Boral Montoro Pty Ltd v McMillan

Boral Montoro Pty Ltd appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation of a clause within a contract for the sale of land, specifically regarding the payment of a deposit and the consequences of a failure to pay. The purchasers, McMillan and another, had entered into a contract to buy land from Boral Montoro, but allegedly failed to pay the deposit by the stipulated date. Boral Montoro sought to terminate the contract and retain the deposit.

The primary legal issue before the Court of Appeal was whether the purchasers' failure to pay the deposit by the due date constituted a repudiatory breach of the contract, thereby entitling Boral Montoro to terminate the agreement and forfeit the deposit. The court was required to consider the nature of the obligation to pay the deposit, whether it was a condition of the contract, and the effect of any purported waiver or election by Boral Montoro.

The Court of Appeal held that the purchasers' obligation to pay the deposit was a condition precedent to the vendor's obligation to proceed with the sale. The court reasoned that the timely payment of the deposit was fundamental to the contract and that the purchasers' failure to do so amounted to a repudiation of their contractual obligations. The court rejected arguments that Boral Montoro had waived its right to terminate or had elected to affirm the contract, finding that the vendor had acted promptly to assert its rights upon learning of the breach.

Consequently, the Court of Appeal allowed Boral Montoro's appeal, setting aside the Supreme Court's decision. The court ordered that the contract be terminated and that Boral Montoro was entitled to retain the deposit paid by the purchasers.