Noske v McGinnis

The plaintiffs, owners of a New South Wales station property, entered into a contract with the defendant, the owner of a Melbourne hotel, for an exchange of properties. The contract stipulated that the conditions of Table A of the Victorian Transfer of Land Act 1928 would apply to the sale of the hotel for the purposes of title inspection, requisitions, and acceptance, while the conditions of the New South Wales Conveyancing Act 1919 applied to the sale of the station. A dispute arose when the plaintiffs requisitioned the defendant regarding unregistered encumbrances on the hotel. The defendant responded that his wife claimed an interest in the hotel and had lodged a caveat. The plaintiffs demanded the removal of the caveat and a clear title, but the defendant stated he was unable to compel its withdrawal and threatened to rescind the contract under clause 3 of Table A if the requisition was not withdrawn. The trial judge found that the wife's claim was unfounded and that the defendant could have had the caveat removed. The plaintiffs sought specific performance and damages for breach of contract.

The central legal issues before the court were: firstly, whether the defendant was entitled to rescind the contract under clause 3 of Table A of the Victorian Transfer of Land Act 1928, given his wife's caveat and his purported inability to remove it; and secondly, whether the plaintiffs were entitled to general damages for loss of the bargain, notwithstanding the rule in *Bain v. Fothergill*. The court also considered the applicability of the New South Wales Moratorium Act 1930-1931 to the proceedings in Victoria.

The court reasoned that the defendant could not rely on his wife's caveat to avoid his contractual obligations. The trial judge's finding that the caveat was effectively the defendant's own, and that he could have procured its removal, meant that his purported rescission was not a genuine inability to comply with a requisition but rather a deliberate act to avoid the contract. Consequently, the defendant could not take advantage of clause 3 of Table A. The court also held that the rule in *Bain v. Fothergill*, which limits damages for breach of a land sale contract where the vendor is unable to make title, did not apply because the vendor's inability stemmed from his own conduct or deliberate abstention from rectifying the situation, rather than a genuine defect in title. The New South Wales Moratorium Act was deemed not to affect the remedies available in the Victorian court, as it was considered procedural and did not extinguish contractual rights.

The court affirmed the decision of the Supreme Court of Victoria, holding that the defendant's attempted rescission constituted a repudiation of the contract. The plaintiffs were awarded general damages for the loss of their bargain, reflecting the difference between the contract price and the market value of the station property at the time of the breach.