Webster v Havyn Pty Ltd - [2004] NSWSC 227

Reported Decision:
(2004) Aust Contract Reports 90-197
(2004) ATPR (Digest) 46-249

Supreme Court

CITATION: Webster v Havyn Pty Ltd [2004] NSWSC 227

HEARING DATE(S): 23 to 25 March, 2004

JUDGMENT DATE:
26 March 2004

JURISDICTION:
Equity Division

JUDGMENT OF: Palmer J

DECISION: Declaration that Plaintiff validly rescinded contract for sale; deposit to be repaid under s.55(2A) Conveyancing Act; Defendant's Cross Claim for damages for misrepresentation/misleading or deceptive conduct dismissed.

CATCHWORDS: CONTRACT - SALE OF LAND - TIME OF ESSENCE - MISREPRESENTATION - contract for sale of land alleged to have been procured by vendor's misrepresentation as to floor area of building - purchaser affirmed contract after discovering alleged misrepresentation - purchaser unable to find purchase money in time for completion - whether vendor not entitled to rescind in reliance upon notice to complete by reason of original misrepresentation inducing contract. - HELD: Vendor validly rescinded - MISREPRESENTATION - Vendor's agent states in flyer approximate floor area of flats - qualifications at foot of both pages of flyer to the effect that measurements believed correct but could not be guaranteed and person should make own enquiries - whether statements as to area could be read in isolation from rest of document - whether representation made as to floor area or as to belief - CAUSATION - Defendant proposed costly redevelopment of building - relied on statement in flyer as to approximate floor area without paying attention to statements that measurements could not be guaranteed and that people should make own enquiries - Defendant made no enquiries - whether Defendant's loss caused by misrepresentation or by Defendant's failure to take sufficient care for its own interests - DEPOSIT - FORFEITURE - contract validly rescinded by vendor - forfeited deposit more than twice vendor's loss suffered on resale - hardship to purchaser - whether relief should be granted under s.55(2A) Conveyancing Act.

LEGISLATION CITED: Conveyancing Act 1919 (NSW) - s.55(2A)
Fair Trading Act 1987 (NSW) - s.42
Strata Schemes (Freehold Development) Act 1973 (NSW)

CASES CITED: - Louis Dreyfus & Cie v Parnaso Cia Naviara SA (The Dominator) [1960] 2 QB 49
- Elders Trustee and Executor Co Ltd v E.G. Reeves Pty Ltd (1987) 78 ALR 193
- Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
- Hasanovic v Polistena [1982] NSW Conv R 55-078
- Lubidineuse v Bevanere Pty Ltd (1984) 3 FCR 1
- Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268
- O'Brien v Smolonogov (1983) 53 ALR 107
- Redgrave v Hurd (1881) 20 Ch D1
- Stern v McArthur (1988) 165 CLR 489
-Tanwar Enterprises Pty Ltd v Cauchi (2003) 77 ALJR 1853
- Wilson v Kingsgate Mining Industries Pty Ltd [1973] 2 NSWLR 713

PARTIES :
Renata Marina Paola Webster - Plaintiff
Havyn Pty Ltd - Defendant

FILE NUMBER(S): SC 5941/02

COUNSEL: R.W. Tregenza - Plaintiff
J. Merkel - Defendant

SOLICITORS: Biddulph & Salenger - Plaintiff
Whittens - Defendant

Introduction
1 By a Summons…

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.

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Details

Case: [2004] NSWSC 227
Decision Date: 26 March 2004

CaseChat Overview and Summary

In the matter of Webster v Havyn Pty Ltd, the dispute arose from a contract for the sale of land where the purchaser alleged that the contract was procured by the vendor's misrepresentation regarding the floor area of the building. The purchaser affirmed the contract after discovering the alleged misrepresentation but was unable to find the purchase money in time for completion. The issue before the court was whether the vendor was entitled to rescind the contract in reliance upon the purchaser's notice to complete, by reason of the original misrepresentation that induced the contract.

The court examined whether the vendor's agent's statements in the flyer about the approximate floor area of the flats could be read in isolation from the rest of the document, which included qualifications stating that the measurements were believed to be correct but could not be guaranteed and that purchasers should make their own enquiries. The court concluded that the representations were made as to the vendor's belief rather than as a factual statement, and therefore, the vendor's agent's statements did not constitute a misrepresentation. Furthermore, the court found that the vendor's loss was caused by the purchaser's failure to take sufficient care for its own interests, rather than by the vendor's alleged misrepresentation.

In light of the court's findings, the vendor was held to have validly rescinded the contract. The purchaser's deposit was forfeited, which was more than twice the vendor's loss suffered on resale. However, the court considered the hardship to the purchaser and granted relief under section 55(2A) of the Conveyancing Act. The final orders of the court included the forfeiture of the purchaser's deposit and the granting of relief to the purchaser under section 55(2A) of the Conveyancing Act.

Orders