Vitek v Estate Homes Pty Ltd

Vitek was the purchaser of a property from Estate Homes Pty Ltd, the vendor. The dispute arose from the vendor's failure to disclose that the land had previously been used as a petrol station, which may have resulted in contamination. The purchaser sought rescission of the contract and damages for the vendor's misleading and deceptive conduct under the Fair Trading Act 1987, as well as damages for breach of contract. The matter was heard in the Supreme Court of New South Wales.

The central legal issues for the court to determine were whether the purchaser's purported rescission of the contract was effective, whether it constituted a repudiation, and if the vendor had engaged in misleading or deceptive conduct. Additionally, the court had to assess the purchaser's reasonable expectations in light of the surrounding circumstances and determine the appropriate assessment of damages for the breach of contract.

The court held that the vendor's failure to disclose the former use of the land as a petrol station constituted misleading or deceptive conduct. However, the court found that the purchaser was already aware of the potential contamination and had taken steps to mitigate the risk. Consequently, the purchaser's reasonable expectations were not significantly impacted by the vendor's conduct. The court also found that the purchaser's purported rescission was not effective, as it was not a genuine attempt to avoid the contract. Instead, it was an attempt to pressure the vendor into accepting a lower price. Regarding the assessment of damages, the court determined that the vendor's reliance on a valuation report as at a date later than the date of the breach was not appropriate. Instead, the court accepted the purchaser's expert evidence, which provided a sound basis for estimating the value of the property at the date of the breach.

The court ordered the vendor to pay the purchaser damages in the amount of $44,000, representing the difference between the contract price and the value of the property at the date of the breach. The court also ordered the vendor to pay the purchaser's costs of the proceeding.