Perry & Anor v Dusty Hotel Pty Ltd [2003] NSWSC 1215

Perry & Anor v Dusty Hotel Pty Ltd [2003] NSWSC 1215

The communications between the solicitors, especially the letter of 23 December 2002 and the inquiry and response on 15 January 2003, objectively manifested a common intention that the $60,000 loan be repaid by equal monthly instalments comprising principal and interest over 60 months, with interest at 8 percent per annum and a right to prepay the balance. The mortgage failed to reflect that common intention by operating as an interest-only mortgage. Alternatively, if subjective intention were relevant, the defendant's guiding mind, Mr Graeme Smith, knew the mortgage omitted the repayment obligation and unconscientiously caused the defendant to take advantage of that mistake....

Jurisdiction
Australia
Judgment Date
15 December 2003
Procedural Posture
Claim for Rectification of a Mortgage in the Equity Division, Commercial List / Judgment on the Plaintiffs' Claim; Matter Stood Over for Short Minutes of Order and Costs Submissions
Outcome
Plaintiffs made out their case for rectification, but not in the precise form sought in prayer 2a; matter stood over for drafting of orders and costs submissions.
Legal Topics
['rectification' 'common Mistake' 'unilateral Mistake' 'mortgage' 'vendor Finance']
['equity' 'contract Law' 'property Law'] ['rectification' 'common Mistake' 'unilateral Mistake' 'mortgage' 'vendor Finance']

Case Brief

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Procedural Posture

Claim for Rectification of a Mortgage in the Equity Division, Commercial List / Judgment on the Plaintiffs' Claim; Matter Stood Over for Short Minutes of Order and Costs Submissions

Legal Issues

  1. 1 ['Whether the mortgage dated 14 February 2003 should be rectified on the ground of common mistake.' 'Whether rectification should alternatively be ordered on the ground of unilateral mistake and unconscientious taking advantage by the defendant.' 'Whether there was a common intention or antecedent agreement that principal be repaid at the rate of $1,000 per month.' "What the letter of 23 December 2002, as clarified on 15 January 2003, objectively manifested as the parties' contractual intention."]

Ratio Decidendi

The communications between the solicitors, especially the letter of 23 December 2002 and the inquiry and response on 15 January 2003, objectively manifested a common intention that the $60,000 loan be repaid by equal monthly instalments comprising principal and interest over 60 months, with interest at 8 percent per annum and a right to prepay the balance. The mortgage failed to reflect that common intention by operating as an interest-only mortgage. Alternatively, if subjective intention were relevant, the defendant's guiding mind, Mr Graeme Smith, knew the mortgage omitted the repayment obligation and unconscientiously caused the defendant to take advantage of that mistake....

Court Disposition

Plaintiffs made out their case for rectification, but not in the precise form sought in prayer 2a; matter stood over for drafting of orders and costs submissions.

Orders

  • ['The mortgage is to be rectified to provide that it imposes on the defendant an obligation to repay the principal sum, together with interest, by equal instalments over the life of the loan at the specified interest rate and subject to the right of prepayment.' 'The matter was stood over to Friday 19 December 2003...