A vendor who failed to inform an auction buyer of a property of a temporary defect in title can be seen to have committed a grave error as the Court of Appeal allowed the purchaser to rescind the contract as a result.
The buyer had contracted to buy the property with vacant possession but at the date of sale, it was still encumbered by a lease that had been invalidly surrendered. The sale documentation prevented the buyer from making sufficient enquiries to know this and the termination of the lease was later obtained by the vendor. The vendor regarded the defect in the title as a technicality. However, the buyer refused to complete and demanded the return of his deposit, which the Court ruled was justified.