A clerical error in the lot number did not affect the seller's ability to complete the sale
The High Court ruled in favour of the seller in a real estate dispute, finding that a clerical error in identifying the correct lot number did not affect the seller’s ability to complete the transaction, and ordering the buyer to pay damages after failing to settle the purchase.
A rural property was subdivided into four lots, and one of the proposed lots was sold to the buyer before titles were issued. The contract described the lot by its provisional designation, but when the subdivision was finalised, the numbering changed. The lot in question was reassigned a new number, while the neighbouring lot received the number originally used in the contract.
In preparing for settlement, the seller’s solicitors mistakenly referenced the neighbouring lot’s title instead of the correct one. They issued a settlement statement referring to the lot description in the contract, but this did not match the numbering on the deposited plan. The buyer did not proceed with the settlement, and the seller subsequently issued a settlement notice that contained the same incorrect lot reference. The buyer did not respond, and the seller cancelled the contract before reselling the property.
The legal dispute involved two key issues: whether the seller was in a position to complete the sale on the agreed settlement date and at the time of cancellation, and whether the buyer had a valid basis to object to the title and cancel the contract.
The High Court determined that summary judgment principles applied, requiring the seller to prove that the buyer had no defence, while the buyer had to establish that the seller’s claim could not succeed. The evidence showed that the seller had always intended to convey the correct property, and that the solicitors’ mistake did not affect the seller’s ability to complete the transaction. The buyer was aware of the error before settlement but did not formally raise it. Instead, the buyer indicated that financial constraints prevented completion of the purchase.
The court found that the seller’s mistaken reference to the wrong lot number did not invalidate the settlement notice. If the buyer had tendered settlement, the seller would have corrected the mistake and proceeded with the transfer. The buyer had not submitted an objection to the correct record of title within the required timeframe, meaning there was no contractual basis to cancel the agreement.
The court ruled that the seller was entitled to damages for the loss incurred due to the resale of the property, along with legal costs, real estate commission, and penalty interest. Interest would continue to accrue until full payment. The court denied the buyer’s application for summary judgment.
