Knight v Siewert [1995] FJHC 171; Hbc0085j.95s (5 December 1995)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO. 085 OF 1995

Between:

PETER IAN KNIGHT
Plaintiff

- and -

1. STEFAN SIEWERT and
GERTRUDE SIEWERT
2. KONTIKI RESORT AND RECREATION
(FIJI) LIMITED
Defendants

Mr. P. Knight for the Plaintiff
Mr. A. Tikaram for the first defendant
Ms V. Narayan for the second defendant

JUDGMENT

By summons dated 13 February the Plaintiff has applied to Court for an Order that the first and second defendants appear and state the nature and particulars of their respective claims to the money in dispute and maintain or relinquish and abide by such order as may be made by this Court.

Whilst Mr. Knight relied on his Affidavit the first and second defendants (D1 & D2 respectively) have both made oral and written submissions at the hearing.

FACTS

The facts and circumstances surrounding this action are, inter alia, as set out in Mr. Tikaram's written submission and which are as follows:

1. Contract dated 28 December 1993 ("the Contract") was prepared by the Second Defendant and was executed by the First Defendant ....
   
2. The First Defendant are German nationals ......
   
3. The Contract was for the sale of Scheme Lot 25 on DP 4159 or 3363 part of CT 12866 containing 2,000 square metres more or less for the sum of FJD$72,000.00.
   
4. The area of 2,000 square metres for Scheme Lot 25 was approximate only and subject to final survey.
   
5. Although the Contract specified dates by which deposit and balance purchase price were to be paid, no settlement date is stated.
   
6. The Second Defendant's obligations under condition (1) of the Conditions of Sale of the Contract was to, inter alia,
   

".....in all things proceed without undue delay to take all necessary steps to construct all necessary roads, culverts and drains and cause the necessary survey plan of or including and delineating the said lot to be prepared and deposited at the Titles Registry....."

7. In compliance with their obligation under the Contract the First Defendant paid the Second Defendant monies as follows for the purchase of Scheme Lot 25:
   

(a) $8,000.00 deposit on execution of the Contract on 28 December 1993; and

(b) $64,000.00 being balance purchase price on 25 May 1994.

8. The final survey plan, as amended was not lodged by the Second Defendant with the Lands Department for approval as to survey until 10 April 1995.
   
9. Scheme Lot 25 had its area reduced on the final survey to 1,337 square metres as against 2,000 square metres more or less contracted to be purchased by the First Defendant.
   
10. The reduction in the area of Scheme Lot 25 from 2,000 square metres to 1,337 square metres was never communicated by the Second Defendant to the First Defendant.
    
11. The First Defendant accidentally found out in or about 25 December 1994 that the area of Scheme Lot 25 had been substantially reduced from 2,000 square metres to 1,337 square metres.
    
12. Parties explored ways to settle the matter of the reduction in the area of the lot being purchased but failed to reach agreement.
    

THE ISSUE

On 10 January 1995 D1 officially rescinded the contract and that gave rise to the present action. The Plaintiff has no further interest under the contract except that he holds in his trust account the sum of $64,430.71 being monies deposited by D1 in compliance with their obligations under the contract.

The grounds on which D1 rescinded the contract and which Mr. Tikaram argued before me are that:

(a) there is substantial reduction in area of land being purchased;

(b) there is undue delay;

(c) the contract terms are oppressive and unconscionable to Purchaser; and

(d) there is non disclosure and/or misinformation by Second Defendant.

The learned Counsel for D2 argues in her written submission that: (a) there is a binding contract between the parties which is "wholly capable of being performed"; (b) that "there has been no undue delay on the part of the second defendants"; (c) that "the first defendant does not have any grounds to rescind the contract" and (d) that "there should be specific performance of the contract".

In short, the main issue for my determination is whether D1 were justified in rescinding the contract in all the circumstances of this case.

DETERMINATION OF THE ISSUE

Mr. Tikaram has raised a number of grounds for rescission of contract and Ms Narayan has argued in opposition maintaining essentially that there is a binding contract which is "capable of being performed".

Leaving aside all the other grounds for rescission for the moment, one ground that sticks out like a sore thumb is that the area of the lot sold to D1 has, after subdivision, been substantially reduced from 2000 square metres "more or less" to 1337 square metres.

It is this reduced area that D2 now wish to transfer to D1. The D1 say that they are not prepared to accept a transfer to them of the property which has been so considerably reduced in size. They say that they did not contract to purchase the said property which has been so substantially reduced in area. They say that the property now being proposed to be transferred to them is not the property they had agreed to buy, but was essentially different therefrom; and if this was going to be the property they would never have agreed to purchase the same.

Upon a careful consideration of the affidavit evidence before me, I find that I am able to dispose of the issue before me on this first ground for rescission of contract, namely, "substantial reduction in area of land being purchased" without the necessity of having to consider the other grounds. I shall comment on these other grounds and the grounds raised by Ms Narayan hereafter in my judgment.

Under the Contract of Sale dated 28 December 1993 the property purchased is described as "property situated on the Island of Vanua Levu, Fiji being part of the Vendor's (D2) freehold land known as "Matani Kavika", Savusavu, Vanua Levu, Fiji and being more particularly described as: Lot 25 DP 4159 or 3363 pt. of CT 12866 containing 2000 metres more or less for the sum of ....." (underlining mine for emphasis).

I entirely agree with Mr. Tikaram that the vendor (D2) is bound to deliver to the purchasers (D1) property corresponding in extent and quality to the property which, either by the description in the contract (including any particulars of sale), or by representations of fact made by D2, the purchasers (D1) expected to get.

In FLIGHT v BOOTH [1834] EngR 1087; 1 BING (N.C.) 370, ER Vol 131 p.1160 it was held that "there was such a material discrepancy between the particulars and the lease, as to entitle a purchaser to rescind his contract". There TINDAL CJ at p.1162 said:

".... A safe rule to adopt, that where the misdescription, although not proceeding from fraud, is in a material and substantial point, so far affecting the subject matter of the contract that it may reasonably be supposed that, but for such misdescription, the purchaser might never have entered into the contract at all, in such case the contract is avoided altogether, and the purchaser is not bound to resort to the clause of compensation. Under such a state of facts, the purchaser may be considered as not having purchased the thing which was really the subject of the sale;..."

In the case before me, although there was no misdescription at the time of entering into the Contract of Sale, the description of the property areawise has after the subdivision of D2's land been transformed into a property with an area of 1337 square metres instead of "2000 sq.m. more or less" which is about two thirds of 2000sq. m. or 67%. In other words D1 is losing about 1/3 of the property. As Tindal C.J said (supra) that but for such misdescription or as in this case because of one third reduction in area D1 might never have entered into the contract.

In KNATCHBULL v GRUEBER [1817] EngR 664; (1817) 3 Mer. 124, 146 LORD ELDON has said:

"This Court is from time to time approaching nearer to the doctrine that a purchaser shall have that which he contracted for, or not be compelled to take that which he did not mean to have."

EVE J in LEE v RAYSON (1917) 1 CR 613 at 619 takes the above passage to mean, as stated by him:

"I take that to mean that what the Court has to do in such a case as I have here to deal with is to decide whether the purchaser is getting substantially that which he bargained for, or whether the vendor is seeking to put him off with something which he never bargained for, and arriving at a conclusion on this question the Court is bound to consider every incident by which the property offered to be assured can be differentiated from that contracted for. If the sum of these incidents really alters the subject-matter, then the purchaser can repudiate the contract; if, on the other hand, the subject-matter remains unaffected, or so little affected as to be substantially that which was agreed to be sold, then the purchaser must be held to his contract." (underlining mine for emphasis)

As I have already stated D1 are only getting about two thirds of the property agreed to be sold. Therefore the property is substantially different from what D1 agreed to buy and for which they not only paid a substantial deposit but the full purchase price. It follows therefore that if D1 as the purchasers are compelled to perform their contract, they would be forced to take something for which they never bargained.

The D2 is asking for specific performance of the contract. In that case "a Court of Equity has a discretionary jurisdiction to say whether it will compel a purchaser to take a contract under which he will get something different from that which he has been led to expect he will get" (STIRLING J. in DAVIS V CAVEY XL Ch.D. 601 at 606).

In JACOBS v REVELL (1900) 2 Ch.D. 858 at 865 BUCKLEY J referring to the case of PORTMAN v MILL [1826] EngR 779; (1826) 2 Russ 570; 26 R.R 175 where the vendor sought specific performance said, inter alia, that the vendor cannot enforce specific performance:

"That was a case in which the vendor sought specific performance. There was a contract to purchase a farm containing 340 acres or thereabout, be the same more or less. In fact, the farm consisted of only a certain number of customary acres, being less than the number of statute acres stated by 100 acres or upwards. There was a stipulation that the parties should not be answerable or accountable for any excess or deficiency in the quantity of the premises, and that such excess or deficiency in the quantity of the premises, and that such excess or deficiency (if any there should happen to be) should not vacate or affect the contract, but that the premises should be taken at the quantity stated, whether more or less. Compensation was therefore excluded. Lord Eldon says (2): "As to the stipulation in the contract - that the parties shall not be answerable for any excess or deficiency in the quantify of the land, and that the premises shall be taken at the quantity before stated - I never can agree that such a clause (if there were nothing else in the case) would cover so large a deficiency in the number of acres as is alleged to exist here." Here I touch upon the question as to how far a trivial or substantial error makes a difference. The condition is not confined to trivial errors; nevertheless, if you get to a point such as that in Flight v. Booth (3), that the purchaser cannot get what he contracted to buy, the vendor cannot enforce specific performance." (underlining mine for emphasis).

Further BUCKLEY J says (p.866) in JACOBS (supra):

"In other words, in a vendor's action to enforce specific performance, if the property he offers to convey so differs from that which he offered to sell as that there is a substantial difference within the decision in Flight v. Booth (1), the vendor cannot enforce specific performance."

In my view in the light of the authorities and even the following wording in the Conditions of Sale will not absolve the vendors from their obligation to transfer to D1 the said property "more or less" bearing in mind the meaning ascribed to these words:

"..... Provided however that the Vendor reserves the right at all times to alter the width or position of any road easement or reserve shown on the plan of such subdivision and to vary amend or alter the scheme of subdivision shown therein in anyway whatsoever in respect of any land therein other than the said lot and in respect of the said lot to such extent and in such respect as it may be found necessary on survey to make any such variation amendment or alteration of the necessity for which the Vendor's surveyor shall be the sole judge."

In this case, no doubt there was a binding contract but as LORD WRIGHT said in G. SCAMMELL AND NEPHEW, LIMITED and H.C. AND J.G OUSTON (1941 AC; HC. 251 at p.269-270:

"It is a necessary requirement that an agreement in order to be binding must be sufficiently definite to enable the court to give it a practical meaning. Its terms must be so definite, or capable of being made definite without further agreement of the parties, then the promises and performances to be rendered by each party are reasonably certain."

In the present case the D1 are not getting what they agreed to which is not even "more or less" the area of the property in question.

In WHITTEMORE v WHITTEMORE (LR [1869] UKLawRpEq 183; 8 Eq. 603) it was held by MALINS V.C. that conditions regarding discovering of errors as not annulling the sale "applied only to small errors, and did not cover so large a deficiency" (753 sq. yards found to contain only 573 sq. yards) and that the purchaser was entitled to compensation.

In addition to what I have already stated regarding the meaning of "more or less" based on the authorities already cited, I shall consider further what is meant by the expression "more or less". Surely it does not mean a reduction of 33%, that is, about one-third the area of land intended to be purchased.

"The words 'more or less' or 'thereabouts' in a contract for sale of realty, will only cover a moderate excess or deficiency ....." (STROUD'S JUDICIAL DICTIONARY 4th Ed. by James p 1705, ADD C (11th Ed 502; see DAY v FYNN, Owen, 133).

Further on the meaning of the term "more or less" I quote below from WORDS AND PHRASES JUDICIALLY DEFINED Vol 3 (1944) which I consider to be very relevant for the determination of the issue before me:

"As to the expression 'more or less', I do not say, those words in a contract will not include a few additional acres: but if the parties are contending about three acres, it would be very singular upon those words to add 24 map acres." Townshend (Marquis) v. Stangroom [1801] EngR 395; (1801), 6 Ves. 328, per Lord Eldon, L.C., at pp.340, 341.

"I regard the words 'more or less' as the ordinary words which one meets with in a contract, where they are equivalent to 'about so much,' and where the contract is not to be rendered void in respect of either of the parties because either a little more or a little less than the amount contracted for has been supplied. I am rather disposed to agree ... that the word 'estimated' would probably have had the very same operation if the words 'more or less' had not been there.' Tancred, Arrol & Co. v. Steel Co. of Scotland, Ltd [1890] UKLawRpAC 9; (1890), 15 App. Cas. 125, per Lord Halsbury, L.C., at p. 136

Australia. - "The property with which I am concerned was a property described as 'my farm situate at Mount Sabine, comprising 280 acres more or less together with buildings and all improvements thereon,' etc; and it appeared that on an accurate measurement the real acreage of that property was found to be 262 acres 2 roods 6 perches... Primarily, I should take it in construing this contract that '280 acres' meant 280 acres by measurement, and that the words 'more or less' were intended to cover small discrepancies in the measurement, or perhaps discrepancies in measurements when the total acreage was made up by adding together the acreages of a number of blocks of land. I am not suggesting the the words 'more or less' are in every case to be limited to a deficiency arising from errors in measurement, but I think that that is primarily what those words are intended to cover; and I also think that nowadays, when the facilities for accurate measurement are so much greater than formerly in all parts of the country, a smaller discrepancy should be held to be outside the words, 'more or less' than in earlier times. But in the present case I have no doubt in my own mind - and I do not think any authority compels me to decide otherwise - that a discrepancy of 18 acres in an area of 280 acres is outside the qualifying words 'more or less'... Both parties have concurred in asking me also to indicate to what extent the variation would be covered by the words 'more or less'. I am asked, in effect, to fix the limits which would be covered by those words. I think it is impossible to do so with accuracy, but, fixing an outside limit, I should think 5 acres short of 280 acres would be the proper figure to take. :.. I think I have taken a fairly liberal margin." Belfrage v. McNaughton, [1924] V. L. R. 441, per Macfarlan, J., at pp. 443, 444.

As can be seen from the authorities and even in the case of BELFRAGE (supra) a reduction of 7% (262 acres given instead of 280) in the area was held to be outside the meaning ascribed to the expression under consideration.

Hence 33% reduction in the area of the property cannot by any stretch of the imagination come within the purview of "more or less" to enable me to pronounce in favour of the second defendant.

As stated earlier the decision to which I have arrived at on the first ground is sufficient to dispose of the issue before me. It is not, therefore, strictly necessary for me to decide the other grounds; but since they have been raised I will make some passing remarks.

On D1's assertion of delay, I am not satisfied that that will succeed on the affidavit evidence to entitle D1 to rescind the contract.

As for the ground that the terms of contract are oppressive and unconscionable I need only say that they are the terms on which the parties decided to bind themselves and it is not for this Court to alter the terms and certainly not on this Summons.

On ground 4 regarding non-disclosure of the fact that the Scheme Plan needed to be amended so drastically, this is taken care of in my consideration of the first ground.

For the above reasons, as already stated hereabove the Court will not grant specific performance of the contract which D2 want the Court to do.

In the outcome, under the above circumstances and on the authorities and for the reasons given the first defendants are entitled to rescind the contract, which they have, and I order it to be delivered up to be cancelled.

Consequently, the first defendants are entitled to the return of the said deposits to them together with any interest earned on those sums of money being made up of the sum of $8000.00 paid on execution of the contract on 28.12.93 and $64,430.71 being the sum of money held by the Plaintiff in his Trust Account.

I therefore order that the Plaintiff pay out forthwith to the first defendants the said sum of $64,430.71 together with any interest earned thereon. I further order that the second defendant pay out to the first defendants the said deposit of $8000.00. The second defendants are ordered to pay the costs of the action which is to be taxed unless agreed.

(D. Pathik)
Judge

At Suva
5 December 1995

HBC0085J.95S