Ryan v Ferguson - [1909] HCA 47

FERGERSON Vendor and purchaser - Contract for sale of land - Concealment of material fact-

Property subject to mortgage-Refresal by vendor to discharge mortgage- Rescission-Constitution of printed conditions-Originating - summons.

In construing a contract containing terms of which some are in writing, and others printed in a common form, if there is any doubt as to the meaning of the whole, greater weight should be given to the written portion, inasmuch as it embodies the language and terms selected by the parties themselves as best suited to express their meaning.

Rule stated by Lord Ellenborough C.J. in Robertson v. French, 4 East., 130, at p. 136, and adopted by Lord Halsbury L.C. in Glynn v. Margetson &Co., (1893) A.C., 351, at p. 358, applied.

One of the printed conditions of a contract for the sale of land provided that the purchaser should within seven days after receipt of particulars of title tender for execution a memorandum of transfer in proper form, and that from completion the purchaser should be entitled to the rents and profits. A written term provided that the purchaser should pay a deposit in cash and the balance of the purchase money at the end of 3 years with interest in the meantime, with the option of paying off the whole at any earlier period. The purchaser paid the deposit, and went into possession with the consent of the vendor. After receipt of particulars of title the purchaser discovered that the property was subject to a mortgage which the mortgagor was entitled to pay off at any time. The mortgagee had assented to the sale. The purchaser without tendering a transfer or offering to pay the balance of

8 CLR 732

the purchase money called upon the vendor to discharge the mortgage. The vendor refused to do SO unless the purchaser paid the balance of purchase

On a vendor and purchaser summons taken out by the purchaser asking for a declaration that he was entitled to rescind, and for an order for rescission and repayment of the deposit

Held, that the purchaser was not entitled to rescind. On a fair construc- tion of the whole contract, the purchaser was not entitled to insist upon a discharge of the mortgage and execution of a transfer by the vendor before payment of the balance of the purchase money.

Per Griffith C.J.-The Equity Court had no jurisdiction on a vendor and purchaser summons to entertain a claim for rescission on the ground of

Per Isaacs J. - -Whatever was the true construction of the provision as to payment of the balance of purchase money, the purchaser was not entitled to claim to have the mortgage discharged until he had tendered a transfer in proper form for execution.

Decision of A. H. Simpson C.J. in Equity (2nd March 1909) affirmed.

APPEAL from a decision of A. H. Simpson, Chief Judge in Equity of the Supreme Court of New South Wales, on an originating summons by a purchaser.

The…

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.

Continue reading Ryan v Ferguson

Details

AGLC: Ryan v Ferguson [1909] HCA 47
Case: [1909] HCA 47
Decision Date: 9 August 1909

CaseChat Overview and Summary

This case concerned a dispute between a vendor and a purchaser of land. The purchaser sought to rescind the contract and recover his deposit, alleging that the vendor had concealed the existence of a mortgage over the property. The vendor refused to discharge the mortgage unless the balance of the purchase money was paid, which the purchaser had not yet offered to do, as the payment was not due for three years. The Supreme Court of New South Wales, in Equity, dismissed the purchaser's summons, and the purchaser appealed to the High Court of Australia.

The legal issues before the High Court were whether the purchaser was entitled to rescind the contract on the grounds of concealment of the mortgage, and whether the purchaser could insist on the discharge of the mortgage and execution of a transfer before paying the balance of the purchase money. A further question arose regarding the jurisdiction of the Equity Court to entertain a claim for rescission on a vendor and purchaser summons.

The High Court, affirming the decision of the court below, held that the purchaser was not entitled to rescind. The Court applied the principle that where a contract contains both printed and written terms, the written terms, being specifically chosen by the parties, are given greater weight in cases of doubt. The Court found that the written terms regarding payment of the balance of purchase money at the end of three years, with interest, implied that the conveyance was to be concurrent with full payment. Therefore, the purchaser was not entitled to demand a discharge of the mortgage and a transfer of the property before the balance of the purchase money was due. Furthermore, the Court expressed grave doubt as to whether a vendor and purchaser summons was the appropriate procedural vehicle to entertain a claim for rescission based on alleged concealment of a material fact.

The appeal was dismissed. The purchaser was not entitled to insist on a discharge of the mortgage and execution of a transfer by the vendor before payment of the balance of the purchase money. The Court also indicated that the purchaser had not tendered a transfer in proper form for execution, which was a prerequisite for claiming further relief.

Orders