Lee & Ors v Ross & Ors (No 2) [2003] NSWSC 507

Lee & Ors v Ross & Ors (No 2) [2003] NSWSC 507

The Purchasers lodged the caveat without reasonable cause because, although they may have honestly believed a contract existed, their solicitor had no reasonable ground to maintain that the Vendors' termination was invalid where his position depended on an untenable construction of the contract or on his own failure to retain a complete copy. The solicitor's lack of reasonable grounds was attributable to the Purchasers. The caveat prevented the Vendors from transferring the land to Mr Ross's sister from 19 January 1998, which would have reduced the family loan principal by $291,000, so the interest payments thereby incurred until 12 May 1999 were pecuniary loss attributable to the caveat....

Jurisdiction
Australia
Judgment Date
11 June 2003
Procedural Posture
Equity Division Proceedings for Specific Performance of a Purported Contract for Sale of Land and Application for Compensation for Lodgement of a Caveat Under S.74 P(1) of the Real Property Act 1900 (nsw) / After Judgment Delivered on 11 April 2003, on Return for the Making of Orders and the Vendors' Application for Compensation
Outcome
Plaintiffs ordered to pay compensation for wrongful lodgement of caveat and to pay the Defendants' costs.
Legal Topics
['compensation for Wrongful Lodgement of Caveat' 'reasonable Cause to Lodge Caveat' 'caveatable Interest' 'attributable Pecuniary Loss' 'mitigation of Loss' 'solicitor as Agent in Conveyancing Transaction']
['real Property' 'caveats' 'conveyancing' 'contract for Sale of Land' 'equity'] ['compensation for Wrongful Lodgement of Caveat' 'reasonable Cause to Lodge Caveat' 'caveatable Interest' 'attributable Pecuniary Loss' 'mitigation of Loss' 'solicitor as Agent in Conveyancing Transaction']

Case Brief

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Procedural Posture

Equity Division Proceedings for Specific Performance of a Purported Contract for Sale of Land and Application for Compensation for Lodgement of a Caveat Under S.74 P(1) of the Real Property Act 1900 (nsw) / After Judgment Delivered on 11 April 2003, on Return for the Making of Orders and the Vendors' Application for Compensation

Legal Issues

  1. 1 ['Whether the Purchasers lodged the caveat without reasonable cause within the meaning of s.74P(1) of the Real Property Act 1900 (NSW).' 'Whether the Purchasers or their solicitor had reasonable grounds to believe that a contract for sale existed and had not been validly terminated.' "Whether interest accruing on loans from Mr Ross's family during the currency of the caveat was pecuniary loss attributable to the lodgement of the caveat." 'Whether the Vendors failed to mitigate loss attributable to the caveat.']

Ratio Decidendi

The Purchasers lodged the caveat without reasonable cause because, although they may have honestly believed a contract existed, their solicitor had no reasonable ground to maintain that the Vendors' termination was invalid where his position depended on an untenable construction of the contract or on his own failure to retain a complete copy. The solicitor's lack of reasonable grounds was attributable to the Purchasers. The caveat prevented the Vendors from transferring the land to Mr Ross's sister from 19 January 1998, which would have reduced the family loan principal by $291,000, so the interest payments thereby incurred until 12 May 1999 were pecuniary loss attributable to the caveat....

Court Disposition

Plaintiffs ordered to pay compensation for wrongful lodgement of caveat and to pay the Defendants' costs.

Orders

  • ["Judgment to be entered against the Purchasers for the interest payable by the Vendors to Mr Ross's family which would not have been payable had the caveat not prevented the transfer of the land for $291,000 from 19 January 1998 to 12 May 1999." 'The proceedings are stood over for calculations of compensation,...