Court of Appeal orders rectification of Contract and finds constructive trust

March 25, 2014

in Property

Property: HousingThe Court of Appeal in February 2014 ordered the rectification of a Contract for the sale of land when a section of land was left out of the Contract when clearly it was intended to be included in the sale.

This was an unusual situation where an elderly couple sold their seaside residential property pointing out the approximate extent of the boundaries but only one of the two titles was included in the legal description of the sale.  The “lost land” title had subsequently been transferred to the Vendors’ son.  The Court was able to infer from the evidence that the lost land was intended to be included in the sale even though the Purchasers’ Lawyer had prepared the Agreement for Sale and Purchase.  The Court found that the son was to hold this title by way of a constructive trust for the Purchasers and the Court therefore ordered the lost land was to be transferred to the Purchasers.

The lesson to be learned from this case is that every care should be taken to ensure the correct legal description, title reference and boundaries are included in the Contract for sale otherwise it can be an expensive exercise for all parties.

Purchasers are advised to make detailed enquiries and obtain legal advice prior to entering into any Contract for purchase.  Farry and Co. are experts in this area and can advise you in all aspects in relation to conveyancing matters.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Michael Nidd

03 477 8870 or 09 379 0055


The information contained in this publication is intended as a guide only.  It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain. 

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