Ausbao (286 Sussex Street) Pty Ltd v The Registrar General of New South Wales  NSWCA 18
This decision highlights the importance of developers paying attention to the deposited plans in contracts for sale of land and, consider independently verifying the size of the site areas being purchased.
What is the Torrens Assurance Fund?
The Torrens Assurance Fund is a statutory scheme designed to compensate people through no fault of their own, who suffer loss or damage as a result of the operation of the Real Property Act 1900 (NSW) (RPA).
A claim for compensation is a two step process whereby:
- The claimant must first establish that it suffered loss or damage under section 129(1) of the RPA caused by:
- an act or omission of the Registrar General;
- the registration of someone else as the owner of land/an estate or interest in land;
- an error, misdescription or omission in the Register;
- the land being converted to Torrens Title;
- an error or omission in an official search; or
- an error in recording details supplied in a Notice of Sale; AND
- The claimant’s actions do not fall under the exceptions under section 129(2) of the RPA whereby:
- own conduct contributed to the loss;
- the loss was caused by a solicitor, licensed conveyancer, real estate or information broker;
- the person failed to mitigate the loss; and
- the loss was offset by a benefit.
Ausbao (286 Sussex Street) Pty Ltd was incorporated for the purpose of acquiring and redeveloping land at 286 Sussex Street, Sydney NSW.
On 26 November 2013, Ausbao entered into a contract for sale of land of four lots for $55 million. The deposited plans described the area to have a total site area of 1,337.4m2. After completion of the contract Ausbao discovered the total site area was only 1,255.9m2. Ausbao made a claim to seek compensation out of the Torrens Assurance Fund.
In this decision of Beech-Jones JA, with Bell CJ and Mitchellmore JA assenting:
The Court determined a misstatement of the area of land in a plan referred to in the folio of the Register did not entitle Ausbao to claim compensation out of the Torrens Assurance Fund. Appeal by Ausbao was dismissed.
The Court rejected the claim for compensation of Ausbao as it failed to meet the two step process required in section 129 of the RPA and took into account the following factors:
- Ausbao was a sophisticated developer of commercial property;
- The land purchased was of considerable value;
- Ausbao attributed great significance to the area stated in the deposited plans in formulating the purchase price. There was severe potential adverse consequences to Ausbao of an erroneous statement of area compared to the relatively modest cost of obtaining an independent survey of the land; and
- Such failure to verify the area constituted a failure to take reasonable care to protect its own interests.