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Decisions of the Superior Courts of New South Wales, 1788-1899

Irving v. Dumareq and Innes (1842) NSW Sel Cas (Dowling) 718; [1842] NSWSupC 70

conveyancing - contract, rescission

Supreme Court of New South Wales

Dowling C.J., Burton and Stephen JJ, 1 December 1842

Source: Dowling, Select Cases, Vol. 6, S.R.N.S.W. 2/3464, p. 316

Where the vendor did not tender a good title to purchaser within a reasonable time after sale; held the purchaser was entitled to rescind the contract and recover his deposit.*

This was an action for money had and received by the defendants to the plaintiff's use. Plea non assumpsit. At the trial before his Honor Chief Justice Dowling and assessors on the 1st August last the case was this: Mr P.L. Campbell being seised in fee of certain lands at the South Head of Port Jackson, and suddenly obliged to leave the Colony from ill health, executed on the 25th May 1840 a conveyance to the defendants of all his lands and estate in New South Wales, in trust to manage his affairs, collect outstanding debts, pay demands on himself and pay him a certain annual allowance during his absence, with power to sell such lands and personalty as should be necessary for the purposes of the trust .

In pursuance of the powers given by the deed the defendants on the 5th July 1841 put up for sale by public auction his land at South Head, on the terms of paying a cash deposit of 10 percent and good bills at different dates within 14 days from the time of the sale. The plaintiff became purchaser at the sale of several lots and paid a cash deposit thereon of £115. The defendants' solicitor furnished the plaintiff with an abstract of title, to which by counsel's advice about 20 objections were made, and after a long correspondence between the solicitors on both sides touching the objections the contract was rescinded by the plaintiff's solicitor writing on the 16th March 1842 to the defendants' solicitor in the following terms:

Dear Sirs,

Had you been able to produce Mr Campbell's execution to his conveyance at once, we might have been induced to waive other objections, but as Mr Campbell is absent from the colony this is impossible. We must insist on the deposit money being returned, or we shall be compelled to proceed.

The deposit money not being repaid the present action was brought to recover it back. After the action was commenced, the defendants' solicitor procured to be executed different instruments required to perfect Mr Campbell's title, and seemed to be anxious to remove all other objections made to the abstract. However, one of these instruments was only delivered as an escrow, whereby the legal interest in the land still remained in a mortgagee. Amongst other objections relied upon to the title, was that the deed of trust under which the defendants sold the land to the plaintiff was to be regarded merely as voluntary and without consideration. It was proved that one of the trustees after the deed was executed had become a creditor of Mr Campbell by incurring pecuniary responsibilities on his account, which fact it was contended though ex post facto was a sufficient consideration to support the deed.

The Judge ruled that though by the conditions of sale no precise time was fixed for making out a good title, yet as a cash deposit was to be paid in the first instance on the 5th July 1841 and the remainder of the purchase money by bills within fourteen days from the date of the sale, the plaintiff had a right to a good conveyance within a reasonable time. And as the plaintiff made his stand on the 18th March 1842 and rescinded the contract upon one objection (without waving others), as advised by counsel, which was requisite to complete the title, the action was maintainable and was not answered by the subsequent ability of the defendants to cure the objections taken to the abstract. Under this direction the assessors found for the plaintiff damages £115.14 - but the Judge reserved for the consideration of the Court, the validity of the objections taken to the abstract of titles and gave leave to have the verdict for the plaintiff set aside and entered for the defendant should the Court be of the opinion that it ought to be so entered.

Dowling C.J. This case was argued at great length during the late term and upon consideration we are of opinion that the verdict ought to stand. It is unnecessary to the determination of the case that we should give any decisive opinion upon any of the various objections made to the defendants' abstract of title. If any one of them were good, it would entitle the plaintiff to retain the verdict. Much discussion arose as to the validity of the deed of trust under which the defendants acted. The present inclination of our opinion is that it cannot be considered voluntary and without consideration and consequently that it would be binding on Mr Campbell. However, the grounds on which we must decide the present case render it unnecessary for us to pronounce any fettering judgment upon the legal affect of that instrument. The question is whether the plaintiff was not entitled to have a good title tendered to him within a reasonable time before action brought, and not whether the defendants are now in a condition to make a good title.

The strength of the argument in answer to the plaintiff's objections to the abstract of title was that they were objections to the mere machinery of title or form of conveyance, and as they did not go to impeach the power of the defendants to give a good title, it was a sufficient answer to the action that they could now make out a good and perfect title. Giving full effect to this argument it appears to us that the plaintiff was not bound to wait until the defendants were in condition to give a title free from all objection. In determining this case we must have regard to the obligations cast upon the defendants by the terms and conditions of sale. It is to be presumed that a vendor when he vends property of this kind into the market is in a condition to convey it to the vendee with a good, perfect and merchantable title within a reasonable time. The conditions of sale here import that the defendants were of able to make a good title within a reasonable time; for the vendee is to pay a cash deposit of 10 per cent and give bills for the residue of the purchase money within 14 days of the sale. Under this contract, if performed, the purchaser had a right to immediate possession and to have a legal marketable title made out with all convenient speed that is in such time as would be reasonably necessary for the preparation of execution of the conveyances.

The sale here took place on the 5th July 1841 and after various delays and negotiations the plaintiff at last on the 16th March 1842 makes his stand and rescinds the contract, the defendants being unable then to obtain the execution of the conveyance by Mr Campbell, which he was advised to be necessary, although he was willing to waive all other objections. It appears to us that he had waited a reasonable time and that it is no answer to this action that the defendants can now make out a good title. On this ground therefore we are of opinion that the plaintiff has a right to retain his verdict.

Published by the Division of Law, Macquarie University