Bannister v Walton

In *Bannister v Walton* [1996] NSWCA 40, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning the sale of a property. The purchaser sought to terminate the contract of sale, alleging that the vendor had failed to comply with a condition precedent.

The primary legal issue before the Court was whether the vendor had fulfilled a condition precedent requiring them to obtain a "satisfactory report" from a pest and building inspector. The purchaser contended that the report obtained was not satisfactory, thereby entitling them to terminate the contract.

The Court analysed the meaning of "satisfactory report" in the context of the contract. It held that the vendor was obliged to obtain a report that was genuinely satisfactory to a reasonable person in the position of the purchaser, having regard to the purpose for which the report was required. The Court found that the report obtained by the vendor, while identifying some minor issues, did not contain any defects that would reasonably cause a purchaser to deem it unsatisfactory. Consequently, the vendor had complied with the condition precedent.

The Court of Appeal therefore allowed the vendor's appeal, finding that the purchaser had wrongfully repudiated the contract by attempting to terminate it. The orders of the primary judge were set aside, and the purchaser was ordered to complete the purchase.