SALE OF LAND CASE

Wairarapa Times-Age, 20 February 1940, Page 7

SALE OF LAND CASE

MAGISTRATE’S RESERVED DECISION. RIGHTS OF SELLING AGENTS. An important reserved decision of particular interest to land and estate agents was given in the Masterton Courthouse recently by Mr H. P. Lawry, S.M., in the case of J. Wilson and Co versus J. E. Snell. Judgment was given in favour of Wilson and Co. Mr C. C. Marsack (Masterton) appeared for plaintiffs and Mr J. F. Thompson (Greytown) for the defendant. The claim arose, the Magistrate stat-* ed,l when Snell instructed Wilson and CoJ by written authority, to sell his property at Te Whiti for £1,900. Wilson and Co negotiated with a buyer (Mr A. Smith), and after some discussion an agreement for sale was signed at a figure of £l.BOO for the property as a going concern. Snell did not disclose the fact that the property (which was Crown leasehold) had been the subject of an adjustment order under the Mortgagors’ and Lessees’ Rehabilitation Act. On the following day Snell intimated that he was not anxious to go on with the deal. After considerable negotiation Snell and Smith signed an agreement cancelling the sale. Wilson and Co then sued for commission amounting to £52 10s on the deal. Snell contended that (1) there was no actual sale; (2) the sale was unlawful under Section 82 of the M and L Rehabilitation Act, 1936, and that it was therefore an illegal contract; (3) that on the authority of Cooper v Luxor (1939 Zill England Rep. Vol. 1, p. 624) if a vendor was legally advised that to carry out a contract would be unlawful. the vendor was excused from the contract. In summing up Mr Lawry stated that: (1) A would-be vendor who makes a certain contract with an agent will not escape liability to the agent if it turns out that he has no interest in the land and so cannot sell.

(2) It was the vendor's duty to obtain the consent of the Court of Review and as he failed to discharge that duty he could not be allowed to take advantage of his own default. (3) It would be surprising if the decision went as far as that, for then it would be a simple matter for a vendor who regretted a sale to induce an unscrupulous adviser to give him an opinion to the effect (whether in error or by design) and the vendor would be free of the obligation.

What the case did decide was that there were some circumstances which would amount to just excuse or reasonable cause for throwing over the plaintiff's contract. The case had since been upset on appeal. For the reasons set out in judgments of the Court of Appeal it was clear that the mere fact that the defendant in the present action had been advised by his solicitor that his contract to sell his land was unlawful would not warrant the defendant in repudiating the plaintiff’s contract. As the plaintiffs had already done all that their contract required of them they were entitled to judgment. Judgment would therefore be for the plaintiffs for the sum of £52 10s and costs on that amount.

It is interesting to note that one of the main cases upon which the Magistrate based his judgment was decided by the Court of Appeal. England, as lately as December 4. 1939. the case having been sent out to New Zealand in record time.