Redapple & Howgate v Hely [1931] HCA 41; (1931) 45 CLR 452 (30 November 1931)

In April of 1927 Catherine Hely sold to Redapple and another "all that piece of land being part of Crown Allotment 9 Section 28 City of Melbourne Parish of North Melbourne County of Bourke and being part of the land more particularly described in certificate of title volume 4469 folio 893674 with building thereon known as 309 Swanston Street Melbourne as such land is shown on the plan annexed hereto and signed by or for the vendor and the purchasers." This plan was the result of actual survey and shows the position of party walls and the precise measurements of the land sold. The certificate of title mentioned in the contract was produced by the vendor to the purchasers, and from this it appears that on the south-eastern boundary a serious discrepancy exists between the land contracted to be sold and the land described in the certificate of title. The discrepancy varies between 5¼ inches and as much as 1 foot 2½ inches, and the south-western end of the party wall does not even rest on the land described in the certificate of title. The parties, evidently, knew that the survey measurements and the title measurements did not agree, for condition 3 of the contract provided that "the vendor will at her own expense forthwith apply to the Registrar of Titles to amend the said certificate of title to accord with the measurements shown on a survey dated the tenth day of March one thousand nine hundred and twentyseven of the said land made by Messrs. Doolan and Goodchild surveyors." The vendor did apply for amendment but was not successful, and withdrew her application. The purchasers on ascertaining this fact, about March 1931, rescinded the contract and sought declarations under a vendor and purchaser summons: (a) That the vendor failed to show a good title to the land sold; (b) that the vendor committed a breach of the conditions of the contract; (c) that the purchasers were entitled to rescind the contract; (d) that the contract was rescinded on 3rd March or 15th April 1931. Mann J. dismissed the summons, and from his decision an appeal has been brought to this Court.

Subject to any special stipulation in the contract, a vendor is bound to show a good title to the land sold, and to prove its identity with that contained in the title documents. It was said that the certificate of title produced by the vendor in the present case established a good title in the vendor to the land sold, because party walls on the north-east and south-east boundaries sufficiently defined her land, and identified it with that sold to the purchasers, though there were certain inaccuracies in dimensions and in connecting points on the map delineated on the title. But this aspect of the case was not investigated before Mann J., and materials are not available to this Court for any satisfactory determination of the matter. In any case, the dimensions and connecting points "are not an addition to something which has already been certainly described, but are part and parcel of the description itself." (Compare Mellor v. Walmesley[1].) Reference was made in support of the argument to another condition (No. 1) of the contract, which is as follows: "The land within described is sold according to the measurements on the within mentioned certificate of title and it is agreed that no compensation shall be paid by the vendor for any deficiency between the actual measurements and such title measurements and that the vendor shall not claim and not be entitled to any increase in the purchase-money by reason of any excess in actual measurements over such title measurements." But the land was sold according to actual survey measurements, and condition 3, already mentioned, provided for an application by the vendor to amend her certificate of title to accord with the measurements shown by survey. It is difficult, in the circumstances, to apply the provisions of condition 1 to the contract; it seems, as Mr. Walker suggested, to be a clause in common use and to have been inserted in a contract on this occasion to which it was not applicable. But, whatever effect the clause may have on compensation, it does not alter the description of the property sold, nor lessen the vendor's obligation to give a good title to the land which she contracted to sell. The purchasers, however, delivered no requisition on the title, and have, in fact, received the rents and profits of the land ever since April 1927. And they insisted that the certificate of title produced to them showed no title whatever to part of the land, and that they were entitled to take objection to title despite a condition of the contract requiring the purchasers to deliver to the vendor in writing requisitions or objections to the title within a specified time, and providing that all requisitions or objections not included in such writing should be deemed to be waived by the purchasers, and in default of such requisition (if none) and subject to such (if any) as were delivered, the purchasers should be deemed to have accepted title. It is not necessary to express any opinion upon the question whether the purchasers could take objection to title despite the condition (see Want v. Stallibrass[2]; In re Tanqueray-Willaume and Landau[3]), for it must be read with the condition No. 3 dealing with the amendment of title. So far as the purchasers accepted the title produced by the vendor, the acceptance must be subject to the obligation of the vendor to apply for amendment of the certificate of title. Condition 3, it is true, does not absolutely promise an amendment, but it imports an obligation on the part of the vendor to use all reasonable and proper endeavours to amend the title. The vendor based her application for amendment upon sec. 233 of the Transfer of Land Act 1915, but it was, as already mentioned, withdrawn. It would seem, on the scanty materials before us, that an application based upon secs. 215 and 216 would have had more chance of success, and that such an application might still be made. The possibility of such an application was not unnoticed by the vendor's advisers, and was held in reserve. Later on, as I shall mention below, the vendor recurred to this idea, and offered to make another application to amend. The failure of the first application does not discharge the vendor from her obligation under condition 3 and on the evidence before the Court she has never performed that obligation, and I should think that she could not obtain specific performance of the contract, or otherwise enforce it, until she does perform the obligation. The purchasers, however, claim to have rescinded the contract owing to the default of the vendor in performing her part. About February 1931 the purchasers discovered that the application to amend the certificate of title had been withdrawn, and on 4th March "elected to treat the contract as at an end." The obligation upon the vendor to make a good title to the land contracted to be sold is an essential condition, and goes no doubt to the root of the contract, and if the stipulation be broken the purchasers may rescind the contract. But was the stipulation broken? That question depends upon whether the vendor refused to go on with her application to amend or whether in fact further pursuit of any application was hopeless. Neither the one fact nor the other is proved. The withdrawal of the application was to meet difficulties raised in the Office of Titles and to prevent its rejection. The possibility of a further application under other sections of the Act was not unnoticed, and, though a long delay took place, the right to make further application was in reserve. No time was fixed by the contract or by the notice from the purchasers for making the application to amend and completing the title. And it is not unimportant to observe that the vendor as soon as she was challenged denied the purchasers' right to treat the contract as at an end, and offered to make a further application to amend. It is true that she denied, before both Mann J. and this Court, any obligation on her part to make such an application, but she suggested, through her counsel, that if an opportunity were given, she could and would make title to the land in accordance with the contract.

In my opinion, the purchasers, in all the circumstances, struck too soon, and were not entitled to rescind the contract. But I do not think a total dismissal of the summons is justified: I should prefer a declaration that the vendor has not yet shown a good title to the land contracted to be sold, that the vendor has not yet committed any breach of the conditions of the contract, and that the acts of the purchasers on 3rd March and 15th April 1931 did not work a rescission of the contract. The parties would thus be at liberty to complete the contract as they might be advised.

The vendor became registered in 1921 as the proprietor of an estate in fee simple of a piece of land fronting the western side of Swanston Street, Melbourne. According to the plan upon the certificate of title, the northern boundary of the land met the Swanston Street frontage at a point 79 feet 7½ inches from the nearest corner of Little Lonsdale Street and Swanston Street, and from that point the frontage extended along Swanston Street for 31 feet 8½ inches. The southern boundary was depicted as the centre line of a reciprocal easement for party wall purposes for an 18 inch wall. This particular party wall easement was shown as running westerly at right angles to Swanston Street for a distance of 30 feet 3 inches when the centre line broke northerly 4½ inches. Thence an easement of a somewhat different character was shown running westerly for 17 feet 1 inch. This easement was described on the certificate of title as "the right to the use of the wall which on 10th June 1920 was standing on the land" nine inches beyond and eleven inches within the boundary, for the purpose of supporting the building then standing upon the land contained in the certificate. Two buildings, which had been erected over 50 years ago, stood upon the land with a party wall between them. A survey plan, dated 10th March 1927, which the vendor caused to be made, showed a number of inaccuracies in the measurements given by the plan upon the certificate of title. The distance from the corner of Little Lonsdale Street to the junction of the northern boundary ascertained on the ground by reference to the building was not 79 feet 7½ inches, but 79 feet 11½ inches. The frontage to Swanston Street therefore actually commenced 4 inches further south than was stated by the plan upon the certificate. Further, this frontage, as measured to the centre line of the 18 inch wall on the southern boundary, was not 31 feet 8½ inches, but 31 feet 11 inches—2½ inches longer. The centre line of the wall was therefore actually 6½ inches (4 inches plus 2½ inches) further south than was stated by the plan on the certificate. Moreover, there was an error of 11 minutes in the bearing of the southern boundary, and it broke to the south instead of the north. The identity of the wall intended to be referred to in the plan of the certificate was undeniable, and its position upon the ground should have served to establish this boundary of the land intended to be described in the certificate, notwithstanding the discrepancy between the actual measurements on the ground and those stated on the plan. The southern of the two buildings occupied a frontage of 15 feet 7 inches, and the northern a frontage of 16 feet 4 inches.

On 14th April 1927 the vendor entered into a contract of sale with the purchasers by which she agreed to sell and they to buy for the sum of £7,812 the land on which the southern of the two buildings stood. The contract described the parcel as part of the land more particularly described in the certificate with the building thereon known as 309 Swanston Street, Melbourne, as such land is shown on the plan annexed thereto and signed by the vendor and the purchasers and thereon coloured red together with and subject to the easements therein set out. The purchase-money was payable by a deposit of £2,000 and the residue in five years. One of the special conditions provided that the purchasers should take a transfer of the land and execute a mortgage to the vendor to secure the payment of the residue of the purchase-money in five years with interest subject to an option of paying off the residue or any part of it upon notice. The general conditions provided that the certificate of title in respect of the land sold should be produced on demand to the purchasers or their solicitors who would make requisitions or objections within 14 days from the day of sale and, in default of so doing, be deemed to have accepted title. They contained no other express stipulation for a good title. A general condition provided that the purchasers should be entitled to possession upon acceptance of title. The third of the special conditions was as follows: "The vendor will at her own expense forthwith apply to the Registrar of Titles to amend the said certificate of title to accord with the measurements shown on a survey dated the tenth day of March one thousand nine hundred and twenty-seven of the said land..." The survey referred to was that annexed to the contract and signed by the vendor and the purchasers. It appears to me necessarily to follow from this clause that the purchasers contracted with the knowledge that the certificate of title did contain a description of the land by measurements which were erroneous and not in conformity with the survey plan adopted by the contract. It appears to me also to follow that the certificate which the general condition requires to be produced is that containing the erroneous measurements, and consequently that the general condition cannot be interpreted as a stipulation for title free from this defect. "When the contract is silent as to the title which is to be shown by the vendor, and the purchaser's right to a good title is merely implied by law, that legal implication may be rebutted by showing that the purchaser had notice before the contract that the vendor could not give a good title" (per Fry J., In re Gloag and Miller's Contract[4]). Thus it would seem that in the circumstances the purchasers must depend upon the interpretation of the third special condition for any right to obtain a title free from the defects of the vendor's certificate. The first special condition, however, was as follows: "The land within described is sold according to the measurements on the within mentioned certificate of title and it is agreed that no compensation shall be paid by the vendor for any deficiency between the actual measurements and such title measurements and that the vendor shall not claim and not be entitled to any increase in the purchase-money by reason of any excess in actual measurements over such title measurements." The meaning and application is disputed of the statement in this clause that the land is sold according to the measurements on the certificate, but the remainder of the clause, which could have no operation if the application to amend the certificate succeeded, appears to contemplate completion without an amendment rectifying the measurements.

The purchasers were put in receipt of the rents and profits of the land on 27th April 1927. They made no requisitions and objections on title. On 3rd December 1927 the vendor lodged in the Office of Titles an application to amend the certificate so that the measurements and the plan would accord with those shown by the survey. This application was made as under the provisions which now stand as sec. 233 (b) of the Transfer of Land Act 1928. The application ought to have been made under the provisions of sec. 215, and perhaps under the provisions also of sec. 216 lest it might be said that the measurements determined the land actually within the certificate in spite of the existing wall being shown as on the boundary. The application appears not to have prospered in the Office of Titles, where difficulties are said to have been raised, not only because the application was not made under sec. 215, but also because the vendor had acquired the land from a registered proprietor who held it and the adjoining tenements under the same title. While this circumstance makes it impossible for the vendor to rely upon length of possession or enjoyment as conferring a title to the land outside the measurements shown in the same certificate and to the easements over the adjoining land, it would seem rather to strengthen than weaken the contention that the vendor's real title was to be ascertained by the centre line of the walls and the measurements were mistakes which ought to be corrected. Indeed, if the vendor acquired title from a vendor who retained the adjoining land, it is not easy to understand upon the facts before us how an application in proper form could be refused. However this may be both in form and in some other respects, the vendor's application does not appear to have commended itself to the Office of Titles, and eventually on 6th August 1930 the vendor's solicitor withdrew the application in deference to the views expressed. He did not, however, inform the purchasers; and when in February 1931 the withdrawal was discovered by their solicitor, the purchasers purported to treat the contract as at an end although the vendor's solicitor offered to make a further application for the amendment of the title.

Upon a vendor and purchaser summons which the purchasers issued, Mann J. decided that the purchasers were not entitled to treat the contract as discharged. In my opinion this decision was right. I think the effect of the special conditions of the contract is to impose upon the vendor the duty of making all reasonable endeavours to obtain an amendment of the measurements shown upon her certificate, but otherwise to require the purchasers to accept title. I do not think there is any justification for treating the third of the special conditions as importing an absolute obligation to obtain an amendment. In terms it requires the vendor to do no more than make an application at her own expense. I think that such a stipulation does contain implications that the vendor would support and proceed with the application, and therefore that she would take all reasonable steps to secure its success, but I can find in it nothing amounting to a warranty that the application will succeed. The first of the special conditions ought not to be read apart from the third. The third condition is framed upon the footing that the measurements upon the vendor's certificate do not accord with the actual measurements of the land sold as ascertained by a survey. It may be conceded that the interpretation of this contract should begin from the position that "if a vendor means to exclude a purchaser from what is matter of common right, he is bound to express himself in terms the most clear and unambiguous" (per Knight Bruce V.C., Symons v. James[5]). But the third condition answers the test proposed by Kindersley V.C. in Smith v. Watts[6], and "points out to a man of ordinary intelligence what are the facts of the case." The purchaser, aware of the facts of the case and therefore knowing that the measurements of the land and the measurements appearing upon the title did not correspond, could not but understand the first condition as saying that the land described in the contract by its correct measurements was sold according to the incorrect measurements of the certificate of title which the contract identified. The measurements in the certificate were material only to the southern boundary of the land sold because its northern boundary would be formed by what the vendor retained out of the whole parcel. But, whether the purchasers had by inspection of the certificate ascertained this or not, they must have understood that no compensation was to be paid or received for the disconformity.

In my opinion, when it appears that the purchasers contracted with a knowledge of the incorrectness of the measurements shown on the title, took no express stipulation for a correct title and, on the contrary, accepted a simple condition that the vendor will apply for a correction, the effect of the initial presumption with which the interpretation commenced has been so weakened that it is proper to construe the remaining conditions according to the natural meaning which they bear, and I am unable to see what else the first special condition can mean but that the purchasers shall accept the title measurements without giving or receiving compensation, that is upon the assumption that the title is not amended pursuant to the third condition. The result, in my opinion, was that, if the vendor had made an application in due form and had supported it properly, the purchasers would have been bound to accept the title notwithstanding the failure of the application. The question then remains whether the vendor's mistake in applying as under sec. 233 and her withdrawal of the application without consulting the purchasers entitles them to dissolve the contract or treat it as discharged. I am of opinion that it did not. I do not think the vendor committed a breach going to the root of the contract. There was no refusal to proceed. The parties had deviated from the terms of the contract which contemplated an immediate transfer to the purchasers and a mortgage by them to the vendor to secure the balance of purchase-money, which instruments doubtless would have been lodged in the Office of Titles on top of the application to amend. This departure from the exact terms of the contract left the purchasers without the control of the application which otherwise they might have obtained. But the vendor acted, I think, quite bona fide and had no intention to set any terms of the contract at nought. No time was fixed, either by the contract or by a notice, for the making of the application. The withdrawal of the application did not prejudice the ultimate success of a proper application. It was not, I think, possible for the purchasers to ignore the vendor's offer to renew the application and forthwith rescind although the time at which they were entitled to completion had not arrived.

By contract dated April 14th, 1927, the respondent acknowledged that she had on that day sold to the appellants for the sum of £7,812 a "piece of land" in the City of Melbourne with a building thereon known as 309 Swanston Street, Melbourne, "as such land is shown on the plan annexed" to the contract "and signed by or for the vendor and the purchasers and thereon coloured red together with and subject to the easements therein set out."

Although there is also a reference in the description of the land sold to a certificate of title (vol. 4469 fol. 893674) under the Transfer of Land Acts, it is clear that what the appellants purchased was the land upon which the building, 309 Swanston Street, then stood as such land was shown upon the survey plan annexed to the contract. The survey had been made only a few weeks before April 14th.

The certificate referred to (upon which the respondent relies to make title to the land sold) shows title to a very small portion of the southern 18 inches party wall of the existing building. The portion of the party wall on the south-east boundary from Swanston Street to a point 30 feet 1 inch from Swanston Street resting on the land in the certificate of title tapers from 2½ inches at Swanston Street to 3¾ inches at a point 30 feet 1 inch from Swanston Street. From the latter point for a distance of about 17 feet no portion of the wall rests upon the land in the certificate. Thence, for the remaining distance of 23 feet 5 inches, only 3¾ inches of the wall is on the title.

The vendor's certificate of title is not referable to 309 Swanston Street alone. The frontage to Swanston Street included in the certificate is 31 feet 8½ inches, and the frontage to 309 Swanston Street sold by the respondent as shown in the survey is 15 feet 7 inches.

As the certificate shows external monuments only, the northern party wall of 309 Swanston Street is nowhere indicated.

Special condition 1 declares that "the land within described is sold according to the measurements on the within mentioned certificate of title," as introductory to a clause excluding the duty of both vendor and purchasers to make compensation or pay increased purchase-money by reason of discrepancies between actual and title "measurements." It is not the ordinary function of a special condition to alter the subject matter of sale, when described by reference to a surveyor's plan. The "measurements on" the certificate of the land do not indicate what frontage to Swanston Street is being sold, and as only the southern wall of 309 Swanston Street is shown on the certificate, it would appear that special clause 1 can only reasonably be applied to the measurements showing the depth of the land. All the land in the certificate ran from Swanston Street to Drewery Lane, and the measurements of depth on the survey plan do not agree with those on the certificate. No doubt the parties might, by more specific reference to the southern party wall of No. 309, have contracted that the only title to be given at that boundary was according to what was shown on the certificate. But this was not done. As the measurements of depth could not in the circumstances be corrected by the application to amend the certificate, special clause 1 still has an operation in the event of an application to amend under special clause 3 succeeding. As it is quite impossible to gather from the certificate of title alone, even approximately, what land was sold, special clause 1 cannot be read as affecting the subject matter of sale.

Special clause 3 imposed upon the vendor the obligation of applying forthwith "at her own expense" to the Registrar of Titles to amend the certificate of title so as to accord with the measurements shown on the survey plan. This clause shows that the parties must be taken to have been aware at the time of the contract that title could not readily be made by the vendor to the land sold. But the latter undertook to apply to amend the certificate so as to make title.

I do not see why it should be inferred that this undertaking represented the full extent of the vendor's duty to make title. But for special clause 3, the Law Institute's conditions which formed part of the contract would have enabled the vendor to rescind had the purchasers insisted upon a requisition as to the discrepancy in title. The actual certificate of title held by the vendor was regarded as requiring amendment, but the knowledge of such fact has no necessary relation to the vendor's obligation to make title. What the vendor was, by general condition 2, bound to produce on demand was the "Crown grant or certificate of title in respect of the land sold." If the certificate produced did not cover the "land sold," a good requisition could be made. The mere fact that both parties knew that, at the moment of the contract, the vendor did not "have" title, could not affect the obligation to "make" title which seems to be explicit enough in general clause 2.

If this view is right, the position is that the vendor did not make, and has not yet made, title to the land by producing a certificate covering the subject matter of sale. The discrepancy is serious and substantial, and, but for one matter to be referred to later, the purchasers would have been entitled to rescind.

The general conditions incorporated in the contract provided that the purchasers should make requisitions within 14 days in default of being deemed to waive them, and that the purchasers should be entitled to possession "upon acceptance of title."

But the special conditions of the contract contemplated that completion would not take place until the vendor's application to amend her certificate was proceeded with. That had to be done to make title, and the transfer and mortgage back would have to await the result of the application. In these circumstances the parties must either be taken as treating a requisition as having been made within the time mentioned in general clause 2 or else as having postponed the adjustment of all questions of title until the vendor's application to amend was finally disposed of. It follows that the purchasers' possession of the land since shortly after the date of the contract cannot be regarded as closing dispute as to title.

The last question is whether the contract was duly rescinded by the purchasers' letter of April 15th, 1931, or the earlier letter dated March 3rd, 1931.

The vendor made her application to amend the certificate on December 3rd, 1927, and withdrew it on August 6th, 1930, more than three years after the date of the contract. The withdrawal of the application was not notified to the purchasers, whose solicitor did not hear of it until February 4th, 1931. On March 3rd, 1931, the purchasers purported to elect to treat the contract as at an end, but the ground taken was that the vendor had "failed to comply with clause 3 of the special conditions." In fact the vendor had made an application, and there was no breach of clause 3. Further, on March 9th, 1931, the vendor stated her willingness, if required, to make a further application, although she insisted that her title was good. The purchasers reiterated their challenge to title in their letter of April 15th, 1931.

In my opinion the purchasers were not entitled to rescind as and when they did. The proper time for completion was a reasonable time after the application to amend the certificate had been finally dealt with. Notwithstanding the vendor's failure to communicate with the purchasers after August 6th, 1930, there had already been a very long delay at the Office of Titles, and the purchasers should have given the vendor a final opportunity of making a good title. The question, however, was not (as the letter of March 9th, 1931, suggested) whether the purchasers might require another application to be made for the amendment of the certificate, but whether the vendor could carry out her obligation to make title and complete by producing one or more certificates of title covering all the land described in the survey plan.

The purchasers, although not entitled to rescind when they purported to do so, should have obtained the first declaration asked for in the summons, that the vendor had not yet shown a good title to the land contracted to be sold.

I agree with the reasons of my brother Dixon, and I have nothing to add. I am of opinion that the appeal should be dismissed.

Judgment of the Supreme Court varied by inserting after the words "that this summons be dismissed" the words "without prejudice to the rights of the parties"; otherwise appeal dismissed with costs.

[1] (1905) 2 Ch. 164, at p. 174.

[2] (1873) L.R. 8 Ex. 175.

[3] (1881) 20 Ch. D. 465.

[4] (1883) 23 Ch. D., at p. 327.

[5] [1842] EngR 529; (1842) 1 Y. & C. C. C. 487, at p. 490; [1842] EngR 529; 62 E.R. 983, at p. 984.

[6] [1858] EngR 1252; (1858) 4 Drew. 338, at p. 341; [1858] EngR 1252; 62 E. R. 131, at p. 132.

High Court of Australia

Redapple & Howgate v Hely [1931] HCA 41; (1931) 45 CLR 452 (30 November 1931)

HIGH COURT OF AUSTRALIA