Again, the bore referred to is the bore located on the Old System land. The letter concludes by enclosing, "copies of title for Boala" .
10 Whatever documents were included with the letter under this heading have not been located. The Defendant has said that she herself did not provide title particulars for Boala to the finance brokers or to the Plaintiffs. She assumes that these particulars were taken from the National Australia Bank whose mortgage was to be discharged by the new loan. This explanation is very possibly correct because the mortgages of Boala prepared by the Plaintiffs, like the mortgage prepared by the National Australia Bank, comprise only the land under the Real Property Act ; they do not include the Old System land on which was located the licensed bore.
11 The Plaintiffs commissioned a valuer to provide a valuation of the mortgage security proffered by the Defendant over Boala . The valuer was apparently provided with particulars of title only to the Real Property Act land. However, in his valuation he valued the whole of the property which the Defendant had acquired under the November 1993 contract and which she had called Boala . He refers to the property by its name Boala and he says that its area is about 730 hectares. That area would include all of the Old System land. Further, and very importantly, he refers in his valuation to the licensed bore as being part of the security. As I have said, the bore is located on the Old System land. There can be no doubt that the security represented as Boala , as valued by the Plaintiffs' valuer, included the Old System land.
12 The Plaintiffs approved the Defendant's mortgage application. Letters of offer of mortgage finance were sent by the Plaintiffs to the Defendant on 3 June 1997. The letters, in referring to the security, included only the titles to the Real Property Act land. The Defendant accepted the offers of finance in terms. Mortgages were prepared. As I have noted, the mortgaged land comprised only the land under the Real Property Act .
13 The Defendant has defaulted under the mortgages and the Plaintiffs, as mortgagees in possession, have entered into a contract for the sale of Boala to a third party. As a result of a recent investigation of title, it has been discovered that the Plaintiffs' mortgages over Boala do not include the Old System land. Hence, the Plaintiffs seek rectification for the mortgages. Alternatively, they apply for an order under s.88K of the Conveyancing Act 1919 (NSW), granting the First Plaintiff an easement for vehicular and water access through that part of the Old System land which contains the licensed bore in order that the proprietor of the land to which the First Plaintiff now has title may have access to that bore.
14 In order to show entitlement to rectification of a contract, a plaintiff must prove to the Court's satisfaction a concurrent intention of the contracting parties existing at the time that the contract is executed, as to a term which would have been embodied in the contract if the parties had not made a mistake in expressing their intention: see, for example, Pukallus v Cameron (1982) 180 CLR 447 at 456.
15 Was there a concurrent intention of the Plaintiffs and the Defendant existing at the time that the Plaintiffs' offers of finance were accepted and at the time that the mortgages were executed that the mortgages would be taken over the whole of the property known as Boala , that is, 730 hectares, more or less, including the Old System land on which the bore is located?
16 The Defendant, who has given her evidence carefully and frankly, says that at the time she executed the mortgages and accepted the offers of finance, she intended that the mortgages be given over the same land as she had acquired from her parents' companies under the 1993 contract, that is, 730 hectares of land comprising both the Real Property Act land and the Old System land.
17 Mr Bishop, who was the lending manager of the Plaintiffs at the time of the transaction, says that he decided to recommend approval of the Defendant's loan application contained in the finance broker's letter of 30 May 1997 on the basis that the security offered over Boala was a mortgage over 730 hectares of land, including entitlement to the licensed bore referred to in the 30 May letter. That evidence was not challenged.
18 Mr Wilson SC, who appears for the Defendant, very frankly concedes that if the parties to the mortgages had been asked at the time of their execution, "does the mortgage cover all of the titles to the property known as Boala ", the answer would have been "yes". But, Mr Wilson says, that does not prove the Plaintiffs' entitlement to rectification of the mortgages.
19 The fact is, Mr Wilson says, that the question whether the mortgages included the titles to all of the property known as Boala did not enter the parties' minds. It follows therefore, he says, that their common intention was that mortgages be executed over those titles which were actually set out in the letters of offer provided by the Plaintiffs and actually described in the mortgages which were executed. To rectify the mortgages, as the Plaintiffs seek, Mr Wilson submits would be to make a contract for the parties which they had not agreed upon for themselves.
20 I am unable to accept this submission. It is clear from the terms of the letters of 30 May 1997 and from the Defendant's evidence in cross examination that the Defendant intended to offer as security to the Plaintiffs a property described as Boala which comprised 730 hectares, more or less, and which included on it a licensed bore. It is also clear from the valuation of that security procured by the Plaintiffs that they intended to take as security a property comprising 730 hectares, more or less, which included on it a licensed bore. That common intention of the parties miscarried through no fault of either of them. The mortgages covered a property which was less than 730 hectares and did not have on it a licensed bore.
21 In my opinion this is a clear case in which a mistake has been made in expressing a common intention of contracting parties as to the terms of their agreement.
22 The mistake can be expressed in very clear terms, viz. a failure to include in the mortgages the references to the land under Old System title. Rectification of the Plaintiffs' mortgages must be ordered so as to include in the security conferred thereby the Old System land forming part of Boala .
23 Because of the conclusion to which I have come, there is no need for me to consider the Plaintiffs' alternative application for the grant of an easement under s.88K of the Conveyancing Act .