 491; Astill & Anor v South Esplanade Developments Pty Ltd (2007) 249 LSJS 334; Sargent v ASL Developments Ltd (1974) 131 CLR 634; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Tudor Developments Pty Ltd v Makeig (2008) 72 NSWLR 624; Everest Project Developments Pty Ltd v Mendoza [2009] V ConvR 54-775; South Esplanade Developments Pty Ltd v Astill [2007] ANZ ConvR 534; Marchesi v Viridian Noosa Pty Ltd [2010] QSC 324; Allmed Pty Ltd v Opak Investments Pty Ltd (in liq) [1995] ANZ ConvR 153; Cockburn v Key Urban Pty Ltd [2009] NSW ConvR 56-243; Immer (no 145) Pty Ltd v Uniting Church in Australia Property Trust (NSW) (1993) 182 CLR 26; Tiplady v Gold Coast Carlton Pty Ltd (1984) 3 FCR 426, considered.

LE CORNU & KURDA v PLACE ON BROUGHAM PTY LTD
[2013] SADC 32
The Issue

The plaintiffs claim damages and the return of a deposit paid upon the signing of a contract for the purchase from the defendant of a unit (apartment 608) in the Adelaide Hotel development at “Place on Brougham”, North Adelaide (T266) for $2,999,000 (T269) on 23 May 2005. (T271 - Ex P11). A deposit of $299,990 was paid. (Ex P11 - Contract, Schedule)
The plaintiffs claim to have rescinded the contract by serving a Notice of Cooling Off (Ex P24) on 5 October 2007. The plaintiffs claim to have been able to serve the Notice of Cooling Off outside of the period of time prescribed for the service of a Notice due to the fact that the Form 1 Notice (Vendor’s Statement) was inaccurate, relying on the principle in Myles Pearce & Co Pty Ltd v Alfredo Leuci, Robert Martin & Roslyn Jean…

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.

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Details

Case: [2013] SADC 32
Decision Date: 15 March 2013

CaseChat Overview and Summary

In the case of Le Cornu & Kurda v Place on Brougham Pty Ltd, the plaintiffs sought the return of a deposit paid for a property, which they had subsequently resold, following the rescission of the original contract of sale. The dispute was heard and determined by the Supreme Court of South Australia. The plaintiffs argued that the community lot, which was the subject of the sale, was not in existence at the time the Vendor's Statement was served, and that the statement itself was inaccurate. The defendants, on the other hand, contended that the statutory right to rescind had been lost due to the conduct of the purchasers, and that the plaintiffs were estopped from denying the validity of the contract.

The court was required to decide whether the existence of the community lot at the time the Vendor's Statement was served was a necessary condition for the sale to proceed under the Land and Business (Sale and Conveyancing) Act 1994 (SA). Additionally, the court needed to determine whether the Vendor's Statement was accurate and whether the plaintiffs' conduct, in continuing to attempt to on-sell the property despite knowing about the alleged defects in the Vendor's Statement, constituted an election to affirm the contract.

The court found that the existence of the community lot at the time of serving the Vendor's Statement was not a prerequisite for the sale to proceed under the Act. It was held that the conduct of the plaintiffs, in continuing to attempt to on-sell the property after becoming aware of the asserted defects in the Vendor's Statement, constituted an election by conduct to affirm the contract. As a result, the plaintiffs were estopped from denying the validity of the contract. Consequently, the plaintiffs' claim for the return of the deposit was dismissed.

Orders