In standard form Contracts for Sale and Purchase of Land in NSW (Contract), it is usually the case that the purchaser will be responsible for the preparation of a Real Property Transfer (Transfer) to effect the ultimate transfer of the land between the parties.

Notwithstanding that, the decision of the Supreme Court of New South Wales in Jaswil Property Pty Ltd ATF Jaswil Unit Trust v Barrak Corporation Pty Ltd [2015] NSWSC 391, demonstrates that Vendors can and do have some responsibility when it comes to ensuring that the Transfer is correct and in an acceptable form.

In Jaswil, the Vendor purported to terminate the Contract because the Purchaser had failed to complete it within the time stipulated in a Notice to Complete the Vendor had previously issued.  As it turned out, the Purchaser’s failure to complete had been due largely to the fact that the Purchaser’s mortgagee would not accept the Transfer which the Purchaser had prepared, because it contained errors.  The Vendor meanwhile, having been provided with the Transfer previously, had failed to detect the errors and simply returned the executed Transfer to the Purchaser for use at settlement.

The Court held that whilst it was the Purchaser’s responsibility to prepare an accurate Transfer, the failure of the Vendor to identify and alert the Purchaser to the errors contained within it contributed significantly to the various delays in settlement and in turn, the breach of the Contract by the Purchaser.

In the circumstances, the Vendor was not permitted to terminate the contract (as it had purported to do) and was ultimately forced to proceed with the settlement of the sale.

Jaswil provides a useful lesson to Purchasers and Vendors (and their solicitors) alike of the importance of ensuring that any Transfer is correct in all respects, irrespective of which party was responsible for its preparation.

For more information please contact ERA Legal.