Clark v Zele

The appeal concerned a dispute arising from a contract for the sale of residential property between the appellant, Mr Clark, and the respondents, Mr and Mrs Zele. Following the failure to complete the sale by the agreed date, the respondents initially sought and were granted specific performance and declaratory relief by Parker J, who found the deposit paid was valid and binding. Subsequently, specific performance became impossible, and both parties purported to terminate the contract. A further hearing before Peden J determined the respondents' entitlement to the return of the deposit.

The central legal issue before Peden J was whether the appellant was entitled to retain a sum of $3,750, which he contended had been forfeited pursuant to section 66V of the Conveyancing Act 1919 (NSW). The appellant argued this forfeited amount could not form part of the deposit under the contract of sale. The respondents, having rescinded an earlier contract during the cooling-off period, asserted their right to the return of the full deposit.

Peden J declared that the respondents had validly terminated the contract and ordered the return of the deposit, acting in accordance with Parker J's earlier finding that the deposit had been paid in full. The appeal to the Court of Appeal concerned whether Peden J erred in returning the deposit, particularly given the appellant did not challenge the earlier judgment or orders of Parker J. The Court of Appeal granted the appellant an extension of time to file the notice of appeal.

The Court of Appeal dismissed the appeal and ordered the appellant to pay the respondents' costs.