This is an extract of our Sale Of Land With Trespass document, which we sell as part of our Property Law Notes collection written by the top tier of University Of Otago students.
The following is a more accessble plain text extract of the PDF sample above, taken from our Property Law Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Sale of Land with Trespass
Situation in Question - trespass occurs at in-between stage
With Standard Contract or contract with a cl 5-like clause - risk lies with the vendor until possession is given and taken
Without cl 5 - default rules mean risk lies with the purchaser
Issue - how does this work in practice?
Cousins v Wilson
- V and P had used earlier version of standard contract - stated that if property was not untenable, purchaser must purchase at the price minus
'diminution in value of property' (only concerned with market value, not concern with cost of reinstating)
- During the in-between stage, neighbour cut down and removed trees
- This was not discovered until after settlement occurred and purchaser took possession
- Purchasers attempted to sue trespasser for damages, vendors eventually added as plaintiffs
- Both lost in district court so appealed to high court
Issue - could any party sue for damage?
o Judgment (purchasers suing trespasser)
- Purchasers were not in possession at the time of the trespass
- There was no reversionary interest in the property
- There wasn't a 'continuing trespass' because nothing has been brough onto the land and left there
- Even if previous issues were satisfied, could not point to any damage to the property as is had not reduced in value
- Therefore, purchaser could not sue
Judgment (vendors suing trespasser)
- Vendors did have possession so entitled to sue
- But could not point to any damage
- Therefore, only entitled so very small nominal and exemplary damages
Judgment (purchasers suing vendor)
- Purchaser could not sue vendor to pay a reduced price as there was no damage to property (covered in the contract)
Potential Expansion of this Law
New Cl 5 in Standard Contract
- Measures diminution in value as the cost of putting property back the way it was
- If this was used in Cousin the vendor could have sued the trespasser and the purchaser could have bought the property at a reduced price
Lockwood Buildings v Trust Bank Canterbury
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