Wood v Balfour

Case [2010] NSWDC 139
CITATION: Wood & Anor v Balfour & Anor [2010] NSWDC 139
HEARING DATE(S): 15, 16, 17, 18, 19, 22, 23, 24, 25, 26, 29 March and 27 April 2010
 
JUDGMENT DATE: 
9 July 2010
JURISDICTION: Civil
JUDGMENT OF: Levy SC DCJ
DECISION: 1. Verdict and judgment for the defendants;
2. The plaintiffs are to pay the costs of the defendants on the ordinary basis unless otherwise ordered;
3. The exhibits may be returned;
4. Liberty to apply on 7 days notice if further orders are required.
CATCHWORDS: TORTS – action framed in deceit – purchase of domestic dwelling – premises affected by past termite activity – purchasers claimed vendors acted fraudulently to cover up and conceal damage due to past termite activity to induce purchasers to buy – whether deceit established – relevance of maxim of caveat emptor – operation of Special Condition 3 of contract for sale – standard of proof required to establish deceit – equivalent to an allegation of fraud - DAMAGES – measure of damages – valuation of property assuming no termite damage compared to valuation taking into account termite damage.
LEGISLATION CITED: Evidence Act 1995, s 135
CASES CITED: AIC Ltd v ITS Testing Services (UK) Limited [2006] EWCA Civ 1601; [2007] 1 All ER (Comm) 667
Akerhielm v De Mare (1959) AC 789
Angus v Clifford [1891] 2 Ch 449
Armstrong v Strain [1951] 1 TLR 856 at 871
Australian Steel & Mining Corporation Pty Limited v Corben [1974] 2 NSWLR 202
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Civil Service Co-operative Society of Victoria Ltd v Blyth [1914] HCA 17; (1914) 17 CLR 601
Clancy v Prince & Ors [2001] NSWSC 85
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Derry v Peek [1889] UKHL 1; (1889) 14 AC 337
Edgington v Fitzmaurice (1885) 29 ChD 459
Gould v Vaggelos [1985] HCA 85; (1984) 157 CLR 215
Jennings v Zilahi-Kiss (1972) 2 SASR 493
John McGrath Motors (Canberra) Pty Ltd v Applebee [1964] HCA 1; (1964) 110 CLR 656
Krakowski v Eurolynx Properties Pty Ltd [1995] HCA 68; (1995) 183 CLR 564
Luxton v Vines [1952] HCA 19; (1952) 85 CLR 353
Oraka Holdings Pty Ltd v Leda Holdings (1997) ATPR 41-558
Oudaille v Lawson [1972] NZLR 259
Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 442
TEXTS CITED: Spencer Bower, Turner and Handley, Actionable Misrepresentation, 4th ed (2000) Butterworths
Stonham, Vendor and Purchaser, (1964) Law Book Co and Williams, Vendor and Purchaser 4th ed, Lightwood, Sweet & Maxwell
PARTIES: Lee Darryl Wood (First plaintiff)
Lesley Jayne Wood (Second plaintiff)
David John Balfour (First defendant)
Judith Yvonne Balfour (Second Defendant)
FILE NUMBER(S): 4285 of 2008; 2008/319042
COUNSEL: Mr E White (Plaintiffs)
Mr D Rayment (Defendants)
SOLICITORS: Robilliard & Robilliard (Plaintiffs)
Redmond Hale Simpson (Defendants)

Table of Contents

A. INTRODUCTION
Nature of the case [1]
Factual background [2] – [6]
Issues for determination [7] – [8]
Elements of…

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Wood v Balfour [2010] NSWDC 139
Case
[2010] NSWDC 139
Decision Date

CaseChat Overview and Summary

In the case of Wood v Balfour, the plaintiffs, a married couple, sought damages from the defendants, the vendors, for deceit in the sale of a domestic dwelling. The plaintiffs alleged that the defendants fraudulently concealed past termite damage to the property, which they claimed induced them to purchase the property. The dispute was heard in the Supreme Court of Victoria.

The primary legal issues the court had to decide were whether the defendants had committed deceit by concealing the termite damage and, if so, what the measure of damages should be. The court also considered the relevance of the maxim caveat emptor and the operation of Special Condition 3 of the contract for sale. The plaintiffs had to establish, on the balance of probabilities, that the defendants acted deceitfully to induce the sale.

The court found that the plaintiffs had failed to prove deceit on the balance of probabilities. The evidence did not support the allegation that the defendants had deliberately concealed the termite damage. The court emphasised that the maxim caveat emptor applied, placing the onus on the purchaser to inspect and discover any defects. The operation of Special Condition 3 of the contract, which required the plaintiffs to inspect the property and seek expert advice, further supported the defendants' position. The court held that the standard of proof for deceit was equivalent to an allegation of fraud, which the plaintiffs had not met. Consequently, the court awarded judgment in favour of the defendants.

The court ordered that the defendants were to receive judgment and verdict, and the plaintiffs were to pay the defendants' costs on the ordinary basis unless otherwise ordered. The exhibits were to be returned, and the plaintiffs were granted liberty to apply for further orders with seven days' notice.

Orders

Orders of the court

1. Verdict and judgment for the defendants;

2. The plaintiffs are to pay the costs of the defendants on the ordinary basis unless otherwise ordered;

3. The exhibits may be returned;

4. Liberty to apply on 7 days notice if further orders are required.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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