When purchasing a property ‘off the plan’, there is the risk that the completed product may not meet a buyer’s expectations. Although there has been recent legislative changes to give buyers greater protections, a recent decision of the NSW Supreme Court applied an old English common law doctrine to grant relief for the buyers.
The rule in Flight v Booth (which takes its name from the 1834 case of the same name), is a legal principle which allows a party to cancel a contract which contains a misdescription so substantial that what they have ended up with is materially different to what they contracted for. In other words, the end product was so different to what was originally agreed, it can reasonably be supposed that but for the misdescription the party would never have entered into the contract.
In the case of Victorsen v Easy Living Holdings Pty Ltd (2019) the buyers entered into an ‘off the plan’ Contract for purchase of a townhouse. Prior to entering the Contract, they were promised a turfed outdoor area which was reflected in the floor plan and landscape plans approved as part of the development consent. However, when constructed an onsite stormwater detention tank was built under the outdoor area and covered by a timber deck.
The buyers sort to cancel the Contract on the basis that due to the relocation of the tank, there was a material and substantial discrepancy from what they agreed to purchase under the Contract. The Court agreed finding that if the buyers had known of the change, it was reasonable to suppose they would not have entered into the Contract and they could therefore cancel the Contract under the rule in Flight v Booth.