Bondi Beach Astra Retirement Village Pty Ltd v Gora

Bondi Beach Astra Retirement Village Pty Ltd (the Appellant) appealed to the New South Wales Court of Appeal against a decision concerning the enforceability of a buyback deed relating to a unit in a retirement village. The dispute centred on whether a contractual restraint on the alienation of the unit, which required the unit to be sold back to the original transferor or their nominee at a price likely below market value, was void as an unlawful restraint on alienation. The respondents, the executors of the original purchasers, sought to sell the unit without adhering to the terms of the buyback deed.

The Court of Appeal was required to determine whether the buyback deed constituted an unenforceable restraint on alienation. This involved considering whether the restraint was total or partial, and whether it was imposed for a valid collateral purpose. The court also had to assess the application of public policy principles to contractual restraints on alienation, particularly in the context of retirement village legislation, and whether the doctrine of restraint on alienation applied to restraints arising from personal contracts like options or rights of pre-emption. Furthermore, the court considered whether the option to repurchase had been validly exercised and whether the contract had been abandoned due to inordinate delay.

The Court of Appeal, applying the principles established in cases such as *Hall v Busst*, held that public policy underpins the doctrine of restraints on alienation, and contractual restraints are generally enforceable if they serve a valid collateral purpose. The court found that the provision of affordable housing for the aged, coupled with the provision of services for residents, constituted a valid collateral purpose that outweighed the public interest in the free alienability of the unit's fee simple interest. The court reasoned that the restraint, while significant, was not total and was intrinsically linked to the scheme of the retirement village, which was recognised by relevant legislation. The court also determined that the purported exercise of the option was defective and that the contract had not been abandoned.

Consequently, the Court of Appeal allowed the appeal in part, setting aside the orders of the court below. The court declared that the respondents were bound by the terms of the buyback deed and ordered that the further amended statement of claim be otherwise dismissed. The respondents were ordered to pay half of the appellant's costs of the appeal.