A vendor sought a declaration that purchasers breached an agreement of purchase and sale and that the deposit held in trust be released to the vendor.
The purchasers alleged fraudulent misrepresentation, arguing they were misled about the legality of their intended commercial use of the property.
The court held that the vendor made no fraudulent misrepresentation and that the purchasers failed to conduct due diligence despite contractual provisions allowing investigation and requisitions.
The illegal use of the property did not constitute a defect going to the root of title.
Applying the doctrine of caveat emptor, the court concluded the purchasers were in breach and the vendor was entitled to the deposit.
