Urban House v Purnell Bros [2007] NSWSC 1248

Urban House v Purnell Bros [2007] NSWSC 1248

The fire rendered the building on the land untenantable and thereby excluded a valuable use of the land as a leased car sales yard. Considering the possible uses of the land and the plaintiffs' actual decision in January 2005 to defer redevelopment and lease the land for four years after the market downturn, the fire damage made the land materially different from that which the plaintiffs contracted to buy. The plaintiffs therefore validly rescinded under Conveyancing Act 1919, s 66L and were entitled to repayment of the money paid under the contract.

Jurisdiction
Australia
Judgment Date
09 November 2007
Procedural Posture
Supreme Court of New South Wales Equity Division Proceedings Concerning Rescission of a Contract for Sale of Land and a Cross Claim by the Vendor / Final Judgment After Trial
Outcome
Declaration that the purchasers validly rescinded the contract for sale under Conveyancing Act 1919, s 66L; order for repayment of $600,000; cross-claim failed; vendor to pay costs and interest.
Legal Topics
['vendor and Purchaser' 'passing of Risk Between Contract and Settlement' 'substantial Damage to Land' 'rescission Under Conveyancing Act 1919, S 66 L' 'material Difference in Land Contracted to Be Bought' 'relief Against Forfeiture' 'return of Deposit']
['conveyancing' 'property Law' 'contract Law' 'equity'] ['vendor and Purchaser' 'passing of Risk Between Contract and Settlement' 'substantial Damage to Land' 'rescission Under Conveyancing Act 1919, S 66 L' 'material Difference in Land Contracted to Be Bought' 'relief Against Forfeiture' 'return of Deposit']

Case Brief

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Procedural Posture

Supreme Court of New South Wales Equity Division Proceedings Concerning Rescission of a Contract for Sale of Land and a Cross Claim by the Vendor / Final Judgment After Trial

Legal Issues

  1. 1 ['Whether the fire damage to the building rendered the land substantially damaged within the meaning of Conveyancing Act 1919, s 66L and s 66J(2).' 'Whether the land after the fire was materially different from that which Urban House Pty Ltd and SCN Holdings Pty Ltd contracted to buy.' 'Whether Urban House Pty Ltd and SCN Holdings Pty Ltd intended to lease the land before redevelopment, and whether that use was relevant to substantial damage.' 'Whether the plaintiffs were entitled to rescind the contract and recover money paid, or alternatively obtain relief against forfeiture under Conveyancing Act 1919, s 55(2A).' "Whether Purnell Bros Pty Ltd's cross-claim should succeed."]

Ratio Decidendi

The fire rendered the building on the land untenantable and thereby excluded a valuable use of the land as a leased car sales yard. Considering the possible uses of the land and the plaintiffs' actual decision in January 2005 to defer redevelopment and lease the land for four years after the market downturn, the fire damage made the land materially different from that which the plaintiffs contracted to buy. The plaintiffs therefore validly rescinded under Conveyancing Act 1919, s 66L and were entitled to repayment of the money paid under the contract.

Court Disposition

Declaration that the purchasers validly rescinded the contract for sale under Conveyancing Act 1919, s 66L; order for repayment of $600,000; cross-claim failed; vendor to pay costs and interest.

Orders

  • ['Urban House Pty Ltd and SCN Holdings Pty Ltd are entitled to a declaration that they validly rescinded the contract for sale.' 'Purnell Bros Pty Ltd must pay Urban House Pty Ltd and SCN Holdings Pty Ltd $600,000.' 'The cross-claim fails.' 'Purnell Bros Pty Ltd must pay the costs of Urban House Pty Ltd and SCN...