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Benchmark - Cases & Commentary
Contract for Sale
    •  Rescission
        -  False misrepresentations
            >  Where parties would have purchased property notwithstanding

Where parties would have purchased property notwithstanding 
Twin Creek Properties had a block of land to sell at Luddenham, and engaged a real estate agent to act on its behalf.

The agent negotiated a sale of some of the blocks to Mr and Mrs Awad. During the negotiations, the agent gave the Awads promotional material that contained a number of representations about the land and future development around the land.

Contracts were exchanged. The Awads intended to build a home upon the land, and engaged architects to design the home they wanted to build.

In due course, the sale completed.

After completion of the contract, the Awads considered that a number of representations made in the promotional material were not true, and that things the real estate agent had verbally said to them also had not been true.

One of the representations that the Awads made that was untrue was that the Twin Creek’s development would comprise 177 residential lots of at least one acre in size whereas it in fact comprised 285 lots a number of which were less than one acre. There was also a representation that a resort hotel would open nearby.

The Awads instituted proceedings seeking orders that the contract of sale be rescinded. They also claimed compensation under section 52 of the Trade Practices Act.

The Court held that certain of the representations had been misleading and deceptive.

However the Court also held that the Awads would have bought the property even if those representations had not been made. Therefore, the Awads could not succeed in having the contract set aside.

However, if the false representations had been true, the property that the Awads had bought would have been more valuable than in fact it was. The Court held that the Awads were entitled to compensation for this difference in price.

Awad v Twin Creek Properties Pty Ltd [2011] NSWSC 923