Facey v Rawsthorne [1925] HCA 10

Facey v Rawsthorne [1925] HCA 10

The High Court (Isaacs and Higgins JJ., Knox C.J. dissenting) held that the Supreme Court's order allowing the purchaser-respondent to rescind contracts and staying the decree for specific performance was wrongly made because the vendor or trustees could have perfected the title within a reasonable period after expiration of the period in which a bankruptcy petition might be lodged. The existence of an available act of bankruptcy did not, without more, entitle the purchaser to immediate rescission, and a reasonable time should have been allowed to see if title could be perfected.

Parties
Plaintiff: Edward Facey; Plaintiff (trustee): Joshua Evans; Plaintiff (trustee): Wilfred Clarence Brooke; Plaintiff (trustee): William Munro Walker; Defendant: Joseph Edward Rawsthorne
Jurisdiction
Australia
Judgment Date
07 May 1925
Procedural Posture
Appeal / Judgment on Appeal From Supreme Court of New South Wales
Outcome
Appeal allowed. Supreme Court order set aside.
Legal Topics
Specific Performance, Vendor and Purchaser, Bankruptcy Effect on Title, Assignment for Benefit of Creditors
Equity Property Law Bankruptcy Specific Performance Vendor and Purchaser Bankruptcy Effect on Title Assignment for Benefit of Creditors

Case Brief

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Parties

Edward Facey

Plaintiff

Joshua Evans

Plaintiff (trustee)

Wilfred Clarence Brooke

Plaintiff (trustee)

William Munro Walker

Plaintiff (trustee)

Joseph Edward Rawsthorne

Defendant

Procedural Posture

Appeal / Judgment on Appeal From Supreme Court of New South Wales

Legal Issues

  1. 1 Whether the purchaser was entitled to rescind contracts for sale of land after a decree for specific performance due to a vendor's act of bankruptcy and assignment for benefit of creditors.
  2. 2 Whether the existence of an unacted-on act of bankruptcy constitutes a defect in vendor's title sufficient to defeat specific performance.

Ratio Decidendi

The High Court (Isaacs and Higgins JJ., Knox C.J. dissenting) held that the Supreme Court's order allowing the purchaser-respondent to rescind contracts and staying the decree for specific performance was wrongly made because the vendor or trustees could have perfected the title within a reasonable period after expiration of the period in which a bankruptcy petition might be lodged. The existence of an available act of bankruptcy did not, without more, entitle the purchaser to immediate rescission, and a reasonable time should have been allowed to see if title could be perfected.

Court Disposition

Appeal allowed. Supreme Court order set aside.

Orders

  • Order of 3rd January 1925 discharged.
  • Further reference directed to the Master in Equity to inquire and report whether a good title to the Burwood Markets can be given to the respondent Rawsthorne.