Case Study
Scenario: (You are to assume the role of the Conveyancing Clerk working at Competent Conveyancing Company Ltd. Your manager, Horace Holemeal has asked you to handle a client file for the purchaser Matti Jones) Matti Jones, a hippy surfer, placed an offer for a "chill out" cabin on a hill overlooking the rock pools, and out to his favourite break on the Mornington Peninsula. Victor Vendor accepted his offer the next day and signed the contract.
Victor employed Lex Regis of Conservation Conveyancing Company Ltd to provide a vendor's statement as required by s.32 of the Sale of Land Act (SLA). The vendor's statement disclosed that there is a restrictive covenant prohibiting the construction of dwellings of more than one storey and prohibiting the use of particular building materials such as cedar.
Victor did not disclose that the storage shed was constructed of cedar boards. The vendor's statement also disclosed a sewerage easement on the registered plan. There were no further restrictions disclosed and all other sections of the vendor's statement were completed in accordance with s.32 SLA. Matti received the vendor's statement prior to signing the contract making his offer and signing the contract of sale, as required.
Horace rang Matti two weeks later to advise that he had discovered that the council is planning to protect that area's native wildlife by amending the planning scheme to prevent any removal of vegetation on properties including the one Matti had bought.
Matti was planning to open a backyard surfboard hire business and build a huge shed to accommodate this business, as well as renovate the main dwelling roof area by adding an attic bedroom and living area.
Horace advised Victor's conveyancer Lex Regis that Matti is exercising his right to rescind under s.32 of the Sale of Land Act.
Question:
You are the conveyancing clerk handling the file at Competent Conveyancing Company Ltd and must provide a written memo for your manager, Horace setting out all the relevant legal issues in relation to the claimed right of rescission.
a) The memo must demonstrate your research and include possible defences, applicable legislation and cases, and any further information you would require. Evaluate and assess the strategies to address the legal issues identified.
Cross-check that all details are clear, concise and accurate in relation to the purchase. As part of the advice, reference should be made to the case of Tymstock Pty Ltd v Patrick and other relevant cases examined.
b) Include in your memo the contractual steps required for you to end the contract on Matti's behalf. Refer to the relevant terms in the standard contract general conditions in relation to the notice, process and consequences of ending the contract.
c) Is the omission of the cedar board non-compliance in the vendor statement, a professional indemnity issue for Lex and Conservation Conveyancing Company?