7 September 2023
September 2023 – Strata Regulatory Watch
In this edition we cover: NSW: Final version of the Fire Safety Schedule NSW : Update on strata management legislation Press release : Welcome to Gerard Doyle, our new NSW…
By Leila Idris (Special Counsel), Michelle Ang (Senior Associate) and Alexandra Pantelis (Law Clerk) in the Melbourne office
Willis v Crosland highlights the significance of:
The Purchaser sought to terminate a contract for sale of land in Bullengarook, Victoria (Contract) pursuant to general conditions 21.2 and 22.2 on the basis that a Building & Pest Inspection Report from a registered building practitioner disclosed [at 21] “major building defect, termite activity and severe damage”. The Purchaser’s written notice to end the Contract was sent by email to the Vendor’s solicitor at 7.51pm on 18 December 2019. At the time of notice, the Purchase had paid $185,000 of the deposit, and the balance remaining was $2,500.
Condition 21 titled ‘Building Report’ included the following:
21.2 The purchaser may end this contract within 14 days from the day of sale if the purchaser:
(a) obtains a written report from a registered building practitioner or architect which discloses a current defect in structure on the land and designates it as a major building defect;
(b) gives the vendor a copy of the report and a written notice ending this contract; and
(c) is not then in default.
21.3 All money paid must be immediately refunded to the purchaser if the contract ends in accordance with this general condition.
The Vendor issued a Notice of Default and Recission to the Purchaser, namely for failure to pay the full deposit by 18 December 2019.
On 27 February 2020, the Purchaser commenced proceedings at the Supreme Court of Victoria to recover the $185,000 deposit paid.
The trial judge dismissed the Purchaser’s claim determining that the Purchaser was not ‘ready, willing and able’ to complete the payment of the deposit before midnight 18 December 2019. Therefore, the purchaser was ‘then in default’, and could not terminate under general condition 21.
The Purchaser appealed to the Court of Appeal the grounds that the trial judge erred that the Purchaser:
Their Honours Sifris, Walker JJA and Macaulay AJA granted leave and allowed the appeal on both grounds. A summary of their Honours’ reasons are as follows:
A party seeking to sue under a contract should assess as soon as possible whether there has been a repudiation of the contract. If so, the party should act quickly to make an election to accept the repudiation and terminate the contract. If a party fails to make an election, the rights and obligations of the parties under the contract remain on foot. Such conduct may be perceived by the Court as an intention to enforce the contract and any unaccepted repudiation of the contract is of no consequence.
 Willis v Crosland  VSCA 320