10 December 2015 | Reading time: 2 minutes
A recent decision in the Supreme Court of New South Wales has highlighted the importance of paying attention to detail for both vendors and purchasers alike. In the case of Jaswil Property Pty Ltd ATF Jaswil Unit Trust v Barrak Corporation Pty Ltd, the Court considered the implications for vendors and purchasers of an inappropriately executed transfer.
Details, Details .
In this case, the purchaser entered into a contract with the vendor for the purchase of land. One responsibility of the purchaser was to prepare a transfer that was to be signed by the vendor. The transfer prepared by the purchaser did not refer to the method of execution and failed to include the appropriate transferor execution clause required for a vendor corporation. The incorrect transfer was signed by the vendor.
At settlement the purchaser’s mortgagee rejected the transfer in its existing form and requested that the transfer be rectified. Consequences followed on from the incorrect transfer that ultimately led to the parties failing to reschedule a timely settlement date. The vendor then served a notice of termination on the basis that settlement was not made on time and the purchaser commenced proceedings on the grounds that the contract was invalidly terminated and sought relief against forfeiture.
It pays to be detailed .
The Supreme Court of New South Wales held that although it was the purchaser’s obligation to include in the transfer the proper form of execution, the failure of the vendor to realise the errors in the transfer played a significant role in the purchaser failing to complete the contract on time and hence breach the contract. This entitled the purchaser to proceed with the purchase and precluded the vendor from terminating the contract.
It takes two to tango.
Other jurisdictions may choose to follow the New South Wales decision given its guidance on the responsibilities of both vendors and purchasers when it comes to a transfer. Importantly, vendors must play their part in punctually advising the purchaser of any mistakes in the transfer once the purchaser prepares and serves the transfer at a reasonable time prior to completion.
  NSWSC 391