Burrell v Cameron

In *Burrell v Cameron* [1998] NSWCA 47, the New South Wales Court of Appeal considered a dispute between the appellant, Burrell, and the respondent, Cameron, concerning the interpretation of a clause within a contract for the sale of land. The central issue revolved around whether the vendor, Cameron, was entitled to forfeit the deposit paid by the purchaser, Burrell, upon the purchaser's failure to complete the sale by the stipulated date.

The Court was required to determine the proper construction of clause 11 of the contract, which dealt with the consequences of default by the purchaser. Specifically, the court had to ascertain whether the vendor's right to retain the deposit was conditional upon the vendor first serving a notice to complete on the purchaser, or whether the right to forfeit the deposit arose automatically upon the purchaser's breach of the time stipulation.

The Court of Appeal, by majority, held that clause 11 of the contract did not require the vendor to serve a notice to complete before becoming entitled to forfeit the deposit. The majority reasoned that the plain language of the clause indicated that the deposit was paid as a guarantee, and its forfeiture was a direct consequence of the purchaser's failure to complete on the due date, irrespective of any further steps taken by the vendor. The legal principle applied was that contractual terms should be interpreted according to their ordinary meaning, and where a contract clearly provides for the forfeiture of a deposit upon a specific breach, that provision will be enforced.

The appeal was accordingly dismissed.