Stern v McArthur [1988] HCA 51

High Court of Australia Mason C.J. Brennan, Deane, Dawson and Gaudron JJ. Stern v McArthur [1988] HCA 51

ORDER Appeal dismissed with costs.

Cur. adv. vult.

The following written judgments were delivered:—

1988, Oct. 11 Mason C.J.

This is an appeal from an order of the New South Wales Court of Appeal (Hope and Priestley JJ.A., with Mahoney J.A. dissenting) allowing an appeal from Waddell J. in the Supreme Court of New South Wales who had dismissed the respondents' action for relief against forfeiture and specific performance of a contract for the sale of land at Cranebrook under which the respondents, Mr. McArthur and Mrs. Bates (formerly known as Mrs. McArthur), were purchasers. By the contract, which was dated 3 November 1969, the appellants, Mr. and Mrs. Stern, agreed to sell and the respondents agreed to buy the land for the sum of $5,250. The contract provided for the payment of $250 as a deposit on the signing of the contract and for the payment of the balance of the purchase price, together with interest thereon at the rate of 8.5 per cent per annum calculated on annual rests, to be paid by regular monthly instalments of not less than $50 on the third day of each month. The respondents were entitled to pay the balance of the purchase price at any time before the due date for payment and they were entitled to pay additional instalments in any year. If the regular monthly payments had been paid without the making of any additional payments, the purchase price would have been paid in full sometime in 1983.

The contract was in the standard form approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales. Clause 9 provided that the appellants should be entitled to the rents and profits and should pay all rates, taxes and outgoings up to and including the date of completion. By cl. 12 the appellants agreed to give possession to the respondents on completion. Clause 15 provided that in the event of default by the respondents the deposit would be forfeited and that the appellants would be entitled to terminate the contract and to sue for breach of contract or to resell the property and to recover the deficiency (if any) arising on resale together with expenses as liquidated damages provided that the proceedings should be commenced within twelve months of termination of the contract. By cl. 18(a) on default in payment of any instalment of the purchase price or interest for four weeks "the balance of the purchase price then owing with accrued interest shall immediately without notice to [the respondents] become due and payable".