Harris v Smith & ors [2008] NSWSC 545

New South Wales Supreme Court

CITATION : Harris v Smith & ors [2008] NSWSC 545

HEARING DATE(S) : 8-9 April 2008

JUDGMENT DATE : 6 June 2008

JURISDICTION : Equity Division Expedition List

JUDGMENT OF : Brereton J

DECISION : The contract and the transfer failed to express the true intention of the parties. The contract can be rectified. Defendant is bound by a personal equity to reconvey the western portion to Plaintiffs, subject to subdivision approval. The reference to acreage in the Schedule of Lands was a contractual warranty. Mr Smith is entitled to damages of $40,000, and interest of $7,000, for that breach. Defendant ordered to retransfer portion to plaintiffs, subject to subdivision approval. Judgment for defendant on cross-claim for $47,000 (including interest).

CATCHWORDS : CONTRACT – RECTIFICATION – COMMON MISTAKE – where contract for sale of land and transfer provided for transfer of whole of a registered lot where it was the intention of the parties to transfer only part of the lot – distinction between rectification for common and unilateral mistake – whether unconscionable conduct an element of common mistake – where transfer repeating mistaken description of land had been registered – whether retransfer to vendors of area mistakenly transferred available – discretionary considerations – whether relief should be withheld due to delay by vendors – whether Schedule of Lands attached to contract should be rectified – EQUITABLE DAMAGES – whether equitable damages appropriate in lieu of retransfer of land. - CONTRACT – RECTIFICATION – DEFENCES – where retransfer of mistakenly transferred land to vendors is appropriate remedy after order for rectification – whether restitutio in integrum relevant to suit for rectification – whether rectification and retransfer possible where a bona fide third party has taken an interest in the land – whether rectification and retransfer possible where contract no longer capable of performance – whether rectification and retransfer is inutile. - CONTRACT – RECTIFICATION – IMPLIED TERMS – relationship between implication of terms and rectification – where rectification of the contract would require provision for subdivision of the subject land – whether terms providing for subdivision of land can be implied into the contract for sale – whether rectification impossible due to uncertainty of terms in respect of subdivision – whether implication of terms requires same standard of certainty of content as suit for rectification. - CONTRACT – WARRANTIES – breach of warranty – whether Schedule of Lands attached to but not referred to in contract amounted to a warranty by vendor of total area land to be transferred – whether regard can be had to evidence extrinsic to contract to determine if Schedule is a warranty – DAMAGES – interest. - PROPERTY – Land under Torrens Title – (NSW) Real Property Act 1901, s 43A – indefeasibility of title – protection of purchaser from notice of unilateral mistake between settlement and registration – "personal equity" – in personam equitable claims against parties with registered interest – whether claim for rectification is a recognised equitable cause of action enforceable against a party with a registered interest – whether registered party's protection against notice of mistake available where parties under common mistake – whether notice possible under common mistake – whether Real Property Act, s 43A relevant to suit for rectification under common mistake – whether unconscionable conduct by party with registered interest necessary to all in personam claims.