Tanzone Pty Ltd v Westpac Banking Corporation

Tanzone Pty Ltd sought rectification of the terms of a lease relating to rent review calculations, arguing that there had been a common mistake in the lease's drafting. The dispute was before the Supreme Court of New South Wales. The central issue was whether the equitable remedy of rectification could be applied in this context, particularly when a third party, Westpac Banking Corporation, had acquired the interest of the original lessor. Tanzone argued that the equitable remedy of rectification was a "mere equity" binding a purchaser of Old System land who took with notice of the equity. Additionally, the court considered whether the purchaser's knowledge of the mistake justified rectification, whether indefeasibility of title precluded this, and if the conduct of the purchaser amounted to unconscionable conduct under the Trade Practices Act.

The court determined that the equity of rectification was indeed a "mere equity," which could bind a purchaser taking with notice. The court held that while indefeasibility of title does not extinguish personal claims, it does mean that a purchaser's knowledge of an unregistered interest does not in itself constitute fraud. The court further found that the plaintiff was not an original party to the lease and there was no evidence of unconscionable conduct by the defendant. The court held that the Trade Practices Act did not apply in this context as there was no limitation period under s87(1) of the Act, and the defendant's conduct did not amount to unconscionable conduct under the Act.

The court ordered that the lease be rectified to reflect the correct rent review calculations as per the parties' original intention. The court noted that the rectification was necessary to prevent the defendant from taking unfair advantage of the mistake. The court also noted that the rectification did not undermine the principle of indefeasibility of title, as the remedy was a personal one and did not affect the defendant's title to the property.