Conveyancing Table of Contents
In this chapter1. Steps Taken by Solicitors in a Conveyancing Transaction. In this outline of the steps involved in a conveyancing transaction italics have been used to indicate steps necessitated by the Conveyancing (Sale of Land) Amendment Act, 1987, often referred to as the "anti-gazumping legislation". With the repeal of this legislation these steps are no longer required. The steps that are required to be taken by the Conveyancing (Sale of Land) Amendment Act, 1989 and Auctioneers and Agents (Sale of Land) Amendment Act, 1989 have been denoted by boldface print. Vendor's Solicitor Purchaser's Solicitor 1. Receive authority from client to obtain documents to prepare contract for sale. 2. Inspect and search title deeds. 3. Obtain s. 149 certificate, drainage diagram, copy of any survey in existence and any other searches necessary. 4. Copy of contract for sale forwarded to office of agent offering property for sale. 1. Purchaser interested in purchase of property will peruse contract. Purchaser may sign preliminary agreement and pay a preliminary deposit (0.1 % of price or $ 100.00, whichever is greater). 2. Preliminary agreement served on vendor. 5. Vendor may sign preliminary agreement at any time before purchaser withdraws from the agreement. The vendor enters into the preliminary agreement by serving on the purchaser a signed copy of the preliminary agreement. 6. Before the end of the "earlier period" (5 business days or an agreed extension) the vendor must serve on the purchaser the contract the form of which was annexed to the preliminary agreement, containing the appropriate additional particulars eg. price. 7. Receive agent's instructions regarding sale. 3. Receive agent's instructions regarding purchase. 8. Discuss contract with vendor. 9. Draft contract. 4. Write to vendor's solicitors setting out purchaser's full name, address and occupation. 10. Retain original contract and send counterpart contract to purchaser's solicitor. Advise the purchaser's solicitor if a certificate under s. 66W is required to shorten or exclude the "cooling off period" which ends at 5 pm on the fifth business day after the day on which contracts were exchanged. 5. On receipt of contract peruse and check with instructions. 6. The purchaser has to exchange contracts before the end of the "later period" which is 5 business days after service of the contract or an agreed extension of that time. 7. Seek confirmation from incoming mortgagee that loan has been approved. Do not exchange contracts before approval is confirmed in writing. 8. Make searches. 9. Discuss contract and effect of the certificate under s. 66W with purchaser. 10. Advise vendor's solicitor of amendments if any required. 11. On receipt of request for amendments discuss with vendor and obtain his instructions. 12. Advise purchaser's solicitor of acceptance or rejection of proposed amendments. 11. If amendments rejected, discuss with purchaser and advise vendor's solicitor whether contract accepted or rejected. 13. When terms of contract have been settled have original signed by vendor and seek to arrange exchange with purchaser's solicitor. 14. If the vendor fails to exchange when the purchaser offers to do so within the "later period" the purchaser may take action against the vendor for specific performance of the preliminary agreement or damages. 12. If the purchaser fails to exchange contracts within the "later period" the preliminary deposit is forfeited to the vendor but the purchaser has no other liability to the vendor and cannot be sued for specific performance. 13. Make necessary inquiries. 14. If searches and inquiries result satisfactorily, explain contract to purchaser and have it signed. Have certificate under s. 66W signed if necessary. 15. Exchange parts of contract so that the purchaser has the original contract for stamping. The vendor's solicitor should receive the deposit and the application for Minister's Consent and certificate under s. 66W , if necessary. 16. Forward deposit to agent. 16. Discuss with purchaser whether and extension of the "cooling off period" should be requested. If necessary, make request to vendor's solicitors. 16. On receipt of request for an extension of the "cooling off period" discuss with the vendor and obtain instructions. If consented to prepare instrument signed by vendor and send it to the purchaser's solicitors. 17. If required by the purchaser rescind the contract by notice in writing to the vendor's solicitors within the "cooling off period". 17. If receive notice of rescission advise agent so that agent may pay 0.25% of purchase price to vendor and balance of deposit to purchaser. 18. If contract has been rescinded seek a refund of stamp duty. 18. Seek instructions from vendor as to whether a claim should be made against purchaser if purchaser has been allowed into possession after exchange. 19. Where the vendor discovers that there is an inaccuracy in his warranties he can give notice to the purchaser to indicate whether he will rescind or proceed. 19. After exchange a purchaser has 14 days in which to rescind if the vendor has not annexed the proper documents to the contract. 20. Furnish statement of title to purchaser's solicitor. There is no obligation to provide particulars of title exchange unless such are requested, except in the case of Old System or Qualified Title where the proper abstract must be provided. Send application for Ministers Consent to Lands Dept. 20. Arrange for a survey if required. 21. Advise outgoing mortgagee of sale, request preparation of discharge of mortgage and assignment of fire policy. 21. When relevant, inspect title documents. 22. Complete searches and enquiries. 23. Furnish statement of title to incoming mortgagee's solicitor. 24. Draft requisitions on title and transfer or other assurance. 25. Stamp contract and assurance. 26. Send requisitions within 21 days of exchange (unless Old System title or Qualified title in which case it is 21 days after provision of a proper abstract). Send draft assurance within 28 days of exchange to the vendor's solicitor. 22. On receipt of requisitions and draft assurance obtain vendor's instructions for replies to requisitions, amend assurance if necessary and obtain execution of assurance by vendor. 23. Send replies to requisitions to purchaser's solicitor. 27. Consider replies to requisitions and if necessary make further requisitions. 28. On receipt of mortgage documents peruse and check and arrange for purchaser to sign mortgage, authority to pay and authority to complete mortgage documents. Obtain mortgagee's costs and disbursements and stamp mortgages if mortgagee's solicitor requires or authority to deduct costs from loan advance. 29. Reply to mortgagee's requisitions as instructed by purchaser and furnish mortgagee's solicitor with results of searches and enquiries and fire policy if required. 24. Reply to further requisitions. 30. If satisfied with title, prepare settlement statement. Any rescission on the basis of a breach of warranty must be effected prior to completion. 31. Send a copy of s. 160 certificate to vendor's solicitor. 25. On receipt of s. 160 certificate prepare settlement statement, advise purchaser's solicitors of settlement figures and cheques required. 26. Arrange a settlement time with purchaser's solicitor and outgoing mortgagee. 32. Arrange a settlement time with vendor's solicitor and incoming mortgagee. 27. Check on availability of keys. 33. Prepare order on the agent. 28. Prepare direction to purchaser's solicitors as to payment of purchase price. 34. Make final search. 35. Purchaser may wish to inspect the property prior to settlement. 36. Obtain bank cheques for settlement if no incoming mortgagee. 29. Attend settlement. 37. Attend settlement. 30. Send authority to agent. 38. Attend to registration of documents if no incoming mortgagee. 31. Prepare and send notices of sale. 39. Prepare and send notices of sale. 32. Report to client. 40. Report to client. 2. The Intending Vendor. On occasion an agent or solicitor may be consulted by an intending vendor who seeks advice as to the best method of effecting a speedy and satisfactory sale. If a solicitor is consulted he should be wary of suggesting a selling price because he is not a valuer or an estate agent. Agents and solicitors should be aware of the advantages and disadvantages of a sale by auction and of the conditions which are normally applicable to an auction sale. The basic auction conditions are set out in clause 21 of the Standard Form of Contract1. Estate agents usually claim that the advantages of offering a property for sale by auction are the likelihood of a quick sale and the immediate identification of genuine buyers with whom private negotiations can be carried out after the auction. These advantages however are likely only to be attained after extensive advertising and advertising is usually at the expense of the vendor. An agent or solicitor may also be asked in relation to a proposed sale by auction whether a reserve price should be fixed. If no reserve is fixed the property may be knocked down to the highest bidder. Few properties are offered at auction without a reserve and a solicitor would ordinarily advise that a reserve be fixed. The reserve price should generally not be disclosed and it should be set at the minimum price that the vendor is prepared to accept for the property. If the reserve is not met at the auction the auctioneer will pass in the property but will open negotiations with the highest bidder and others who exhibited a genuine interest in the property. If the intending vendor decides to offer the property for sale by auction his solicitor is instructed to prepare the contract for sale before the auction date. The solicitor will draft the contract based on the vendor's instructions about the inclusions in the sale and the special conditions to be incorporated into the contract. The solicitor will include in the contract the results of various searches and inquiries. The solicitor or agent would also ascertain the amount of the rates levied on the property for the current year so that this information would be available to prospective purchasers. The agent and solicitor should advise the vendor that, unless some other arrangement is arrived at, that in addition to advertising fees he will be liable to pay commission to the auctioneer or an offering fee where no sale results. If no sale results the vendor will be liable to pay his solicitor's costs for preparation of the contract. Where the vendor wishes to sell the property by private treaty he has a choice between offering the property personally or through a licensed real estate agent. If the vendor offers the property personally he will not be liable for an agent's commission but he is unlikely to reach as large a number of prospective buyers as an agent. Where the property is placed with an agent the agent will ordinarily advertise the property at his own expense. It is necessary to negotiate a commission with the agent or accept without challenge a reasonable commission. The Real Estate Institute has a recommended scale of commissions which is the rate usually adopted by the agent. The agent and solicitor should also make the vendor aware of the various types of agency agreement which may be entered into. For example, exclusive, sole or selling agency agreement. 3. The Intending Purchaser. When an intending purchaser approaches an agent or solicitor he may intend to buy a particular property or he may make just a general enquiry. In any case the purchaser's main concerns will be the availability of finance, the probable costs and what inspections and investigations should be made. The agent and solicitor should endeavour to keep himself informed as to the current sources and availability of finance for property purchase. The inspections and investigations that may be made by or on behalf of the purchaser include:- * Title searches; * Zoning searches; * Sewerage and drainage; * Builders Licensing Board or other inspection by a builder or architect; * Survey; * Compliance with Council Ordinances; * Valuation. The probable costs that the purchaser may incur include:- * Stamp duty; * Search and inquiry fees; * Loan application fees; * Valuation fees; * Survey fees; * Inspection fees; * Registration fees; * Rates and land tax; * Legal costs for purchase and mortgage; * Insurance premiums. These costs can be estimated where the solicitor is informed of the probable purchase price. The stamp duty, valuation fees and solicitors costs are calculated by reference to scales. The purchaser must find out these costs to ensure that finance is available to cover the purchase price and all the costs associated with the purchase.. 4.. The Agent's Instructions. When a vendor and purchaser have reached a bargain in relation to a specific property a solicitor will be instructed to act for the vendor and another to act for the purchaser. When an agent is involved the vendor's agent will forward written instructions to both solicitors. The instructions will be in such detail as to allow the solicitors to ascertain the exact bargain that has been concluded between the parties. It is important that the instructions provide details of the purchasers, the parties present addresses and where they have be contacted, including telephone numbers. All the the terms of the contract discussed by the parties should be recited in the instructions to ensure that the contract when drafted fully documents the bargain arrived at. In providing detailed instructions the agent may prevent delays necessitated by the parties solicitors negotiating amendments to the draft contract. 5. The Purchaser's Finance. One of the matters the agent or solicitor for the purchaser will enquire about when taking instructions is the source of funds. The purchaser should advise whether the necessary cash for the purchase is available, whether some other assets must be realised into cash or whether part of the necessary funds must be borrowed. Consideration should also be given as to whether written approval of finance has been given and when such finance will be available. If assets have to be realised enquiries should be made as to the progress of this realisation. If written approval of finance has not been received or an asset has yet to be sold it would normally be prudent for the purchaser to ask that a "subject to finance" or "subject to sale" clause be inserted into the contract. 6. The Requirement of Writing for the Contract. Section 54A of the Conveyancing Act provides:- "(1) No action or suit may be brought upon any contract for the sale or other disposition of land or any interest in and unless the agreement upon which such action or suit is brought, or some memorandum or note thereof, is in writing and signed by the party to be charged or by some other person thereunto by him lawfully authorised. (2) This section applies to contracts whether made before or after the commencement of the Conveyancing (Amendment) Act, 1930, and does not affect the law relating to part performance, or sales by the Court. (3) This section applies and shall be deemed to have applied from the commencement of the Conveyancing (Amendment) Act, 1930, to and under the provisions of the Real Property Act, 1900." Although this section does not bear on the formation or validity of a contract it does require certain writing and signature in the absence of which no action can be taken to enforce it. If advantage is to be taken of the provision by a party resisting an action it must be specifically pleaded as a defence, otherwise the defendant will be take to have admitted that the requirements of the section have been satisfied. It is sometimes said in relation to contracts for the sale land of and that the essentials of the required writing are the three P's, viz: the parties, the property and the price. It is the practice of most solicitors in N.S.W. to make use of the standard form of contract for the sale of and adding in such detail as required by the form and such amending or additional provisions as the agreements reached by the parties require. Use of the standard form not only records the agreements of the parties in a form which complies with s. 54A(1) but also serves to exclude, modify or enlarge conditions which might otherwise be implied by law or statute. 7. Open Contract and special contract. At the stage when the solicitor first receives instructions there is no enforceable contract in existence. The parties may have made a contract by offer and acceptance but the contract may not be enforceable for want of writing which will satisfy the requirements of s. 54A of the Conveyancing Act. On the other hand, sometimes when the instructions are first given a contract enforceable against one or the other, or both, of the parties will already have been entered into by reason of the signature by a vendor or his agent of a receipt for a deposit, which contains sufficient information to satisfy the statutory requirements, or of the signature by one or the other of a written offer to sell or buy, which has been accepted according to its tenor, or of the signature by a purchaser of a written acceptance of an offer or of an act of part performance. Some minimum requirements must be satisfied. The parties should have reached a concluded agreement on the essential terms of the bargain and each should have consented to be immediately bound by that agreement. Some minimum terms must be agreed to ie. the parties, the property and the price. The High Court has upheld an order for specific performance of an open contract created by an offer and acceptance in correspondence which contained a term relating to the completion of the sale.2 This type of enforceable contract is usually an "open contract" and it will usually be replaced by a more formal contract which will contain more detailed conditions. Section 60 of the Conveyancing Act provides that every contact for the sale of land is deemed to be subject to the conditions set out in Schedule III. It is possible to exclude or modify these conditions but that would normally produce a special contract. The opening provisions in the standard form of contract excludes the provisions of Schedule III from applying to that contract. Some of the conditions implied in an open contract by virtue of Schedule III are:- * The vendor must furnish particulars of title. * The purchaser must raise requisitions within 21 days after delivery of the particulars of title. * The purchaser is entitled to compensation for error or misdescription of land. * Rates and outgoings are adjusted on completion. These topics are usually incorporated in special contracts of sale. In N.S.W. the current form of standard contract for the sale of and is the 1988 edition. Professor Andrew Lang suggests: " that a vendor should not deliberately enter into an open contract, as it is more advantageous to enter into a special contract which utilises the standard contract for the sale for land. The purchaser is more seriously disadvantaged by an open contract than the vendor. There are conditions in the standard contract which benefit the purchaser and are not incorporated in an open contract (e.g. cl. 11(e), (f), 9, 10, 14, 14A, 19). A purchaser should not deliberately enter into an open contract, as the standard contract offers greater protection to him."3 It would appear however that an open contract cannot comply with the 1986 Conveyancing Act "vendor disclosure and warranties" amendments and as such the open contract would always be rescindable by the purchaser. This would make it difficult for the vendor to require the purchaser to complete the sale. The vendor disclosure and warranties legislation will be considered in greater depth in the next chapter. 8. Preparation of the Contract. It is the practice for the vendor's solicitor to draw the contract for sale and to submit it to the purchaser's solicitor for approval. The counterpart, not the original, is sent to the purchaser's solicitor so that, following exchange, the purchaser's solicitor will be in possession of the original document signed by the vendor. It is the original contract that will be required to be produced at the Stamp Duties Office and marked at the time the purchaser pays stamp duty. Prior to the "anti-gazumping" legislation in 19884 with the contract there should have been sent to the purchaser's solicitor forms under the Land Sales Act, 1964 which reserved to the purchaser the right to serve on the vendor, or grantor of an option, a prescribed notice within 2 business days after he executed the contract. The service of the notice had the effect that the contract was deemed never to have been executed by the purchaser. The Land Sales Act provisions did not apply if a purchaser was a and agent, solicitor, barrister, company, if the property was sold at auction or where the purchaser's signature was witnessed by a solicitor, barrister or clerk of the Local Court and the contract bore a certificate by that witness that he explained the effect of the instrument to the purchaser before it was executed by him. The operation of these provisions was further restricted by a Court decision5 which held that the Land Sales Act did not operated when a contract was submitted to the purchaser in anticipation of a subsequent exchange, Helsham, C.J. indicated:- "[The Act] was never intended to apply to conveyancing transactions conducted in the ordinary way between two solicitors, or others who adopt the same or a similar process." Conveyancing legislation appears now to have come almost full circle as the Conveyancing (Sale of Land) Amendment Act, 1989 and Auctioneers and Agents (Sale of Land) Amendment Act, 1989 re-instate the "cooling-off" period. It will be interesting to see whether the practise develops as it did with the Land Sales Act of requiring in almost every case a certificate to exclude the "cooling-off" period. Only the proposed period to be allowed to the purchaser to "cool" is 5 days instead of 2 days. 9. Exchange of Contracts. Exchange of contracts usually takes place at the office of the vendor's solicitor, but may take place elsewhere by mutual arrangement. Exchange may take place by post, where the solicitor for one party may forward one part of the contract, signed by his client, to the solicitor of the other, subject to the receipt, in due course, of the other part of the contract signed by that other party. Exchange "is the crucial and vital fact which brings the contract into existence .... it is of the greatest importance, and that is why in past ages this procedure came to be adopted by everybody as the proper procedure"6 Upon exchange the vendor's solicitor should ensure that he receives a cheque, usually payable to the agent, for so much (if any) of the deposit stated in the contract as has not previously been paid to the agent or to the vendor's solicitor. When reference is made to "parts" of the contract it is pertinent to note that any document, other than a prescribed form, may be prepared in a number of parts (ie. exact copies). One of these parts may be executed by one or more of the parties and another by other parties, so that, taken together the several parts in total represent a document signed by all parties. It is customary to speak of one part as the "original" and other parts as "counterparts", even though the counterparts may be original in the sense that they are typewritten and not carbon copies. As discussed earlier the signature on part of the contract by or on behalf of a party is required if the contract is to be enforceable against that party (s. 54A Conveyancing Act). The signature may be by surname only, by initials only, or by a mark. It may even be made by the impressing of a stamp upon which is engraved a facsimile of the party's signature. A signature placed on any part of the agreement will be sufficient, provided that it may fairly be concluded that it was intended to authenticate all the relevant parts of the agreement. There is, however no statutory requirement that the signature to a document executed under hand be witnessed, and attestation is not a pre-requisite of enforceability. Despite this, it is prudent to ensure that the signatures to the contract are attested by an independent witness who should initial every alteration to the document and sign each annexure. This is to facilitate proof of signatures and the state of the contract when signed should it be necessary. Upon exchange the parts of the contract are checked by both solicitors to ensure that each is complete and identical with the other, and that each has been duly signed and attested. The parts are then dated by the vendor's solicitor and exchanged to the intent that the vendor's solicitor receives the part signed by the purchaser, and the purchaser's solicitor the part signed by the vendor. The High Court has held7 that in certain circumstances there can be a binding contract for the sale of land even though the parts of the contract exchanged are not the same. The Court took the view that whether it was essential that the parts of the contract exchanged should be identical depended upon the intention of the parties:- "...if the parties, through negotiation between their solicitors, have agreed on the terms of their bargain and settle on an exchange of parts in order to seal that bargain, it would usually accord with their intention to treat the exchange as creating a binding contract, notwithstanding the lack of correspondence in the parts, so long as that lack of correspondence is capable of being remedied by rectification. It will be otherwise when it appears that the parties intend to be bound only by an exchange of parts in identical terms or when the prior negotiations do not completely settle the terms of the bargain and the parties look to the parts as exchanged to fix those terms ... the importance of exchange lies not so much [in fixing] the terms of the contract as in ... fixing the existence of a binding contract, thereby terminating the period in which each party is free to withdraw from the negotiations." This concept of exchange allows the Court to do greater justice between the parties, by precluding one party from acting on the footing that there is no binding contract when, as a result of an undetected error, one part of the contract does not correspond with the other. The Court also commented that it may be easier to find an intention that there be no binding contract except by exchange of identical counter parts where the exchange is effected by solicitors for the parties rather than by the parties themselves; and that it may be more difficult to find a binding agreement where the counterparts openly contradict each other. The Court of Appeal has held8 that there was no binding contract where the terms of a subject to finance clause in the exchanged counterparts were different. The vendor's solicitor had not informed the vendor of a proposed alteration to the subject to finance clause and it could not be said that the parties had agreed to the terms of their bargain and intended the exchange of contracts merely to seal their bargain. Besides the physical exchange of contracts described above it is also possible to exchange contracts through the post or document exchange and even over the telephone. Although it is not a common practice in N.S.W. it is possible over the telephone to agree that the contracts are to be considered as exchanged and each solicitor holds the copy of the contract executed by his client on behalf of the other party. A contract by a corporation may be executed under its seal or by the signature of a person duly authorised to sign on its behalf. Where the execution is by an authorised person evidence of the authority should be obtained by the other party. This could take the form of a minute of a resolution or a letter from its secretary and should be obtained by the other party. A contract may be executed on behalf of a natural person by his attorney or agent and evidence of the agency and non-revocation of it should be sighted. From the 1st January, 1991 companies will be required to include their Australian Company Number in the attestation clause to validly execute a document. Note also that a company which is formed within a reasonable time after a pre-incorporation contract may ratify the contract and upon ratification the company is bound by the contract as if it had been entered into prior to the formation of the company9. On exchange of contracts the purchaser acquires an equitable interest in the property which he may protect by lodging a caveat where the land is under Torrens title or register the contract for sale of old system land. This preserves the purchaser's priority over subsequent persons proposing to deal with the land. Although it is not a common practice in N.S.W. to lodge a caveat or register the contract it was common in the real estate boom years in the 1970's when individual certificates of title had not issued for a subdivision and the lot was resold in a short space of time. 10. 1989 Amendments to the Conveyancing Act. .c4.(a) Generally. The Conveyancing (Sale of Land) Amendment Act, 1987, often referred to as the "anti-gazumping legislation", as predicted by many proved a dismal failure for reasons which included the following:- * Its real impact on gazumping was much less than intended; * It certainly did not simplify conveyancing which was one of its intended objectives; * It introduced some ethically undesirable practices; * It demonstrated the difficulties that arise should the estate agents be involved with the contractual process of conveyancing; * It proved detrimental rather than beneficial, in costs and delays, for vendors and purchasers; * Its legal implementation proved to have been defective, rendering it largely defunct. The Minister for Natural Resources constituted a committee to review the legislation. The committee, called the Conveyancing Committee, recommended the repeal the provisions dealing with preliminary agreements and to replace them with a mandatory non-excludable cooling off period in every contract for sale of residential property. The amending legislation, the Conveyancing (Sale of Land) Amendment Bill, 1989 and the Auctioneers and Agents (Sale of Land) Amendment Bill, 1989 were introduced in the Legislative Assembly on 21st November, 1989 and were passed by it on the 7th December, 1989. However in the Legislative Council the Opposition and independents combined to defer debate on the Bills until April, 1990. The Conveyancing (Sale of Land) Amendment Act inserts Divisions 8 (contracts for sale of residential property) and 9 (options) into Part 4 of the he Conveyancing Act .c4.(b) Availability of the Contract at the Point of Sale. The requirement contained in the present s. 66Y is replaced by the proposed s. 66R. This obliges a vendor to have a copy of the proposed contract (excluding particulars of the purchaser and the purchase price) and the documents required to be attached by s. 52A of the Conveyancing Act available for inspection by purchasers before a residential property is offered by sale by written or broadcast advertisement. Effectively there is no change, but the provision only applies when the vendor makes a written or broadcast advertisement relating to residential property and no other modes of marketing property for sale. It is an offence to do so. This is a requirement whether the sale is by private treaty or by auction. The legislation however does not provide where the "required documents" are to be made available for inspection but does provide that they must be at the same place. The documents could be made available at the vendor's home, the vendor's solicitors office or at some other place provided that they are available for inspection. However s. 84AA of the Auctioneers and Agents Act will provide that the agent must have the required documents available for inspection at his registered office. The Auctioneers and Agents (Sale of Land) Amendment Act, contains a new s. 84AA which imposes a similar requirement on estate agents before a residential property is offered for sale. The current s. 84AA has been criticised because it only imposes the need to have a draft contract available when the licensee invites an offer to purchase residential property or makes an offer to sell. The new section is much broader and extends to a licensee indicating "that residential property is for sale or is to be auctioned at any future time" (s. 84AA(2)(a)). This encompasses advertising or promoting the property in any way, placing a sign on or near the property indicating that it is for sale and placing on display particulars or a description or photograph of the property at the agent's office (s. 84AA(4). .c4.(c) Application of the Legislation. What properties are included in the term "residential property"? 66Q(1) For the purpose of this Division, residential property is:- (a) land on which are situated (or in the course of construction) not more than two places of residence, and no other improvements; or (b) vacant land on which the construction of a single place of residence alone is not prohibited by law; or (c) a lot or lots (including a proposed lot or lots) under the Strata Titles Act, 1973 or the Strata Titles (Leasehold) Act, 1986, comprising not more than one place of residence alone, whether constructed or in the course of construction, and including any place used or designed for use for a purpose ancillary to the place of residence. (2) Residential property does not however include:- (a) land or a lot that is used wholly for non-residential purposes; or (b) land that is more than 2.5 hectares in area (or such other area as may be prescribed). (3) For the purposes of this section, "place of residence" means a building or part thereof used, or currently designed for use, as a dwelling only, and includes outbuildings or other appurtenances incidental to any such use. Lang suggests10 that s. 66Q is a considerable improvement of the former definition in s. 66P and has the following broad effect:- * Residential property, when the land is improved, is limited to improvements containing one or two "places of residence" and containing no other improvements. That covers a single cottage (with or without a granny flat), duplex, two semi-detached cottages (subdivided or unsubdivided). It excludes a block of flats (s. 66Q(3)). * Properties used wholly for non-residential purposes are excluded (s. 66Q(2)(a))11. * Properties used partly for non-residential purposes are included if they otherwise comply with the definition of residential property. That is one of the difficult areas of this topic.12 * Vacant land is included if the construction of a single place of residence alone on it is not prohibited by law (s. 66Q(1)(b)). * However, land with improvements as well as vacant land is excluded when the land exceeds 2.5 hectares in area (s. 66Q(2)(b)). That excludes large farms as well as many hobby farms and parcels of unsubdivided land. * Strata title lots are only covered as specified in s. 66Q(1)(c). That clearly excludes the sale of a property containing several strata lots or the sale of two or more residential units under a single contract to a single purchaser. A "place used or designed for use for a purpose ancillary to the place of residence" (s. 66Q(1)(c)) as it applies to a single strata dwelling is intended to cover a carport, garage, storage area or garden area which is comprised in a separate strata title lot but which is used as part of and in conjunction with a strata dwelling. The legislation would not apply to the sale on its own of a garage which is a separate lot in a strata plan. If there is a property where it is not absolutely certain whether it is or not a "residential property" it should be ensured that a contract is available at the point of sale and assuming that the cooling off provisions applies. .c4.(d) The "Cooling-Off" Period. There is a "cooling-off" period for "every contract for the sale of residential property" (s. 66S(1)) however there is no cooling-off period in the following situations (s. 66T):- * If the cooling-off period is excluded; * If the property is sold by public auction. This would include on site auctions abut not hastily arranged "sham" auctions; * If the contract is made on the same day when the property was offered for sale by public auction but passed in. A preauction sale is not exempted and a sale on the day of an abortive auction is exempted but only if the property was offered for sale at the auction and was passed in; * If the contract is made in consequence of the exercise of an option to purchase the property (but not if the option is void under s. 66ZG). The "cooling-off" period commences "when the contract is made" (s. 66S(2)). Generally there is not difficulty in determining this time when there is a physical exchange. If the document exchange is utilised clause 20 of the contract will need to be referred to. Other circumstance may require reference to the parties agreement and contractual principles will be required eg. telephonic exchange and postal exchange. The cooling-off period ends "5 p.m. [Sydney time (s. 66P(2)] on the fifth business day after the day on which the contract was made" (s. 66S(3)). It appears that the date when the contract is made is excluded from the computation of the 5 days because of s. 36(1) of the Interpretation Act, 198713. Lang14 also advises that in computing the 5 days Saturdays, Sundays and public or bank holidays throughout New South Wales should be excluded. The duration of the cooling-off period can be extended but the legislation requires that the extension be "by the vendor in writing" (s. 66S(4)) and that should occur before the end of the cooling-off period. Solicitors do not have implied or ostensible authority to make or to vary contracts for clients15 and if the solicitor is to confirm an extension of the cooling-off period he must be actually authorised to do so. Lang suggests16 that if an extension of is not incorporated into the contract a supplemental agreement signed by both parties or at least in some brief instrument, such as a letter, signed by the vendor. .c4.(e) Statement in the Contract. Every contract for the sale of residential property must contain a statement in the prescribed form relating to the cooling-off period (s. 66X(1)). Failure to do so enables the purchaser to rescind the contract at any time before completion (s. 66X(2)) and is not liable to forfeit 0.25 % (s. 66X(3)). It is expected that the statement will be printed on the published standard form of contract. However, there is no need for the statement to appear on the contract if a certificate under s. 66W has been given for the purpose of s. 66S ie. to shorten the cooling-off period or s. 66T ie. to exclude it altogether (s. 66X(5)). .c4.(f) Excluding the Cooling-Off Period. A certificate under s. 66W is required if it is desired to exclude or shorten the cooling-off period. That certificate needs to be in writing, given by a barrister or by an independent solicitor and must:- (i) indicate the purpose for which it is given; (ii) contain a statement to the effect that the person giving the certificate explained to the purchaser:- (a) the effect of the contract; (b) the nature of the certificate; and (c) the effect of giving the certificate to the vendor (s. 66W(2)). If the purchaser is a corporation see s. 66W(2). It is not likely that the form of this certificate will be prescribed no is it required to be included in the contract. The certificate may be handed over on exchange and it may also be given by fax (s. 66W(4)). Hopefully an adequate standard form17 of certificate will be drafted by the Law Society Conveyancing Committee. It has been commented:- "If solicitors who act for vendors adopt a policy, as we did in the case for the old Land Sales Act, of demanding a certificate in almost every case then there will be virtually nothing left of the anti- gazumping legislation which was originally intended to protect purchasers and give purchaser a chance, during at least a 5 day period to make certain enquiries concerning the property, particularly concerning insect pest infestation and structural soundness of the building."18 However the Government has warned:- "I would issue a word of warning to all persons associated with the process of buying and selling real property that the Government is very much aware that the practical effectiveness of this legislative package is reliant on all practitioners operating within the spirit and intent of the legislation....Should it be shown that a practice develops whereby vendors insist in every case on purchasers being routinely and arbitrarily compelled to surrender their cooling off rights the Government will take immediate steps to ensure that purchasers' cooling off rights are protected".19 .c4.(g) Rescinding the Contract Within the Cooling-Off Period. If a purchaser is entitled to rescind the contract during the cooling off period:- * Written notice of rescission should be given (s. 66U(1)); * Which should be signed and served as outlined in s. 66U(3 - 5); * The rescission is ab initio, but on the basis that:- (i) the purchaser forfeits 0.25 % of the purchase price (s. 66V(2)); (ii) the balance of the deposit is repayable to the purchaser (s. 66V(5)); (iii) neither party can claim any amount from the other except as is specified in s. 66V(7). Section 66V(7)(a) only applies when the purchaser was in possession of the property. * The purchaser should not be allowed into early occupation until after the cooling-off period has expired to avoid any problems under s. 66V(7)(a). Lang comments that he finds it difficult to follow the rationale behind s. 66V(7)(b) when the purchaser consciously exercises the cooling-off entitlement and the vendor knew that it was a possibility; * Any stamp duty paid under the contract is refundable to the purchaser(s. 66V(9)); * The estate agent is authorised to pay to the vendor the forfeited 0.25 % from the deposit (s. 84AC(2) of the Auctioneers and Agents Act) and regulations will cover the repayment of the balance to the purchaser (s. 84AC(3)). Sub-section 66V(7)(b) is virtually the same as condition 19(c)(i) of the 1988 edition of the standard form contract for sale and sub-section (7)(a) is similar to condition 19(c)(ii). These conditions have not been repeated in the 1992 edition of the contract but the provisions of the Regulation apply in any case. It seems that a vendor would be entitled to claim occupation fees from a purchaser allowed into possession and/or compensation if a purchaser, with or without the benefit of possession, carried out work, to the detriment of the property, during the 5 day cooling off period and then rescinded the agreement within the cooling-off period. .c4.(h) Estate Agent's Authority. Vendor's solicitors could always delegate the exchange of contracts to the agent. Section 84AB(1-3) of the Auctioneers and Agents Act will provide that a licensee may in respect of residential properties:- (i) fill in the contract details of the purchaser's name, address and description, the purchaser's solicitor's name and address, the purchase price and the date of the contract; (ii) insert in or delete from contracts the description of furnishings or chattels included in the sale; (iii) participate in the exchange or making of the contract. However this is subject to the qualification contained in s. 84AB(4):- "If a prospective party to a proposed contract for the sale of residential property for whom a licensee acts in relation to the exchange or making of the contract notifies the licensee, or it is apparent from the proposed contract, that a solicitor is or will be acting for the party, the licensee may only participate in the exchange or making of the contract if authorised to do so by the party or the solicitor." Section 66P is also interesting in this regard because it contains the definition of "agent". Agent is defined as not only meaning a real estate agent but also any representative named in the contract for sale. Supposedly this would include an unqualified conveyancer. Lang makes the following comments20 in relation to these particular provisions:- "The provision is largely a political measure and trying to dress it up as intending to assist the parties or to streamline conveyancing is unjustified and hypocritical. In my view there is no adequate legal or practical reason or need for this provision. The suggested reason was to avoid claims that any of these activities might breach the Legal Profession Act, 1987, notwithstanding that an estate agent is the vendor's agent and is not performing these functions for reward. Vendors' solicitors could always delegate the exchange of contracts to the agent. It is suggested that solicitors, whether acting for the vendor or for the purchaser, should control the timing and the process of the parties entering into a binding contract. The clients should be advised to resist permitting estate agents to effect an exchange, unless that occurs under the supervision and with the authority of the parties' solicitors. That is especially the position if either party is involved in a double transaction,.buying and selling properties simultaneously." Another concern to real estate agents should be their liability to their client, the vendor, in the event that the contract they exchange contains provisions detrimental to the interests of their client. If the provision is something which the exercise of due diligence on the part of the agent should have guarded against the agent may be liable to the vendor in negligence. It is interesting to considered whether the standard of care expected of agents will be the same as the other persons who normally have the responsibility for the exchange of contracts ie. solicitors. Solicitors have compulsory insurance to protect them personally against this type of legal action however real estate agents do not. The comments of David De Cavalho21, Chairman of the Conveyancing Review Committee are also significant in this regard:- "There is no provision for the authority to be given in writing, thus opening the way for arguments as to whether the authority was given or not. There is nothing in s. 84AB which provides that an agent for a vendor who "participates in the exchange of contracts" will have any liability to the purchaser for negligence. Practitioners should keep reminding themselves that all of this anti-gazumping business was supposed to help purchasers. The amendment does not make it clear that an agent is liable to a purchaser but does seem to suggest that a real estate agent can "act in relation to the exchange or making of the contract" for "a prospective party to a proposed contract" and if the agent can so act then it could follow that the agent is liable to the purchaser either for negligent advice leading to the exchange of contracts or for failing to draw to the purchaser's attention conditions of the contract which the agent knew or ought to have known were adverse to the interests of the purchaser. Time will tell." .c4.(i) Observations on the Legislation. Unfortunately this has the effect of leaving the vendor uncertain for a period of time after exchange of contracts as to whether contracts would proceed. One positive aspect of the "anti-gazumping" legislation was that at least once contracts had been exchanged there was no "cooling-off" period that would defeat the vendor's expectations. The new legislation also retains the requirement that a draft contract should be available at the point of sale. This has the effect of ensuring that a contract can be prepared promptly on a purchaser being found. Lang22 makes a number of observations in relation to the legislation:- "(1) Solicitors and clients will find it much easier to live with the new procedures than with the requirements for preliminary agreement. (2) It will reduce cost and trouble, as the extra documentation and procedures will no longer apply. (3) The expressed purpose of the new legislation is to protect parties against gazumping, provide streamlined and workable conveyancing procedures. It is likely to reduce the incidence of gazumping, but cannot eliminate it altogether. (4) I express some reservations on this as an entirely satisfactory consumer protection measure, because:- (a) if the purchaser cools off, the purchaser loses money and both parties will incur legal and other costs; (b) there is a psychological and possibly financial loss for vendors when the property is taken off the market and is again put up for sale after cooling-off; (c) there is still the potential unethical bargaining and practices by purchasers when threatening to cool off. (5) I am concerned that no limit has been placed on the value of properties to which cooling off applies, notwithstanding a very low ceiling in Victoria. It is also noteworthy that in Victoria, where cooling off had extensive exposure, that in a highly regarded text Conveyancing - Sale and Purchase by M. McCutcheon, 2nd Ed. (1988), it is pointed out (at p. 12):- "It is better that advice in respect of the contract be given and the purchaser loses the three day cooling off than the purchaser signs a contract without legal advice." That highlights the primary importance of legal advice over and above cooling off rights. (6) The legislation does not resolve the problem of double transactions. If contracts are exchanged, simultaneously the cooling off rights end at the same time. A party could be caught if a purchaser rescinds unexpectedly at the last moment, preventing the vendor from rescinding the purchase within time. That can be resolved in at least two ways:- (a) By excluding cooling off in each contract; or (b) By reducing or extending the time for cooling off in one of the contracts, so that there is an extra day for rescission in one of the contracts; or (c) By making contracts conditional (on sale proceeding). (7) "Notwithstanding the Government's expressions of good intentions to improve conveyancing. I suspect that there is some pandering to sectional interests, an attempt to have the perceived problems and complaints "go away" and little serious attempt at real conveyancing reform. A much more meaningful move would be the provision of adequate funds, technical support and coercion to create a proper computerised register of restrictions and land data bank. That would speed up and reduce the cost of conveyancing and provide a real community benefit.23" 11. Vendor's Duty of Disclosure. .c4.(a) Defects in Title. (i) Under the General Law. Under the general law, and apart from any provisions in the contract, the vendor is obliged to disclose to the purchaser all latent defects in title. A latent defect in title is a defect which cannot be discovered by the exercise of reasonable care on an inspection of the property eg. easements for water or sewerage not discoverable on inspection of the surface and restrictive covenants24. The vendor is not however obliged to disclose to the purchaser patent defects in title. A patent defect is a defect which is discoverable by the exercise of reasonable care on an inspection of the property eg. the land sold is crossed by a highway, the house is in ruinous condition25. Under the general law where a substantial or essential latent defect is not disclosed the purchaser may rescind the contract or obtain specific performance with compensation for the defect. Termination is only possible if the test in Flight v. Booth26 is satisfied:- "...where the misdescription, although not proceeding from fraud, is in a material and substantial point, so far affecting the subject- matter of the contract that it may reasonably be supposed, that, but for such misdescription, the purchaser might never have entered into the contract at all, in such case the contract is voided altogether, and the purchaser is not bound to resort to the clause of compensation. Under such a state of facts, the purchaser may be considered as not having purchased the thing which was really the subject of sale." The test is not easy to apply in day to day situations. In some decisions defects reducing or rendering the property less effective by around 10 %, or removing some important facility such as a carport or bedroom, have been held to satisfy this test. It was found27 to be a defect in title in a material or substantial part of the subject matter of the sale where in response to an application under s. 317A of the Local Government Act council advised that before a certificate could issue an unauthorised addition would have to be removed. The addition was about 9 % of the total floor area of the dwelling. If the defect is not substantial the vendor can enforce the contract subject to his allowing compensation to the purchaser for the deficiency. Where the defect is patent the purchaser may also be able to recover damages for breach of contract but this area of the law is not free from question. The fact that the vendor may have been unaware of the latent defect is largely immaterial although the purchaser's pre-contract knowledge is relevant. However the purchaser's knowledge must be actual knowledge and not constructive notice. For example, the fact that the defect is recorded in the register for Torrens Title land does not of itself fix the purchaser with knowledge of it. Failure of the purchaser to carry out a pre-contract title search will not preclude him from later objecting. Misrepresentations by the real estate agent engaged by the vendor will have the same effect as if they were made by the vendor even though the misrepresentations were made without the vendor's knowledge and approval. An agent employed to sell land has implied authority to describe the nature and value of the property. The purchaser will be entitled to rescind the contract made on the faith of such misrepresentations of the vendor's agent although after completion, the contract can only be rescinded if the misrepresentation was fraudulent. The vendor should set out in the contract any difficulty in the title or state that there exists a document which is material to the title and which should be inspected by the purchaser. It should also be kept in mind the danger to the purchaser for wrongfully terminating a contract. The purchaser's erroneous termination of a contract for an alleged defect in title constitutes a repudiation of the contract, resulting in loss of the deposit and liability to damages, if established, over and above the deposit. (ii) Under the Contract for Sale. Two conditions in the standard contract are relevant. Clause 16.2.3 requires the vendor on completion to cause the "unencumbered legal title" to pass to the purchaser. Schedule 1 refers to documents attached and forming part of the contract as a means of disclosing various matters. Clause 10 precludes the purchaser from raising any objection, requisition or claim in respect of the matters listed and "everything else the substance of which is disclosed in this contract". Clause 16.2.3 and Schedule 1 tend to abrogate the effect of the general law however the combined effect of these conditions may be that the purchaser is entitled to object to a title subject to a defect in title that is not disclosed in the Schedule. This right may exist whether the defect be latent or patent and independant of whether or not the purchaser was aware of the defect at the time of entering into the contract. In these circumstances if the vendor fails to disclose the defect the purchaser may be able to rescind the contract or demand compensation in proceedings for specific performance or have a right to compensation under condition of the contract. Imposed upon the general law principles is the vendor disclosure and warranty legislation and regulations but these principles are not replaced. There is no reason to suppose that the legislation and regulations are intended to be an exhaustive code governing the vendor's duty of disclosure. A new provision was added to the 1992 edition of the standard contract allowing the purchaser to requisition for the remedy of the cause of the failure of a building certificate under s. 172 of the Local Government Act, 1993 to issue. Clause 13 is largely untested as yet and will be considered later. .c4.(b) Defects in Quality. (i) Under the General Law. By way of contrast to defects in title the vendor has no general obligation to disclose defects in the quality of the land or improvements whether latent or patent. This is because there is no implied term that the property sold has any particular quality and the caveat emptor (let the buyer beware) rule applies. There is no implied condition in the contract that the premises are fit for the purposes for which the purchaser wants to use them, nor that the use to which the premises are put conforms to town planning requirements. The following statement from Voumard28 has been cited with approval by the Court29:- "...in the present state of the authorities it appears to be clear that in the absence of fraudulent concealment or of misrepresentation or of an express agreement, a vendor of real estate is not liable to a purchaser for defects in a building or land rendering it dangerous or unfit for occupation, even if the vendor has created the defects himself or is aware of their existence. As to such matters the maxim caveat emptor is applicable. It follows that a purchaser will not be entitled to rescind a contract on the ground of non-disclosure by the vendor of matters relating to the physical condition of the property." Where the contract is for the sale of land together with a house to be erected by the vendor or in the course of erection by the vendor there is an implied term that it will be constructed in a proper and workmanlike manner, that proper materials will be used and that the house will be reasonably fit for human habitation. In this context Butt30 observes an interesting development:- "It may be that the vendor's comparative immunity from negligence ... is about to disappear. There is a comparable principle in the area of landlord and tenant, namely, that a tenant has no claim in tort against a landlord for injuries received as a result of the defective state of the premises ... except where the landlord participated in the construction or design of the premises.... Recent Australian authority, however, suggests that in this country landlords are not exempt from the general Donoghue v. Stevenson ... principles and may owe a duty of care to their tenants regardless of whether the landlord participated in the construction or design of the building ... If such a duty is owed by landlords to tenants, it would seem but a short step to impose a similar duty upon vendors towards purchasers. There are therefore some exceptions to the general rule that the vendor is not required to disclose defects in quality. A defect in quality may also amount to a defect in title which if latent must be disclosed. The vendor will not be allowed to shield behind a representation that the land possessed certain advantages which an undisclosed latent defect in quality falsifies31. Failure to disclose a latent defect in quality may also result in denial of specific performance at the suit of the vendor. (ii) Under the Standard Contract for Sale. In the 1986 edition of the standard form of contract certain warranties by the vendor were introduced in condition 12(b) which necessitate more detailed disclosure by the vendor. In the 1992 edition of the contract these warranties are not set out but the rights created by the Conveyancing (Vendor Disclosure) Regulation, 1986 aare referred to on the back of the contract. It should be noted however that the vendor disclosure and warranty legislation and regulations concern largely matters of title and information about title. They do not extend to matters of defects in quality, except in so far as defects in quality may also constitute defects in title, as in the case of defects in quality caught by s. 172 of the Local Government Act, 1993. In matters of quality, the maxim of "caveat emptor" remains in force. Generally any warranties as to quality need to be covered expressly in the contract, otherwise the purchaser will not have any remedy. A purchaser was held32 not to be entitled to terminate a contract for the purchase of a home unit in the course of construction where defects in the construction of walls in the basement area of the building admitted water in heavy rain. There was no express warranty as to quality of the building in the contract. However the position may be different if the effect of the defects is to render the property substantially different in quality and value from the property agreed to be sold33. The 1992 edition of the contract includes clause 10.2 provides that "the purchaser cannot rescind or terminate only because of a defect in the title to or quality of the furnishings and chattels."
1 The Standard Contract for the Sale of Land is the contract published by the Joint Committee of the Law Society of New South Wales and the Real Estate Institue of New South Wales. 2 Cavallari v. Premier Refrigeration Co. Pty. Ltd (1952) 85 C.L.R. 20. 3 New South Wales Conveyancing Law & Practice by Lang, CCH , p.5,651. 4 Part II of the Land Sales Act was repealed from 1st June, 1988 when the Conveyancing (Sale of Land) Amendment Act, 1987 commenced. 5 Goodwin v. Davies decision 3rd October, 1985. 6 Lord Greene, M.R. in Eccles v. Bryant (1947) 7 Georgiou v. Sindel (1984) 58 A.L.J.R. 515. 8 Longpocket Investments Pty. Limited v. Hoadley (1985) C.C.H. N.S.W. Conv. R. 55-244. See also De Jong v. Carpenter (1982) 2 B.P.R. 9524 were it was held that there was no contract between the paries. Identical counterparts had not been exchanged and the purchasers nor their solicitor was not aware of a time of the essence clause. 9 s. 81(2) Companies Code 10 The New Conveyancing Legislation 90/1 by Prof. Andrew Lang, College of Law Continuing Legal Education p. 6. 11 Eg. a residential flat in the centre of town which has not been altered but is used only as an office, an inner city residential tenement used only for commercial purposes such as computer sales and advice or an art gallery, a strata unit used only for professional consulting rooms: Anti Gazumping Legislation by David De Carvalho & Bill Macquarie, The New Conveyancing Legislation 90/1, The College of Law Continuing Legal Educatin 1990, p. 31. 12 Mixed use premises were intended to be excluded. Anti Gazumping Legislation by David De Carvalho & Bill Macquarie, The New Conveyancing Legislation 90/1, The College of Law Continuing Legal Educatin 1990, p. 29. 13 s. 36(1) If in any Act or instrument a period of time, dating from a given day, act or event, is prescribed or allowed for any purpose, the time shall be reckoned exclusive of that day or of the day of that act or event. 14 The New Conveyancing Legislation 90/1 by Prof. Andrew Lang, College of Law Continuing Legal Education p. 9. 15 In Nowrani Pty Ltd v. Brown (1989) it was held that the vendor's solicitor who is not actually authorised could not extend the date for compliance with a special condition in the contract so as to bind the vendor. The result was that the purchaser could not rely on that extended date. 16 The New Conveyancing Legislation 90/1 by Prof. Andrew Lang, College of Law Continuing Legal Education p. 10. 17 For an example of a suggested form of certificate see The New Conveyancing Legislation 90/1 by Andrew G. Lang, The College of Law Continuing Legal Educatin 1990, p. 12. 18 Anti Gazumping Legislation by David De Carvalho & Bill Macquarie, The New Conveyancing Legislation 90/1, The College of Law Continuing Legal Educatin 1990, p. 36. 19 From second reading speech of Mr Causley, Minister for Natural Resources, in the Legislative Assembly. 20 The New Conveyancing Legislation 90/1 by Andrew G. Lang, The College of Law Continuing Legal Educatin 1990, p. 15. 21 Anti Gazumping Legislation by David De Carvalho & Bill Macquarie, The New Conveyancing Legislation 90/1, The College of Law Continuing Legal Educatin 1990, p. 49. 22 The New Conveyancing Legislation 90/1 by Andrew G. Lang, The College of Law Continuing Legal Educatin 1990, p. 17. 23 The New Conveyancing Legislation 90/1 by Andrew G. Lang, The College of Law Continuing Legal Educatin 1990, p. 19. 24 Also a public footpath not obvious as such; an underground culvert or sewer where land is sold to build upon: Australian Encyclopeadia of Forms & Precedents 2nd Ed., Butterworths, 1970, Vol. 12, p. 33. 25 Australian Encyclopeadia of Forms & Precedents 2nd Ed., Butterworths, 1970, Vol. 12, p. 35. 26 (1834) 1 Bing (NC) 370; 131 ER 1160. 27 Hanna v. McDiarmid (1983) NSW Conv R 55-157. 28 Sale of Land, 3rd Ed., p. 193. 29 Kadissi v. Jankovic [1987] V.R. 255 at 258. 30 The Standard Contract for Sale of Land in N.S.W. by Butt, Law Book Co., 1985, second cumulative supplement p. 73. 31 See Gordon v. Selico Co. Ltd (1986) 278 E.G. 53 (C.A.): vendor held liable in deceit for concealing dry rot in order to deceive the purchaser. See also Ridge v. Crawley (1958) 172 E.G. 637: concealing cracks indicating settlement of foundations. See also Koutsonicolis v. Principe (1986) A. & N.Z. Conv. R. 806 a sale was set aside five years after completion where the vendor fraudulently concealed substantial cracks in house. 32 T. Palmerston (Qld) Pty. Ltd. v. Fogl (1984) ANZ Conv R. 413. 33 Ping v. Pearse Paradise Pty. Ltd. (1982) NSW Conv R 55-059.
