publications monitor Autumn 2007 Land buyers hold the balance | Land buyers hold the balance |
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A district court case has tested the Land Sales Act 1984, with the first judicial interpretation of Section 9 giving land buyers the right to avoid a contract of sale up until settlement where there is a technical breach. This means developers should ensure that all disclosure plans and statements for land subdivisions strictly comply with the requirements of the Act. In Begley vs Fisgi, the solicitors for the vendor of a land allotment in a new subdivision forwarded a signed (but undated) transfer to the purchaser's solicitors with a letter directing them to hold the transfer pending settlement and to use the transfer for stamping purposes only. The vendor provided the purchaser with a disclosure plan and a disclosure statement; however these did not comply with the Act. The day before settlement the purchaser sent written notice to the vendor to terminate the contract pursuant to s.9(5) of the Act. In court, the vendor argued the transfer was a registrable instrument of transfer, which meant the cut-off point had been reached for avoiding the contract of sale under s.9(5) and the vendor could keep the deposit. His Honour Judge McGill ruled in favour of the purchaser and noted that the Act's focus of consumer protection should be strictly applied. He concluded that if there is a technical breach, purchasers have the right to avoid a contract up until settlement and that a transfer is not capable of registration until that date. This decision has been appealed and will be heard in the Court of Appeal on 19 April 2007.
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