STUART EARLE (REAL ESTATE) PTY LTD v BAINES [1988] NSWCA 149

STUART EARLE (REAL ESTATE) PTY LTD v BAINES

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

SAMUELS, MCHUGH and CLARKE JJA 25 March 1988

[1988] NSWCA 149

PRINCIPAL and AGENT — appeal from District Court — breach of term implied by law that agent would execute mandate with care skill and diligence — damages — loss of opportunity to resell property after sale rescinded by purchaser on account of vendor's agent's innocent misrepresentation — no question of principle — appeal does not lie from order of District Court judge striking out third party notice — not within s128(2A) — Fraser Credits Pty Ltd v Osterberg-Olsen [1978] 1 NSWLR 121 applied although reluctantly by McHugh JA calling for legislative reassessment — no other question of principle.

Samuels JA The first and second respondents, Mr and Mrs Baines, were the owners of land at Londonderry which, in August 1981, they listed for sale with the appellant, a real estate agency which, at the time, employed as a salesman the third respondent, Mr Claydon. On 22 September 1981 the vendors, Mr and Mrs Baines, exchanged contracts with a family called Van der Berg to-sell the property for $80,000, less the stamp duty, which the vendors agreed to pay by dint of a special condition in the contract, producing a net price of $78,400. Completion was to take place on 1 November 1981.

In October 1981, however, the purchasers' solicitors gave notice to the vendors' solicitors that the purchasers had no intention of proceeding with the purchase because of the pooling of water on the property. The vendors' solicitors served a notice to complete expiring on 9 December 1981, and on 1 December 1981 the purchasers riposted with a notice of rescission claiming as a latent defect that the land was affected by flooding.

On 15 January 1982 the vendors filed a summons for specific performance and on 26 February 1982 the purchasers cross-claimed for rescission and a return of their deposit of $8000 and interest.