Kayserian Nominees (No 1) Pty Ltd v J R Garner Pty Ltd [2008] NSWSC 803

New South Wales Supreme Court

CITATION : Kayserian Nominees (No 1) Pty Ltd v J R Garner Pty Ltd [2008] NSWSC 803

HEARING DATE(S) : 20, 23 June 2008 JURISDICTION : Equity Division Expedition List

JUDGMENT OF : Brereton J

EX TEMPORE JUDGMENT DATE : 23 June 2008

DECISION : Vendor was entitled to and had validly rescinded contract for failure of condition subsequent. Purchaser held liable to defendant for mesne profits for period plaintiff remained in possession of property after rescission.

CATCHWORDS : CONTRACTS – CONSRUCTION OF CONTRACT – contract for the sale of land – where contract provides that purchaser accepts property with all defects patent and latent – where contract provides right of rescission to both parties in the event that building certificate is not issued – where contract provides that purchaser cannot make structural alterations to the property – whether vendor had done all things necessary to procure the issue of a building certificate – whether vendor obliged to effect repair work requisitioned by local Council or to allow the purchaser to undertake such work – whether vendor obliged to challenge the Council's requisition or to afford purchaser opportunity to do so - CONTRACTS – WAIVER – whether a party can waive benefit of contingent condition where the contract confers right to rescind on both parties - CONTRACTS – CONDITION SUBSEQUENT – RESCISSION – where vendor purported to rescind on the basis that a building certificate was not issued before completion – whether rescission in bad faith, capricious, arbitrary or unconscionable – nature of equitable restraints on right to rescind – whether rescission ineffective if motivated by predominantly commercial considerations – waiver and election – distinction between rights available upon breach of contract and failure of condition precedent – whether relief against forfeiture available where contract rescinded due to failure of condition subsequent - DAMAGES – whether cross-claimant suffered compensable damage pursuant to (NSW) Real Property Act 1900, s 74P, due to caveat being lodged without reasonable cause – whether cross-claimant entitled to mesne profits after cross-defendant remained in occupation after contract validly rescinded.