Actall Pty Ltd v Pacific Bay Development Pty Ltd

This case involved an appeal by Actall Pty Ltd against Pacific Bay Development Pty Ltd concerning a contract for the sale of subdivided land. The central dispute revolved around Pacific Bay's rescission of the contract, which was subject to the registration of a plan by a specified date. Actall argued that Pacific Bay's exercise of its right to rescind was improper. The appeal was heard by the Court of Appeal of New South Wales.

The legal issues before the court were whether Pacific Bay had acted unconscientiously in rescinding the contract, and whether it had done everything reasonable to ensure the plan was registered by the contractual date. Actall contended that Pacific Bay's rescission was arbitrary, capricious, unreasonable, or in bad faith, and for an ulterior purpose.

The court considered the principles established in *Tanwar Enterprises Pty Ltd v Cauchi*, which held that the term "unconscientious" is an accurate synonym for various epithets used to describe improper exercises of a vendor's power to rescind. The court found that by at least 24 May 2003, Actall, through its principal who was a solicitor, should have been aware that construction delays meant the plan was unlikely to be registered by 28 February 2004. Furthermore, by 3 July 2003, it was evident that construction could not commence before the development application was approved on 1 July 2003, and that 40 weeks of construction would extend significantly beyond the registration date. The court noted that Pacific Bay began considering rescission on 3 July 2003, and subsequently explored options to seek additional funds from purchasers, including Actall, to maintain their contracts.

The appeal was dismissed, and Pacific Bay was awarded its costs.