Ryan v Ferguson

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.