Minister for Education & Training v Canham
[2004] NSWSC 274
•16 April 2004
Reported Decision:
(2004) NSW ConvR 56-080
Supreme Court
CITATION: Minister for Education & Training v Canham [2004] NSWSC 274 HEARING DATE(S): 31/03/04, 01/04/04 JUDGMENT DATE:
16 April 2004JUDGMENT OF: Pearlman AJ DECISION: 1. Declaration that plaintiff has good equitable title; 2. Declaration that plaintiff is entitled to a retransfer; 3. Order that the defendant retransfer property to the plaintiff; 4. Defendant to pay plaintiff's costs. CATCHWORDS: Equity - Contract for sale of land - Land transferred by mistake - Mistake in transfer executed by vendor - Purchaser knew or ought to have known disputed land not included in sale - Retention of disputed land by purchaser unconscionable - Retransfer ordered. - Torrens system - indefeasibility of title - exceptions - personal equity - equity to order rectification and retransfer for mistake. LEGISLATION CITED: Real Property Act 1900
Fair Trading Act 1987CASES CITED: Frazer v Walker and Ors (1967) 1 AC 569 at 585
Breskvar v Wall (1971) 126 CLR 376 at 384-385
Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222
Tutt and Anor v Doyle and Anor (1997) 42 NSWLR
Oh Hiam v Tham Kong (1980) 2 BPR 97130 at 9454
Bahr and Anor v Nicolay and Ors (1988) 164 CLR 604 at 638PARTIES :
Minister for Education and Training
v
Wilson Sherlock CanhamFILE NUMBER(S): SC 1288/03 COUNSEL: Plaintiff: V B Hughston SC & J M Jagot
Defendant: I M KhanSOLICITORS: Plaintiff: Crown Solicitor
Defendant: David Geddes Solicitors
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
Civil LIST
Pearlman AJ
Friday, 16 April 2004
1288/03 MINISTER for Education and Training v Wilson Sherlock CANHAM
Introduction
1 This case concerns a parcel of land situated at Mulwala in southern New South Wales. The Minister for Education and Training (“the plaintiff”) seeks an order that an estate in fee simple in that parcel of land be retransferred to him from the current registered proprietor, Wilson Sherlock Canham (“the defendant”).
2 The proceedings arise because the plaintiff transferred that parcel of land to the defendant by mistake. The parcel of land is described as lot 1 Sec 17 DP 758726 being part of the land described in Auto Consol 1331-114 and being the land known as 69 Sturt Street, Mulwala (“the disputed site”). It comprises a house and surrounding land on the corner of Sturt and Erne Streets, Mulwala.
3 The defendant relies upon the indefeasibility provisions of the Real Property Act 1900, claiming that, since he has been registered as the proprietor of the disputed site, his title cannot be disturbed. The plaintiff asserts, however, that the facts and circumstances create in the plaintiff a right in personam, or personal equity, which he is entitled to enforce against the defendant and which would empower the Court to order the retransfer of the disputed site.
Background facts
4 In late 1991, the plaintiff decided to dispose of the former Mulwala high school site (“the school site”). The school site comprised 17 lots that are described as follows:
- Lot 1 DP 520624 – Folio Identifier 1/520624
Lot 2 DP 520624 - Folio Identifier 2/520624
Lots 1 to 10 Sec 24 DP 758726 – Auto Consol 3987 – 163
Lot 2 Sec 17 DP 758726 – Auto Consol 1331 – 114
Lot 3 Sec 17 DP 758726 – Folio Identifier 3/17/758726
Lot 8 Sec 17 DP 758726 – Folio Identifier 8/17/758726
Lots 9 to 10 Sec 17 DP 758726 – Auto Consol 1331 – 115
5 The school site was vacant land. It formed part, but not the whole, of a rectangular parcel of land located between Sturt, Erne, McKee, Savage and Inglis Streets Mulwala. Those parcels of land which were located within the rectangle but which were not included in the school site were, first, a parcel of land on the corner of Sturt and Inglis Streets on which was erected a scout hall (“the scout hall”), secondly, some closed lanes and roads (“the roads”), and, thirdly, the disputed site.
6 The approximate location of both the lots comprising the school site and the three parcels of land not included in the school site was set out on a sewerage diagram, a copy of which was attached to the contract for sale, to which I refer in par 11. The relevant part of that sewerage diagram is as follows (with the disputed site hatched):
7 A critical matter to note is that Auto Consol 1331 – 114 comprised two lots, namely, lot 2 Sec 17 DP 758726 (which was included in the school site) and lot 1 Sec 17 DP 758726 (which is the disputed site and which was not included in the school site). In other words, what was being sold was part only of the land comprised in Auto Consol 1331 –114.
8 In April 1992, the Department of Education and Training sought proposals from local real estate agents for the marketing and sale of the school site by auction, and ultimately it appointed Elders VP Real Estate at Yarrawonga (“the selling agent”) to do so.
9 For the purpose of determining a reserve price for the auction, the plaintiff instructed Ian William Condon, a valuer in the employ of the State Valuation Office, to determine the current market value of the school site. He valued the school site as at 26 March 2002 as between $290,000 and $325,000, and stated that an appropriate reserve price was $300,000.
10 On 7 May 2002, the Department instructed the Crown Solicitor to prepare a contract for sale (“the contract”) and to forward it to the selling agent. At the same time, it forwarded the title deeds to the Crown Solicitor. The Crown Solicitor carried out its instructions, including in the contract the whole of the land described in Auto Consol 1331 –114. Some correspondence then ensued between the Crown Solicitor and the Department as to whether or not the disputed site was included in the school site and, upon receipt of instructions that the disputed site was not included, the Crown Solicitor prepared another schedule of titles which he forwarded to the agent for insertion in the contract.
11 The contract relevantly contained the following:
1. The address of the land was noted as “ Former Mulwala High School Site”.
2. In the space in the form relating to the “lot”, the words “ See annexure A” were inserted.
3. In that part of the form relating to improvements, the box denoting “other” was marked, and the words “ vacant land” were inserted.
4. There were two attachments each marked “annexure A”. One was a list of the title references (as I have set out in par 4) numbered consecutively from 1 to 7, and headed “ Annexure A”. The other was a document containing seven special conditions, headed “ Special Conditions” and referred to in the following words: “ This is the annexure marked ‘A’ to the contract for sale of land between the Minister for Education & Training as Vendor and… as purchaser”. (I shall distinguish these annexures by referring to the former as “annexure A” and to the latter as “the special conditions”).
5. As required by the Conveyancing (Sale of Land) Regulation 2000 (the Vendor Disclosure Regulations), copies of the folio identifiers relating to the titles disclosed in annexure A were attached. One of the folio identifiers was a copy of Auto Consol 1331 – 114, which, of course, noted both lots 1 and 2 Sec 17 DP 758726 in the schedule of parcels to which it referred.
6. The Vendor Disclosure Regulations also require the attachment of copies of plans relating to the land in the contract. Plans were attached for some of the lots, but not all; and one of the plans so attached was illegible.
8. A section 149 certificate was attached (being a certificate issued by the local council in relation to applicable environmental instruments and other information pertaining to the land the subject of inquiry to the council). The certificate contained a description of the land to which it referred, including, relevantly, the words “… Part Lot 1, Lot 2, 8 & 10 Section 17 DP 758726…” It also contained the following words: “ Is the land identified on the application as vacant? Yes” , and there followed information about the permissibility of the erection of a dwelling house on the land.7. The sewerage diagram that I have set out in par 6 was attached.
12 The drafting of the contract was far from ideal. It was confusing, documents were omitted, and the attachments were carelessly put together. Nonetheless, I find that the disputed site was not included in the land the subject of the contract. I accept the opinion of the two experts, both well qualified and experienced solicitors, called to give evidence about the conveyancing transaction. The plaintiff called Neville James Moses, and the defendant called Margaret Colleen Hole. Mr Moses said that a solicitor perusing the contract would have pointed out that, although Auto Consol 1331 –114 referred to two lots, only one of those lots, lot 2, was being purchased. Ms Hole gave evidence to similar effect.
13 I return, now, to the steps in the transaction that took place.
14 Rodney Maxwell Leslie was the auctioneer employed by the selling agent. He said that he placed auction boards advertising the site, one on Sturt Street and the other on Inglis Street. He also placed newspaper advertisements. The wording in the auction boards and the advertisements was not identical, but it is sufficient to note, as indicative of all of them, the advertisement placed in the Yarrawonga Chronicle, which was as follows (omitting reference to the name and contact details of the selling agent):
Auction
Saturday, June 29th, 11.00am
Under Instructions from NSW Dept Education & Training
Former Mulwala
High School Site
Approx 3.149 HA (7.78 Acres)
Unique opportunity to acquire a large parcel of residential land prime
for redevelopment (S.T.C.A), central and conveniently located to Lake Mulwala, sporting ground and shops.
Bordered by Erne, Sturt, Inglis and Savage/McKee Street.
15 The evidence that I have set out thus far is not substantially in dispute, but from this point on, the evidence and the plaintiff and the defendant diverges on some aspects, some of them critical to the issue in the case.
16 Mr Leslie’s evidence is that, on or about 24 or 25 May 2002, he received a telephone call from the defendant, who inquired, so far as Mr Leslie can recollect, about the auction, the auction date and the price. Mr Leslie’s evidence is that the defendant did not ask for a copy of the contract. However, the defendant, whilst admitting that the conversation took place, asserts that he asked Mr Leslie for a copy of the contract, and was told that it would not be available until the day before the auction.
17 The selling agent received the contract on 27 May 2002, and the amendment to annexure A to which I have referred in par 10 was made on 29 May 2002.
18 On the day of the auction, 29 June 2002, Mr Leslie went to the school site at about 8:30am, and prepared by putting auction pointer boards and an auction flag in place. At 10am, he placed a copy of the contract on a small table located in the vicinity of the area in which the auction took place. Mr Leslie estimated that between 40 and 60 persons were present by about 10:45am.
19 At 11am on that date, the auction took place, conducted by Mr Leslie.
20 Mr Leslie’s evidence is that he commenced by making an announcement, reading some parts of the contract and describing the school site. His evidence is that he read out the property description from the contract, and stated that “There aren’t any improvements on the property”. He said that he described the school site in the following words:
I emphasise that there are parcels of land that go across the land we
The vacant land bordered by Inglis Street, Sturt Street down to the
scout hall, down as far as the house on the corner of Erne St, down to
the rail line and back to Inglis Street.
are selling today. They were once disused roads, they are no longer
disused roads and are not part of the sale.
21 A number of the plaintiff’s witnesses who were present at the auction, gave evidence as to what Mr Leslie said in his opening announcement. Robert Craig Tait is a real estate agent who is the branch manager of the selling agent. He said that Mr Leslie said words to the following effect, whilst pointing first to the scout hall and then to the disputed site:
We are going to sell the land and all the land excluding the scout hall
on our left hand side and that piece of land on the corner over there
that has a red brick home on it.
22 Paul John Belot is a property developer in the Yarrawonga and Mulwala area. He corroborated Mr Tait’s recollection of the words said by Mr Leslie, stating that Mr Leslie pointed to the scout hall and the disputed site, whilst saying that they were not included in the sale. Adrian Anthony Chisnall is a real estate agent whose business is located in Yarrawonga. He also corroborated Mr Tait’s recollection, stating that Mr Leslie pointed to the dispute site, and that he said that the “…house on the north-east corner did not go with the property…” and nor did the scout hall or the roads.
23 The defendant’s evidence is that he arrived at the location of the auction about ten minutes after the auction had commenced. He said that he heard Mr Leslie state that the roads were not included in the sale, nor the scout hall, but he did not hear Mr Leslie refer to the disputed site as not being part of the sale. Lindsay Howard Evans, who is employed by the defendant as a sales representative, gave evidence that he also attended the auction but arrived about the same time as the defendant, that is, about ten minutes after it commenced. He said he was talking to a Mrs Belot and also to the defendant and did not recall any specific details about what Mr Leslie said.
24 After making the announcements I have referred to, Mr Leslie called for questions. He said that Mr Belot asked him about the roads, and that the defendant asked him about the zoning of the school site. There were no other questions. The defendant denies that he asked about the zoning, but states that he himself asked a question about the roads. Mr Belot confirmed that he had asked the question about the roads, and Mr Tait recalled that some person in the crowd had asked about the roads.
25 Then the bidding started. Mr Tait kept a tally of the bids, and his notes were in evidence. There were nine bids. They started at $100,000. After reaching $250,000, they proceeded in $10,000 increments, until the second last bid which was $280,000. The defendant then bid $300,000. Mr Leslie called for Mr Tait to produce the sealed reserve price to him. Mr Leslie read it, stated that the school site was now on the market, and the defendant confirmed his last bid. The sale of the school site was then knocked down to the defendant at $300,000.
26 After the auction was completed, the defendant went to his office nearby, accompanied by Mr Leslie. The defendant’s solicitor, Godfrey Michael Stewart, was also present. Mr Stewart’s evidence was that he went through the contract at that time. He said in cross-examination that he had perused the copies of the folio identifiers and the attached plans and checked them off against the sewerage plan. He said that he did not check them off against annexure A, because, although he noted the reference on the front of the contract to annexure A, he thought that reference meant the special conditions, since they were also marked “annexure A”.
27 The normal conveyancing steps then ensued. One of them involved a conveyancing clerk in Mr Stewart’s office forwarding a printed version of requisitions on title to the Crown Solicitor on 8 July 2002.
28 At this point, the sale was being handled on behalf of the plaintiff by Michael Gregory Norman, then a solicitor employed by the Crown Solicitor. He had recently commenced his employment, and had not prepared the contract himself. He did, however, respond to the requisitions on title on 18 July 2002. In response to a requisition about compliance with regulations in relation to buildings, Mr Norman replied that there were no buildings on the land. He noted other questions about building works as being “not applicable”, and he said that there were no tenancies.
29 On 31 July 2002, Mr Stewart’s conveyancing clerk submitted a draft transfer for the approval of Mr Norman. This is where the mistake occurred. The transfer referred to Auto Consol 1331 – 114, without distinguishing the fact that part only of the land described in Auto Consol 1331-114 was being sold. Mr Norman also made a mistake. He accepted the transfer as being in conformity with the contract, and did not notice the mistake in it. He replied on 1 August 2002 stating that the transfer was in order. An engrossed transfer in that form was forwarded on 7 August 2002, and executed on behalf of the plaintiff.
30 Settlement took place at the office of the Crown Solicitor on 12 August 2002, Mr Norman acting as agent for Mr Stewart for that purpose. The executed transfer and the title deeds were handed over. They were lodged for registration, and the defendant became the registered proprietor of the disputed site.
31 Some time in September 2002, the mistake in the transfer was discovered, and these proceedings were ultimately commenced.
The defendant’s evidence
32 The defendant is a real estate agent, and the proprietor of the business called Lake Mulwala Real Estate. He had been a real estate agent for over 24 years, but at the time of the auction he had been operating in Mulwala only for about two months.
33 The defendant’s principal assertion is that he honestly believed that the disputed site was included within the school site, and that he was buying at auction land that included a parcel upon which a house was located.
34 The remainder of his evidence may be summarised as follows:
1. He knew about the sale because he had seen the advertisement in the Yarrawonga Chronicle;
2. His intention was to acquire the school site for subdivision development. This was the first time that he intended to undertake development on his own account, although he had been associated with a lot of development in his capacity of a real estate agent;
4. However, he knew, prior to the auction, that the land offered for sale did not include the scout hall, nor did it include the roads. A member of the Scouting Association had asked him before the auction for an appraisal of the scout hall, so he knew it was not included in the sale. A council officer had contacted him before the auction, asking him, as a local agent, to tell anyone who inquired that the roads were not included in the sale.3. From the reference to the streets in the advertisement, he believed that the land offered for sale comprised the whole of the land within the rectangle bordered by those streets;
5. After being told by Mr Leslie that the contract was not then available, he did not seek to inspect it at any time before the auction, although he considered that it is important to look at the contract before the auction of any property. He said “…that’s the first thing I always ask for…..” ;
6. He was aware, prior to the auction, that the land offered for sale did not in fact include the whole of the land bordered by the streets named in the advertisement, but he made no further inquiries, and believed that the disputed site was included;
7. He formed the opinion that the advertisement was a misrepresentation, since the whole of the land bordered by the streets was not included in the sale. However, he believed that the area of land offered for sale was as stated in the advertisement, namely, 3.149 hectares;
8. His intention regarding the house erected on the disputed site was to demolish it. He did not know, prior to the auction, that it was occupied by tenants. He thought it had not been maintained because the grass around it was overgrown;
9. He was late arriving at the auction, because his real estate agency was a sole person operation, and he closed his office as late as possible. In any event, he thought it unnecessary to attend earlier because “… there’s a spiel that’s going to take 15 ,20 half an hour…”;
11. Since the date of the auction, he has bought the scout hall and the roads. He bought the scout hall in October 2003 for a price of $110,000.10. He planned to develop the school site into subdivided residential lots, but he did not obtain a survey of the school site, nor any engineering plans. For the purpose of its future development, he relied on the advertisement and on his “… general knowledge of real estate.”;
35 The defendant’s evidence has an air of unreality about it. He is a real estate agent with years of experience, yet he took none of the preparatory steps one would have expected him to take prior to an auction at which he was intending to bid. He relied upon the advertisement, believing it to offer for sale the whole of the rectangular parcel bordered by the named streets. Yet he knew, prior to the auction, that his belief was ill founded because he had been informed that neither the scout hall nor the roads were included. Yet he did not inquire further. He did not inspect the contract, although he considered that was always an important preparatory step. He did not have preliminary engineering or survey reports prepared, although he intended to develop the school site by subdivision into residential lots for sale. Although he intended to participate in the auction by placing bids, he arrived late.
36 These matters convince me that the defendant’s evidence is unreliable. His conduct prior to and at the auction satisfies me that he knew, or ought to have known, that the disputed site was not included in the sale, and I do not accept his assertion to the contrary.
37 The state of the defendant’s knowledge may also be derived from the conduct of his solicitor prior to settlement. His solicitor, acting as his agent, also knew or ought to have known that the disputed site was not included in the sale. It was not included in the contract, and the answers to requisitions on title confirmed that it was not so included.
38 I find, therefore, that prior to settlement the defendant knew or ought to have known (by himself or through his agent) that the disputed land was not included in the sale.
The valuations
39 The plaintiff and the defendant each adduced valuation evidence.
40 Simon Alderson deGaris, who is a valuer in the employ of the State Valuation Office, swore an affidavit in the plaintiff’s case. He set out his valuation of both the disputed site and the school site as at 29 June 2002, the date of the auction. He valued the disputed site at $133,000 and the school site at $300,000 as at that date.
41 In his affidavit, Mr deGaris stated that the basis for his valuation of the school site was the price of $300,000 paid at the auction, and the valuation by Mr Condon, to which I have referred in par 9 above.
42 For the defendant, David Ernest McKenzie, a partner of the firm of Hann McKenzie & Co of Yarrawonga, furnished a valuation of the school site as at the auction date. He valued it at $165,000 based on a hypothetical in globo subdivision. As a check method, he also considered comparable sales. Although he noted that the school site had sold at auction, he did not utilise the price paid at the auction as a basis for his valuation.
43 I do not think it necessary to dwell on the valuations, or to resolve the differences in value between them, because in my opinion they are of limited assistance. The defendant would urge the Court to accept that, as the value of the school site at the date of the auction, according to Mr McKenzie, was $165,000, then the only inference to be drawn from the price paid by the defendant was that he intended to buy the disputed site as well as the school site. But such an inference cannot safely be drawn having regard, first, to the valuations of both Mr Condon and Mr deSaris, and, secondly, to the evidence of the underbidder at the auction, Wayne Charles Kennedy, whose evidence was that he bid up to $280,000 in the knowledge that the school site did not include the scout hall, the roads and the disputed site.
The relevant law
44 The applicable principles are not in dispute. It is well established that a registered proprietor has an indefeasible title to the land in respect of which he or she is registered, subject only to the exceptions set out in s 42 of the Real Property Act 1900 (“the RP Act”) and subject only to an in personam claim against the registered proprietor: Frazer v Walker and Ors (1967) 1 AC 569 at 585; Breskvar v Wall (1971) 126 CLR 376 at 384-385.
45 Section 42 of the RP Act provides as follows:
Estate of registered proprietor paramount
(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except:
(a) the estate or interest recorded in a prior folio of the Register by reason of which another proprietor claims the same land,
(a1) in the case of the omission or misdescription of an easement subsisting immediately before the land was brought under the provisions of this Act or validly created at or after that time under this or any other Act or a Commonwealth Act,
(b) in the case of the omission or misdescription of any profit à prendre created in or existing upon any land,
(c) as to any portion of land that may by wrong description of parcels or of boundaries be included in the folio of the Register or registered dealing evidencing the title of such registered proprietor, not being a purchaser or mortgagee thereof for value, or deriving from or through a purchaser or mortgagee thereof for value, and
(d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected:
Provided that:
(i) The term for which the tenancy was created does not exceed three years, and
(ii) in the case of such an agreement or option, the additional term for which it provides would not, when added to the original term, exceed three years.
(iii) (Repealed)
(2) In subsection (1), a reference to an estate or interest in land recorded in a folio of the Register includes a reference to an estate or interest recorded in a registered mortgage, charge or lease that may be directly or indirectly identified from a distinctive reference in that folio.
46 The facts and circumstances of this case do not fall within the exceptions set out in s 42, and the case turns on whether or not the plaintiff has established an in personam claim against the defendant that will entitle the plaintiff to the relief that he seeks.
47 The relevant principles guiding the Court in its determination are as follows:
1. A personal equity arises where there is a known legal or equitable cause of action enforceable against the registered proprietor: Grgic v Australian and New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 222;
2. The personal equity includes the equity to order rectification or retransfer for mistake. Relief will be available where the registered proprietor knew, or had reason to know, that the other party was, or might well be, mistaken: Tutt and Anor v Doyle and Anor (1997) 42 NSWLR 10 per Handley JA at 14 - 15;
3. Unconscionability is the test – is it unconscionable for one party knowingly to take advantage of another party’s mistake? per Meagher JA in Tutt v Doyle at 12. The Court is able…” exercising its jurisdiction in personam to insist upon proper conduct in accordance with the conscience which all men should obey:” per Lord Russell of Killowen delivering the judgment of the Privy Council in Oh Hiam v Tham Kong (1980) 2 BPR 97130 at 9454;
5. And the conduct in question may be that of a person for whom the registered proprietor is responsible, such as his agent: Grgic v ANZ Bank at 223.4. The personal equity may arise from the conduct of the registered proprietor both before and after registration: Bahr and Anor v Nicolay and Ors (1988) 164 CLR 604 at 638.
The competing claims
48 Mr Hughston SC, for the plaintiff, submitted that a personal equity has arisen in favour of the plaintiff as against the defendant by reason of three particular legal or equitable causes of action.
49 The first, in his submission, arises from the mistake in the transfer. Under the contract, the plaintiff was bound only to convey the school site and the defendant had a right to a conveyance of the school site and no more. The transfer included more than the school site – it included the disputed site as well. It was presented to the plaintiff’s solicitor as a transfer in respect of the contract, and the plaintiff approved the transfer under a mistaken belief, which the defendant, by his solicitor as his agent, induced and which mistake was fundamental. The defendant now seeks to take advantage of the plaintiff’s mistaken belief by retaining the disputed site that was never intended to be conveyed.
50 The second arises out of negligence. Mr Hughston submitted that the preparation of the transfer by Mr Stewart was negligent. Mr Stewart was the defendant’s solicitor, and thus his agent, so that the defendant was responsible for the actions of Mr Stewart.
51 Thirdly, it is said that here has been a breach of s 42 of the Fair Trading Act 1987. That section proscribes conduct in trade or commerce which is misleading or deceptive. Here, it is submitted, the transfer was misleading and deceptive, was likely to mislead and deceive, and did mislead and deceive the plaintiff’s solicitor who, in reliance upon it, arranged for it to be executed. Hence, by operation of s 68 of the Fair Trading Act, a legal cause of action became vested in the plaintiff.
52 Mr Hughston submitted that, in all of those circumstances, the defendant’s conscience vis a vis the plaintiff is bound, and equity would intervene to place the parties back in their pre-registration positions so far as concerns the disputed site.
53 Mr Khan, for the defendant, submitted that there was a unilateral mistake on the part of the plaintiff, that is, the plaintiff conveyed the disputed site to the defendant when the plaintiff did not intend to do so. He further submitted that the defendant did not knowingly take advantage of the plaintiff’s mistake, and there is no evidence that establishes any right in personam in the plaintiff.
Conclusion
54 I am satisfied that the plaintiff should succeed in his claim.
55 The defendant’s solicitor, acting on behalf of the defendant, made a mistake. He included the disputed site in the transfer by reference to the whole of the land in Auto Consol 1331 441 rather than part of that land. He created what Ms Hole called “a loaded gun”. He gave the “gun” to the plaintiff’s solicitor in circumstances where he knew, or ought to have known, that it was “loaded”. The plaintiff’s solicitor mistakenly believed that the transfer was in accordance with the contract (and erred in not checking its accuracy). Relying on his mistaken belief, the plaintiff’s solicitor had the transfer executed and handed over on settlement.
56 However, as I have found, prior to settlement the defendant knew, or ought to have known, that the disputed site was not included in the sale. He now seeks to take advantage of the plaintiff’s mistake in accepting the transfer, and to retain more land than the plaintiff intended to convey and more land than he undertook to purchase. It would be unconscionable for the defendant to retain the disputed site in circumstances where (by himself or through his solicitor as his agent) he knew or ought to have known what was being sold and that the transfer did not reflect what was being sold.
57 I am satisfied that the facts and circumstances create in the plaintiff a right in personam or personal equity that is enforceable against the defendant as registered proprietor of the disputed site. It is sufficient for the plaintiff to succeed for the Court to find that the plaintiff has an equity to relief by way of retransfer by mistake (Tutt v Doyle at 14). It is not necessary for me to go further and decide whether or not the personal equity residing in the plaintiff arises from a cause of action in negligence or an action under the Fair Trading Act, and I expressly refrain from so deciding.
Orders
58 In accordance with the foregoing, I make the following formal orders:
2. I declare that the plaintiff is entitled to a retransfer from the defendant of the estate in fee simple in the property;1. I declare that the plaintiff has a good equitable title to the property described as lot 1, Sec 17, DP 758726 being part of the land comprised in Auto Consol 1331 – 114 known as 69 Sturt Street Mulwala (“the property”) which the plaintiff can assert against the defendant notwithstanding his registered title;
4. I order that the defendant pay the costs of the plaintiff, as agreed or as assessed.3. I order that the defendant forthwith retransfer the property to the plaintiff;
59 The exhibits may be returned.
Last Modified: 05/19/2004
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