Wood v Balfour

The appeal concerned a dispute arising from the sale of residential property. The purchasers, Mr. and Mrs. Wood, alleged that the vendors, Mr. and Mrs. Balfour, had engaged in deceit by concealing major termite damage to the property. The purchasers claimed that the vendors had undertaken repairs to cover up this damage and that their non-disclosure amounted to a representation that no serious termite damage existed. The case was heard in the Court of Appeal of New South Wales, with Giles, Macfarlan, and Meagher JJA presiding.

The primary legal issues before the court were whether the vendors had made a representation regarding the absence of serious termite damage, and if so, whether this representation was deceitful. Additionally, the court considered an application by the purchasers to adduce further evidence discovered after the first instance hearing, specifically concerning the prior treatment of a damaged timber beam which had been deliberately left in situ by the purchasers and their legal representatives. The court had to determine if the purchasers had satisfied the requirement of reasonable diligence in relation to this new evidence.

The Court of Appeal found that the vendors were unaware of the major termite damage and had not acted dishonestly. Consequently, the court held that the purchasers' claim in deceit could not succeed. Regarding the application to adduce further evidence, the court determined that the purchasers had not demonstrated reasonable diligence in their handling of the damaged timber beam prior to the first instance hearing.

The appeal was allowed in part. The order for costs made by the primary judge was set aside, and the purchasers were ordered to pay the vendors' costs of the proceedings at first instance on the ordinary basis. The appeal was otherwise dismissed, and the purchasers were ordered to pay 75 per cent of the vendors' costs of the appeal.