Churnin v Pilot Developments Pty Ltd

Churnin and others (the purchasers) appealed to the New South Wales Court of Appeal against a decision of the primary judge concerning a contract for the sale of apartments off-the-plan. The purchasers sought to rescind the contracts, alleging that the vendor, Pilot Developments Pty Ltd, had failed to proceed with the subdivision of the land with due expedition. The dispute centred on the interpretation of the vendor's obligations under the contract, particularly concerning the timing and manner of the subdivision works.

The central legal issues before the Court of Appeal were whether the vendor had breached its contractual obligation to proceed with all due expedition to procure the subdivision, and whether the purchasers were entitled to rescind the contracts on this basis. The court also considered the meaning and effect of the vendor's obligation to use its "best endeavours" to cause the subdivision works to be carried out in a proper and workmanlike manner, and the timeframe within which completion of the subdivision was required.

The Court of Appeal, in dismissing the appeals, reasoned that the primary judge had correctly interpreted the contractual provisions. The court found that the vendor's obligation to proceed with "all due expedition" was not an absolute obligation to complete within a specific, implied timeframe, but rather an obligation to act with reasonable diligence. Furthermore, the court held that the vendor's "best endeavours" clause did not impose a higher standard than that of reasonable diligence, and that the evidence did not establish a breach of this obligation. The purchasers' claim for rescission was therefore unfounded.