Toma v Olcorn
[2018] VCC 224
•13 March 2018
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-17-04364
| RIMON TOMA | Plaintiff |
| v | |
| CAROLYN ANNE OLCORN | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 19, 20, 22 February 2018 | |
DATE OF JUDGMENT: | 13 March 2018 | |
CASE MAY BE CITED AS: | Toma v Olcorn | |
MEDIUM NEUTRAL CITATION: | [2018] VCC 224 | |
REASONS FOR JUDGMENT
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Subject: SALE OF LAND
Catchwords: Sale of land; special condition relative to prepaid rent for
telecommunications facility on rural property; general provision as to apportionment of rent and outgoings at settlement; purchaser entitled to apportionment of 99 years’ prepaid rent; vendor acting under unilateral mistake; mistake known to purchaser; purchaser not disabusing vendor; vendor entitled to relief - rectification or rescission at option of purchaser.
Legislation Cited: Sale of Land Act 1962; Evidence Act 2008
Cases Cited: Taylor v Johnson (1983) 151 CLR 422; Johnstone v Commerce
Consolidated Pty Ltd [1976] VR 463; Thomas Bates & Son v Wyndham’s(Lingerie) Ltd [1981] 1 WLR 505; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Browne v Dunn (1893) 6 R 67; Food and Beverage Australia Ltd v Andrews [2017] VSCA 258; Briginshaw v Briginshaw (1938) 60 CLR 336; Taylor v Johnson (1983) 151 CLR 422; Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463; Garrard v Frankel (1862) 30 Beav 445; Harris v Pepperell (1867) LR 5Eq; May v Platt [1900] 1 Ch 616, 623; Solle v Butcher [1950] 1 KV 671; Riverlate Properties Ltd v Paul [1975] Ch 133
Judgment: 1. Within 14 days the Plaintiff must elect whether to accept rescission
of the subject contract or accept rectification of the contract as sought
in the Amended Defence and Counterclaim. 2. Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M Ravech | Spigler & Schwarcz |
| For the Defendant | Mr N Jones | De Marco Lawyers |
HIS HONOUR:
Background
1 Ms Olcorn is the registered proprietor of an estate in fee simple in a property at 1480 Wallan-Whittlesea Road, Upper Plenty commanding panoramic views of the surrounding countryside. It includes a renovated farm house, seven dams, an Olympic size menage (used for equestrian events such as dressage), stables and other outbuildings. (Transcript “T” 31)
2 When Ms Olcorn decided to offer her property for sale through an estate agency known as Real Estate City, the property was publicised on the internet with the advertisement including a video tour shot from a drone. (T113, L28 – T114, L5)
3 In mid-2017, the plaintiff, Mr Toma, and his wife Ms Erdem, had been in the market looking for a rural property for two years. (T30, L28-31) They viewed the internet video of the Olcorn property. (T32, L1-4) As a result, on 14 June Ms Erdem exchanged text messages with Ms Shirley Collins, who is an agent’s representative working with Real Estate City. Ms Erdem was seeking to arrange an inspection; 14 June was a Wednesday. Whilst no inspection was arranged until the following Monday, 19 June, Mr Toma and his wife drove to Upper Plenty and travelled along a gravel road which they believed was part of the public road system.
4 As it turned out, it was the driveway to Ms Olcorn’s property. According to Mr Toma, he had a brief conversation with Ms Olcorn, who was “kind enough” to show them round. He and his wife noticed a telecommunications tower on the property. Mr Toma said he asked Ms Olcorn about the tower and she replied “that there was a lease in place for it and that was it”. (T7, L17-18) Mr Toma said he and his wife then left. “It was only for a good five minutes that we were there and we were out.” (Ibid L13-20) Ms Olcorn was inclined to place these events on Thursday, 15 June, but ultimately was prepared to concede they may have happened, as Mr Toma recalled, on 16 June. (T114, L9-12) According to her, Mr Toma and his wife “seemed quite excited about everything…They asked a few questions about cattle. They were interested in getting cattle.” (T114, L22-24) According to Ms Olcorn, she said relative to the communications tower, “that it had been paid out. If you buy the property it’s the house and the land only. Um, and Vodafone need 24-hour access. So there’s no payments at all.” (Ibid L27-30)
5 The tower and its surrounding installations occupied approximately 100 square metres. (T2, L25 – T3, L5) The lessee was a company known as Crown Castle Australia Pty Ltd which appears to be associated with the telco Vodafone. The lease was expressed to be for some 99 years commencing 30 April 2012. (Court Book “CB” 115) According to the schedule to the lease, the rental was $350,000 plus goods and services tax for the total term, calculated as being at the rate of $3,535.35 per annum, with the total amount plus goods and services tax being paid by two instalments; the first on 30 June 2012 and the second on 2 July 2012. (Ibid)
6 For Mr Toma and his wife, the Olcorn property ticked all the right boxes. (T53, L11-15) Following the informal inspection, Mr Toma put in a written offer to purchase for $870,000. When Ms Olcorn had granted Real Estate City Pty Ltd an exclusive selling agency authority on 17 May 2017, she authorised the agent to offer the property for a price between $870,000 and $950,000. (CB 204-209)[1] He made the offer to the agent’s representative, Ms Collins, initially by telephone. (T8, L25-26) Friday was Ms Collins’ day off. She received the call from Mr Toma whilst she was at home. According to her, she “advised him to put his expression or his offer in an email form in writing to me so I had that in writing. So once he viewed the property and had done his due diligence, then I would be presenting the offer to the vendors.” (T150, L10-14)
[1]The plaintiff prepared the Principal Court Book and the defendant prepared a Supplementary Court Book. However, the pagination follows one book to another. Accordingly references in this judgment are simply to the Court Book.
7 On Friday afternoon, Mr Toma sent the requested email to Ms Collins stating:
“I would like to make an offer of $870,000 for the property; 1480 Wallan-Whittlesea Road, Upper Plenty.
I would like to set out the following conditions of purchase;
- 5% deposit of purchase price. Happy to sign section 27 to have deposit released at an earlier stage.
- 4 months settlement.
I look forward to hearing from you.
Best regards,
Rimon Toma
…” (CB 136)
8 At this stage, no contract of sale or statement under s32 of the Sale of Land Act 1962 had been prepared. Ms Collins said, “I was not prepared to put an offer forward to the vendor until the property had been viewed and the right documentation had been viewed by Mr Toma.” (T150, L28-31)
9 According to Ms Collins, “I did also speak to them and advised them that I was not going to present their [offer] until they had viewed the property.” (T151, L12-15) On 19 June, Ms Collins met Mr Toma and his wife at the property. Neither Ms Olcorn nor anyone else was present. (T151, L20-22) Following inspection of the house, Ms Collins, Mr Toma and his wife walked toward the tower. (T151, L28 – T152, L4) According to Ms Collins:
“I relayed exactly what the vendor had advised me, that the tower had a 99 year lease on it, I explained to them that the Vodafone -Telstra Vodafone maintenance gentleman had right to come up the driveway on the property at any given time and access the tower within the fenced off area, and I advised them that there was no more payments or rent to be made from the tower as it had been paid back, it had been paid out to the vendor.” (T152, L8-16)
10 Ms Collins said she continued:
“I advised them that there was no more rent to be paid out and they accepted that fact and did not ask any further questions. To my understanding they understood there was no more rent to be paid back on that tower if they purchased the property.” (Ibid L18-22)
11 According to Mr Toma, Ms Collins responded to his queries about the tower, saying: “Can’t answer any further questions because she doesn’t have contracts in her hands and she was hoping to have them that afternoon.” (T13, L1-3) Mr Toma denied that there were any details about the lease given or that he was told that the rental had been prepaid. (Ibid L4-12) The following day, a draft contract and statement under s32 was provided to Mr Toma. (Ibid L24-25; CB 211-303) The contract followed the form prescribed by the Estate Agents (Contracts) Regulations 2008. It included a Special Condition 32 as follows:
“32The purchaser acknowledges the Lease contained in the contract to Crown Castle Australia Pty Ltd/Vodafone Network Pty Ltd and the continuing rights of the Lessee contained therein. The purchaser further acknowledges that all payments due pursuant to the terms of the Lease have been paid to the vendor/lessor and that no further payments are required to be made by the Lessee under the terms of the Lease.” (CB 221)
12 General Condition 15 under the heading “Adjustments”, provided as follows:
“15.1All periodic outgoings payable by the vendor and any rent and other income received in respect of the property must be apportioned between the parties on the settlement date any adjustment paid and received as appropriate.
15.2The periodic outgoings and rent and other income must be apportioned on the following basis:
(a)the vendor is liable for the periodic outgoings and entitled to the rent and other income up to and including the day of settlement; and
(b)the land is treated as the only land of which the vendor is owner (as defined in the Land Tax Act 2005); and
(c)the vendor is taken to own the land as a resident Australian beneficial owner; and
(d)any personal statutory benefit available to each party is disregarded in calculating apportionment.” (CB 225)
13 Ms Olcorn had engaged Ms Terri Sari of conveyancing firm Sargeants of Wallan to prepare the contract and a statement under s32. Ms Sari is the proprietor of the practice, Sargeants of Wallan, which operates pursuant to a franchise arrangement with a legal practitioner, Mr David Sargeant, who acts as franchisor. (T170 – T171)
14 On 21 June at 4.08pm, Mr Toma sent a text to Ms Collins stating: “Can you pls let us know if offer is accepted or not??” (CB 129)
15 According to Mr Toma”
“… and Shirley Collins had gotten back to me by this stage, refused my first offer of 870,000, said it was at the low ball of the - the price, asking price, and I said okay. She said, ‘If you can get it to your 900,000 mark’, um, she can do something with that offer. I said okay. (T18, L1-6)
16 Mr Toma sent a text to Ms Collins at 9.38am on Friday, 23 June, stating:
“As per our conversation, We are happy to increase our offer to $900,000 Happy to sign contracts today. Please get back to me as soon as you can.” (CB 129)
17 Ms Collins said that she:
“… advised Mr Toma that there was going to be an open house on the Saturday and that we would finalise the offer with the vendor. However, we will be still conducting the open house because it had been registered on the internet as being open the next day.” (T155, L25-29)
18 Presumably, Ms Collins was allowing for the possibility that a better offer might have been forthcoming from a person inspecting on the Saturday. When I suggested that to her, her reply was:
“Maybe, I don't know but we still had the open home because that's what we had agreed upon to start off with.” (T156, L5-7)
19 Following the “open for inspection” day on the Saturday, Ms Collins put Mr Toma’s offer to her and ─
“She was then happy to accept the offer with the terms and conditions that were already attached to the offer.” (T156, L28-29)
20 Mr Toma was unable to attend the office of Real Estate City. Ms Collins:
“… advised [him] to send through sales particulars, I would fill out the contract and email a copy over to him which I believe his solicitors viewed on that day.” (T158, L9-12)
21 There was some to-ing and fro-ing as to particulars relative to the finance clause, which are not material to the present dispute. (T159) Ms Collins said:
“I had the contracts emailed back to me from the signing of the purchasers, and I went out to the vendor that evening, Monday evening and had the vendor sign the contracts.” (T158, L18-20)
22 Mr Toma had emailed the signed contract to Ms Collins at 12.21pm that day. (Ibid, L22-24) That same day, before Mr Toma signed the contract, he telephoned Ms Collins. According to her, Mr Toma ─
“… just wanted to make one more confirmation from myself and by the vendors [sic] that there was no more further payments to be made back from the tower again.” (T160, L14-17)
23 Ms Collins again spoke to Ms Olcorn. She said she was:
“… a little bit bamboozled while [scil why] again I was having to say the same things over again.” (Ibid, L30-31)
24 According to Ms Collins, her [that is, Ms Olcorn’s] words were:
“… that she had been paid out, there was no final payments to be made to the purchaser or to anyone after – that was it, she had been paid out.” (T161, L16-19)
Ms Collins said she telephoned Mr Toma and “advised him yet again of the conversation that I had reconfirmed …” (Ibid, L27-29) Once Ms Olcorn had signed the contracts, Ms Collins telephoned Mr Toma and informed him that the contracts had been signed and “we would arrange for the contracts to be exchanged by the conveyancer’s solicitors [sic].” (T162, L22-24)
25 Mr Toma paid the $45,000 deposit in two instalments, receiving a receipt for $1,000 dated 28 June, and $44,000, the balance, on 11 July. (CB 157-8, 167-8, T24, L26 - T25, L14) Mr Toma did not mention the last pre-signature discussion described by Ms Collins in his evidence-in-chief or in cross-examination. However, he agreed that a conversation along these lines did take place. (T73-3)
26 The following day, Tuesday 27 June 2017, Ms Rajab of Spigler & Schwarcz Solicitors, who were acting on the purchase for Mr Toma, sent an email announcing that her firm was acting. She attached an authority for the release of information from the Department of Economic Development, Jobs, Transport and Resources, in connection with a desire by Mr Toma “to run horses and cattle” on the subject property. The letter also sought “confirmation that rental in the total of $385,000 will be an adjustable item at settlement”. Ms Sari, the conveyancer, said that she was surprised to receive that email because she did not even know that contracts had been exchanged. The email was timed at 10am. (CB 152, T174, L28-31) At 10.22am, Ms Sari sent a responding email to Ms Rajab stating inter alia:
“…all monies payable under the lease have already been paid to the vendor and will not be adjusted at the settlement.” (CB 153)
27 Ms Sari said she probably sent that reply without any additional instructions from the vendor, Ms Olcorn. (T175, L16-20) The timing of the responding email would support this view. With an even briefer turnaround time, a further email from Ms Rajab went to Ms Sari stating that the rental was─
“… clearly an adjustable item with respect to the unused portion of the rent being made available to our client at settlement. It beggars belief that you wish to obviate the terms of the lease and deem the funds received by your client as a non-adjustable item.
Please confirm by return that an adjustment will take place and no mention is made of anything to the contrary in the Contract or Section 32.” (CB 154, transmitted 10.35am)
28 Ms Sari rang Ms Olcorn telling her:
“… that the purchaser wants to go after the lease money that's been paid and she said, "But how can he?", she said, "He came to the", I think she called it Farm Gate, "She said, "I ran into him at the Farm Gate and he pointed up at the phone tower and said, 'What's going on there?', and she said to him at the time, "There is no money coming for that, I have already been paid out for that." (T176, L24-31)
29 The following day at 3.22pm, Ms Sari emailed Ms Rajab stating inter alia:
“The agent advised the purchasers that the vendor had received a lump sum payment for the rent for the ninety nine years and that no monies would be paid to the purchasers.
The purchasers were also aware of the terms of the lease and these terms were to be honoured by the purchasers.
We are concerned that a demand for the adjustment of the rent has been made and deny the purchasers right to do so.” (CB 160)
The dispute as to the adjustment remained unresolved. Mr Toma’s solicitors filed a writ dated 20 September 2017 seeking specific performance of the contract and a declaration that the contract must be performed, including the payment of the adjustment.
The plaintiff’s claim
30 In his statement of claim, the plaintiff alleged the making of the contract and the existence of the lease in favour of Crown Castle Australia. He said by virtue of the operation of General Condition 15 of the contract of sale quoted above, on the agreed settlement date, 26 October 2017, Ms Olcorn, as vendor, was obliged to adjust the rent payable for the tower giving Mr Toma an allowance of 34,151 days, approximately 94/99ths of the total rent calculated at $330,572.76. Ms Olcorn’s refusal to make this adjustment was said to manifest “an intention no longer to be bound by the contract of sale”, and to constitute a repudiation. The plaintiff elected to affirm the contract and was ready, willing and able to perform.
Amended defence and counterclaim
31 In her amended defence and counterclaim, Ms Olcorn contended that the contract for the sale of land was partly oral and the oral portions were constituted by discussions between Mr Toma and his wife, and Ms Collins, the estate agent, on or about 19 June 2017 and 26 June 2017, and discussions between Mr Toma and his wife and Ms Olcorn on or about 15 June 2017. The effect of those discussions, it was said, was ─
“…that there was a lease with Telstra/Vodafone for the telecommunications tower on the Land, that the rent payable under the lease had been prepaid and that none of the prepaid rent was to be paid to any purchaser of the Land.”
Mr Toma, it was said, did not dispute those statements. It was said that Ms Olcorn informed Mr Toma and his wife ─
“… that the lease for the telecommunications tower had been paid out and that if they bought the property they would get the house and land only and they would receive no payments from the lease of the telecommunications tower.”
Therefore, it was contended that it was “an oral term of the Contract of Sale that the rent had been paid under the Lease to the Defendant [and] would not be adjusted”, and it was an implied term that General Condition 15 “would be amended to the extent required by the oral term of the [Contract] alleged”. Accordingly, it was said, there was no obligation on Ms Olcorn to agree to the disputed adjustment.
32 Alternatively, it was contended that Mr Toma was “estopped from claiming an adjustment of rent”. By reason of the discussions earlier in the statement of claim, it was said Mr Toma had represented to Ms Olcorn “that he would not be entitled to an adjustment …” In reliance on that representation, Ms Olcorn “assumed that [Mr Toma] would not seek an adjustment of rent in his favour”, and Ms Olcorn “acted in reliance on the representation and the assumption by executing the Contract of Sale”. Mr Toma, it was said, had resiled from the representation and Ms Olcorn would suffer detriment if Mr Toma were allowed so to resile. It was said that Ms Olcorn received market appraisals of the property to the effect that it would realise a price between $860,000 and $950,000, with the subject contract to sell to Mr Toma being “within the appraisal range”, and Ms Olcorn would not have sold the land to Mr Toma for $900,000 “if she had been aware that [Mr Toma] intended to seek the Adjustment”. Accordingly, it was said, it would be “unconscionable” for Mr Toma to be allowed to “resile from the representation” by insisting on the adjustment.
33 Alternatively, it was said that it was the common intention of the parties when they executed the contract that “there would not be any adjustment between [them] … in respect of any rent that had been prepaid…”. The contract of sale, it was said, was executed “on the understanding that it included the common intention”, and the contract of sale was not in conformity with that common intention by virtue of General Condition 15 allowing for an adjustment of rent. Therefore, it was said that the contract was entered into the parties “by mistake” as it was not in conformity with the common intention …” Ms Olcorn sought rectification “in accordance with the common intention”.
34 Next, it was said that Ms Olcorn executed the contract of sale “on the understanding that there would not be any adjustment between [Mr Toma]” and herself. It was said Mr Toma knew that Ms Olcorn executed the contract of sale on that understanding. It was not in accordance with her understanding by reason of the operation of General Condition 15. Therefore, the contract of sale was entered into by Ms Olcorn “by mistake as it was not in conformity” with her understanding, and Mr Toma did not take any steps to inform her prior to or at the time of execution that the contract was not in conformity with her understanding. Accordingly, Ms Olcorn sought rectification of the contract in accordance with her understanding. Mr Toma was only willing to settle on the basis of the adjustment being paid to him.
35 By way of counterclaim, reliance was placed on General Condition 25 of the contract. In General Condition 25, it was said that, by failing to settle on 26 October 2017, Mr Toma had breached the contract of sale and Ms Olcorn was entitled under those contractual terms to compensation or damages and interest on the balance of the purchase price from 26 October 2017 “to the date of payment of the balance of contract price”.
36 In the course of opening his case, Mr Jones announced that his client was “not pressing the implied term”. (T100, L29) The effect was that the defendant, subject to arguments based on mistake and estoppel, considered that the contract was comprised wholly in the written argument. During final submissions the defendant was granted leave, without opposition by the plaintiff, to seek rescission of the contract as an alternative to rectification.
Reply and defence to counterclaim
37 In his reply and defence to amended counterclaim, Mr Toma said that the contract of sale was wholly in writing and was not partly oral. As to the meeting on 19 June 2017, when Mr Toma inspected the property with Ms Collins, it was said that at no time did Ms Collins inform him or his wife, “that the rent payable under the Lease had been prepaid and that none of the prepaid rent was to be paid to any purchaser of the Land.” The pleading continued, however, to refer to a telephone conversation on 26 June 2017 between Mr Toma and Ms Collins where it was said, “She informed him that all of the money due under the lease had been paid to the vendor.” As to the attendance by Mr Toma and his wife at the subject property on 16 June 2017, it was said Ms Olcorn told Mr Toma that the telecommunications tower was leased but did not tell him: either that the rent payable under the lease had been paid out; or that if he and his wife bought the property, they would get the house and land only and receive no payment from the lease of the telecommunications tower.”
38 The alleged implied term was denied and further it was said that it would be “impermissibly in conflict with the express term contained in General Condition 15”. Mr Toma denied that he was estopped from claiming an adjustment of the tower rent. Further, he said, “that at no stage during the course of the Meeting [on 19 June] or at any other time did Shirley Collins inform him and/or his wife Polen Erdem that the rent payable under the Lease had been prepaid and that none of the prepaid rent was to be paid to any purchaser of the Land.” He said that if Ms Olcorn executed the contract of sale under a mistake, such mistake “was not known” to him.
39 As to the counterclaim, whilst the terms of the default provisions in the contract of sale were admitted, according to Mr Toma, the parties agreed, “to defer the settlement date prescribed in the contract of sale pending the hearing and determination of this proceeding.” Accordingly, there was no breach of contract by the plaintiff. Accordingly, he denied any liability for damages, interest or compensation.
40 In final submissions, Mr Jones, on behalf of the defendant, having earlier abandoned the arguments based upon alleged oral or implied terms additional to the written contract, then abandoned the defences based on mutual mistake. He relied only upon the defence based upon a unilateral mistake said to have been known to the plaintiff at material times and a contention based on equitable estoppel.
Contentions of the parties
Defendant’s contentions
41 Mr Jones placed primary reliance upon the statement of principle by the High Court in Taylor v Johnson (1983) 151 CLR 422, 432. He noted that:
“where there has been a unilateral mistake specific performance cannot be allowed and the mistaken party will be entitled to rescission of the contract.”
42 Next, he referred to Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463, 468, per Crockett J, where his Honour said:
“if one party to a transaction knows that the instrument contains a mistake in his favour but does nothing to correct it, he (and those claiming under him) will be precluded from resisting rectification on the ground that the mistake is unilateral and not common.” [1976] VR 463, 468
43 He noted that his Honour’s decision was subject to appeal to the Full Court but said the Court left this part of his Honour’s reasoning undisturbed. He also referred to Thomas Bates & Son v Wyndham’s(Lingerie) Ltd [1981] 1 WLR 505.
“Where there has been unilateral mistake an order for rectification can be made as well as an order for rescission.”
44 In the present case, according to Mr Jones, his client entered into the written contract:
“… under a serious mistake about its contents in relation to a fundamental term. She believed the contract contained a term providing that there would be no adjustment of prepaid rent.”
45 This mistake was, he said, fundamental given that the adjustment in question was of $330,000 plus an amount which exceeded one-third of the total purchase price.
46 According to Mr Jones, the following matters supported these contentions. He said Ms Olcorn told her conveyancer, Terri Sari, that the rent on the tower had been prepaid and there was no payment to the person who bought the property and that there would be no adjustment. (T111 – T112) Ms Sari, he said, told Ms Olcorn that she was going to put into the contract a special condition that there would be no adjustments of prepaid rent. Ms Olcorn accepted this and believed such a provision would be placed in the contract. (T124)
47 At T172 he said Ms Sari gave evidence that she was instructed by Ms Olcorn that as vendor she wanted to retain all the moneys from the lease and there were not to be any adjustments in respect of prepaid rent and that she was to retain all of the funds.
48 According to Mr Jones, Ms Sari said that she drafted Special Condition 32 of the contract to achieve this result. (T173)
49 According to Mr Jones, Mr Toma, as purchaser, was aware of circumstances indicating that Ms Olcorn was entering into the contract under a serious mistake or misapprehension as to its contents. He said the evidence of Ms Olcorn and Ms Collins was supportive of such a finding. In particular, he said Ms Olcorn told Ms Collins in initial discussions that the tower rent had been prepaid and there was to be no payment to the person who bought the property and there would no adjustment. (T111 – T112) Ms Olcorn told Ms Sari that the rent on the tower had been prepaid and there was to be no payment to the person who bought the property and there was to be no adjustment. (T111 – T112) Ms Olcorn told Mr Toma on 16 June 2017 that, with respect to the tower, there would be no payments at all. (T114 – T115) According to Mr Jones, Ms Collins gave evidence that on 19 June she told Mr Toma and his wife of the 99 year lease for the Vodafone tower giving the lessee a right of access at any time and there were no more payments of rent to be made as the rent had been paid out to the vendor; viz Ms Olcorn. (T152) Ms Collins gave similar evidence as to a statement she made to Mr Toma on 26 June 2017.
50 According to Mr Jones, it was highly unlikely that Mr Toma gave an accurate account of what Ms Olcorn told him on 16 June in saying no more than that there was a lease in place. He submitted Ms Olcorn’s account in which she described telling Mr Toma that she had already received the entirety of the rent due on the tower lease was more plausible, especially as that was consistent with the instructions she had already given to her conveyancer. Again, Mr Jones submitted that Ms Collins’ evidence of a fuller disclosure as to the tower at the inspection on 19 June was more plausible than Mr Toma’s account of her being unable to give him any information as to the tower and the absence of draft contracts and a s32 statement. He said:
“It is unlikely that if [Mr Toma’s] main questions were about the tower, Shirley Collins would not have passed on the information she had which she had obtained from the vendor.”
51 As to Mr Toma’s initial offer to purchase at $870,000, which was within the known price range at which the property was being offered for sale, Mr Jones noted that such offer was made “without knowledge of any of the terms of the lease”. He said this was consistent with Mr Toma’s not being concerned as to the terms of the lease, since he knew he would not be receiving any of the rental. He referred to Mr Toma’s characterisation of the $870,000 offer as “low ball” (T12 and T32) and in his evidence he did not factor in the lease at all when he made the offer. (T33) Therefore, said Mr Jones, whether Mr Toma was to receive any rental relative to the lease, nevertheless he was prepared to offer $870,000 without any rental entitlements, “as he and his wife like the property” and had been looking for such a property for two years. Mr Jones submitted that upon the evidence, Mr Toma should be regarded as “a relatively sophisticated and knowledgeable purchaser”. He referred to Mr Toma’s evidence as to his acquisition of four other properties and his knowledge of issues relative to communication towers based on property owned by his family. Insofar as Mr Toma said that without the claimed adjustment of rent, he would not have purchased the property (T21), this was inconsistent with his earlier conduct in offering $870,000 without knowledge of the terms of the lease. Mr Jones said that when Mr Toma made his offer to buy at $870,000, “it did not matter whether the rent was for a small amount or what the length of the lease was” (referring to T37) Mr Jones noted Mr Toma’s description of the prepaid rent as “bizarre”. (T16) When solicitors for Mr Toma sought confirmation of the adjustment the day after the contract was signed, he said there was no satisfactory explanation given for seeking this clarification four months before settlement and the day after the contract was signed.
52 Mr Jones observed that Mr Toma was aware from the internet advertisement that the sale price for the property was in the range of $870,000 to $950,000. He noted that the property was “ticking all the boxes” for the plaintiff, Mr Toma, and his wife. (T35) Mr Jones pointed out the absence of any discussion as to the adjustment of rent before the contract was signed. He said, “It is unlikely that [Mr Toma] believed [Ms Olcorn] would be prepared to accept a net amount of less than $570,000 for the property given the advertised price.”
53 According to Mr Jones, Mr Toma set out to “ensure that [Ms Olcorn] did not become aware of the existence of her mistake.” Mr Jones said Mr Toma and his wife had a discussion where Mr Toma explained each of the relevant clauses to his wife and they calculated the amount of the adjustment. Clarification on the adjustment was sought on the day after the contract was made. He said:
“If it is accepted that the plaintiff was told by the defendant and Shirley Collins that there would be no adjustment of the rent then it should be inferred that the plaintiff deliberately set out to ensure that the defendant did not become aware of the existence of her mistake as he was well aware of the terms of the contract but took no steps to inform the defendant until the day after settlement.”
54 Accordingly, said Mr Jones, “It would be inequitable to allow the contract to stand in its written form.”
55 Mr Jones referred to the formulation of the requirements for equitable estoppel referred to in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. He submitted that the requirements for such an equitable estoppel were made out. He said, first, Ms Olcorn had assumed a particular legal relationship existed between her and Mr Toma, “namely that there would be no adjustment of the tower rent.” Secondly, he said Mr Toma induced Ms Olcorn to adopt the assumption or expectation by standing by when both she and Ms Collins made statements to this effect. “He did nothing to disabuse them of the plaintiff’s understanding.” Third, according to Mr Jones, his client acted in reliance on the assumption, as she gave evidence, that if she had known that there would be an adjustment of $330,000, she would have asked for a price for the property of $1.2 million (T131) and would not have signed the contract in its present form if she had known the existence of the requirement to adjust. (T117 – T118) Mr Jones said that, as a result of Mr Toma’s actions or inactions, Ms Olcorn would sustain a detriment, namely receiving $330,000 less than the price she expected to receive. Mr Toma did not seek to avoid that detriment, rather he was seeking to enforce the contract according to its written terms.
56 Mr Jones submitted that, insofar as Mr Toma’s evidence conflicted with the evidence from Ms Olcorn and her witnesses, the latter should be preferred.
57 Likewise, Mr Jones submitted that Ms Erdem’s evidence should be rejected insofar as it conflicted with the evidence of Ms Olcorn and her witnesses. He contended that she wrongly sought to minimise her involvement in her husband’s property affairs.
58 In contrast, according to Mr Jones, Ms Olcorn’s evidence should be accepted as “consistent with the instructions she gave her estate agent and conveyancer”. Likewise, submitted Mr Jones, Ms Collins’ evidence should be accepted. He said, “She gave evidence in a truthful manner and to the best of her recollection.” He said the evidence of Ms Sari should be accepted because it was “effectively against her own interests”.
Plaintiff’s contentions
59 The written outline of submissions handed up by Mr Ravech, on behalf of the plaintiff, concentrated upon the defendant’s pleaded defence of mutual mistake which, as previously noted, was not pressed by Mr Jones. Mr Ravech submitted, rightly, that no relief by way of rectification based on mutual mistake would be available unless it were proven that there was a mistake common to the parties. Mr Ravech conceded that in light of the evidence of the conveyancer, Ms Sari, Ms Olcorn could be regarded as labouring under the mistaken belief that the contract would not entail any obligation upon her to readjust and apportion the prepaid tower rent. The key question, then, was whether it could be regarded as proven that Mr Toma was aware of Ms Olcorn’s mistake and took unconscientious advantage of it. According to Mr Ravech, this was a very serious allegation of unconscientious behaviour against Mr Toma and no such finding should be made against him, save in accordance with the principles formulated in the celebrated judgment of Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336.
60 Insofar as Ms Olcorn had given evidence that she had informed Ms Sari and others that there was to be no adjustment of the prepaid tower rent, Mr Ravech submitted that her evidence should not be accepted. The evidence from other witnesses including Ms Collins and a diary note taken by Ms Sari (CB 31) to the effect that the rent had been paid out, was the accurate evidence. It was consistent with the terms of Special Condition 32 of the contract. Merely to establish, as the evidence of Ms Collins does, that there were repeated statements to the effect that the rental for the tower had been paid out, did not establish any common intention that there be no apportionment or adjustment of rent. According to Mr Ravech, there was no basis for alleging any unconscionable conduct on the part of Mr Toma. The contract of sale was prepared by Ms Olcorn’s conveyancer. Neither Mr Toma nor his solicitors had any input into the terms of the contract and made no request to vary them. Their sole contribution was advice as to particulars; for instance, in a finance clause. The evidence of municipal valuations and market appraisals, he said, confirmed “that the purchase price of $900,000 stipulated in the contract [was] a fair price”. He noted that Ms Olcorn said her only issue with it was the adjustment of rent provided for in General Condition 15. This was a standard condition provided for in the Estate Agents (Contracts) Regulations 2008. He said, “The Court takes judicial notice of the fact that it is standard practice, in conveyancing transactions for rental to be adjusted at settlement.”
61 Mr Ravech said that the very serious allegation of unconscionable conduct entailed in Ms Olcorn’s reliance on unilateral mistake had not been squarely put in cross-examination to Mr Toma. He referred to Browne v Dunn (1893) 6 R 67; Food and Beverage Australia Ltd v Andrews [2017] VSCA 258 at [171].
62 Mr Ravech said, even if I were, contrary to his submissions, to be convinced that Mr Toma was aware, before entering into the contract, of the mistake under which Ms Olcorn was labouring, it would nevertheless be inappropriate to order rectification as sought by the plaintiff. He noted that Mr Toma had given evidence that he would not have purchased the property on terms that there be no apportionment of the tower rent. That being the case, this essential common intention, which, according to Mr Ravech, was an indispensable requirement for rectification and provided its rationale, was lacking. To bind Mr Toma to a contract to purchase for $900,000 with no adjustment for the rent would be to bind him to a contract which he never made and never intended to make.
63 Mr Ravech submitted that, insofar as Ms Olcorn gave evidence to the effect that she had spoken, in her discussions with her agent, the conveyancer or Mr Toma before the contract was made, about “adjustment” of the tower rent, that evidence should be rejected.
Conclusions
64 Taking a broad view of the evidence in this case, it seems that Mr Toma and those advising him were alive to the operation of General Condition 15 of the Standard Contract for the Sale of Land in Victoria for the prepaid rent on the tower, which formed part of the present contract. Those in the defendant’s camp seem not to have been alive to the implications of this standard provision for the present contract. Ms Olcorn’s conveyancer believed that Special Condition 32 of the contract which she drew was effective to exclude any adjustment of the prepaid tower rent. (T181, L15-19) To put it another way, Ms Olcorn and her advisers, agent’s representative, Ms Collins, and conveyancer, Ms Sari, proceeded on the footing that, to obtain an acknowledgement and agreement from Mr Toma that all rent had been prepaid and that no further rent for the tower was payable, was sufficient to remove the prepaid rent from the purchase and settlement equation altogether. It is now common ground that that legal interpretation is, in the face of the terms of the written contract, and General Condition 15 in particular, untenable. The defendant’s camp believed that the process of adjustment at settlement could not touch prepaid rent at all. Therefore, the issue of adjustment did not arise and did not need to be the subject of special provision in the contract relative to the prepaid rent.
65 The evidence given by Ms Olcorn at trial does not, however, accord entirely with this analysis. For instance, in describing the instructions which she gave Ms Collins relative to Mr Toma’s offer of a purchase price of $870,000, after saying she informed Ms Collins that the tower rent had been paid out, according to her evidence, she continued “and there was no adjustment”. (T116, L8) I asked if it was possible that her instructions to Ms Collins merely stated that the rent had been paid out without any reference to adjustments. Ms Olcorn replied, “Well, we spoke about it several times, so – and several times I’ve spoken about it and I was very blunt that there was – there was no adjustments.” (Ibid L25-27) I pointed out that a statement that there was no more money payable relative to the tower was not the equivalent of a statement that there would be no adjustment, and Ms Olcorn replied, “Yeah, so I mean every time I spoke about it was that it’d been paid out and there was no – there was no adjustments …” (T117, L2-4) Mr Ravech rightly pointed out that this reference to adjustments is not reflected in the evidence of other witnesses. Certainly, Mr Toma described nothing along those lines as having been said to him by Ms Olcorn, nor did Ms Collins. Special Condition 32 said nothing about adjustment, which would be surprising if the issue of adjustment had been specifically raised with the conveyancer, Ms Sari. After the dispute as to adjustment arose on 27 June, Ms Sari made a diary note, which is to be found at CB 31, in the following terms:
“Spoke to Shirley, estate agent. She advised that the purchaser questioned her in relation to the lease and would the monthly payments be made to them as indicated in the lease. Shirley phoned Carolyn who advised that all of monies due under the lease had been paid to the [vendor] and that no further money was due. Shirley passed this information on to the purchaser advising that no money was due under the lease and the purchaser understood. The purchaser then continued their negotiations and contracts were further negotiated and then signed.”
Once again, there is no reference to adjustment. In those circumstances, I conclude that Ms Olcorn’s evidence that she repeatedly told those involved in the contractual negotiations that there were to be no adjustments cannot be accepted.
66 As to the allegation that Mr Toma was aware of Ms Olcorn’s mistake, Mr Jones did not distinctly deny the submission made by Mr Ravech on Mr Toma’s behalf that such a finding could be made only in accordance with the principles of Briginshaw v Briginshaw. The passages frequently invoked from Sir Owen Dixon’s celebrated judgment in Briginshaw are to be found in the section of the judgment where his Honour stated:
“When, in a civil proceeding, a question arises whether a crime has been committed, the standard of persuasion is, according to the better opinion, the same as upon other civil issues.” ((1938) 60 CLR 336, 363)
Here, there is no allegation of the commission of any criminal offence. Perhaps, more pertinently, his Honour dealt directly with the issue which arose in the case before him in the following terms:
“Upon an issue of adultery in a matrimonial cause the importance and gravity of the question make it impossible to be reasonably satisfied of the truth of the allegation without the exercise of caution and unless the proofs survive a careful scrutiny and appear precise and not loose and inexact. Further, circumstantial evidence cannot satisfy a sound judgment of a state of facts if it is susceptible of some other not improbable explanation. But if the proofs adduced, when subjected to these tests, satisfy the tribunal of fact that the adultery alleged was committed, it should so find.” ((1938) 60 CLR 336, 368-9)
67 The standard of proof in civil proceedings is specifically dealt with in s140 of the Evidence Act 2008, which, on one view, might be thought to constitute a statutory code on the subject, rendering unnecessary and inappropriate reference to pre-existing case law. The section provides as follows:
“Civil proceedings—standard of proof
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account—
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.”
68 Nevertheless, in a number of decisions of intermediate courts of appeal since the introduction of the Uniform Evidence Act, we find continued references to Briginshaw. I am content, therefore, to approach fact finding on that issue in light of the principles to be found in Briginshaw. Section 140 of the Evidence Act appears to be universal in its application to all civil proceedings, and, accordingly, I have regard to its provisions as well. Where a question arises as to the knowledge of a person or his intention, fact finding must necessarily rely heavily, and sometimes exclusively, upon inferences drawn from surrounding circumstances. Those surrounding circumstances might be described as “circumstantial evidence”, which is customarily regarded as bearing less weight than more direct evidence. In the case of a question of knowledge or intent, however, the only more direct evidence available in the circumstances surrounding the relevant events, and the events themselves, is what the subject individual says in Court or outside the witness box. Even in a criminal trial where the standard of proof is beyond reasonable doubt, on a matter of knowledge or intention, a jury is not bound to accept the utterances of the accused, whether from the witness box or otherwise. A jury is not obliged to accept the evidence of an accused person who says, for instance, during a trial on a charge of murder, “When I fired the pistol, I intended to shoot over the deceased’s head merely to frighten him” or even regard it as raising a reasonable doubt.
69 In Taylor v Johnson (1983) 151 CLR 422 in a joint judgment, Mason ACJ and Murphy and Dean JJ said:
“…a party who has entered into a written contract under a serious mistake about its contents in relation to a fundamental term will be entitled in equity to an order rescinding the contract if the other party is aware that circumstances exist which indicate that the first party is entering the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension. What we have said is sufficient to demonstrate the broad basis of support which the authorities provide for that proposition. Moreover, and perhaps more importantly, it is a principle which is best calculated to do justice between the parties to a contract in the situation which it contemplates. In such a situation it is unfair that the mistaken party should be held to the written contract by the other party whose lack of precise knowledge of the first party's actual mistake proceeds from wilful ignorance because, knowing or having reason to know that there is some mistake or misapprehension, he engages deliberately in a course of conduct which is designed to inhibit discovery of it … .”
70 In Taylor v Johnson the parties executed a contract of sale for two adjoining pieces of land of approximately 5 acres each, with a total price of $15,000. The vendor subsequently said that she had believed that the price was some $15,000 per acre. The High Court upheld the decision of the trial judge and reversed the Court of Appeal finding that the trial judge had correctly determined to rescind the contract. The court (Dawson J dissenting) did so in accordance with the principle stated above.
71 In the present case, both counsel were agreed that the mistake or misapprehension under which Ms Olcorn laboured in making the contract for the sale of her property, resulting in a reduction of over 30 per cent in the cash which would flow to her upon settlement could, for analytical purposes, be regarded as “fundamental” or a “serious mistake or misapprehension”, to use the formulation adopted by the joint judgment in Taylor v Johnson.
72 Mr Toma sought information as to the tower lease repeatedly and was concerned, it seems, to have confirmation that all of the rental had been prepaid. Ms Collins said that she felt “bamboozled” by these repeated questions. His last inquiry on this subject with Ms Collins was immediately before he executed the contract of sale. It was plainly a matter weighing on his mind. First thing the following morning, his solicitors raised the issue of the adjustment with Ms Sari. I accept Mr Jones’ submission that this indicated that they and Mr Toma apprehended that there would be a dispute as to the adjustment of the prepaid rent. This action is indicative of a knowledge and belief that the adjustment of prepaid rent was not something which Ms Olcorn or her conveyancer realised would be necessary under the terms of the contract, or were agreeing to undertake. Mr Toma, through his solicitors, moved early because he knew there would be a fight on this subject. The letter might also be regarded, in colloquial terms, as a “gotcha” response on behalf of Mr Toma. I am satisfied, therefore, that Mr Toma was aware that Ms Olcorn was labouring under a mistake, being unaware that the terms of the written contract would require an adjustment of prepaid tower rent. He sought opportunistically to take advantage of the mistake. Where one party knows of a serious mistake under which the other party is labouring but takes no step to disabuse that other party the mistaken party may be entitled to relief for unilateral mistake (Leibler v Air New Zealand (No. 2) [1999] 1 VR 1, 26 [68] per Kenny JA). I am satisfied of that matter in accordance with the principles discussed in Briginshaw and in light of the requirements of s140 of the Evidence Act 2008.
73 I note there was no suggestion from Mr Toma that his solicitors, in writing their letter on the morning of 27 June, were acting without instructions. As to this letter, Mr Toma said, “It is a large amount, so we want to make sure we’re on the right pages and the appropriate steps to settlement.” (T51, L12-14) Mr Toma was pressed on this point. It was put to him that his solicitors moved early because he and they knew there would be a dispute on the matter of adjustment at settlement. His response was “Not necessarily, no”. (T52, L30) Following that relatively weak denial, his next answer, “I was actually quite, ah, shocked when I found out that it was an issue and that that was the – the what was happening, you know”, (T53, L2-5) was unconvincing. Mr Ravech, it will be recalled, submitted that the rule in Browne v Dunn had not been observed with respect to these matters. The allegation of a unilateral mistake on Ms Olcorn’s part, but known to Mr Toma at material times, was clearly pleaded. In the questions which led to the answers which I have quoted above, Mr Jones did distinctly put to Mr Toma that he raised the issue of adjustment through his solicitors only after the contract had been made, despite repeated queries on the subject of prepayment before contract because he knew Ms Olcorn was not intending, or did not think she was agreeing to, an apportionment of the prepaid rent. These matters could have been put perhaps more vigorously or extensively, but, in my view, the questions which were asked were sufficient in context to meet the requirements of the rule.
74 Mr Ravech, on behalf of the plaintiff, submitted that even in the face of the findings which I have made, it would not be proper to grant rectification to Ms Olcorn as sought in her Amended Defence and Counterclaim, leaving Mr Toma bound to complete a contract which was fundamentally different from the one which he entered into.
75 On this point, Mr Jones, on behalf of Ms Olcorn, relied on a decision at first instance of Crockett J in Johnstone v Commerce Consolidated Pty Ltd [1976] VR 463. In that case, the parties entered into terms of contract for the sale of land. The parties had negotiated the terms of the contract which entailed annual payments in reduction of the outstanding purchase price, but with interest payable at the rate of 8 per cent per annum on the unpaid balance. The negotiations did not yield a date from which such interest was to accrue and be paid. Possession of the land was to be given in May 1974 and the contract, as executed, provided that interest was to accrue from 1 May 1975. The plaintiff vendors contended that this date was a mistake and should be rectified to read 1 May 1974. His Honour concluded that a mistake had been established and rectification should be granted. He said that where a mutual mistake was established, it was unnecessary to prove a contract antecedent to the written instrument to be rectified so long as there was a firm cause or common intention as to the relevant matter. His Honour said that in a case of unilateral mistake (which is the finding which I have made in the present case), if one party was aware of the mistake in his favour but did nothing to correct it, he would be precluded from resisting a rectification.
76 According to Mr Jones, Mr Toma, by his unconscientious actions, had brought about the present difficulty and in accordance with the principles stated by Crockett J in Johnstone’s case should be regarded as unable to resist the application for rectification. Professor Carter, in his loose-leaf work, Carter on Contract, states at paragraphs [22–490]:
“in cases where a basis for rectification or rescission has been made out, orders have occasionally been made for rescission or rectification at the ‘option’ or ‘election’ of the unmistaken party.” (Page 52,547, Service 24)
77 In support of this proposition, Professor Carter referred to a number of English authorities. In Garrard v Frankel (1862) 30 Beav 445) it was agreed that the defendant should lease from the plaintiff a house at £230. The lease, when executed, stated the rental to be £130. Sir John Romilly MR, held the plaintiff was not entitled to have the lease rectified, but that the proper relief was to give the lessee the option of taking the rectified lease or rejecting it. His Honour remarked:
“The Court will, I apprehend, interfere in cases of mistake, where one party to the transaction, being at the time cognizant of the fact of the , error, seeks to take advantage of it.” ((1862) 30 Beav 445, 451)
78 His Honour said later in the judgment:
“I doubt therefore whether I can compel (the) Defendant to be bound by a lease inconsistent with a portion of the agreement which she signed, and which, in one view which might be taken of it, might govern the other portion. I am quite clear that I cannot compel the Plaintiff to be bound by the terms of the lease as it stands, or permit the Defendant to derive any advantage from this mistake and, in that respect, the Plaintiff is, in my opinion, entitled to relief.
I think the proper course to be taken is the following. I shall give the Defendant the option of retaining or rejecting the lease, but if she retains it I shall decree the lease to be reformed by substituting the rent of £230 pounds for £130 per annum. If, however, the Defendant wishes to give up the lease and agreement altogether, I shall permit her so to do, but in that case I shall direct her to pay for the use and occupation of the house, during the time she had possession of it, at a rate of £230 pounds per annum which was the rent paid by the last tenant, and which I consider to be proved to be the value of it.” ((1862) 30 Beav 445, 457-458)
79 In Harris v Pepperell (1867) LR V Eq 1, the learned Master of the Rolls now raised to the peerage as Lord Romilly MR, according to the head note, stated:
“The rule that the Court will not interfere to rectify an instrument unless it is proved that the mistake was common to both parties, does not apply to the case of a contract which has been executed between parties in the relation of vendor and purchaser, whom it is in the power of the Court to place in their original position.
Accordingly where, any conveyance of messuages, the plan on the deed comprised a piece of land not intended by the vendor to be included, a decree was made to rectify the deed, an option being given to the purchaser to have his contract annulled;”
80 In Pagett v Marshall (1884) 28 ChD 255) Vice-Chancellor Bacon was uncertain as to whether the evidence did establish a common mistake ((1884) 30 ChD 255, 266). He said, however, he was satisfied that the plaintiff lessor was mistaken and that the lease should be “annulled”. He continued:
“I think it would be right and just and perfectly consistent with other decisions that the Defendant should have an opportunity of choosing whether he will submit, as the Plaintiff asks that he should submit, to have the lease rectified by excluding from at the first floor of No. 48, whether he will choose to take his lease with that rectification, or whether he will choose to throw up the thing entirely, because the object of the Court is, as far as it can, to put the parties into the position in which they would have been if the mistake had not happened.” ((1884) 38 ChD 255, 266–267)
81 In May v Platt [1900] 1 Ch 616, 623, Farwell J concluded that the evidence did not establish circumstances justifying the approach adopted in Harris v Pepperell and Pagett v Marshall. He remarked, however, that the Vice- Chancellor and Master of the Rolls treated the conduct of the unmistaken party in those cases as “equivalent to fraud” ([1900] 1 Ch 616, 623). In Solle v Butcher [1950] 1 KB 671, the English Court of Appeal made a similar order giving the tenant of premises, the lease of which was affected by common mistake, the option to stay on at a proper rent or else quit the premises.
82 These cases were “doubted” by the English Court of Appeal in Riverlate Properties Ltd v Paul [1975] Ch 133 but only insofar as it had been contended that relief by way of rescission could be granted in a case of unilateral mistake in the absence of a finding that the other party was aware of that mistake. In Leibler v Air New Zealand (No. 2) [1999] 1 VR 1 the Court of Appeal granted the remedy of rectification for unilateral mistake but only upon the further finding that the parties had reached a consensus as to the contract before the mistake.
83 My conclusions based on Taylor v Johnson render it unnecessary to deal with the defence based on the Waltons Stores case.
84 In Johnstone’s case, Crockett J, and on appeal, the Court of Appeal [1976] VR 724, 731-732, determined that a unilateral mistake was sufficient to justify rectification in the circumstances there presenting. In my view, that case does not cover the present one. The mistake in question there was not of the serious or fundamental nature which the mistake or misapprehension in Taylor v Johnson or, in this case, was.
85 Based on these authorities, I believe the proper disposition here is that the plaintiff should be given 14 days to elect whether to accept the rescission of the contract or, alternatively, to opt for rectification as sought by the defendant in her Amended Defence and Counterclaim.
Counterclaim
86 It is appropriate to defer consideration of the Counterclaim if the plaintiff elects for rescission since the contract will be undone from the start. That will necessarily dispose of any rights which otherwise might have accrued.
Costs
87 I have heard no submissions on the question of costs and so I will reserve them.
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